2020 (9) TMI 147 - AT - Income Tax

Levy of late filing fee u/s 234E and interest u/s 220(2) - Late filing of TDS returns / statemetn - fee u/s 234E before 01.06.2015, i.e., the date when clause (c) was inserted in section 200A(1) for the computation of the said fees at the time of processing - scope of amendment - conflicting decisions on issue - HELD THAT - No doubt the provisions of section 234 E have been held to be constitutionally valid which is not the dispute before us. So far as the argument of Ld. DR on rule of consistency is concerned, the same in our opinion is not absolute but in the present case we are faced with a situation which has been considered by our coordinate benches and there is no subsequent development to depart there from. Moreover, our coordinate Benches have followed one approach in view of conflicting decision of different High Courts in the absence of any decision of the Jurisdictional High Court. So far as the levy of fee u/s. 234E for defaults of period in filing TDS/TCS statements / returns even for the period prior to 1.06.2015 is concerned, as mentioned earlier there are conflicting decisions by different High Courts and there is no decision on this issue by the jurisdictional High Court. While Hon ble Karnataka High Court is in favour of the assessee holding that the amendments brought in statute w.e.f. 01.06.2015 are prospective in nature and hence notices issued u/s. 200 A of the Act for computation and intimation in payment of late filing fee u/s.234E of the Act relating to the period of tax deduction prior to 01.06.2015 were not maintainable, the Hon ble Gujarat High Court has decided the issue against the assessee and in favour of the revenue. After considering the above conflicting decisions, the coordinate benches of the Tribunal are taking the view that when there are conflicting decisions, the decision in favour of the assessee should be followed in the light of decision of Hon ble Supreme Court in the case of Vegetables Products Limited 1973 (1) TMI 1 - SUPREME COURT No justification in confirming the late fee levied by the AO u/s. 200 A r.w.s. 234 E since the defaults are prior to 1.06.2015. Accordingly we set aside the order of the Ld. CIT(A) and the fee levied u/s. 234 E and interest there on u/s. 220 (2) is directed to be deleted. - Decided in favour of assessee.

Summary

Issues Involved:
1. Delay in filing appeals before the CIT(A)
2. Levy of late filing fee under section 234E
3. Interest under section 220(2)

Detailed Analysis:

Issue 1: Delay in Filing Appeals Before the CIT(A)

The assessee argued that the appeals were filed on time against the order passed under section 154, not under section 200A as mistakenly noted. The CIT(A) dismissed the appeals citing delays ranging from 1938 to 2008 days, based on the original order dated 11th November 2013. However, the rectification order under section 154 was dated 11th February 2019, and the appeals were filed on 2nd March 2019, within the due date of 11th March 2019. The Tribunal found merit in the assessee's argument and noted that the CIT(A) failed to appreciate the facts properly, leading to an incorrect dismissal of the appeals on account of delay. The Tribunal held that the appeals were filed on time and there was no delay, thus dismissing the CIT(A)'s order on this issue.

Issue 2: Levy of Late Filing Fee Under Section 234E

The core issue was whether the late filing fee under section 234E could be levied for TDS statements filed before 01.06.2015. The Tribunal referred to multiple cases, including the Hon'ble Karnataka High Court in Fatehraj Singhvi vs. UOI and the Hon'ble Gujarat High Court in Rajesh Kourani vs. UOI. The Karnataka High Court held that the amendment to section 200A(1) was prospective, effective from 01.06.2015, and thus, late filing fees under section 234E could not be charged for periods before this date. The Tribunal followed this view, noting that in the absence of a jurisdictional High Court decision, the Supreme Court's principle in the case of Vegetable Products Ltd. should be applied, favoring the assessee in case of conflicting decisions. Consequently, the Tribunal held that no late filing fee under section 234E could be levied for defaults prior to 01.06.2015.

Issue 3: Interest Under Section 220(2)

The Tribunal observed that since the levy of late filing fee under section 234E was not justified for the period before 01.06.2015, the consequent interest under section 220(2) also did not survive. This was consistent with the principle that if the primary demand is invalid, any consequential interest cannot be sustained.

Conclusion:

The Tribunal allowed all the appeals filed by the assessee, quashing the levy of late filing fees under section 234E and the interest under section 220(2), based on the finding that the appeals were filed on time and the late filing fee could not be levied for periods before 01.06.2015. The decision emphasized the importance of procedural correctness and the prospective application of statutory amendments.