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TMI Blog2020 (9) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... E 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 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] . 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 - Fee levied u/s. 234 E is directed to be deleted. - Decided in favour of assessee. - ITA No.6706 to 6708/Del/2019, ITA No. 6709 to 6711/Del/2019, ITA No. 6712 to 6714/Del/2019, ITA No. 6715 to 6717 /Del/2019, ITA No. 6718 to 6720 /Del/2019 - - - Dated:- 31-8-2020 - Shri R.K. Panda, Accountant Member And Shri Sudhanshu Srivastava, Judicial Member For the Appellant : None For the Respondent : Ms. Rakhi Vimal, SR. DR ORDER PER R.K PANDA, AM: This batch of appeals filed by the respective assessees are directed against the separate orders of the CIT(A) dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8] 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 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. 6. 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. 7. She also drew the atten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision 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 provisions, explanatory notes and orders of various other High Courts wherein the validity of provisions of sec.234E has been upheld. 12. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 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 charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue had come up before the Tribunal in the case of Anjani Technoplast Ltd. vs. ACIT-TDS-CPC, vide ITA No.7931 to 7937/Del/2019 and batch of appeals for A.Y. 2013-14, 2014-15 and 2015-16. Vide order of even date, we have held that there is no delay in filing of the appeals by observing as under:- 22. So far as the delay in filing of the appeals before the CIT(A) is concerned, a perusal of the Form No.35 filed along with copy of order passed u/s 154 by the CPC shows that the date of order u/s 200A was 27th July, 2013 and the assessee filed the rectification application before the CPC and the order u/s 154 was passed on 6th February, 2019. The assessee has filed the appeal against the order passed u/s 154 on 26th February, 2019 which is well within the time. Even the ld.CIT(A) at para 4.2 of his order has also mentioned that the assessee has filed the appeal against the correction dated 6th February, 2019. However, the ld.CIT(A), without considering the facts properly, has held that there is inordinate delay in filing of the appeals before him and the assessee failed to submit explanation so as to justify the above delay for which he dismissed the appeals on account of delay in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in Rajesh Kourani vs Union of India (supra) and applying the proposition that where there was difference of opinion between Hon ble High Courts on a particular issue and in the absence of any decision rendered by the Jurisdictional High Court, then the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 been brought about with effect from 1.6.2015 cannot be said as only by way of a regulatory mode or a regulatory mechanism but it can rather be termed as conferring substantive power upon the authority. It is true that, a regulatory mechanism b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Statute w.e.f. 01.06.2015. The said amendment was held to be prospective in nature and hence, notices issued under section 200A of the Act for computation and intimation for payment of late filing fees under section 234E of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh 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 prior to 01.06.2015. 18. Further before parting, we may also refer to the order of CIT(A) in the case of Junagade Healthcare Pvt. Ltd., where the CIT(A) had dismissed appeals of assessee being delayed for period of December, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 each seller was less than the prescribed limit of ₹ 50 lacs and therefore, provision of section 194IA was not applicable. The demand has been raised by the department u/s 200 in terms of failure to comply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 for the previous period or previous year prior to 1.6.2015 could not have been made. 7. Thus, we hold that no fee was leviable to the assessee u/s 234E in violation of section 200(3), because assessee had furnished the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2018, order dated 26.04.2019. 23. 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 23.1 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 case we are faced with a situation which has been considered by our coordinate benches and there is no subsequent development to depart there from. Moreover, our coordinate Benches have followed one approach in view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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