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TMI Blog2020 (9) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2012, under which the liability was imposed upon the deductor in such cases where TDS statements / returns were filed belatedly to pay the fees as per said section. The amendment was brought in by the Finance Act, 2015 w.e.f. 01.06.2015 and such an amendment where empowerment is given to the Assessing Officer to levy or charge the fees cannot be said to be clarificatory in nature and hence, applicable for pending assessments. The Hon ble Supreme Court in CIT Vs. Vatika Township Pvt. Ltd. [ 2014 (9) TMI 576 - SUPREME COURT] has explained the general principle concerning retrospectivity and have held that of the various rules guiding how a legislation has to be interpreted, one established rule is that unless contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. Idea behind the rule is that current law should govern current activities . It cannot be said that insertion made by section 200A(1)(c) of the Act is retrospective in nature, where the Legislature was aware that the fees could be charged under section 234E of the Act as per Finance Act, 2012 and also the provisions of section 200A of the Act were inserted by Finance (No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the appeals on the ground that the assessee has filed the present appeals after a long delay; in one case in 1941, other appeals are with similar delay. It may be pointed out that the appeals before the CIT(A) were against the order passed under section 154 of the Act, which are all dated 09.04.2018, except for the appeals relating to Assessment Year 2015-16, which are filed in time. The appeals were filed before the CIT(A) on 12.03.2019/ 16.03.2019/18.03.2019/19.03.2019 respectively. The delay at best is for less than an year as there is no merit in counting the delay from date of issue of intimation under section 200A of the Act, which is not correct, as the appeal is filed not against the original intimation issued, but against the order passed under section 154 of the Act. We deem it fit to codone the said delay in filing the appeal before the CIT(A). It may be further pointed out that the CIT(A) has also decided the issue on merits; hence, we proceed to decide the issue on merits. 4. The issue arising in all the appeals before us is against intimation issued under section 200A of the Act and / or order passed under section 154 of the Act in charging late fees payable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al in Udit Jain vs ACIT (Supra) have recently decided the issue vide order dated 29.11.2019, but he stressed that rule of consistency could not be applied. In this regard, he placed reliance on the decision of the jurisdictional High Court in the case of Krishak Bharati Cooperative Ld. Vs DCIT [2012] 23 taxmann.com 265 (Del.). He also placed reliance on written submission relating to the provisions of section 234E of the Act and 200A of the Act and then took us through para 10.1 onwards to propose that late fee which was payable under section 234E of the Act was to be voluntarily paid by the assessee along with TDS returns. He referred to the provision of section 200A of the Act and pointed out that these were machinery provisions and even in the absence of the provision of section 200A(1)(c) of the Act, which was inserted with effect from 01.06.2015, the charging of late fee under section 234E of the Act was automatic payment to be made by the assessee in default. He also pointed out that the fee charged was not in the form of tax, penalty, etc, for which such machinery provisions were required. On the other hand, the fee so charged was compensatory in nature. The relevant paras 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng section was already effective since 01/07/2012. Similar will be the scenario if TDS return with default of being delayed is submitted after 01/06/2015 and processing is done thereafter. Since the charging section was already effective on the date of occurrence of default (i.e. the due date filing of TDS return on which TDS return was not filed), any TDS return processed after introduction of clause 200A(1) (c ) ( i.e. giving effect to computation of fees u/s 234E of the Act) should include computation of fees under section 234E. This also needs consideration by Hon'ble ITAT." 8. The Ld. DR for the Revenue placed reliance on the following decisions:- I. Rashmikant Kundalia (Bom.) (2015) 54 Taxman.com 200 (Bom). II. Dunlod Shikshan Sansthan vs UOI in [2015] 63 taxamann.com 243(Raj.) III. Rajesh Kourani vs Union of India [2017] 83 taxmann.com 137 (Guj.) IV. Qatalys Software Technologies (P.) Ltd. vs UOI [2020] 115 taxmann.com 345 (Madras) 9. He then referred to the decision of the Karnataka High Court in the case of Fateh Raj Singhvi & Ors. vs UOI [2016] 289 CTR 602(Kar.) in para 10.14 onwards and concluded para 10.15, which reads as under:- "10.15 On perusal of the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) had taken note of the issue being decided by the Pune Bench of the Tribunal in Maharashtra Cricket Association, Pune vs DCIT [2016] 74 taxmann.com 6(Pune Trib.), in the case of Medical Superintendent Rural Hospital, DOBI BK vs DCIT [2018] 100 taxmann.com 78 (Pune-Trib.) and decision of the Delhi Bench of Tribunal in Meghna Gupta vs ACIT[2018] 99 taxmann.com 334 (Delhi Trib.). Further, the Delhi Bench of the Tribunal have consistently taken similar view in the case of M/s Samikaran Learning Private Ltd. vs TDS Officer (Supra). The relevant finding of the Tribunal in the case of Udit Jain vs ACIT (Supra), wherein reference is made to the decision of the Karnataka High Court in Fateh Raj Singhvi & Ors. vs UOI (supra) and also the decision of the Hon'ble Gujarat High Court in the case of Rajesh Kourani vs UOI (Supra) is as under:- "9. We have heard the rival contentions and perused the record. The issue which needs to be adjudicated in these appeals is the charging of late filing fee u/s 234E of the Act while issuing the intimation u/s 200A of the Act. The case of the assessee before us is that where the legislature has inserted clause (c) to section 200A(1) of the Act w.e.f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, the intimation issued by the Assessing Officer under section 200A of the Act in all these appeals does not stand and the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted. The intimation issued by the Assessing Officer was beyond the scope of adjustment provided under section 200A of the Act and such adjustment could not stand in the eye of law." 12. The said proposition has been applied in the next bunch of appeals with lead order in Vidya Vardhani Education and Research Foundation in ITA Nos.1887 to 1893/PUN/2016 and others relating to assessment years 2013-14 and 2014-15 vide order dated 13.01.2017 and also in Swami Vivekanand Vidyalaya Vs. DCIT(CPC)-TDS (supra) and Medical Superintendant Rural Hospital Vs. ACIT (CPC)-TDS in ITA Nos.2072 & 2073/PUN/2017, order dated 21.12.2017, which has been relied upon by the learned Authorized Representative for the assessee. 13. The Hon'ble High Court of Karnataka in the case of Fathera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould be treated as retroactive in character and not prospective. 22. It is hardly required to be stated that, as per the well established principles of interpretation of statute, unless it is expressly provided or impliedly demonstrated, any provision of statute is to be read as having prospective effect and not retrospective effect. Under the circumstances, we find that substitution made by clause (c) to (f) of sub-section (1) of Section 200A can be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand under Section 200A for computation and intimation for the payment of fee under Section 234E could not be made in purported exercise of power under Section 200A by the respondent for the period of the respective assessment year prior to 1.6.2015. However, we make it clear that, if any deductor has already paid the fee after intimation received under Section 200A, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest." 14. The Hon'ble High Court thus held that where the impugned notices given by Revenue Department under section 200A of the Act were for the period pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold that intimation issued by Assessing Officer under section 200A of the Act in all the appeals does not stand and the demand raised by charging late filing fees under section 234E of the Act is not valid and the same is deleted. 17. Before parting, we may also refer to the order of CIT(A) in relying on the decision of Hon'ble High Court of Gujarat in Rajesh Kourani Vs. Union of India (supra). On the other hand, the learned Authorized Representative for the assessee has pointed out that the issue is settled in favour of assessee by the Hon'ble High Court of Karnataka in the case of Fatheraj Singhvi Vs. Union of India (supra). Since we have already relied on the said ratio laid down by the Hon'ble High Court of Karnataka, the CIT(A) has mis-referred to both decisions of Hon'ble High Court of Karnataka and Hon'ble High Court of Gujarat; but the CIT(A) has failed to take into consideration the settled law that where there is difference of opinion between different High Courts on an issue, then the one in favour of assessee needs to be followed as held by the Hon'ble Supreme Court in CIT Vs. M/s. Vegetable Products Ltd. (supra), in the absence of any decision rendered by the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 154 was filed on 08- 06-2017/09- 03-2017 in the respective years. The said application was decided by the Assessing Officer on 09-06-2017. The assessee filed an appeal against the dismissal of the rectification application filed under section 154 of the Act. The said fact is clear from the perusal of Form No.35 with special reference to Column 2(a) and 2(b). In the entirety of the above said facts and circumstances, we find no merit in the order of CIT(A) in the case of Medical Superintendent Rural Hospital, Surgana in dismissing the appeal inlimine being filed beyond the period of limitation. We have already decided the issue on merits in favour of assessee." 20. We have already decided the issue on merits in favour of assessee. Accordingly, the grounds of appeal raised by assessee in all appeals are allowed." 12. Reference is also made to the decision of the Delhi Bench of the Tribunal in Meghna Gupta vs ACIT (Supra), the same reads as under:- "6. "We have heard the rival submissions and also perused the relevant finding given in the impugned orders as well as material referred to before us. At the outset, from the perusal of the rectification order u/s 200A gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax not at the time of purchase albeit on 5.4.2014 and on the same date, statement has also been filed. The relevant provision of section 200(3) read with rule 31A (4A) only refers to filing of 'challan cum statement' after the tax has been paid. The word "challan" in the said rule indicates that the tax must stand paid and that is how form 26QB is generated. Thus, here in this case, it cannot be held that there is any violation of section 200(3). In any case, the levy of fee u/s 200A in accordance with the provision of section 234E has come into the statute w.e.f. 1.6.2015. Since the challan and statement has been filed much prior to this date, therefore, no such tax can be levied u/s 200A. This has been clarified and held by Hon'ble Karnataka High Court in the case of Fatheraj Singhvi & Ors vs. Union of India reported in (2016) 289 CTR 0602, wherein the lordship had made following observations :- "14. We may now deal with the contentions raised by the learned counsel for the appellants. The first contention for assailing the legality and validity of the intimation under Section 200A was that, the provision of Section 200A(1)(c), (d) and (f) have c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the date of filing, the returns could not be accurately processed of such person on whose behalf tax has been deducted i.e. deductee, until information of such deductions is furnished by the deductor within the prescribed time. Since the substantial number of deductors were not filing their TDS returns / statements within prescribed time frame, then it lead to an additional work burden upon the Department due to the fault of the deductor and in this light and to compensate for additional work burden forced upon the Department, fees was sought to be levied under section 234E of the Act. The Hon'ble High Court held that looking at this from this perspective, section 234E of the Act was not punitive in nature but a fee which was a fixed charge for the extra service which the Department had to provide due to the late filing of TDS statements. It was further held by the Hon'ble High Court that late filing of TDS returns / statements was regularized by payment of fees as set out in section 234E of the Act. Therefore, the findings of Hon'ble High Court were thus, that the fees sought to be levied under section 234E of the Act was not in the guise of tax sought to be levied on the deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n required to collect tax of certain specified receipts under section 206C of the Act. In order to provide effective deterrence against the delay in furnishing TDS / TCS statements, the Finance Act, 2012 inserted section 234E of the Act to provide for levy of fees on late furnishing of TDS / TCS statements. The Memo further took note of the fact that the Finance (No.2) Act, 2009 inserted section 200A in the Act, which provided for furnishing of TDS statements for determining the amount payable or refundable to the deductor. It further took note that however, as section 234E of the Act was inserted after the insertion of section 200A in the Act, the existing provisions of section 200A of the Act does not provide for determination of fees payable under section 234E of the Act at the time of processing of TDS statements. It was thus, proposed to amend the provisions of section 200A of the Act so as to enable the computation of fees payable under section 234E of the Act at the time of processing of TDS statements under section 200A of the Act. The Memo explaining the Finance Bill, 2015 very categorically held that currently there does not exist any provision in the Act to enable the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in default, fees would be charged on such person. The said section itself provided that fees shall not exceed the amount of tax deducted at source or collected at source. It was further provided that the person responsible for furnishing the statements shall pay the said amount while furnishing the statements under section 200(3) of the Act. However, power enabling the Assessing Officer to charge / levy the fee under section 234E of the Act while processing the TDS returns / statements filed by a person did not exist when section 234E of the Act was inserted by the Finance Act, 2012. The power to charge fees under the provisions of section 234E of the Act while processing the TDS statements, was dwelled upon by the Legislature by way of insertion of clause (c) to section 200A(1) of the Act by the Finance Act, 2015 w.e.f. 01.06.2015. Accordingly, we hold that where the Assessing Officer has processed the TDS statements filed by the deductor, which admittedly, were filed belatedly but before insertion of clause (c) to section 200A(1) of the Act w.e.f. 01.06.2015, then in such cases, the Assessing Officer is not empowered to charge fees under section 234E of the Act while processing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a legislation is presumed not to be intended to have a retrospective operation. Idea behind the rule is that current law should govern current activities". The Memo explaining the Finance Bill, 2015 very clearly also recognizes that and refers to the current provisions of sub-section (3) to section 200 of the Act, under which the deductor is to furnish TDS statements. However, as section 234E of the Act was inserted after insertion of section 200A in the Act, the existing provisions of section 200A of the Act did not provide for determination of fees payable under section 234E of the Act at the time of processing of TDS statements. In this regard, it was thus, proposed to amend the provisions of section 200A of the Act so as to enable the computation of fees payable under section 234E of the Act at the time of processing of TDS statements under section 200A of the Act. In other words, the Assessing Officer is empowered to charge fees payable under section 234E of the Act in the intimation issued after insertion of clause (c) to section 200A(1) of the Act w.e.f. 01.06.2015. The Legislature itself recognized that under the existing provisions of section 200A of the Act i.e. prior to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 234E of the Act while processing TDS returns / statements and such power is to be applied prospectively. In any case, the Parliament itself has recognized its operation to be prospective in nature while introducing clause (c) to section 200A(1) of the Act and hence, cannot be applied retrospectively.
19. We further hold that the amendment to section 200A(1) of the Act is procedural in nature and in view thereof, the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, the intimation issued by the Assessing Officer under section 200A of the Act in all these appeals does not stand and the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted. The intimation issued by the Assessing Officer was beyond the scope of adjustment provided under section 200A of the Act and such adjustment could not stand in the eye of law.
20. In the result, all appeals of different assesses are allowed.
Order pronounced in the open court on 31st August, 2020. X X X X Extracts X X X X X X X X Extracts X X X X
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