ITAT rules late fees cannot be levied under the IT Act

ITAT rules late fees cannot be levied under the IT Act

It cited the order of the Karnataka High Court in a similar case

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has held that the imposition of late fees under the Income Tax Act, 1961 has a prospective effect. Therefore, it cannot be levied without the machinery provision of Section 200A of the IT Act.

The appellant had contended that no other adjustment in the amount refundable to or recoverable from the tax deducted was permissible in accordance with the law. This was because it existed prior to 1 June 2015.

The Coram of Judicial Member George George K and Accountant Member Padmavathy S observed that the Karnataka High Court in a similar case had allowed the appeal in favor of the assessee. The court had held that the intimation given in the purported exercise of the power under the IT Act was for the period prior to 1 June 2015.

The tribunal ruled, "We are following the binding decision of the jurisdictional high court that the fee cannot be levied without the machinery provision of the IT Act."