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TMI Blog2017 (7) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... The provisions under the Act would further require the petitioner to file periodic statements of such tax deducted at source and depositing the tax in the Government within the time prescribed. With effect from 01.07.2012, section 234E was introduced in the Act for levying fee for default in furnishing the statement of tax deducted or collected at source. As per rule 31A of the Rules, the person responsible for deduction of tax in terms of subsection (3) of section 200 would have to file quarterly statements in prescribed form. Subrule (2) of rule 31A prescribed dates by which such statements would have to be filed. 4. Section 200A of the Act pertains to processing of statements of tax deducted at source. This provision provides for processing the statement filed by person deducting the tax. Prior to 01.06.2015, this provision did not contain any reference to the adjustment of fee to be computed in accordance with the provisions of section 234E of the Act. This provision was made only with effect from 01.06.2015. 5. In the petition, the petitioner has raised following threefold grievances: I. That section 234E of the Act is ultravires and unconstitutional. II. Rule 31A of the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel also relied on a decision of Division Bench of Karnataka High Court in case of Fatheraj Singhvi v. Union of India, reported in [2016] 73 taxmann.com 252 (Karnataka), in which, the Court has taken a view that the amendment in section 200A with effect from 01.06.2015 cannot have retrospective effect. 8. On the other hand learned counsel Shri Manish Bhatt for the department opposed the petition contending that two different time limits for filing statements under rule 31A are for Government and nonGovernment agencies. Looking to the multilayered system of operation of the Government agencies and overall workload, the legislature thought it fit to grant 15 days additional time to the Government agencies to file the statements. This is therefore not a case of discrimination, but a case of reasonable classification. 9. With respect to the amendment in section 200A, counsel submitted that the charging provision is section 200E of the Act. Section 200A merely provides a mechanism. Such a provision cannot govern the charging provision. Even in absence of amendment in section 200A, the Assessing Officer was always authorized to levy fee in terms of section 200E of the Act. At best, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount of tax deductible or collectible, as the case may be. (3) The amount of fee referred to in subsection (1) shall be paid before delivering or causing to be delivered a statement in accordance with subsection (3) of section 200 or the proviso to subsection (3) of section 206C. (4) The provisions of this section shall apply to a statement referred to in subsection( 3) of section 200 or the proviso to subsection (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012." 13. With effect from 01.07.2012, the legislature also introduced section 271H of the Act providing penalty for failure to furnish statements required to be filed under subsection (3) of section 200 or under proviso to subsection (3) of section 206C of the Act. As per subsection (2) of section 271H in case of default to file the statements, the assessee may be liable to penalty of not less than rupees ten thousand but not more than rupees one lakh. Under subsection (3) of section 271H however, such penalty would be avoided if the assessee proves that he had paid the tax deducted or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement" shall mean a claim, on the basis of an entry, in the statement- (i) of an item, which is inconsistent with another entry of the same or some other item in such statement; (ii)in respect of rate of deduction of tax at source, where such rate is not in accordance with the provisions of this Act; (2) For the purposes of processing of statements under subsection (1), the Board may make a scheme for centralised processing of statements of tax deducted at source to expeditiously determine the tax payable by, or the refund due to, the deductor as required under the said subsection." With effect from 01.06.2015, subsection (1) of section 200A was amended. In the amended form, the same provision reads as under: Section 200A(1) "Processing of statements of tax deducted at source. 200A. (1) Where a statement of tax deduction at source [or a correction statement] has been made by a person deducting any sum (hereafter referred to in this section as deductor) under section 200, such statement shall be processed in the following manner, namely:- (a)the sums deductible under this Chapter shall be computed after making the following adjustments, namely:- (i)any arithmetical error ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate specified in the corresponding entry in column (3) of the said Table, if the deductor is an office of Government; and (ii) the due date specified in the corresponding entry in column (4) of the said Table, if the deductor is a person other than the person referred to in clause (i) TABLE Sl. No. Date of ending of quarter of financial year Due date Due date (1) (2) (3) (4) 1 30th June 31st July of the financial year 15th July of the financial year 2 30th September 31st October of the financial year 15th October of the financial year 3 31st December 31st January of the financial year 15th January of the financial year 4 31st March 15th May of the financial year immediately following the financial year in which the deduction is made. 15th May of the financial year immediately following the financial year in which the deduction is made. This rule thus, while laying down the last date by which such statements should be filed, draws two categories; in case of deductor is an office of government and in case of a deductor is a person other than the office of the government. Consistently, the office of the government is granted 15 days extra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llectible as the case may be. Section 271H was also introduced for the first time for levying penalty for failure to furnish the statements. Such penalty would be in the range of Rs. 10,000/and Rs. 1 lakh. No penalty would be imposed if the tax is deposited with fee and interest and the statement is filed within one year of the due date. With addition to these two provisions prescribing fee and penalty respectively, clause (k) of subsection (2) of section 272A became redundant and by adding a proviso to the said section, this effect was therefore limited upto 01.07.2012. 17. In essence, section 234E thus prescribed for the first time charging of a fee for every day of default in filing of statement under subsection (3) of section 200 or any proviso to subsection (3) of section 206C. This provision was apparently added for making the compliance of deduction and collection of tax at source, depositing it with Government revenue and filing of the statements more stringent. 18. In this context, we may notice that section 200A which pertains to processing of statements of tax deducted at source provides for the procedure once a statement of deduction of tax at source is filed by the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the machinery provision. If at all, the recasted clause (c) of subsection (1) of section 200A would be in nature of clarificatory amendment. Even in absence of such provision, as noted, it was always open for the Revenue to charge the fee in terms of section 234E of the Act. By amendment, this adjustment was brought within the fold of section 200A of the Act. This would have one direct effect. An order passed under section 200A of the Act is rectifiable under section 154 of the Act and is also appealable under section 246A. In absence of the power of authority to make such adjustment under section 200A of the Act, any calculation of the fee would not partake the character of the intimation under said provision and it could be argued that such an order would not be open to any rectification or appeal. Upon introduction of the recasted clause (c), this situation also would be obviated. Even prior to 01.06.2015, it was always open for the Revenue to calculate fee in terms of section 234E of the Act. The Karnataka High Court in case of Fatheraj Singhvi (supra) held that section 200A was not merely a regulatory provision, but was conferring substantive power on the authority. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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