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TMI Blog2020 (9) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... 4E 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 case of Vegetables Products Limited [ 1973 (1) TMI 1 - SUPREME COURT] . 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. Appeals filed by the assessee are allowed. - ITA No. 1274 to 1276/Del/2019 - - - Dated:- 31-8-2020 - SHRI R. K. PANDA , ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA , JUDICIAL MEMBER Appellant by : Sh. Vijay Jindal , CA Respondent by : Ms. Rakhi Vimal , SR. DR ORDER PER R.K PANDA , AM : This batch of three appeals filed by the assessee are directed against the separate orders of the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oundation of the decision of Hon ble Karnataka High Court has also been analysed and is distinguishable in view of the case-laws referred to. Accordingly she urged that the above decision dated. 29.11.2019 should not be followed in the name of rule of consistency in the case of above mentioned appeals as also res- judicata is not applicable in income-tax proceedings. 5. 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) 6. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) Dunlod Shikshan Sansthan vs. UOI [2015] 63 taxmann.com 243 (Raj)] (v) Rashmikant Kundalia vs. UOI [2015] 54 taxmann.com 200 (Bombay) (vi) Lakshminirman Bangalore Pvt. Ltd. vs. DCIT [2015] 60 taxmann.com 144 (Karnataka) (vii) Sree Narayana Guru Smaraka Sangam Upper Primary School vs. UOI [2017] 77 taxmaim.com 244 (Kerala) (viii) Dr. Amrit Lai Mangal vs. UOI [2015] 62 taxmami.com 310 ( P H) 10. 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of TDS return/statements and thus the provisions starts only after the filing of such TDS returns/statements, whether in time or delayed, whereas section 234E seeks to levy the fees for the period of delay in filing such TDS returns and statements. Therefore, it may be seen that the charging provisions of section 234E precedes the operation of the machinery provisions 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 be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s merely a mechanical provision providing for computation, such amendment in procedural section should be considered as clarificatory in nature. The same have not been considered by Hon ble ITAT. 12. She submitted that in the case of Rajesh Kourani, Hon ble Gujarat High Court has considered the chargeability of fee u/s 234E before 01.06.2015 when clause (c) was inserted to section 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 pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Hon ble Court didn t gave any such findings which can be said to have negated the mandatory charging of fees u/s 234E for late filing of TDS/TCS returns / statements which creates an automatic charge on the deductors who have defaulted on this count who are required to voluntarily pay the fee u/s 234E before delivering such belated TDS/TCS returns /statements in accordance with sub-section (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 accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant case has basically challenged the levy of late fee u/s 234E by the AO which has been upheld by the CIT(A). 20. A perusal of the order of ld. CIT(A) shows that all these TDS statements were filed before 01.06.2015, therefore, the question that has to be considered is as to whether the CIT(A) was justified in confirming the levy of late fee u/s 234E for delay in filing of the TDS statements and interest u/s 220(2) of the IT Act, 1961. We find, identical issue had come up before the coordinate Bench of the Tribunal in the case of Udit Jain (supra). The Tribunal, after considering the decision of the Hon ble Karnataka High Court in the 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 clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocedural 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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 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 D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 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 in- limine 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction 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 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ically 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 we hold that no late filing fee is to be charged, then consequent interest charged u/s 220(2) of the Act also do not survive. 21. We find, the Delhi Bench of the Tribunal in the following decisions also have held that no fee can be levied u/s 234E in terms of section 200A where the date of filing of TDS statement and date of intimation are much prior to 01.06.2015:- i) Prakash Industries Ltd. vs. DCIT, ITA Nos.5865 to 5869/Del/2016, order dated 29.07.2019; ii) M/s Ajvin Infotech Pvt. Ltd. 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. 22. 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 constituti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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