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TMI Blog2020 (9) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... ned earlier there are conflicting decisions by different High Courts and there is no decision on this issue by the jurisdictional High Court. While Hon ble Karnataka High Court is in favour of the assessee holding that the amendments brought in statute w.e.f. 01.06.2015 are prospective in nature and hence notices issued u/s. 200 A of the Act for computation and intimation in payment of late filing fee u/s.234E of the Act relating to the period of tax deduction prior to 01.06.2015 were not maintainable, the Hon ble Gujarat High Court has decided the issue against the assessee and in favour of the revenue. After considering the above conflicting decisions, the coordinate benches of the Tribunal are taking the view that when there are conflicting decisions, the decision in favour of the assessee should be followed in the light of decision of Hon ble Supreme Court in the case of Vegetables Products Limited [ 1973 (1) TMI 1 - SUPREME COURT] No justification in confirming the late fee levied by the AO u/s. 200 A r.w.s. 234 E since the defaults are prior to 1.06.2015. Accordingly we set aside the order of the Ld. CIT(A) and the fee levied u/s. 234 E and interest there on u/s. 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that the ld.CIT(A) has also decided the issue on merit and has simply held that since the AO has levied late filing fee u/s 234E only after 01.06.2015 which was subsequently corrected on 6th February, 2019, the claim of the assessee for the exemption from levy of late filing fee is liable to be dismissed. 5. Referring to the decision of the Delhi Bench of the Tribunal in the case of Udit Jain vs. ACIT, vide ITA No.5380/Del/2017 and batch of other appeals, order dated 29.11.2019, he submitted that the Tribunal has thoroughly discussed the issue and held that when the period of default was before 01.06.2015, there is no merit in charging late filing fee u/s 234E of the Act. Referring to various other decisions of the coordinate Benches of the Tribunal, he submitted that the Tribunal has taken the view that levy of fee u/s 234E cannot be levied on such kind of default before 01.06.2015. He accordingly submitted that all these appeals filed by the assessee should be allowed and the levy of fee u/s 234E by the AO which has been sustained by the CIT(A) should be deleted. 6. The ld. DR, on the other hand, strongly supported the order of the CIT(A). She submitted that the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rarka vs CIT [1962] 44 ITR 529 (SC) 8. The ld. DR drew the attention of the Bench to the Memorandum to the Finance Bill, 2012 which elaborates the rationale / explanatory notes with respect to amendments being brought in the provisions of the L T. Act. The rationale for such amendments in TDS/TCS related provisions have been provided under the heading E. Rationalization of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) Provisions which comprise of 6 paras. Para (III) relates to insertion of section 234E in the statute relevant to the issue under consideration. 9. She further drew the attention of the Bench to the Memorandum to the Finance Bill, 2015 which elaborates the rationale for insertion of clause (c) in section 200A(I) in the statute. Para (I) para (III) under the heading L Rationalization of Measures which are relevant to the issue. 10. She also drew the attention of the Bench to the provisions of Section 271H of the Act which was simultaneously inserted with the provisions of section 234E w.e.f. 01.07.2012 by the Finance Act, 2012. She submitted that the applicability interpretation of the provisions of sec. 271H have been discussed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elaborates the rationale for insertion of clause (c) in section 200A(1) in the statute it is absolutely clear that this is merely an enabling section to compute/process the TDS Statement. Section 234 E is the charging section imposing liability of payment of fee by the defaulting deductors as per its sub-section (3) as even in the absence of section 200A of the Act with introduction of section 234E, it was always open for the revenue to charge the fees in terms of section 234 E of the Act from the date of its introduction in the statute i.e. 01.07.2012. It may be noted that section 234.E creates an automatic charge on the deductors who have defaulted on this count who are required to pay the fee u/s 234E before delivering such belated TDS/TCS returns /statements in accordance with sub-section (3) of sec. 234E. By amendment [introduction of clause 200A(l)(c)] this adjustment was brought within the fold of section 200A of the IT Act so that the fee u/s 234E can be computed at the time of processing issue of intimation in the event of non-payment of fee before delivering such belated TDS/TCS statements by the defaulting deductors. Any view that inhibits the levy of fees under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepting TDS statement/return at belated point of time. This fact has not been considered by Hon ble ITAT in its order dt.29.11.2019. f). Section 271H of the Act does not provide for any penalty for delayed filing of TDS return/statement if a person proves that he has paid the TDS amount and also filed TDS statements along with fee and interest before expiry of a period of 1 year from the prescribed time. However, the delay in filing of TDS return/statement upto a period of 1 year from the prescribed time is subject to levy of fee u/s 234E. The penalty leviable u/s 271H of the Act is not automatic whereas the fees leviable u/s 234E is mandatory and the AO has no discretion. These are two independent provisions and the findings of Hon ble High Courts in this regard may kindly be referred to. The same have not been considered by Hon ble ITAT. g) Before the insertion of Clause (c) to section 200A(1), section 200A did not provide for computation of fee payable u/s 234E of the Act at the time of processing of TDS statements though the same was mandatorily leviable for the delay in filing of TDS statements. In this sense, insertion of Clause (c) to section 200A(1), is only an addend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des for computing the fee payable u/s 234E. On this issue, specific reference may kindly be made to para 18, 19 20 of the order where specific findings of Hon ble High Court are recorded. The categorical findings of Hon ble Gujarat High Court, though considered by Hon ble ITAT in its order dt 29.11.2019, has not been appreciated by Hon ble Tribunal in right perspective when read in conjunction with the provisions, explanatory notes and orders of various other High Courts wherein the validity of provisions of sec.234E has been upheld. 15. She submitted that the issue of legality of intimations / orders passed u/s 200A levying fee u/s 234E for late filing of TDS/TCS returns / statements, prior to the amendments made by Finance Act 2015 w.e.f. 01.06.2015, was considered by Hon ble Rajasthan High Court also in the case of Dunlod Shikshan Sansthan vs. UOI reported in [2015] 63 taxmann.com 243 (Raj)]. Para-8 of the order is relevant the same is reproduced as under :- 8. In the present case, the fee was levied under section 200for late filing of the returns, prior to the amendments made by the Finance Act, 2015 with effect from 1.6.2015 in Sections 200A, 246A and 272A providing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fatehraj Singhvi and accordingly, the decision of in the case Fatehraj Singhvi which has been relied upon by Hon ble ITAT in its order dt.29.11.2019, does not hold ground for consideration. 18. On perusal of the decisions of various High courts wherein the constitutional validity of provisions of sec. 234E have been upheld, it may be seen that in several cases the period under consideration before Hon ble High Courts were even the periods prior to 01.06.2015 i.e. the date when clause (c) was inserted to section 200A(1) by the Finance Act, 2015. Having considered the periods prior to 01.06.2015 having upheld the validity of sec. 234E by Hon ble High Courts, it can t be said that the controversy, being raised now, has escaped the eyes of Hon ble High Courts and therefore there can t be any doubt that there is any iota of ambiguity with respect to the period of default for which the fee u/s 234E is chargeable. In view of the same and categorical findings of Hon ble High Courts, the fee u/s 234E is undoubtedly leviable for the defaults of period in filing TDS/TCS statements/returns, even for the period prior to 01.06.2015 independent to the provisions of Sec.200A(l) of the Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... typographical error in the Form 35 where the assessee, instead of mentioning section 154, mentioned section 200A against the section and subsection of the Income-tax Act, 1961. We, therefore, find merit in the argument of the ld. Counsel that there is no delay in filing of the above appeals. 23. Further, the Hon ble Delhi High Court in the case of Remfry and Sons (supra) has held that procedural/technical mistakes could not stand in the way of imparting justice and the authority must allow opportunity to the assessee to rectify mistakes. Since, in the instant case, there was merely a technical mistake in wrong mentioning of the provision, therefore, we are of the considered opinion that this technical mistake should not stand in the way of imparting justice and, therefore, the order of the CIT(A) holding that there is delay in filing of these appeals is not correct. Accordingly, we hold that the assessee has filed the appeals well in time and there is no delay. The order of the CIT(A) on this issue is accordingly dismissed. 24. A perusal of the order of the CIT(A) shows that all these TDS statements were filed before 01.06.2015. Therefore, the question that has to be conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer passed under section 154 of the Act rejecting rectification application moved by assessee against intimation issued levying late filing fees charged under section 234E of the Act. The case of assessee before us is that the issue is squarely covered by various orders of Tribunal, wherein the issue has been decided in respect of levy of late filing fees under section 234E of the Act, in the absence of empowerment by the Act upon Assessing Officer to levy such fees while issuing intimation under section 200A of the Act. The Tribunal vide order dated 21.09.2016 with lead order in ITA Nos.560/PN/2016 561/PN/2016, 1018/PN/2016 to 1023/PN/2016 in Maharashtra Cricket Association Vs. DCIT (CPC)-TDS, Ghaziabad, relating to assessment years 2013-14 and 2014-15 for the respective quarters deliberated upon the issue and held as under:- 34. Accordingly, we 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered and examined. Not only that, but, if the mode and the manner is not expressly prescribed, the provisions may also be vulnerable. All such aspects will be required to be considered before one considers regulatory mechanism or provision for regulating the mode and the manner of recovery and its enforceability as retroactive. If at the time when the fee was provided under Section 234E, the Parliament also provided for its utility for giving privilege under Section 271H(3) that too by expressly put bar for penalty under Section 272A by insertion of proviso to Section 272A(2), it can be said that a particular set up for imposition and the payment of fee under Section 234E was provided but, it did not provide for making of demand of such fee under Section 200A payable under Section 234E. Hence, considering the aforesaid peculiar facts and circumstances, we are unable to accept the contention of the learned counsel for respondent-Revenue that insertion of clause (c) to (f) under Section 200A(1) should 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The CIT(A) has overlooked the fact that notices under section 200A of the Act were issued for computing and charging late filing fees under section 234E of the Act for the period of tax deducted prior to 1st day of June, 2015. The same cannot be charged by issue of notices after 1st day of June, 2015 even where the returns were filed belatedly by the deductor after 1st June, 2015, where it clearly related to the period prior to 01.06.2015. 16. We hold that the issue raised in the present bunch of appeals is identical to the issue raised before the Tribunal in different bunches of appeals and since the amendment to section 200A of the Act was prospective in nature, the Assessing Officer while processing TDS returns / statements for the period prior to 01.06.2015 was not empowered to charge late filing fees under section 234E of the Act, even in cases where such TDS returns were filed belatedly after June, 2015 and even in cases where the Assessing Officer processed the said TDS returns after June, 2015. Accordingly, we 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 fili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee had filed appeals against the order passed under section 154 of the Act, hence the time period of appeals filed by assessee before the CIT(A) have to be computed from the date of order passed under section 154 of the Act and not from the date of issue of intimation. Thus, there is no merit in the order of CIT(A) in dismissing the appeals of assessee on this issue. 19. We find similar issue has been decided by us in the case of Medical Superintendent Rural Hospital Vs. ACIT(CPC)-TDS (supra) and vide para 15, order dated 21.12.2017 it was held as under:- 15. Further, before parting, we may also refer to the order of the CIT(A) in these two appeals. The CIT(A) had dismissed the appeals of the assessee being delayed for a period of two and half years. The CIT(A) had taken the date of intimation under section 200A(3) dated 07-08-2014 and computed the delay in filing the appeal late before him. However, the assessee had filed the appeal before the CIT(A) against the order passed under section 154 of the Act. The said application for rectification under section 154 was filed on 08-06-2017/09- 03-2017 in the respective years. The said application was decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been made by the person deducting any sum u/s 200, then such statement shall be processed in the manner given therein. Clause (c) of section 200A has been substituted by the Finance Act 2015 w.e.f. 1.6.2015 which reads as under:- (c) the fee, if any, shall be computed in accordance with the provisions of section 234E; 6.1. Fee for default u/s 234E provides that, when a person fails to deliver or cause to be delivered a statement within the time prescribed u/s 200(3), then that person shall be liable to pay fee in the manner provided therein. Thus, fee u/s 234E is leviable if the statement is not filed as prescribed u/s 200(3) which in turn provides that the statement to be filed after the payment of tax to the prescribed authority. The relevant rule 31A(4A) provides that for filing of the 'challan cum statement' within seven days from the date of deduction. Now here in this case the demand has been raised purely on the ground that statement has not been furnished for the tax deduction at source. As stated above, the assessee has duly deposited the tax not at the time of purchase albeit on 5.4.2014 and on the same date, statement has also been filed. The releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the present case before us, the assessee, Udit Jain had deducted tax at source u/s 195 of the Act against purchase of property. The tax was deducted at 18.05.2015 and was even paid on 18.05.2015, though the return in Form No.27A was filed on 23.06.2016. We hold that since the period under consideration is first quarter of Financial Year 2015-16 i.e. prior to the amendment to section 200A(1) of the Act wherein clause (c) was inserted w.e.f. 01.06.2015 and since the assessee had already deposited the tax deducted at source, on the same day of deduction, there was reasonable cause in the hands of the assessee in not depositing the return in Form No.27A and the said default needs to be condoned. Even otherwise, following the ratio laid down in the decisions rendered to in the paras above, the Jurisdictional issue of exercise of power by the Assessing Officer in charging late filing fee u/s 234E of the Act, suffers from infirmity as clause (c) to section 200(A)(1) of the Act has been made applicable specifically from the date from 01.06.2015. Since the period of default was before the said date i.e. 01.06.2015, there is no merit in charging late filing fee u/s 234E of the Act. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee holding that the amendments brought in statute w.e.f. 01.06.2015 are prospective in nature and hence notices issued u/s 200 A of the Act for computation and intimation in payment of late filing fee u/s 234E of the Act relating to the period of tax deduction prior to 01.06.2015 were not maintainable, the Hon ble Gujarat High Court has decided the issue against the assessee and in favour of the revenue. After considering the above conflicting decisions, the coordinate benches of the Tribunal are taking the view that when there are conflicting decisions, the decision in favour of the assessee should be followed in the light of decision of Hon ble Supreme Court in the case of Vegetables Products Limited (supra). In the light of the above discussion we hold that the CIT(A) is not justified in confirming the late fee levied by the AO u/s. 200 A r.w.s. 234 E since the defaults are prior to 1.06.2015. Accordingly we set aside the order of the Ld. CIT(A) and the fee levied u/s. 234 E and interest there on u/s. 220 (2) is directed to be deleted. 28. In the result, all the appeals filed by the assessees are allowed. The decision was pronounced in the open court on 31.08.2020. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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