2017 (11) TMI 69 - AT - Income Tax

Inordinate delay in filing the appeal - Fee for late filing the statement U/s 234E - intimation U/s 200A - not admitting the appeals filed by the assessee due to delay - sufficient cause for not presenting then appeals within the prescribed time U/s 249(2) - Held that - Section 246A of the Act provides regarding the appealable order before the CIT(A). The outcome of processing under sub-Section (1) of Section 200A are appealable w.e.f. 01/6/2015 only. Prior to that the levy of fees U/s 234E was not an appealable order. Thus, the fees for failure to furnish the statement as per Section 200 of the Act is levied U/s 234E of the Act and the period from 01/7/2012 to 01/6/2015 is not appealable. Thus, the fees levied for default in quarter 4 of financial year 2013-14 and 2014-15 and the demand was raised on 19/06/2014, 23/06/2014 and 12/02/2015 are not appealable. However, the revenue had not produced any evidence to establish this fact. As per the assessee s claim the demand notice had not received on e.mail as mentioned by the revenue. The relevant date of service of notice of demand is 02/2/2016, therefore, this issue raised in all these appeals is restored back to the file of the ld. CIT(A) to be decided on merit and also the issue in ITA No. 664/JP/2017 where notice of demand was served on 02/09/2015 is restored back to the file of the ld. CIT(A) to be decided on merit. - Decided in favour of assessee.

Summary

Issues Involved:
1. Non-admission of appeals due to alleged non-receipt of notice of demand.
2. Applicability and constitutionality of Section 234E of the Income Tax Act, 1961.
3. Appealability of fees levied under Section 234E prior to 01/06/2015.

Issue-wise Detailed Analysis:

1. Non-admission of appeals due to alleged non-receipt of notice of demand:
The assessee's appeals were dismissed by the CIT(A) on the grounds that they were not filed within the 30-day period specified under Section 249(2) of the Income Tax Act, 1961. The notices of demand were allegedly sent on various dates in 2014 and 2015 via email. The assessee claimed non-receipt of these notices, but the CIT(A) dismissed this claim due to a lack of documentary evidence. The Tribunal, however, found that the CIT(A) was not justified in dismissing the appeals without considering whether the assessee had a sufficient cause for the delay. The Tribunal cited the Supreme Court's judgment in Collector Land & Acquisition vs. Mst Katiji & Others, emphasizing a liberal approach towards condonation of delay to ensure substantial justice.

2. Applicability and constitutionality of Section 234E of the Income Tax Act, 1961:
Section 234E imposes a fee for default in furnishing TDS statements within the prescribed time. The Tribunal referenced the Bombay High Court's decision in Rashmikant Kundalia Vs. Union of India, which upheld the constitutional validity of Section 234E. The High Court reasoned that the fee is not punitive but compensatory, addressing the additional burden on the Department due to delayed TDS statements. The fee ensures timely processing of returns, which is crucial for efficient tax administration and timely refunds to taxpayers.

3. Appealability of fees levied under Section 234E prior to 01/06/2015:
The Tribunal noted that the fee for late filing under Section 234E was made appealable by the Finance Act 2015, effective from 01/06/2015. Thus, fees levied for defaults between 01/07/2012 and 01/06/2015 were not appealable. The Tribunal highlighted that the revenue did not provide evidence to establish the service of demand notices via email. The assessee claimed the relevant date of service was 02/02/2016. Consequently, the Tribunal restored the issue back to the CIT(A) for a decision on merit, including the specific case where the notice was allegedly served on 02/09/2015.

Conclusion:
The Tribunal allowed all the appeals of the assessee, restoring the issues back to the CIT(A) for a merit-based decision. The judgment emphasized the importance of substantial justice over technicalities and validated the legislative intent behind Section 234E, ensuring timely compliance and efficient tax administration. The order was pronounced in the open court on 18/09/2017.