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TMI Blog2020 (9) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of any decision of the Jurisdictional High Court. So far as the levy of fee u/s. 234E for defaults of period in filing TDS/TCS statements / returns even for the period prior to 1.06.2015 is concerned, as mentioned 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] CIT(A) is not justified in confirming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es- judicata is not applicable in income-tax proceedings. 4. As regards 'Rule of consistency' is concerned, she placed reliance on the decision of jurisdictional High Court in the case of Krishak Bharati Cooperative Ltd vs DC1T [2012] 23 taxmann.com 265 (Delhi) wherein Hon'ble Delhi HC considered the decision of Hon'ble Supreme Court in the case of Radhasoami Satsang vs CIT (1992] 60 taxman 248(SC) and has held that the rule of consistency should not create anomaly. She also relied on the following decisions:- (i) Rohitasava Chand [2008] 306 ITR 242 (Delhi) (ii) Anup Sharma vs Addl CIT, ITA No.l61/CHD/2012, order clt.26.08.2014 of ITAT, Chandigarh (iii) Meeraj Estate & Developers vs DCIT [2014] 44 taxraann.com 431 (ITAT, Agra) (iv) K K Khullar vs DCIT [2009] 116 ITD 301(Delhi) (v) Dwarkadas Kesardeo Morarka vs CIT [1962] 44 ITR 529 (SC) 5. 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 I T. Act. The rationale for such amendments in TDS/TCS related provisions have been provided under the heading "E. Rationalization o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dr. Amrit Lai Mangal vs. UOI [2015] 62 taxmami.com 310 ( P& H) 9. The ld. DR submitted that a harmonious and conjoint reading of provisions of section 234E & Memorandum to Finance Bill, 2012, Section 271H, section 200 A(l)(c), Memorandum to Finance BiH'2015 and the case-laws on this issue makes following points unambiguously clear that: a) The fee payable u/s 234E is a charging provision and the AO has no discretion at all whereas section 200A is a machinery provision enabling for processing of TDS statements, computation of adjustments, fees and generation of intimation etc. Hon'ble ITAT has not appreciated this obvious difference in its order dt. 29.11.2019, referred supra. b) As apparent from the heading of the section 200A as well as the Memorandum to the Finance Bill, 2015 which 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 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of section 200A. Hon'ble ITAT has not appreciated this obvious difference in its order dt. 29.11.2019, referred supra. e). The fee payable u/s 243E is compensatory in nature to the department for the services provided for regularization of the delay in filing of a TDS return/statement & is not penal in nature since the Income Tax Department has to expend extra effort & resources for processing delayed TDS returns or statements and also the additional burden of interest to be paid on refunds payable to the assessee on whose account tax deduction has been made. [ As held in para 27 by Hon'ble Delhi High Court in the case of Biswajit Das vs. UOI, [2019] 103 taxmann.com 290 (Delhi)] that the fee imposed u/s 234E of the Act is for all intents & purposes a 'late fee' payable for accepting 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 ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 200A(1) by the Finance Act, 2015. Hon'ble High Court also considered the decision of Hon'ble Karnataka High Court in the case of Fatehraj Singhvi & Others. The issue has been discussed in great detail in para 16 to 21 and Hon'ble High Court has upheld the levy of fee u/s 234E since the day the provisions of section 234E was brought to statute and even prior to 01.06.2015 when section 200A(1) was amended to include clause (c). Hon'ble High Court has held that section 200A of the Act is a machinery provision providing mechanism for processing a statement of IDS and for making adjustments whereas section 234E is a charging provision creating a charge for levying fee for certain defaults in filing the statements. W.e.f 01.06.2015 the provision of section 200A specifically provides 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 prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) of sec. 234E. Second, Hon'ble Karnataka High Court left the question of constitutional validity of sec.234E open for consideration by the Division Bench [Para-26 of the order] which was earlier decided by Single Member Bench of the High Court upholding the validity of sec. 234E in the case of Lakshminirman Bangalore Pvt. Ltd. vs. DCIT [cited supra]. It is reiterated at the cost of repetition that the issue of constitutional validity of sec. 234E has been upheld by various High Courts including the jurisdictional High Court of Delhi and Punjab & Haryana High Court. Relevant case-laws have been mentioned above. The decision of Hon'ble Delhi High Court Biswajit Das vs. UOI, [cited supra] is subsequent to the date of order of Hon'ble Karnataka High Court in the case 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. 15. 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Fatehraj Singhvi vs. UOI as well as the decision of the Hon'ble Gujarat High Court in the case of Rajesh Kourani vs. UOI reported in (2017) 83 taxmann.com 137, has decided the issue in favour of the assessee by observing 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 01.06.2015, then in respect of the TDS statements which were filed under the respective sections of the Act, for the period prior to 01.06.2015, no late filing fee could be charged u/s 234E of the Act, in the intimation issued u/s 200A of the Act. We find that the said issue has been adjudicated by the Hon'ble Karnataka High Court in Fatehraj Singhvi & Others vs Union of India (supra), which proposition has been applied by the Pune Bench of the Tribunal in Medical Superintendent Rural Hospital, DOBI BK vs DCIT (supra). The Tribunal had also taken note of the decision of Hon'ble Gujarat High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Fatheraj Singhvi Vs. Union of India (supra) had also laid down similar proposition that the amendment to section 200A of the Act w.e.f. 01.06.2015 has prospective effect and is not applicable for the period of respective assessment years prior to 01.06.2015. The relevant findings of the Hon'ble High Court are in paras 21 and 22, which read as under:- "21. However, if Section 234E providing for fee was brought on the state book, keeping in view the aforesaid purpose and the intention then, the other mechanism provided for computation of fee and failure for payment of fee under Section 200A which has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntimation 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 prior to 01.06.2015, then same were illegal and invalid. Vide para 27, it was further held that the impugned notices under section 200A of the Act were for computation and intimation for payment of fees under section 234E of the Act as they relate for the period of tax deducted at source prior to 01.06.2015 were being set aside. 15. In other words, the Hon'ble High Court of Karnataka explained the position of charging of late filing fees under section 234E of the Act and the mechanism provided for computation of fees and failure for payment of fees under section 200A of the Act which was brought on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 jurisdictional High Court. The Hon'ble Bombay High Court in Rashmikant Kundalia Vs. Union of India (2015) 54 taxmann.com 200 (Bom) had decided the constitutional validity of provisions of section 234E of the Act and had held them to be ultra vires but had not decided the second issue of amendment brought to section 200A of the Act w.e.f. 01.06.2015. In view thereof, respectfully following the ratio laid down by the Hon'ble High Court of Karnataka and Pune Bench of Tribunal in series of cases, we delete the late filing fees charged under section 234E of the Act for the TDS returns for the period pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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." 10. The Delhi Bench of Tribunal in Meghna Gupta vs ACIT (supra) has also laid down similar proposition and held 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 generated by TDS (CPC), it is noticed that the TDS in 26QB mentions date of filing of 'challan cum statement' as 5.4.2014, wherein late filing of 'challan cum statement' u/s 234E has been levied. The assessee had purchased the property on 6.12.2013 i.e., relevant to the assessment year 2014-15. Since assessee had purchased the property from eight sellers and the payment to each of the seller has been made separately for an amount of ₹ 41,87,500/- aggregating to ₹ 3,35,00,000/-, the assessee' contention has been that it was not required to deduct TDS, because the payments made to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 come into force only with effect from 1.6.2015 and hence, there was no authority or competence or jurisdiction on the part of the concerned Officer or the Department to compute and determine the fee under Section 234E in respect of the assessment year of the earlier period and the return filed for the said respective assessment years namely all assessment years and the returns prior to 1.6.2015. It was submitted that, when no express authority was conferred by the statute under Section 200A prior to 1.6.2015 for computation of any fee under Section 234E nor the determination thereof, the demand or the intimation fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. vs. DCIT, ITA No.2305 & 2306/Del/2017, order dated 04.03.2020; iii) M/s D.D. Motors, Haryana vs. DCIT, ITA NO.956/Del/2017, order dated 18.10.2019; and iv) District Health & Welfare Society vs. ITO, ITA No.7473/Del/2018, order dated 26.04.2019. 21. So far as the various decisions relied on by Ld. DR are concerned, we have carefully gone through all those decisions and are of the opinion that these can be divided broadly into three categories i.e. a) Provisions of section 234 E are constitutionally valid b) Rule of consistency is not applicable and c) Late of fee u/s. 234 E is leviable for defaults of period in filing the TDS/ TCS statements/ returns even for the period prior to 01-06-2015 22. So far as the argument of the Ld. DR on the basis of various decisions including the decision of Hon'ble Delhi High Court in the case of Biswajit Das (supra) that provisions of section 234E are constitutionally valid is concerned, no doubt the provisions of section 234 E have been held to be constitutionally valid which is not the dispute before us. So far as the argument of Ld. DR on rule of consistency is concerned, the same in our opinion is not absolute but in the present c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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