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2023 (2) TMI 78 - AT - Income TaxLate fee u/s. 234E - intimation u/s. 200A - delay in filing the above TDS statement - Financial Years 2012-13 to 2014-15 - HELD THAT - Hon ble Supreme Court in the case of CCI Vs. M/S.Dilip Kumar Co 2018 (7) TMI 1826 - SUPREME COURT brought out distinction between interpretation of a charging section of a taxing statute and of an exemption notification / clause. The Court held that any ambiguity in a taxing statute should enure to the benefit of the subject / assessee. On the contrary any ambiguity in the exemption clause must be conferred in favour of revenue and such exemption should be allowed to be availed only to those subjects / assesses who demonstrate that a case for exemption squarely falls within the parameters enumerated in the notification and they satisfy all the conditions precedent for availing exemption. Levy of late fee u/s.234-E of the Act cannot be said to be an exemption clause but can be construed only as a charging section in the sense that imposes a burden on an Assessee. In that view of the matter we are of the view that the reliance placed by the NFAC on the decision of Hon ble Supreme Court in the case of M/S.Dilip Kumar Co. (supra) to sustain the levy of interest u/s.234-E of the Act cannot be sustained. We are of the view that the levy of interest u/s.234E of the Act in the present case cannot be sustained and the same is directed to be deleted and the appeals of the Assessee are allowed.
Issues Involved:
1. Validity of levy of late fee under Section 234E of the Income-Tax Act, 1961 for delayed filing of TDS returns prior to 1.6.2015. 2. Applicability of the Karnataka High Court decision in Fatehraj Singhvi v. UOI. 3. Conflicting judgments from different High Courts on the levy of late fee under Section 234E. 4. Interpretation of the Supreme Court decision in CCI Mumbai Vs. M/S. Dilip Kumar and Co. & others. Detailed Analysis: 1. Validity of Levy of Late Fee under Section 234E for Delayed Filing of TDS Returns Prior to 1.6.2015: The core issue revolves around whether the late fee under Section 234E can be levied for TDS returns filed before 1.6.2015. The appellant bank's various branches filed TDS statements for AY 2013-14 to 2015-16, which were delayed, leading to the levy of late fees by the Assessing Officer (AO) under Section 234E. The appellant contended that the provisions of Section 200A, which allow for the computation and levy of such fees, were amended to include clauses (c) to (f) only from 1.6.2015. 2. Applicability of the Karnataka High Court Decision in Fatehraj Singhvi v. UOI: The appellant relied on the Karnataka High Court's decision in Fatehraj Singhvi v. UOI, which held that the amendment to Section 200A allowing for the levy of fees under Section 234E had only prospective effect from 1.6.2015. Therefore, the levy of fees for periods prior to this date was deemed invalid. The NFAC/CIT(A) acknowledged this decision but also considered conflicting judgments from other High Courts. 3. Conflicting Judgments from Different High Courts: The NFAC/CIT(A) noted conflicting views from the Gujarat High Court in Rajesh Kourani Vs. UOI and the Rajasthan High Court in M/S. Dundlod Shikshan Sansthan & another Vs. Union of India. These courts held that the levy of fees under Section 234E was valid even before the amendment to Section 200A, as the section merely regulated the computation of such fees. The NFAC/CIT(A) upheld the levy of fees based on the date of filing the TDS return, considering the Supreme Court's decision in CCI Mumbai Vs. M/S. Dilip Kumar and Co. 4. Interpretation of the Supreme Court Decision in CCI Mumbai Vs. M/S. Dilip Kumar and Co. & others: The Supreme Court's decision in CCI Mumbai Vs. M/S. Dilip Kumar and Co. emphasized strict interpretation of exemption notifications, stating that ambiguities should favor the revenue. However, the Tribunal clarified that Section 234E is a charging provision, not an exemption clause. Therefore, ambiguities in charging provisions should benefit the assessee, aligning with the Karnataka High Court's decision in Fatehraj Singhvi. Conclusion: The Tribunal concluded that the levy of late fees under Section 234E for TDS returns filed before 1.6.2015 was invalid, following the Karnataka High Court's decision. The Tribunal emphasized that conflicting views from non-jurisdictional High Courts should not override the jurisdictional High Court's decision. Consequently, the appeals were allowed, and the levied fees were directed to be deleted. Result: The appeals were allowed, and the levy of late fees under Section 234E for the periods prior to 1.6.2015 was deleted.
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