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TMI Blog2020 (9) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... was not applicable for different quarters of assessment years prior to 01.06.2015. Where power is being enshrined upon the AO to charge late fees while processing the TDS returns w.e.f. 01.06.2015, such provision cannot have retrospective effect as it would be detrimental to the case of tax payer. The provision under which a new enabling power is being given to charge fees under 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. 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 AO 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 delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court in the case of Rajesh Kourani vs Union of India [2017] 83 taxmann.com 137 (Guj.) upheld the order of the Assessing Officer. 5. The Ld. Counsel for the assessee pointed out that the present appeals are against the late fees charged under section 234E of the Act for various quarters relating to different assessment years for default in not filing TDS returns in time. He stressed that no fee can be levied under section 234E of the Act for the periods prior to 01.06.2015, when the intimation under section 200A of the Act was issued. The Ld. AR for the assessee stated that the issue stands covered by various decisions of the Delhi Tribunal. He made reference to the ratio laid down in the following decisions:- I. Udit Jain vs ACIT ITA No.5380/Del/2017, order dated 29/11/2019. II. M/s Wits Interior Pvt. Ltd. vs ACIT ITA No.5321 to 5331/Del/2017, order dated 22/05/2018. III. M/s Samikaran Learning Private Ltd. vs TDS Officer ITA No.4050 to 4054/Del/2017, order dated 09/11/2017. 6. The Ld. DR for the Revenue strongly objected to the submissions made by the Ld. AR for the assessee. He fairly admitted that the Delhi Bench of the Tribunal in Udit Jain vs ACIT (Supra) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho have defaulted on this count who are required to pay the fee u/s 234E voluntarily 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 section 234 E due to the absence of regulatory provision will tantamount to charging section yielding to machinery provision which should not be allowed. This has not been considered by Hon ble ITAT. 10.3. Section 200A entails the procedure for procedure for processing of TDS returns. Amended section of 200A (1 )(c), with effect from 01/06/2015, enables computation of fees chargeable u/s 234E under the purview of 200A. Therefore, if any TDS return is processed after 01/06/2015, then fees chargeable u/s 234E is required to be computed as per section 200A(l)(c) by virtue of the fact that the charging section was already ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been taken note of by the Tribunal in the case of Udit Jain vs ACIT (supra) and other appeals decided by benches of Delhi Tribunal. 10. We have heard the rival contention and perused the record. The issue which is arising in the present set of appeals is against the chargeability of late filing fee in terms of section 234E of the Act. The issue which is raised by different assessee before us is whether where the return for the TDS deduction was filed under respective sections of the Act, for the period prior to 01.06.2015 though belatedly, but no late filing fee can be charged under section 234E of the Act. The machinery provisions of charging the said fee as per clause (c) of Section 200A(1) of the Act was inserted by legislature with effect from 01.06.2015. We find that the said issue has been decided by the Hon ble Karnataka High Court in the case of Fateh Raj Singhvi Ors. vs UOI (supra) and it is held that section 200A of the Act inserted with effect from 01.06.2015 had prospective effect and was not applicable for different quarters of assessment years prior to 01.06.2015. The Delhi Bench of the Tribunal while deciding the appeals in the case of Udit Jain vs ACIT (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fees under section 234E of the Act while issuing intimation under section 200A of the Act, in the first bunch of appeals. The second bunch of appeals in the case of Junagade Healthcare Pvt. Ltd. is against order of Assessing 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y provision is inserted for liability to pay any tax or the fee by way of compensatory in nature or fee independently simultaneously mode and the manner of its enforceability is also required to be considered 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 Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quarters after 1st day of June, 2015 and even the order charging late filing fees was passed after June, 2015, then the same are maintainable, since the amendment had come into effect. 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 Jun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PC on the same day. The CIT(A) was of the view that there was no merit in condonation of delay, wherein appeals were filed beyond the period prescribed. 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed time, prepare such statement for such period as may be prescribed. Provision of section 200A provides that where the statement of tax deduction at source has 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r u/s 201(1) has been passed holding the assessee to be assessee in default and, therefore, such an interest is also deleted. 12. We may also refer to the decision of the Pune Bench of the Tribunal in the case of Maharashtra Cricket Association vs DCIT (Supra), wherein reference was made to the reliance placed by the Revenue on the decision of the Hon ble Bombay High Court in the case of Rashmikant Kundalai vs Union of India (Supra) and it was observed as under:- 27. While deciding the present bunch of appeals, the Revenue had placed reliance on the ratio laid down by the Hon ble Bombay High Court in Rashmikant Kundalia Vs. Union of India (supra) wherein, the constitutional validity of section 234E of the Act was challenged. The Hon ble High Court noted the fact that where the deductor was required to furnish periodical quarterly statements containing the details of deduction of tax made during the quarter, by the prescribed due date and the delay in furnishing such TDS returns would have cascading effect. It was further observed by the Hon ble High Court that under the Income-tax Act, where there is an obligation on the Income-tax Department to process the income-tax r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the above said ratio laid down by the Hon ble Bombay High Court, the case of the learned CIT-DR before us was that there is no merit in the present set of appeals filed by the assessee as the Hon ble High court has laid down that no appeal is provided from an order passed under section 234E of the Act and the same merits to be dismissed at the outset. In this regard, he has raised two issues that (a) the appeal filed by the assessee is not maintainable and also (b) there is no merit in the claim of the assessee that the Assessing Officer is not empowered to charge fees under section 234E of the Act before insertion of clause (c) to section 200A(1) of the Act by the Finance Act, 2015 w.e.f. 01.06.2015. The learned Authorized Representative for the assessee on the other hand, drew our attention to the Memorandum to the Finance Bill, 2015 while introducing the said clause (c) to section 200A(1) of the Act. The Finance Bill took note of the provisions of Chapter XVIIB, under which the person deducting tax i.e. deductor was required to file quarterly tax deduction at source statement containing the details of deduction of tax made during the quarter by the prescribed due dates. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence, the same are not being referred to. The Finance Bill further provided that the amendment would take effect from 01.06.2015. 29. The perusal of Memo explaining the provision relating to insertion of clause (c) to section 200A of the Act clarifies the intention of Legislature in inserting the said provision. The provisions of section 234E of the Act were inserted by the Finance Act, 2012, under which the provision was made for levy of fees for late furnishing TDS / TCS statements. Before insertion of section 234E of the Act, the Finance (No.2) Act, 2009 had inserted section 200A in the Act, under the said section, mechanism was provided for processing of TDS statements for determining the amount payable or refundable to the deductor, under which the provision was also made for charging of interest. However, since the provisions of section 234E of the Act were not on statute when the Finance (No.2) Act, 2009 was passed, no provision was made for determining the fees payable under section 234E of the Act at the time of processing the TDS statements. So, when section 234E of the Act was introduced, it provided that the person was responsible for furnishing the TDS r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 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. However, in cases, where the assessee has failed to deposit the said fees, then in order to enable the Assessing Officer to collect the said fees chargeable under section 234E of the Act, it is incumbent upon the Legislature to provide mechanism for the Assessing Officer to charge and collect such fees. In the absence of enabling provisions, the Assessing Officer while processing the TDS statements, even if the said statements are belated, is not empowered to charge the fees under section 234E of the Act. 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. 15. The Hon ble Supreme Court in CIT Vs. Vatika Township Pvt. Ltd. (2014) 367 ITR 466 (SC) has explained the general principle concerning retrospectivity and have held that of the various rules guiding how a legislation has to be interpreted, one estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n issued under section 200A of the Act levying the fees for delayed filing of the TDS statements under section 234E of the Act. The Hon ble High Court notes that the Finance Act, 2015 had made amendments to section 200A of the Act enabling the Assessing Officer to make adjustments while levying fees under section 234E of the Act was applicable w.e.f. 01.06.2015 and has held that it has prospective effect. Accordingly, the Ho n ble High Court held that intimation raising demand prior to 01.06.2015 under section 200A of the Act levying section 234E of the Act late fees is not valid . However, the Hon ble High Court kept open the issue on constitutional validity of section 234E of the Act. We have already referred to the decision of Hon ble Bombay High Court in Rashmikant Kundalia Vs. Union of India (supra) in this regard, wherein the constitutional validity of section 234E of the Act has been upheld. 17. Accordingly, we hold that where power is being enshrined upon the Assessing Officer to charge late fees while processing the TDS returns w.e.f. 01.06.2015, such provision cannot have retrospective effect as it would be detrimental to the case of tax payer. The provision under wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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