2019 (8) TMI 99 - AT - Income Tax

Charging of fee u/s 234E - intimation u/s 200A for the default in furnishing e-TDS statement for the period prior to 1st June, 2015 - difference of opinion between different High Courts - AR relied Judgment of Karnataka High Court in the case of Fatheraj Singhvi vs. Union of India 2016 (9) TMI 964 - KARNATAKA HIGH COURT which had laid down a clear proposition that the amendment to section 200A w.e.f. 1-6-2015 has prospective effect and is not applicable for the period of respective assessment years prior to 1-6- 2015. - whereas DR relied on Gujarat High Court in the case of Rajesh Kourani v. Union of India 2017 (7) TMI 458 - GUJARAT HIGH COURT which held that it was always open for the Revenue to charge fees in terms of section 234E since, the returns of TDS were filed after 2016 and were processed after 2016 when there was enabling provision in section 200A for levying late fees u/s 234E HELD THAT - We therefore find that though there has been a delay in filing of TDS returns, however, in all these cases, the TDS return has been filed and processed much before 1.6.2015 and none of the three cases involved a case of continuing default where the assessee has defaulted in furnishing the TDS statement even after 01.06.2015. In view of the settled law that where there is difference of opinion between different High Courts on an issue, then the one in favour of assessee needs to be followed as held by the Hon ble Supreme Court in Vegetable Products Ltd 1973 (1) TMI 1 - SUPREME COURT . In the absence of any decision by the jurisdictional High Court, the decision of the Hon ble Karnataka High Court supports the case of the assessee. In light of above discussion and in the entirety of facts and circumstances of the case, there is no basis for levy of fees u/s 234E and the same is hereby directed to be deleted in all three cases - appeals allowed

Summary

Issues:
Whether the fee prescribed under section 234E could be levied in intimation under section 200A for the default in furnishing e-TDS statement for the period prior to 1st June, 2015.

Analysis:

Issue 1: Interpretation of Provisions
The appellant contended that prior to 1st June, 2015, there was no provision enabling the levy of fees under section 234E in intimation under section 200A. The appellant relied on the decision of the Amritsar Bench of ITAT in a previous case, which supported this argument. Additionally, reference was made to a judgment by the Hon'ble Karnataka High Court, stating that the amendment to section 200A with effect from 1-6-2015 was prospective and not applicable for assessment years before this date. The Hon'ble Gujarat High Court held a differing view, allowing the Revenue to charge fees under section 234E post-2016 when enabling provisions existed in section 200A.

Issue 2: Precedents and Legal Interpretations
Various judgments were cited to support the appellant's position, including decisions by the Pune Bench of the Tribunal and the Hon'ble Supreme Court's principle that in case of conflicting judgments, the one favoring the assessee should be followed. The appellant also highlighted specific cases from the Amritsar Bench where the levy of fee under section 234E was deemed illegal.

Issue 3: Adverse Arguments
The respondent, supported by the Hon'ble Gujarat High Court's judgment, argued in favor of the lower authorities' findings. However, the appellant contested these arguments based on the legal interpretations and precedents discussed earlier.

Judicial Findings:
In a detailed analysis of previous cases, the Tribunal found that in instances where the TDS returns were filed and processed before 1st June, 2015, there was no basis for levying fees under section 234E. The Tribunal referred to specific cases where such fees were deleted due to the absence of a continuing default post-2015. The Tribunal emphasized the importance of following the judgment in favor of the assessee in cases of conflicting High Court decisions.

Conclusion:
Based on the above analysis and legal interpretations, the Tribunal allowed all three appeals filed by the assessee, directing the deletion of fees under section 234E. The decision was made in adherence to the principle that in the absence of a jurisdictional High Court decision, the judgment favoring the assessee should be followed.