2017 (3) TMI 1572 - AT - Income Tax

Constitutional validity of section 234E challenged - Fee for default in furnishing TDS return/statements - as per assessee fee is known in the commercial and legal world to be a recompense of some service or some special service performed and it cannot be collected for any dis-service or default - Held that - Due to late submission of TDS statements means the Department is burdened with extra work which is otherwise not required if the TDS statements were furnished within the prescribed time. This fee is for the payment of the additional burden forced upon the Department. A person deducting the tax (the deductor) is allowed to file his TDS statement beyond the prescribed time provided he pays the fee as prescribed under section 234E of the Act. In other words the late filing of the TDS return/statements is regularized upon payment of the fee as set out in section 234E. This is nothing but a privilege and a special service to the deductor allowing him to file the TDS return/statements beyond the time prescribed by the Act and/or the Rules. We therefore cannot agree with the argument of the petitioners that the fee that is sought to be collected under section 234E of the Act is really nothing but a collection in the guise of a tax. See Rashmikant Kundalia Vs. Union of India 2015 (2) TMI 412 - BOMBAY HIGH COURT - Decided against assessee.

Summary

Issues:
- Late filing fee under section 234E of the IT Act, 1961 charged by the Assessing Officer.
- Interpretation of the judgment by the Hon'ble Bombay High Court regarding late submission of TDS statements and the fee under section 234E.
- Consistency in decision-making for appeals with similar grounds.

Analysis:
1. Late Filing Fee under Section 234E:
- The appeals by the assessee were against the orders of the Commissioner of Income Tax (A) regarding the late filing fee of Rs. 17,000 charged under section 234E of the IT Act, 1961 for the assessment year 2012-13.
- The assessee argued that during the relevant period, there was no provision in section 200A for charging such a late filing fee while processing the Quarterly statement filed in form No. 26Q.
- The Departmental Representatives supported the orders of the authorities below, citing a judgment by the Hon'ble Bombay High Court in the case of Rashmikant Kundalia Vs. Union of India.
- The Coordinate Bench considered the judgment and decided the issue in favor of the assessee in a separate case.
- The Hon'ble Bombay High Court emphasized that the fee under section 234E is for the payment of the additional burden on the Department due to late submission of TDS statements, allowing the deductor to file statements beyond the prescribed time upon payment of the fee.
- The Tribunal found no merit in the contention of the assessee and dismissed the appeal, upholding the late filing fee under section 234E.

2. Interpretation of Bombay High Court Judgment:
- The judgment by the Hon'ble Bombay High Court clarified that the fee under section 234E is a privilege and a special service to the deductor, regularizing late filing of TDS statements upon payment of the prescribed fee.
- The Tribunal, in line with the Bombay High Court judgment, rejected the argument that the fee collected under section 234E is akin to a tax, emphasizing the additional burden on the Department due to late submissions.

3. Consistency in Decision-Making:
- Appeals in ITA Nos. 89 & 90/JP/2017 were dismissed as the issue was similar to that raised in ITA No. 88/JP/2017, and the decision to reject the appeal of the assessee was consistent across all appeals.
- The Tribunal maintained a uniform approach in dismissing all appeals by the assessee, ensuring consistency in decision-making for cases with common grounds.

In conclusion, the Tribunal upheld the late filing fee under section 234E of the IT Act, 1961, based on the interpretation of the judgment by the Hon'ble Bombay High Court, and maintained consistency in decision-making across all appeals with similar issues.