2021 (12) TMI 695 - AT - Income Tax

Levy of late fee u/s. 234E - Fee for default in furnishing statements - delay in filing statement of TDS within the prescribed time - conflicting views - HELD THAT - It is not in dispute that if the ratio laid down in the case of Fateeraj 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. The Hon ble Bombay High Court in the case of Subramaniam -vs.- Siemens India Ltd. 1983 (4) TMI 3 - BOMBAY HIGH COURT held that in the case where there is conflict of views between different High Courts authorities must follow the decision of the High Court within whose jurisdiction he is functioning. 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. Relief should not be refused to the taxpayer merely because there was a conflicting decision of a non-jurisdictional high court - 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 appeals of the Assessee are allowed.

Summary

Issues:
Appeal against levy of late fee under section 234E of the Income-Tax Act for delayed filing of TDS statements for assessment years 2013-14 to 2015-16.

Detailed Analysis:
1. The Appellant filed 11 appeals against orders passed by the National Faceless Appeal Centre (NFAC) for late fee levied under section 234E of the Income-Tax Act due to delayed filing of TDS statements. The late fee is imposed at Rs. 200 per day for each day of delay in filing the TDS statement.

2. The Assessee contended that the provisions of section 234E were inserted by the Finance Act, 2012, effective from 1.7.2012. The Assessee argued that the authority could not levy the fee under section 234E for TDS statements filed before 1.6.2015, as the relevant provisions of section 200A came into force only from 1.6.2015. The Assessee relied on the decision of the Hon'ble Karnataka High Court in a similar case.

3. The NFAC/CIT(A) upheld the levy of late fee under section 234E, citing decisions from Madras, Gujarat, and Kerala High Courts, which supported the revenue's right to demand and collect the fee even without the provisions of section 200A. The Assessee appealed to the Tribunal against this decision.

4. The Tribunal considered the conflicting views of different High Courts but emphasized that the decision of the jurisdictional High Court, i.e., the Hon'ble Karnataka High Court, should be followed. The Tribunal held that the levy of late fee under section 234E for TDS returns filed before 1.6.2015 was not valid based on the Karnataka High Court's decision.

5. Referring to the case law, the Tribunal reiterated that the decision of the jurisdictional High Court is binding on the authorities within its jurisdiction. The Tribunal also highlighted a recent case where it was emphasized that the NFAC must follow the decision of the jurisdictional High Court, even if there are conflicting decisions from non-jurisdictional High Courts.

6. In conclusion, the Tribunal ruled in favor of the Assessee, directing the deletion of the late fee levied under section 234E of the Income-Tax Act. The Tribunal held that the levy of late fee for TDS returns filed before 1.6.2015 was not sustainable based on the decision of the jurisdictional High Court and allowed the Assessee's appeals.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved, the arguments presented by the parties, the decisions of the lower authorities, and the final ruling by the Tribunal, all while maintaining the legal terminology and significant details from the original text.