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2020 (9) TMI 189 - AT - Income TaxLevy 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 Section 200A(1)(c) for computation of late filing fee. 3. Validity of Section 234E and its retrospective application. 4. Rule of consistency in judicial decisions. 5. Constitutionality of Section 234E. Issue-wise Detailed Analysis: 1. Levy of Late Filing Fee under Section 234E: 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 pertain to TDS statements filed for periods before 01.06.2015. The Tribunal examined whether the CIT(A) was justified in confirming the levy of late fee under Section 234E for delays in filing TDS statements. 2. Applicability of Section 200A(1)(c) for Computation of Late Filing Fee: The Tribunal considered whether the AO was empowered to levy fees under Section 234E while issuing intimation under Section 200A of the Act for periods before the amendment of Section 200A(1) by the Finance Act, 2015, which introduced clause (c) effective from 01.06.2015. The Tribunal referenced the decision of the Karnataka High Court in Fatehraj Singhvi vs. UOI, which held that the amendment to Section 200A(1) is prospective and not applicable to periods before 01.06.2015. The Tribunal also noted that the Gujarat High Court in Rajesh Kourani vs. UOI upheld the levy of fee under Section 234E even before the amendment. 3. Validity of Section 234E and Its Retrospective Application: The Tribunal highlighted that Section 234E, which imposes a fee for delayed filing of TDS statements, is a charging provision effective from 01.07.2012. The Tribunal noted that the machinery provision under Section 200A, which enables the computation of this fee, was introduced later. The Tribunal emphasized that the charging provision precedes the machinery provision, and the fee under Section 234E was always leviable from the date of its introduction, irrespective of the amendment to Section 200A. 4. Rule of Consistency in Judicial Decisions: The Tribunal discussed the rule of consistency, referencing the decision of the Delhi High Court in Krishak Bharati Cooperative Ltd vs. DCIT, which stated that the rule of consistency should not create anomalies. The Tribunal acknowledged conflicting decisions from different High Courts on the issue but followed the principle that in the absence of a jurisdictional High Court decision, the decision favoring the assessee should be followed, as held by the Supreme Court in Vegetable Products Ltd. 5. Constitutionality of Section 234E: The Tribunal addressed the argument regarding the constitutionality of Section 234E. The Tribunal noted that various High Courts, including the Gujarat High Court in Rajesh Kourani and the Bombay High Court in Rashmikant Kundalia vs. UOI, have upheld the constitutional validity of Section 234E, stating that it is not ultra vires or violative of the constitution. The Tribunal reiterated that the fee under Section 234E is compensatory and not penal in nature. Conclusion: The Tribunal concluded that the CIT(A) was not justified in confirming the late fee levied by the AO under Section 234E for periods before 01.06.2015. The Tribunal set aside the orders of the CIT(A) and directed the deletion of the fee levied under Section 234E and the interest thereon under Section 220(2). The appeals filed by the assessee were allowed, following the principle of favoring the assessee in cases of conflicting judicial decisions.
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