2020 (9) TMI 285 - AT - Income Tax

Late filing fee u/s. 234E - contention 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 - conflicting decisions by different High Courts - HELD THAT - 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. 200A 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 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 . 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 - Fee levied u/s. 234 E is directed to be deleted. - Decided in favour of assessee.

Summary

Issues Involved:
1. Levy of late filing fee under Section 234E of the Income Tax Act, 1961.
2. Applicability of Section 200A(1)(c) for computation of fees under Section 234E before 01.06.2015.
3. Rule of consistency and the application of conflicting High Court decisions.
4. Constitutional validity of Section 234E.

Detailed Analysis:

1. Levy of Late Filing Fee under Section 234E:
The primary issue in the appeal is the levy of a late filing fee under Section 234E by the Assessing Officer (AO), which was upheld by the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) confirmed the levy of the late filing fee of ?1,79,300/- for delay in filing TDS statements.

2. Applicability of Section 200A(1)(c) Before 01.06.2015:
The Tribunal examined whether the CIT(A) was justified in confirming the levy of late fees under Section 234E for delays in filing TDS statements before 01.06.2015. The Tribunal referred to the decision in the case of Udit Jain, which considered the Karnataka High Court's decision in Fatehraj Singhvi vs. UOI and the Gujarat High Court's decision in Rajesh Kourani vs. UOI. The Tribunal held that the amendment to Section 200A(1) of the Act, which included clause (c) for computing fees under Section 234E, was prospective from 01.06.2015. Therefore, for TDS statements filed before this date, no late filing fee could be charged under Section 234E in the intimation issued under Section 200A.

3. Rule of Consistency and Conflicting High Court Decisions:
The Tribunal noted that there are conflicting decisions from different High Courts on the issue of the levy of fees under Section 234E for periods before 01.06.2015. The Karnataka High Court in Fatehraj Singhvi held that the amendment to Section 200A(1) was prospective and not applicable to periods before 01.06.2015. Conversely, the Gujarat High Court in Rajesh Kourani upheld the levy of fees under Section 234E even for periods before 01.06.2015. Following the principle laid down by the Supreme Court in the case of Vegetable Products Ltd., the Tribunal decided in favor of the assessee, holding that when there are conflicting decisions, the decision favoring the assessee should be followed.

4. Constitutional Validity of Section 234E:
The Tribunal acknowledged that the constitutional validity of Section 234E has been upheld by various High Courts, including the Gujarat High Court in Rajesh Kourani and the Bombay High Court in Rashmikant Kundalia. However, the Tribunal clarified that the issue at hand was not the constitutional validity but the applicability of the amendment to Section 200A(1) for periods before 01.06.2015.

Conclusion:
The Tribunal concluded that the CIT(A) was not justified in confirming the late fee levied by the AO under Section 200A read with Section 234E for defaults prior to 01.06.2015. The Tribunal set aside the CIT(A)'s order and directed the deletion of the fee levied under Section 234E. The appeal filed by the assessee was allowed.