2022 (11) TMI 546 - HC - Income Tax

Late fee u/s 234E - delay in filing the statement of TDS remittance - HELD THAT - In the decision in M/s. Sarala Memorial Hospital v. Union of India and Another 2018 (12) TMI 1818 - KERALA HIGH COURT an identical question arose for consideration. After considering the statutory provisions of section 234E and section 200A of the Act and the implications of the amendment brought in to the Act, it was held that the amendment would take effect only from 1st 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. Decisions cited are distinguishable on the facts of those cases itself. Thus quash Ext.P1 to Ext.P5 intimations to the extent it demands late fee under section 234E for the period from 2012-13 till 01.06.2015. The writ petition is therefore allowed as above.

Summary

Issues:
Late fee under section 234E of the Income Tax Act, 1961 for delayed filing of TDS returns; Applicability of section 200A and its amendment; Jurisdiction to levy late fee; Effect of delay in challenging the levy; Interpretation of relevant statutory provisions.

Analysis:
The petitioner, an assessee under the Income Tax Act, deducted TDS and remitted the same to the Income Tax Department. However, a delay occurred in filing the statement of returns regarding the TDS remittance. The second respondent levied late fee under section 234E of the Act due to the delay in filing the statement. The petitioner was called upon to pay the late filing fee for the periods from 2012-13 to 2014-15 based on the provisions of section 234E, which imposes a fee for default in furnishing statements.

The petitioner argued that since section 234E was introduced in 2012, and section 200A was amended in 2015, they cannot be held liable for the late fee before the amendment to section 200A. The respondents contended that the demands for late filing fee were raised through appealable orders from 2013 to 2016, which the petitioner did not challenge, making the demands final. They argued against granting relief due to delay, citing legal precedents where delay defeated the claim.

After hearing both parties, the court considered the statutory provisions of section 234E and section 200A, along with the implications of the amendment. Referring to a previous judgment, the court held that the amendment to section 200A would be prospective from 1st June 2015, making the jurisdiction to levy late fee under section 234E effective only from that date. The court dismissed the respondents' objections based on delay, stating that delay cannot be used to deny relief when a total lack of jurisdiction is alleged.

The court distinguished the cited legal precedents, emphasizing that they did not involve a total lack of jurisdiction or authority like in the present case. Ultimately, the court found the demands for late fee in the intimations from 2012-13 to 2014-15 to be lacking in authority and legally unsustainable. Consequently, the court quashed the intimations demanding late fee for the specified period, allowing the writ petition in favor of the petitioner.