Amendment vide Finance Act, 2015, introducing clause (c) to Sec 200A(1) cannot be applied retrospectively to earlier AYs: ITAT

NEW DELHI,  : THE ISSUE IS – Whether the amendment brought in by the Finance Act, 2015 w.e.f June 1, 2015 by way of introducing clause (c) to Sec. 200A(1) can be applied retrospectively to earlier assessment years. NO IS THE ANSWER.

Facts of the case

The assessee company preferred an appeal challenging the order passed by the CIT(A) in confirming the order passed u/s 200A for levying the late fees penalty u/s 234E for the Quarter Second of FY 2012-13 for late furnishing of TDS Statement on Form No. 26Q.

On appeal, the ITAT held that,

++ as per newly substituted clause (c) to Sec. 200A(1) w.e.f. 01.6.2015, the fees, if any, is to be computed in accordance with the provisions of Sec.. 234E. However, under the earlier clause (c), there was no such provision. The amendment to Sec. 200A(1) is procedural in nature and in view thereof, the AO while processing the TDS statements/returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees u/s 234E. I further find that the coordinate Bench of Pune in the case of Gajanan Constructions has made an elaborate discussion on the issue and decided in favour of the assessee.

It is also noted that while coming to a particular conclusion, the Pune Bench of the Tribunal duly considered the decisions relied upon by the CIT-DR. It is also noted that the Bench has followed the decision in the case of Fatheraj Singhvi vs UOI and Kash Realtors Pvt. Ltd. vs ITO. Even if two views are possible/available, as per the decision from the Apex Court in the case of Vegetable Products, the view, which favors the assessee has to be followed;

++ the issue before the Bombay High Court in the case of Rashmikant Kundalia was with respect to constitution validity of the Section introduced by Finance Act, 2015 w.e.f. 01/06/2015 but was not abreast of the applicability of Sec. 234E by the AO while processing TDS statement.

So far as, the Karnataka High Court is concern, it was held that intimation raising demand prior to 01/06/2015, u/s 200A, levying fee u/s 234E, is not valid.

Respectfully following the stated decision of the Coordinate Bench, I hold that amendment in Sec. 200A(1) is procedural in nature, therefore, the AO while processing the TDS statements, returns in the present set of appeals of the period prior to 01/06/2015, is not empower to charge fee u/s 234E, hence, the intimation issue by the AO u/s 200A, in the appeals before us, does not stand, therefore, the demand rais by way of charging fee u/s 234E is not valid, resultantly, the same is delete as the intimation issue by the AO in the present case, for the period prior to 01/06/2015, is beyond the scope of adjustment provide u/s 200A.