2021 (12) TMI 757 - AT - Income Tax

Levy of fees u/s. 234E for delay in filing quarterly statements of deduction of taxes u/s. 200(3) - assessee has filed quarterly statement of tax deducted at source in form no. 26Q for all the above three years - HELD THAT - As brought to the notice of both the sides that jurisdictional High Court of Gujarat in the case of Rajesh Kourani vs. Union of India 2017 (7) TMI 458 - GUJARAT HIGH COURT held that section 234E of the act is a charging provision creating a charge for levy of fess for certain default in filing statements and also held that the fees prescribed u/s. 234E could be levied even without a regulatory provision being found in section 200A for computation of fees. We have noticed that rule 31A of IT rule laid down the time limit for filing quarterly statement for deduction of tax u/s. 200(3) of the act. Section 234E prescribes the charging of fees for every day default in filing of statement u/s.200(3) of the act or any proviso to subsection (3) of section 206 of the act. Section 200A pertained to processing of statement of tax deducted at source and prior to 01-06-2015 this provision did not include any reference of the fees payable u/s. 234E of the act. W.e.f. 1st June, 2015, this provision specifically provides for computing fees payable u/s. 234E of the act. As in the case RAJESH KOURANI 2017 (7) TMI 458 - GUJARAT HIGH COURT has held that when section 234E has already created a charge for levying fees, it would thereafter not have been necessary to have yet another provision creating the same charge. Even in absence of section 200A with introduction of section 234E, it was always open for the revenue to demand and collect the fees for late filing of the statement. As also held that section 234E is a charging provision and it was always open for the revenue to charge fees in terms of section 234E of the act even prior to 1st June, 2015. After considering the above facts and judicial findings, we are not inclined with the contention of the ld. counsel that CPC was not authorized to levy fee u/s. 234E of the act.

Summary

Issues:
Appeal against levy of late fees under section 234E of the Income Tax Act for delayed filing of quarterly tax deduction statements.

Analysis:
The case involved nine appeals by the assessee for assessment years 2013-14 to 2015-16 challenging the late fees levied under section 234E of the Income Tax Act. The appeals were related to the delay in filing quarterly statements of deduction of taxes under section 200(3) of the Act. The lead case, ITA 324/Ahd/2018, set the precedent for the remaining appeals.

The assessee had filed quarterly tax deduction statements for the relevant years, which were processed by the Income Tax Centralized Processing Cell TDS, resulting in a late filing fee of ?5,29,994 being charged under section 234E of the Act. The assessee appealed to the CIT(A) contending that there was no provision prior to June 2015 for raising a demand for late fees under section 234E. However, the CIT(A) upheld the late fee charges.

During the appellate proceedings, the assessee cited judicial pronouncements and argued that the demand raised under section 234E was not authorized as section 200A did not include provisions for computing fees prior to June 2015. The departmental representative supported the lower authorities' orders.

The Tribunal considered the arguments and referred to a judgment of the jurisdictional High Court of Gujarat in a similar case. The High Court held that section 234E was a charging provision creating a fee for late filing of statements, and it was not necessary to have another provision like section 200A for the same purpose. The High Court clarified that section 200A was a machinery provision for processing statements and did not create a charge. Therefore, the Tribunal dismissed the appeals related to late fees but restored five appeals where orders under section 200A(1) were not passed within one year for fresh consideration.

In conclusion, the Tribunal dismissed four appeals challenging late fees under section 234E, following the High Court's decision. However, it allowed five appeals for reconsideration regarding the timeliness of orders under section 200A(1).