2018 (4) TMI 1424 - AT - Income Tax

Validity of the impugned order u/s. 154 - AO power to make adjustment u/s.234E as per amended provisions of section 200A vide impugned Intimation u/s.154 - Held that - High Court of Gujarat in the case of Rajesh Kourani vs. Union of India (2017 (7) TMI 458 - GUJARAT HIGH COURT) held that section 234E is a charging provision creating a charge for levy of fess for certain default in filing statements and also held that the fees prescribed u/s. 234E could be levied even without a regulatory provision being found in section 200A for computation of fees. The hon ble jurisdictional high court of Gujarat in the case cited supra has held that when section 234E has already created a charge for levying fees it would thereafter not have been necessary to have yet another provision creating the same charge. Even in absence of section 200A with introduction of section 234E it was always open for the revenue to demand and collect the fees for late filing of the statement. The Hon ble High Court has also held that section 234E is a charging provision and it was always open for the revenue to charge fees in terms of section 234E of the act even prior to 1st June 2015. We are not inclined with the contention of the ld. counsel that CPC was not authorized to levy u/s. 234E of the act we are also not affirmed with his view that the order passed u/s. 154 was bad in law. - Decided against assessee.

Summary

Issues:
- Validity of the impugned order u/s. 154
- Power of the Assessing Officer to make adjustment u/s.234E

Analysis:
1. Validity of the Impugned Order u/s. 154:
The appeals filed by the assessee for A.Y. 2013-14 to 2015-16 challenged the order of the CIT(A)-8, Ahmedabad dated 13-06-2016 under section 154 of the Income Tax Act, 1961. The assessee contended that the CIT(A) erred in not considering the 2nd ground of appeal challenging the validity of the order u/s. 154. The issue revolved around the levy of fees u/s. 234E for delay in filing quarterly statements of deduction of taxes. The CIT(A) dismissed the appeal, stating that the assessing officer rightfully charged fees u/s. 234E. During the appellate proceedings, the assessee provided judicial pronouncements supporting their case. However, the ITAT found that the jurisdictional High Court of Gujarat had held that section 234E is a charging provision, and fees could be levied even without a regulatory provision in section 200A for computation of fees. The ITAT, therefore, dismissed the ground challenging the validity of the order u/s. 154.

2. Power of the Assessing Officer to Make Adjustment u/s.234E:
The second issue raised was whether the Assessing Officer had the power to make adjustments u/s.234E as per the amended provisions of section 200A of the Income Tax Act. The ITAT observed that prior to June 2015, there was no enabling provision for raising a demand regarding the levy of fees u/s. 234E. However, the jurisdictional High Court of Gujarat clarified that section 234E created a charge for levying fees, and it was not necessary to have another provision creating the same charge. The High Court held that even in the absence of section 200A, the revenue could demand and collect fees for late filing of statements. The ITAT, following the High Court's decision, concluded that the Assessing Officer had the power to levy fees u/s. 234E even before June 2015. Therefore, the ITAT dismissed both grounds of appeal raised by the assessee.

In conclusion, the ITAT upheld the levy of fees u/s. 234E for delay in filing quarterly statements of deduction of taxes and dismissed all fifteen appeals filed by the assessee. The judgment was pronounced on 23-03-2018 by the ITAT Ahmedabad.