2022 (4) TMI 1313 - AT - Income Tax

Levy of late filing fee u/s. 234E - Fee for default in furnishing TDS Statement - appellant as a buyer has first deposited entire TDS u/s 194IA and thereupon filed prescribed Form 26QB-cumchallan before due date on 24-11-2014 but inadvertently committed an error therein of depositing this TDS using PAN of the seller instead of PAN of the appellant (as the buyer) - HELD THAT - Assessee had initially deposited the entire TDS in respect of purchase of immovable property on 24-11-2014 u/s 194-IA of the Act i.e. within the due date from purchase of immovable property. Due to certain technical error committed (incorrect interchanging of PAN numbers of buyer and seller in online filing of Statement 26QB) the seller could not get credit of TDS and later on the advise of Revenue authorities again the buyer (the assessee) paid the TDS again amount along-with interest for late deposit. CIT(A) did not take into consideration the peculiar facts and circumstances of the instant case where the assessee had initially deposited TDS u/s 194-IA of the Act on purchase of immovable within due date on 24-11-2014. Due to a technical error since the seller could not get credit of TDS deposited in the initial deposit on the advise of Revenue Authorities the assessee had again deposited TDS along with late filing interest Rs. 46, 977/- payable for 14 months on 16-12-2015. Ld. CIT(A) also did not appreciate that had the assessee at the time of initial deposit of TDS mentioned the correct PAN numbers i.e. had the assessee not committed the aforesaid technical error there would have been no question of levy of interest u/s 234E of the Act. The Ld. CIT(A) also did not take cognizance of the fact that in the facts of the case there was no loss caused to the Revenue. In the case of CIT v. Gujarat Oil and Allied Industries Ltd. 1992 (9) TMI 67 - GUJARAT HIGH COURT took the view that the benefit of exemption should not be denied merely on account of delay in furnishing the same and it is permissible for the assessee to produce the audit report at a later stage either before the Income-tax Officer or before the appellate authority by assigning sufficient cause. In view of various authorities cited above we are of the considered view that Ld. CIT(A) did not consider the facts and attendant circumstances of the case while upholding levy of penalty u/s 235E of the Act. Once the assessee has initially deposited TDS and furnished Statement in Form 26QB within time but committed a technical error while depositing TDS resulting in non-grant of TDS to transferor compelling it to again deposit TDS along-with interest for late deposit then in the interests of justice and considering the fact that no loss is caused to the Revenue the assessee cannot be saddled with levy of late filing fee u/s 234E of the Act taking a judicious view of the matter. In result we hold that Ld. CIT(A) has erred in law and in facts in upholding levy of penalty u/s 234E - Appeal of assessee allowed.

Summary

Issues Involved:
1. Late filing levy under Section 200A.
2. Technical error in filing TDS statement.
3. Applicability of Section 234E for late filing fee.
4. Judicial approach and consideration of attendant circumstances by Revenue Authorities.

Issue-Wise Detailed Analysis:

1. Late Filing Levy under Section 200A:
The primary issue revolves around the late filing levy of Rs. 74,600 imposed by the Centralized Processing Centre (CPC) under Section 200A for a delay of 373 days in filing the amended Form 26QB. The assessee had initially deposited the TDS amount within the due date but made an error by using the seller's PAN instead of the buyer's PAN. This error was rectified by re-depositing the TDS along with interest, leading to the late filing levy.

2. Technical Error in Filing TDS Statement:
The assessee purchased an immovable property and deducted tax under Section 194-IA, depositing the TDS before the due date. However, a technical error occurred when filing the TDS challan, where the PAN numbers of the buyer and seller were interchanged. This mistake led to the seller not receiving credit for the TDS, prompting the assessee to re-deposit the TDS amount along with interest.

3. Applicability of Section 234E for Late Filing Fee:
The CIT(A) upheld the levy of the late filing fee under Section 234E, relying on the Gujarat High Court's decision in Rajesh Kourani vs. Union of India, which stated that Section 234E is a charging provision for levying fees for defaults in filing statements. The court held that Section 200A, which provides the mechanism for processing TDS statements, does not override the charging provision of Section 234E. The assessee argued that the provisions of Section 234E were not applicable retrospectively to the TDS deposited before the enactment of the enabling section 200A(1)(c).

4. Judicial Approach and Consideration of Attendant Circumstances by Revenue Authorities:
The Tribunal noted that the CIT(A) did not consider the peculiar facts and circumstances of the case, where the assessee had initially complied with the substantive provisions of Section 194-IA by depositing the TDS within the due date. The technical error in the PAN numbers was rectified, and there was no loss to the Revenue. The Tribunal emphasized the need for a judicial approach, considering all attendant circumstances, as highlighted in various judgments of the Gujarat High Court. The Tribunal concluded that the CIT(A) erred in upholding the levy of the late filing fee under Section 234E, given the technical nature of the default and the absence of any revenue loss.

Conclusion:
The Tribunal allowed the appeal, holding that the CIT(A) erred in law and facts in upholding the levy of the penalty under Section 234E. The Tribunal emphasized the importance of a judicious approach, taking into account the specific facts and circumstances of the case, and noted that the assessee should not be penalized for a technical error that did not result in any loss to the Revenue. The appeal was allowed, and the late filing levy of Rs. 74,600 was canceled.