2022 (3) TMI 1291 - HC - Income Tax

Late filing fee under section 234E - Intimation u/s 200A and the implications of the amendment brought in to the Act - HELD THAT - In the decision in M/s.Sarala Memorial Hospital v. Union of India 2018 (12) TMI 1818 - KERALA HIGH COURT held that the amendment would take effect only from 1 st June, 2015 and is thus prospective in nature. The aforesaid judgment has become final and is binding upon the authorities. Thus the jurisdiction to levy late fee under section 234E arises only from 01-06.2015 and not earlier. As regards the contention on the delay, though the said contention was impressive on first blush, it can be seen that the nature of challenge raised by the petitioner is based upon the lack of jurisdiction of the respondents to impose late fee. Since in matters where total lack of jurisdiction is alleged, delay cannot be relied upon as a ground to deny the relief, this Court is of the view that the objections of the respondents are without any basis. The decisions cited are distinguishable on the facts of those cases itself. In the decision in Digambar's case 1995 (5) TMI 262 - SUPREME COURT the delay of 20 years in approaching the High Court for grant of compensation for alleged utilization of the land was held as a decisive factor to disentitle the petitioner therein. Similarly in G.C.Gupta's case 1987 (5) TMI 383 - SUPREME COURT the issue related to seniority and petitioners challenged the orders of confirmation and determination of inter se seniority only after 15 years. In the decision in Bhailal Bhai's case 1964 (1) TMI 33 - SUPREME COURT the question related to refund of tax claimed belatedly. None of those cases related to a total lack of jurisdiction or authority.

Summary

Issues:
1. Levy of late fee under section 234E of the Income Tax Act for delayed filing of TDS remittance statements.
2. Interpretation of the provisions of section 234E and section 200A of the Income Tax Act.
3. Validity of demands raised for late filing fees from 2012-13 to 2014-15.
4. Impact of delay in challenging the levy of late fee.
5. Application of precedents related to delay in legal proceedings.

Analysis:
Issue 1: The petitioner, an assessee under the Income Tax Act, faced late fee levied under section 234E for delays in filing TDS remittance statements. The petitioner argued that the late fee demands were unjustified, leading to a legal challenge.

Issue 2: The petitioner contended that the introduction of section 234E in the Act necessitated a reference to section 200A, emphasizing that the liability to pay late fees for non-filing of TDS statements arose only after a specific amendment in 2015.

Issue 3: The respondents defended the demands for late filing fees, asserting that the petitioner had failed to challenge the levy in a timely manner, rendering the demands final and acceptable. They referenced legal precedents to support their stance.

Issue 4: The court considered the impact of delay in challenging the late fee demands. It noted that the challenge was based on the lack of jurisdiction of the authorities to impose late fees, indicating that delay should not be a ground to deny relief in cases of alleged total lack of jurisdiction.

Issue 5: The court distinguished the cited legal precedents, emphasizing that they were not directly applicable to the current case involving jurisdictional issues. The court highlighted that the demands for late fees were without legal authority and therefore unsustainable.

Final Judgment: The court ruled in favor of the petitioner, quashing the intimations demanding late fees under section 234E for the period in question. The judgment clarified that the jurisdiction to levy late fees under section 234E arose only from June 1, 2015, and not earlier, thereby granting relief to the petitioner based on the interpretation of relevant statutory provisions and legal precedents.