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2020 (9) TMI 148 - AT - Income TaxLevy of late filing fee u/s 234E - legality of intimations / orders passed u/s 200A levying fee u/s 234E for late filing of TDS/TCS returns / statements, prior to the amendments made by Finance Act 2015 w.e.f. 01.06.2015 - Scope of amendments in sec 200A - Whether fee u/s 234E is not leviable 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? - 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 CIT(A) is not justified 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.
Issues Involved:
1. Levy of late filing fee under Section 234E of the Income Tax Act. 2. Applicability of Section 200A(1)(c) for computation of fees under Section 234E before its amendment on 01.06.2015. 3. Validity of the CIT(A)'s order confirming the levy of late filing fee under Section 234E. 4. Rule of consistency in judicial decisions. 5. Constitutional validity of Section 234E. 6. Distinction between charging provisions and machinery provisions. Detailed Analysis: 1. Levy of Late Filing Fee under Section 234E of the Income Tax Act: The primary issue in these appeals is the levy of late filing fee under Section 234E by the Assessing Officer (AO), which was confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)]. The appeals were decided based on the available records and after hearing the Department Representative (DR). The DR supported the CIT(A)'s order, arguing that the fee under Section 234E is applicable even before the amendment on 01.06.2015, as it is a charging provision, whereas Section 200A is a machinery provision. 2. Applicability of Section 200A(1)(c) for Computation of Fees under Section 234E Before 01.06.2015: The CIT(A) confirmed the levy of late filing fee on the ground that Section 200A was amended by the Finance Act, 2015, w.e.f. 01.06.2015, empowering the AO to levy late filing fee under Section 234E. The Tribunal noted that the TDS statements in question were filed before 01.06.2015. The Tribunal referred to the decision of the Karnataka High Court in Fatehraj Singhvi vs. UOI, which held that the amendment to Section 200A(1) w.e.f. 01.06.2015 is prospective and not applicable for periods prior to this date. Therefore, no late filing fee could be charged under Section 234E for TDS statements filed before 01.06.2015. 3. Validity of the CIT(A)'s Order Confirming the Levy of Late Filing Fee under Section 234E: The Tribunal found that the CIT(A) had confirmed the late filing fee based on the amended Section 200A, which was not applicable for periods before 01.06.2015. The Tribunal held that the AO was not empowered to charge late filing fees under Section 234E for TDS statements filed before 01.06.2015, even if the processing occurred after this date. 4. Rule of Consistency in Judicial Decisions: The DR argued that the rule of consistency should not create anomalies, citing various judicial decisions. However, the Tribunal noted that in the absence of a decision from the jurisdictional High Court, conflicting decisions from different High Courts should be resolved in favor of the assessee, following the Supreme Court's decision in the case of Vegetables Products Ltd. 5. Constitutional Validity of Section 234E: The DR cited several High Court decisions upholding the constitutional validity of Section 234E, arguing that the fee is compensatory and not penal. The Tribunal acknowledged these decisions but clarified that the issue before it was the applicability of the fee for periods before the amendment to Section 200A. 6. Distinction Between Charging Provisions and Machinery Provisions: The DR emphasized the distinction between charging provisions (Section 234E) and machinery provisions (Section 200A), arguing that the former creates an automatic charge for late filing, while the latter provides the mechanism for processing TDS statements. The Tribunal, however, reiterated that the amendment to Section 200A, which includes the computation of fees under Section 234E, is prospective from 01.06.2015 and cannot be applied retroactively. Conclusion: The Tribunal concluded that the CIT(A) was not justified in confirming the late filing fee under Section 234E for TDS statements filed before 01.06.2015. The appeals were allowed, and the late filing fees and interest levied under Sections 234E and 220(2) were directed to be deleted. The Tribunal's decision aligns with the principle that in the case of conflicting High Court decisions, the one in favor of the assessee should be followed.
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