2021 (7) TMI 562 - AT - Income Tax

Late filing fees u/s 234E - intimation u/s 200A - - TDS return for the 1st quarter for the financial year 2014-15 was filed on 25. 08.2015, which was due on 15. 07.2014 - TDS returns were filed after June, 2015, even intimation was issued after June, 2015 - diversified view - HELD THAT - In the case of Gangamai College vs. ACIT, 2018 (11) TMI 697 - ITAT PUNE has held that the AO had no jurisdiction to issue notices u/s 200A of the Act for computing and charging late filing fees u/s 234E of the Act for the period of tax deducted prior to first day of June, 2015, by following the judgment in the case of Fatheraj Singhvi vs. Union of India 2016 (9) TMI 964 - KARNATAKA HIGH COURT wherein in has been held that even in the cases of belated returns where it is clearly related to the period prior to 01. 06. 2015. Hon ble Supreme Court in the case of CIT vs. Vegetable Product Ltd. 1973 (1) TMI 1 - SUPREME COURT wherein the Hon ble Court has held that in case of difference of opinion on an issue, the opinion which is in favour of assessee needs to be followed. Since, the issue involved in the present case is identical to the issue involved in the case of Gangamai College vs. ACIT (supra) and the Tribunal has decided the same in favour of the appellant/ assessee, we find merit in the contention of the Ld. counsel that the impugned order is contrary to decision of the Pune Bench of the Tribunal discussed above. Hence, respectfully following the decision of the Pune Bench of the Tribunal discussed above, we allow the appeal of the assessee and set aside impugned order passed by the Ld. CIT(A). Accordingly, we direct the AO to delete late fee imposed in this case. Appeal of the assessee is allowed.

Summary

Issues Involved:

1. Retrospective application of the amendment to Section 200A(1)(c) of the Income Tax Act.
2. Legality of imposing a late fee under Section 234E for periods before the amendment.
3. Consideration of judicial precedents in similar cases.
4. Bona fide mistake and intent behind the delay in filing TDS returns.

Issue-wise Detailed Analysis:

1. Retrospective Application of Amendment to Section 200A(1)(c):

The primary issue was whether the amendment to Section 200A(1)(c) of the Income Tax Act, which came into force on 01.06.2015, could be applied retrospectively to impose a late fee for TDS returns filed for periods before the amendment. The appellant argued that the law applicable prior to the amendment should have been applied. The Tribunal agreed, referencing multiple cases where it was held that the amended provisions could not be applied retrospectively. Specifically, the Tribunal cited decisions from the Pune, Mumbai, and Delhi Benches, which uniformly held that the authorities wrongly applied the amended provisions of Section 200A retrospectively.

2. Legality of Imposing Late Fee Under Section 234E for Periods Before the Amendment:

The Tribunal examined whether the Assistant Commissioner had the jurisdiction to impose a late fee under Section 234E for periods before the amendment to Section 200A. It was noted that the Pune Bench of the Tribunal, in the case of Gangamai College vs. ACIT, had held that the AO had no jurisdiction to issue notices under Section 200A for computing and charging late filing fees for periods prior to 01.06.2015. This position was supported by the Hon'ble High Court of Karnataka in the case of Fatheraj Singhvi vs. Union of India, which held that the amendment to Section 200A was prospective and not retroactive.

3. Consideration of Judicial Precedents in Similar Cases:

The appellant's counsel referred to several judicial precedents where similar issues were decided in favor of the assessee. These included decisions from the Amritsar Bench in the case of Sibia Health Care Pvt. Ltd., the Mumbai Bench in the case of Board of Control for Cricket in India vs. ACIT, and the Pune Bench in the case of Gangamai College vs. ACIT. The Tribunal acknowledged these precedents and noted that the findings of the CIT(A) were contrary to these decisions. The Tribunal emphasized the importance of following judicial precedents, especially when there is a difference of opinion, as guided by the Hon'ble Supreme Court in the case of CIT vs. Vegetable Product Ltd.

4. Bona Fide Mistake and Intent Behind the Delay in Filing TDS Returns:

The appellant argued that the delay in filing the TDS return was due to an inadvertent bona fide mistake caused by frequent changes in the officers managing the accounts. The Tribunal did not delve deeply into this issue, as the primary legal contention regarding the retrospective application of the amendment was sufficient to decide the case in favor of the appellant. However, the Tribunal's decision implicitly acknowledged the appellant's lack of intent to delay the filing maliciously.

Conclusion:

The Tribunal concluded that the CIT(A) had wrongly confirmed the order passed by the Assistant Commissioner by retrospectively applying the amended provisions of Section 200A. It held that the AO was not empowered to charge late filing fees under Section 234E for periods prior to 01.06.2015. The Tribunal set aside the impugned order passed by the CIT(A) and directed the AO to delete the late fee imposed. The appeal of the assessee was allowed, and the order was pronounced on 5th July 2021.