2023 (3) TMI 407 - AT - Income Tax

Late fee u/s. 234E - delay in filing the TDS statement - contradictory views on issue - intimation u/s. 200A - assessee’s contention before the AO was that the provisions of section 234E of the Act was inserted by the Finance Act, 2012 w.e.f. 1.7.2012 - HELD THAT:- It is not in dispute that if the ratio laid down by the Hon’ble Karnataka High Court in the case of Fatehraj Singhvi [2016 (9) TMI 964 - KARNATAKA HIGH COURT] is applied then the levy of interest u/s.234-E of the Act would be illegal for returns of TDS in respect of the period prior to 1.6.2015. The present appeals of the Assessee relate to TDS returns filed prior to 1.6.2015 and therefore levy of interest u/s.234E of the Act would not be valid, following the ratio laid down by the Hon’ble Karnataka High Court.

It is no doubt true that three Hon’ble High Courts of Gujarat and Kerala have taken a view contrary to the view taken by the Hon’ble Karnataka High Court in the case of Fatehraj Singhvi (supra). If there is conflicting views rendered by different High Courts, the view taken by the jurisdictional High Court is binding in the jurisdictional area of the respective High Court. See Subramaniam -vs.- Siemens India Ltd. [1983 (4) TMI 3 - BOMBAY HIGH COURT]

The Court further added that in cases where there is a conflict between the decisions of non-jurisdictional High Courts, the ITO must take the view which is in favour of the assessee and not against him. In CIT - vs.- Sunil Kumar [1994 (7) TMI 42 - RAJASTHAN HIGH COURT] it was held that the decision of the Jurisdictional High Court is binding on the Income tax Authorities and the Tribunal within the jurisdiction of the Court and the contrary decision of another High Court is not relevant, and that a point decided by the Jurisdictional High Court can no longer be considered to be a debatable issue.

In the case of Mahadev Cold Storage [2021 (6) TMI 506 - ITAT AGRA] it was held that although a centralized NFAC had been created by the notifications, it had to be ensured that where an appellate order was passed by the NFAC, the decision of the jurisdictional high court with jurisdiction over the AO should be followed and applied by the NFAC. Relief should not be refused to the taxpayer merely because there was a conflicting decision of a non-jurisdictional high court.

Thus we are of the view that the levy of interest u/s.234E of the Act in the present case cannot be sustained and the same is directed to be deleted and the appeal of the Assessee is allowed.