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2022 (9) TMI 1019 - AT - Income TaxRectification of mistake u/s 154 - late fee levied u/s. 234E - delay in filing the above TDS statement - intimation u/s 200A - assessee filed application u/s.154 before the AO pointing out that the provisions of section 234E of the Act was inserted by the Finance Act, 2012 w.e.f. 1.7.2012 - HELD THAT - We are satisfied that the mention of 200A in sub column of column 4.1 of Form 35 cannot be basis to hold that the appeal filed by the assessee is an appeal against the original intimation under section 200A of the Act and not against the order under section 154 - In the given facts and circumstances of the case, we are of the view that there is no delay in filing appeal by the assessee before CIT(A) and the view taken by the CIT(A) is purely technical and on a wrong reading of Form No.35 filed by the assessee before the CIT(A). CIT(A) having held that the appeal filed by the assessee is an appeal against the original intimation under section 200A dated 06.07.2018 has also observed that the issue sought to be raised by the assessee in the application under section 154 is a highly debatable issue. By doing so, in our view, CIT(A) has also construed the appeal of the assessee as one against the order u/s 154 - This inference is supported from the observations made by the CIT(A) on the debatable nature of the issue raised by the assessee in the application u/s.154 of the Act. It is not in dispute that if the ratio laid down by the Hon ble Karnataka High Court in the case of Fateeraj Singhvi 2016 (9) TMI 964 - KARNATAKA HIGH COURT if applied then the levy of interest u/s.234-E of the Act would be illegal for returns of TDS in respect of the period prior to 1.6.2015. The present appeals of the assessee relate to TDS returns filed prior to 1.6.2015. The decision of Fateeraj Singhvi (supra)was rendered on 26.8.2016. As rightly contended by assessee, there is no ambiguity in the non applicability of the provisions of section 200A of the Act for the period prior to 01.06.2015 as interpreted in the case of Fateeraj Singhvi (supra). Therefore the issue before the AO in the application under section 154 of the Act cannot be said to be a debatable issue on which two views are possible. It cannot also be said that the mistake is not obvious and patent. The law is well settled that the decision of the Jurisdictional High Court is binding on the authorities functioning under its jurisdiction. AO as well as the CIT(A) ought to have allowed the application of the assessee under section 154 of the Act by following law laid down in the case of Fateeraj Singhvi (supra). We, therefore, allow these appeals filed by the assessee and hold that the levy of interest under section 234E of the Act as detailed below cannot be sustained - Decided in favour of assessee.
Issues Involved:
1. Levy of late fee under Section 234E of the Income-Tax Act, 1961. 2. Validity of the application under Section 154 of the Act. 3. Delay in filing appeals before the CIT(A). 4. Applicability of the Karnataka High Court decision in Fatehraj Singhvi v. UOI. Detailed Analysis: Issue 1: Levy of Late Fee under Section 234E of the Income-Tax Act, 1961 The assessee filed TDS statements for various quarters for FY 2012-13 to 2014-15. There was a delay in filing these statements, leading the Centralized Processing Centre (CPC) to levy a late fee under Section 234E of the Income-Tax Act, 1961. Section 234E imposes a fee of Rs. 200 per day for delays in filing TDS statements. The assessee contended that the fee could not be levied for periods prior to the amendment of Section 200A by the Finance Act, 2015, effective from 1.6.2015, which allowed the computation of such fees during the processing of TDS returns. Issue 2: Validity of the Application under Section 154 of the Act The assessee filed an application under Section 154 of the Act before the Assessing Officer (AO), arguing that the late fee under Section 234E could not be levied for periods prior to 1.6.2015. The assessee relied on the Karnataka High Court's decision in Fatehraj Singhvi v. UOI, which held that the amendment to Section 200A allowing the levy of fees under Section 234E was prospective and not applicable to periods before 1.6.2015. The CPC rejected the application, maintaining the levy of the fee. Issue 3: Delay in Filing Appeals before the CIT(A) The CIT(A) dismissed the appeals on the grounds of delay. The CIT(A) noted discrepancies in the Form No. 35 filed by the assessee, particularly in the section and sub-section of the Income-Tax Act under which the order appealed against was passed. The CIT(A) interpreted the appeal as being against the original intimation under Section 200A, dated 06.07.2014, rather than the order under Section 154, dated 26.09.2019. Consequently, the CIT(A) found the appeal to be delayed by more than five years without a sufficient cause for condonation. Issue 4: Applicability of the Karnataka High Court Decision in Fatehraj Singhvi v. UOI The Tribunal observed that the Karnataka High Court's decision in Fatehraj Singhvi v. UOI clearly laid down that the provisions of Section 200A for levying fees under Section 234E were not applicable for periods prior to 1.6.2015. The Tribunal noted that this decision was binding on authorities within the jurisdiction. The Tribunal found that the issue raised by the assessee in the application under Section 154 was not debatable and was an apparent mistake on record, as the law was clear and settled by the jurisdictional High Court. Tribunal's Decision: The Tribunal held that the CIT(A)'s interpretation of the appeal being against the original intimation under Section 200A was incorrect. The Tribunal found that the appeal was indeed against the order under Section 154. It further held that there was no delay in filing the appeal before the CIT(A) and that the CIT(A)'s view was a technical misreading of Form No. 35. The Tribunal concluded that the levy of fees under Section 234E for periods prior to 1.6.2015 was illegal, following the Karnataka High Court's ruling in Fatehraj Singhvi v. UOI. Consequently, the Tribunal allowed the appeals and directed the deletion of the fees levied under Section 234E. Conclusion: The Tribunal allowed all the appeals filed by the assessee, holding that the levy of fees under Section 234E for periods prior to 1.6.2015 was unsustainable. The Tribunal directed the deletion of such fees and found no delay in the filing of appeals before the CIT(A). The decision was pronounced on 19-07-2022.
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