2021 (12) TMI 1397 - HC - Income Tax

Late filing fee u/s 234E - default in furnishing statements - Intimation u/s 200A - HELD THAT - Learned counsel for the petitioner brought to my attention the decision in M/s.Sarala Memorial Hospital v. Union of India and Another 2018 (12) TMI 1818 - KERALA HIGH COURT wherein an identical question arose for consideration. After considering the statutory provisions and the implications of the amendment brought into the Act it was held that the amendment would take effect only from 1st June 2015 and is thus prospective in nature. It is submitted that the aforesaid judgment has become final and is binding upon the authorities. The demand for late fees for the period till the first quarter of the assessment year 2015-16 is without authority. The demand in Ext.P1 to Ext.P15 intimations for the period from 2012-13 to the first quarter of assessment year 2015-16 is bereft of authority and cannot be legally sustainable. Accordingly we quash Ext.P1 to Ext.P15 intimations to the extent it demands late fee under section 234E for the period from 2011-12 till 01.06.2015.

Summary

Issues:
1. Late filing fee under section 234E of the Income Tax Act, 1961 demanded for the periods from 2012-13 to 2015-16.
2. Interpretation of section 234E of the Act and its applicability.
3. Effect of the introduction of section 200A(1) with clause (c) to clause (f) from 01.06.2015.
4. Legal validity of the demand for late fees for the mentioned periods.

Analysis:
The petitioner was called upon to pay the late filing fee under section 234E of the Income Tax Act, 1961 for the periods from 2012-13 to 2015-16. Section 234E imposes a fee for default in furnishing statements, with a sum of two hundred rupees for every day during which the failure continues. The petitioner contested the demand, citing the introduction of section 200A(1) with effect from 01.06.2015, which refers to the computation of fees. The petitioner argued that until 01.06.2015, they cannot be held liable to pay late fees for not filing the statement of tax deduction at source.

During the hearing, the petitioner's counsel referred to a previous judgment where a similar question was considered. The court in that case held that the amendment to the Act would be prospective, effective only from 1st June, 2015. Relying on this precedent, the petitioner argued that the demand for late fees for the period until the first quarter of the assessment year 2015-16 lacked authority and was legally unsustainable. The court agreed with the petitioner's argument and quashed the intimations demanding late fees under section 234E for the period from 2011-12 till 01.06.2015.

In conclusion, the court allowed the writ petition, holding that the demand for late fees for the specified periods was without authority and legally unsustainable. The judgment clarified the applicability of section 234E and the effect of the introduction of section 200A(1) in determining the liability for late filing fees under the Income Tax Act, 1961.