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2017 (1) TMI 1105 - KERALA HIGH COURTConstitutional validity of Section 234E - late filing of the TDS returns - Period from 2012 to 2015 and post 2015 - The main argument of the petitioner is that being a fee, there is no quid pro quo for the levy - Held that:- The main contention of the petitioner is based on the memorandum explaining amendment moved in the Finance Bill, 2012, wherein it is indicated that the provision had been incorporated as a deterrence to the deductors who delays in furnishing TDS statement in time. While considering the validity of a statute, we do not think that the exact words of the Explanatory Note can have any relevance. It has to be verified whether the fee that is being charged is in the form of a penalty so that an opportunity should be given to the deductor to explain the reasons for delay before imposing such fee/penalty. As already held in Rashmikant Kundalia (2015 (2) TMI 412 - BOMBAY HIGH COURT ), "undoubtedly, delay in furnishing of TDS return/statements has a cascading effect. Under the Income Tax Act, there is an obligation on the Income Tax Department to process the income tax returns within the specified period from the date of filing. The Department cannot accurately process the return on whose behalf tax has been deducted (the deductee) until information of such deductions is furnished by the deductor within the prescribed time." The Bombay High Court has thereafter elaborated the consequences of delay in filing the statement. It is on account of the additional work burden which has fallen upon the department due to the fault of the deductor that a fee has been levied. We do not think that a different view can be taken in the matter. It is also held that the provision is not onerous even in the absence of a right of appeal as it is always open for the aggrieved person to approach the High Court under Article 226 of the Constitution of India. Section 200A was amended by the Finance Act 2015 incorporating clause (c) and an order passed under Section 200A is made appealable under Section 246A. This benefit of appeal is available only after the commencement of Finance Act 2015. In the judgment of the Rajasthan High Court in M/s.Dundlod Shikshan Sansthan & another v. Union of India and others (2015 (9) TMI 807 - RAJASTHAN HIGH COURT ), reference is also made to the amendment to Section 200A that there was no provision for appeal earlier against collection of fee under Section 234E. But as per the amendment made to the Finance Act 2015, with effect from 01.06.2015, a provision for appeal has been inserted under Section 246A against an order under sub-section (1) of Section 200A. Since the appellate remedy has already been provided, the petitioner cannot contend that the impugned provision of the Act is unreasonable and arbitrary. In the light of the aforesaid discussion, we do not think that the petitioners have succeeded in challenging the vires of Section 234E. Writ petitions are therefore dismissed reserving the right of the petitioners to take appropriate action in accordance with law.
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