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2020 (9) TMI 143 - AT - Income TaxLevy of late filing fee u/s 234E - intimation issued under section 200A of the Act and / or order passed under section 154 of the Act in charging late fees payable under section 234E - charging of fees payable u/s 234E prior to amendment to section 200A(1)(c) of the Act vide Finance Act, 2015 w.e.f. 01.06.2015, while processing the TDS returns - whether where the return for the TDS deduction was filed under respective sections of the Act, for the period prior to 01.06.2015 though belatedly, but no late filing fee can be charged under section 234E of the Act - amendment brought in by the Finance Act, 2015 w.e.f. 01.06.2015 by way of insertion of clause (c) to section 200A(1) of the Act is clarificatory or is prospective in nature and is not applicable to the pending assessments? HELD THAT - Undoubtedly, the provisions of section 234E were inserted by the Finance Act, 2012, under which the liability was imposed upon the deductor in such cases where TDS statements / returns were filed belatedly to pay the fees as per said section. The amendment was brought in by the Finance Act, 2015 w.e.f. 01.06.2015 and such an amendment where empowerment is given to the Assessing Officer to levy or charge the fees cannot be said to be clarificatory in nature and hence, applicable for pending assessments. The Hon ble Supreme Court in CIT Vs. Vatika Township Pvt. Ltd. 2014 (9) TMI 576 - SUPREME COURT has explained the general principle concerning retrospectivity and have held that of the various rules guiding how a legislation has to be interpreted, one established rule is that unless contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. Idea behind the rule is that current law should govern current activities . It cannot be said that insertion made by section 200A(1)(c) of the Act is retrospective in nature, where the Legislature was aware that the fees could be charged under section 234E of the Act as per Finance Act, 2012 and also the provisions of section 200A of the Act were inserted by Finance (No.2) Act, 2009, under which the machinery was provided for the Assessing Officer to process the TDS statements filed by the assessee. The insertion categorically being made w.e.f. 01.06.2015 lays down that the said amendment is prospective in nature and cannot be applied to processing of TDS returns / statements prior to 01.06.2015.We also find support from the decision in Sri Fatheraj Singhvi Ors 2016 (9) TMI 964 - KARNATAKA HIGH COURT wherein the Hon ble Court had quashed the intimation issued under section 200A of the Act levying the fees for delayed filing of the TDS statements under section 234E - intimation raising demand prior to 01.06.2015 under section 200A of the Act levying section 234E of the Act late fees is not valid. The provision under which a new enabling power is being given to charge fees under section 234E of the Act while processing TDS returns / statements and such power is to be applied prospectively. In any case, the Parliament itself has recognized its operation to be prospective in nature while introducing clause (c) to section 200A(1) of the Act and hence, cannot be applied retrospectively. Amendment to section 200A(1) of the Act is procedural in nature and in view thereof, the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, the intimation issued by the Assessing Officer under section 200A of the Act in all these appeals does not stand and the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted. - Decided in favour of assessee.
Issues Involved:
1. Delay in filing appeals before CIT(A). 2. Chargeability of late fees under section 234E of the Act prior to the amendment to section 200A(1)(c) of the Act effective from 01.06.2015. 3. Validity of the CIT(A)'s reliance on various High Court decisions and the subsequent upholding of the Assessing Officer's order. Detailed Analysis: 1. Delay in Filing Appeals Before CIT(A): The CIT(A) dismissed the appeals on the grounds of significant delays in filing. However, it was noted that the appeals were against the orders passed under section 154 of the Act, not the original intimation issued under section 200A. The delay was considered less than a year, and the Tribunal deemed it fit to condone the delay. The CIT(A) had also decided the issue on merits, allowing the Tribunal to proceed with the merits of the case. 2. Chargeability of Late Fees Under Section 234E Prior to Amendment: The core issue was whether late fees under section 234E could be charged for periods prior to 01.06.2015, before the amendment to section 200A(1)(c). The Tribunal referred to various decisions, including the Karnataka High Court in Fateh Raj Singhvi & Ors. vs UOI, which held that the amendment to section 200A effective from 01.06.2015 was prospective and not applicable to periods before this date. The Tribunal consistently followed this view, stating that the Assessing Officer was not empowered to charge late fees under section 234E for periods before the amendment. 3. Validity of CIT(A)'s Reliance on High Court Decisions: The CIT(A) relied on decisions from the Rajasthan High Court and the Gujarat High Court, which upheld the constitutional validity of section 234E. However, the Tribunal noted that these decisions did not address the specific issue of the amendment's prospective effect. The Tribunal emphasized the principle that in cases of differing High Court opinions, the view favoring the assessee should be followed, as held by the Supreme Court in CIT vs. Vegetable Products Ltd. Conclusion: The Tribunal concluded that the Assessing Officer was not empowered to levy late fees under section 234E for TDS statements filed for periods before 01.06.2015. The amendment to section 200A(1)(c) was prospective and could not be applied retrospectively. Consequently, the demand raised by charging late fees under section 234E was invalid and deleted. The appeals were allowed in favor of the assessees.
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