2023 (8) TMI 922 - AT - Income Tax

Rectification u/s 154 - validity of order u/s 200A - Assessee requested the ITO to rectify the levy of fee charged u/s234E - scope of debatable question - HELD THAT - Rectification application is for correcting the mistakes apparent from records. One cannot take recourse under section 154 in the case of issues which are debatable issues. Hon ble Gujarat High Court in the case of Rajesh Kourani 2017 (7) TMI 458 - GUJARAT HIGH COURT has stated that they do not concur with the view expressed in the case of Fatehraj Singhvi vs. Union of India 2016 (9) TMI 964 - KARNATAKA HIGH COURT held that section 234E cannot be levied for the period prior to 1.06.2015. Thus, the two Hon ble High Courts have expressed the different views regarding the question whether late fee under section 234E can be levied for the period prior to 1.6.2015 - this question is a debatable question. The order passed u/s 200A cannot be rectified on the issue which is a debatable issue. Provisions of section 154 cannot be invoked for debatable issue. In this case, levy of late fee under section 234E is a debatable issue as discussed in earlier para. It is not a clear cut mistake apparent from record. Therefore, the order under section 200A cannot be rectified under section 154 of the Act.

Summary

Issues involved:
The appeal filed by the assessee against the order of ld. Commissioner of Income Tax (Appeals) under section 250 of Income Tax Act, 1961 for A.Y. 2013-14 regarding the levy of fee charged under section 234E of the Act.

Issue 1: Application under section 154 against order under section 200A
The assessee filed an application under section 154 of the Act against the order under section 200A, requesting rectification of the levy of fee under section 234E. The ITO rejected the application, citing it as a debatable issue not covered under section 154, based on a decision of the Jurisdictional Rajasthan High Court. The ld. CIT(A) upheld the order under section 154, leading the assessee to appeal before the Tribunal. The Tribunal noted the belated filing of TDS statements and the application of late fee, with the assessee relying on case laws to argue against the levy of late fee prior to 1.6.2015.

Issue 2: Grounds of appeal
Under Ground No. 1, the assessee contended that proper opportunity was not given by the ld. CIT(A). However, the Tribunal found that the ld. CIT(A) had issued multiple notices to the assessee, who failed to respond, indicating sufficient opportunity. Ground No. 1 was dismissed. In Ground No. 2, the debate centered around whether the late fee under section 234E could be levied for the period before 1.6.2015. The Hon'ble Gujarat High Court dismissed the appeal of the assessee, disagreeing with the Hon'ble Karnataka High Court on this issue. The Tribunal concluded that the question was debatable, following the precedent that debatable issues cannot be rectified under section 154. Ground No. 3, a general ground, was dismissed, leading to the dismissal of the assessee's appeal.

Separate Judgment:
None mentioned.