2021 (11) TMI 1157 - HC - Income Tax

Levy late filing fee u/s 234E - Fee for default in furnishing statements/ not filing the statement of tax deduction at source - Intimation u/s 200A - as argued till 01.06.2015 petitioner cannot be mulcted with any liability to pay late fee for non filing of any statement of tax deduction at source - HELD THAT - After considering the statutory provisions and the implications of the amendment brought in to the Act, it was held that the amendment would take effect only with effect 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 the period from 2011-12 to 2015-16 is bereft of authority and cannot be legally sustainable. Thus quash notice to the extent it demands fee under section 234E for the period from 2011-12 till 01.06.2015. WP allowed.

Summary

Issues:
Late filing fee under section 234E of the Income Tax Act, 1961 for the period from 2011-12 to 2021-22. Interpretation of section 200A(1) and its applicability to the late fee demand.

Analysis:
The petitioner received a notice demanding a late filing fee under section 234E of the Income Tax Act, 1961. The demand was for an amount of Rs. 4,02,150 for the periods from 2011-12 to 2021-22. Section 234E imposes a fee for default in furnishing statements related to tax deductions at source. The petitioner argued that the demand was not legally sustainable as section 234E was introduced by the Finance Act, 2012, but the petitioner was being asked to pay for periods before the amendment. The petitioner contended that until 01.06.2015, they should not be liable to pay any late fee for non-filing of tax deduction statements.

During the hearing, the petitioner's counsel cited a previous judgment where a similar issue was considered. In the case of M/s. Sarala Memorial Hospital v. Union of India, it was held that the amendment to the Act would only be effective from 1st June, 2015, making it prospective in nature. The petitioner argued that this judgment was final and binding on the authorities. Based on this argument and interpretation of the statutory provisions, the court found that the demand notice for the period from 2011-12 to 2015-16 was without authority and not legally sustainable.

As a result of the above analysis, the court quashed the notice demanding the fee under section 234E for the period from 2011-12 till 01.06.2015. The writ petition was allowed in favor of the petitioner on this issue.