2020 (9) TMI 186 - AT - Income Tax

Levy of late filing fee u/s 234E - intimation under Section 200A - contention of the assessee that 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 - delay in filing of the TDS statements and interest u/s 220(2) - HELD THAT - 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 case of Vegetables Products Limited 1973 (1) TMI 1 - SUPREME COURT . We hold that the 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. Appeals filed by the assessee are allowed.

Issues Involved:
1. Levy of late filing fee under Section 234E of the Income Tax Act.
2. Applicability of amendments to Section 200A(1) effective from 01.06.2015.
3. Rule of consistency in judicial decisions.
4. Constitutional validity of Section 234E.
5. Interpretation of Section 271H in conjunction with Section 234E.
6. Retrospective vs. prospective application of amendments.

Detailed Analysis:

1. Levy of Late Filing Fee Under Section 234E:
The primary issue revolves around the levy of late filing fee under Section 234E by the Assessing Officer (AO) and its subsequent confirmation by the Commissioner of Income Tax (Appeals) [CIT(A)]. The assessee argued that the fee under Section 234E should not be levied for defaults occurring before 01.06.2015. The Tribunal had previously discussed this in the case of Udit Jain vs. ACIT, concluding that the fee under Section 234E cannot be levied for defaults occurring before 01.06.2015.

2. Applicability of Amendments to Section 200A(1) Effective from 01.06.2015:
The Tribunal examined whether the amendments to Section 200A(1) effective from 01.06.2015, which included clause (c) for the computation of fees, could be applied retrospectively. The Tribunal found that the amendment is prospective, and thus, fees under Section 234E cannot be charged for periods before 01.06.2015. This conclusion was supported by the decision of the Karnataka High Court in Fatehraj Singhvi vs. UOI.

3. Rule of Consistency in Judicial Decisions:
The Tribunal addressed the rule of consistency, noting that while it is not absolute, it is generally followed unless there is a significant reason to deviate. The Tribunal referenced the decision of the Supreme Court in the case of Vegetable Products Ltd., which states that in the presence of conflicting decisions, the decision favoring the assessee should be followed.

4. Constitutional Validity of Section 234E:
The Tribunal acknowledged that several High Courts, including the Gujarat High Court in Rajesh Kourani vs. UOI, have upheld the constitutional validity of Section 234E. However, the Tribunal clarified that the issue at hand was not the constitutional validity but the applicability of the fee for periods before the amendment to Section 200A(1).

5. Interpretation of Section 271H in Conjunction with Section 234E:
The Tribunal discussed Section 271H, which provides for penalties related to TDS statements, and noted that it does not automatically impose penalties for delays if certain conditions are met. The Tribunal emphasized that Section 234E is a mandatory fee provision, while Section 271H involves discretionary penalties. The Tribunal concluded that the AO's levy of fees under Section 234E for periods before the amendment was not justified.

6. Retrospective vs. Prospective Application of Amendments:
The Tribunal held that the amendment to Section 200A(1) introducing clause (c) is prospective and cannot be applied retrospectively. This was supported by the decision of the Karnataka High Court, which stated that the amendment confers substantive power and thus should not be applied retroactively.

Conclusion:
The Tribunal allowed the appeals filed by the assessee, holding that the levy of late filing fees under Section 234E for periods before 01.06.2015 was not justified. The Tribunal directed the deletion of the fees and any related interest charged under Section 220(2). The decision was pronounced in the open court on 31.08.2020.

← Previous Next →