TMI Blog2015 (11) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ct are neither ultra vires nor unconstitutional and, thus, finding no merit in the instant writ petition, the same is hereby dismissed. - Decided against assessee. - CWP No. 6255 of 2014 - - - Dated:- 14-8-2015 - Ajay Kumar Mittal And Ramendra Jain, JJ. For the Appellant : Mr. Vishal Gupta, Adv For the Respondent : Mr. Yogesh Putney, Adv ORDER Ajay Kumar Mittal, J. 1. In this writ petition filed under Articles 226/227 of the Constitution of India, the petitioners have prayed for issuance of a writ in the nature of certiorari for quashing the provisions of Section 234E of the Income Tax Act, 1961 (in short the Act ) as incorporated vide Finance Act, 2012. Further, prayer has been made for quashing the assessment orders (Annexure P-2 Colly) passed under Section 200A read with Section 234E of the Act whereby late filing fee under Section 234E of the Act has been levied upon the petitioners. 2. Briefly stated, the facts necessary for adjudication of the instant petition as narrated therein may be noticed. The petitioners are challenging the vires of Section 234E of the Act inserted vide Finance Act, 2012 w.e.f. 1.7.2012. Under Section 200 (3) of the Act rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same was made. The petitioners controverted the averments made in the written statement by filing replication and reiterated that of the averments made in the writ petition. 4. Learned counsel for the petitioners, inter alia, submitted that the fee cannot be equated with the tax and is always charged for rendering services. It was further submitted that the provision is violative of principles of natural justice as no opportunity of being heard is provided before demand of fee under Section 234E of the Act can be raised. In other words, no power has been conferred on the Assessing Officer to condone the delay and even no remedy of appeal has been provided to challenge the imposition of such fee. In support of the said contentions, learned counsel for the petitioners has placed reliance upon the following judgments:- (i) Jindal Stainless Ltd. and another v. State of Haryana and others, AIR 2006 SC 2550 ; (ii) Rajesh Kumar and others v. D.C.I.T. and others, AIR 2007 SC 181; (iii) Sahara India (Firm), Lucknow Versus Commissioner of Income Tax, Central I and another, (2008) 14 SCC 151 ; (iv) Bidhannagar (Salt Lake) Welfare Association v. Central Valuation Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay a sum of ₹ 200/- per day by way of fee in case he defaults to deliver or cause to be delivered a statement within the time prescribed in Section 200(3) or the proviso to Section 206C (3). Sub-section (2) of Section 234E of the Act prescribes the maximum amount of fee under Section 234E(1) which shall not exceed the amount of tax deductible or collectible as the case may be. A mandate has been laid down under subsection (3) whereby it has been stipulated that the amount of fee under Section 234E(1) shall be paid before delivering or causing to be delivered a statement in accordance with Section 200(3) or the proviso to Sector 206C(3). Section 234E (4) enacts whereby these provisions shall apply to statement referred to in Section 200(3) or the proviso to Section 206C(3) which is to be delivered or caused to be delivered for tax deducted at source or the tax collected at source, as the case may be after 1.7.2012. 9. It would also be expedient to notice the legislative intent in enacting Section 234E of the Act. The respondents in their written statement have enumerated the purpose of introducing this provision in the following words:- As per the existing provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to pay penalty for late furnishing of TDS statement, if he pays the requisite fee and file the TDS statement within the extended period of one year. 10. It further gives reason to demonstrate that the provision relates to collection of a fee and not tax. The relevant portion of the reply reads thus:- That the marginal heading of section 234E reads Fee for defaults in furnishing statements . The title per se indicates that the section is regarding collection of fee. This is not a penal provision, but a fee for defaults in furnishing statements in TDS. The late submission of TDS statement creates additional work for the Income-tax department. The department has to revise the assessment order already passed in the case of the deductee for determining his correct tax liability in the light of belated information furnished by the deductor. Moreover, in case of income-tax return having refund claim, the department has to pay extra interest due to delay in determining the correct amount of refund for want of information of tax deducted which result in delay of issue of refund. The fee under section 234E is levied to address this additional work burden forced upon the depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther, the provision of Section 234E of the Act was held to be constitutionally valid with the following observations:- It is equally well settled that a statute relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, freedom of religion etc. As regards economic and other regulatory legislation it is imperative that the Court exercises judicial restraint and grants greater latitude to the legislature whilst judging the constitutional validity of such a statute. This is for the simple reason that the Court does not consists of economic and administrative experts and has no expertise in these matters. These well settled principles have been very succinctly set out in the judgment of the Supreme Court in the case of Government of Andhra Pradesh and Others versus P. Laxmi Devi [2008] 4 SCC 720, and more particularly, paragraphs 46, 67, 68, 78, 79 and 80 thereof, which read thus:- 46. In our opinion, there is one and only one ground for declaring an Act of the legislature (or a provision in the Act) to be invalid, and that is if it clearly violates some provision of the Constitution in so evident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, freedom of religion, etc. Thus, the Constitution Bench decision in R.K. Garg case [(1981) 4 SCC 675 : 1982 SCC (Tax) 30; [1982] 133 ITR 239 (SC) is an authority for the proposition which has been stated herein, namely, when a law of the legislature encroaches on the civil rights and civil liberties of the people mentioned in Part III of the Constitution (the fundamental rights), such as freedom of speech, freedom of movement, equality before law, liberty, freedom of religion, etc., the Court will not grant such latitude to the legislature as in the case of economic measures, but will carefully scrutinise whether the legislation on these subjects is violative of the rights and liberties of the citizens, and its approach must be to uphold those rights and liberties, for which it may sometimes even have to declare a statute to be unconstitutional. 79. Some scholars regarded it a paradox in the judgments of Holmes, J. (who, as we have already stated above, was a disciple of Thayer) that while he urged tolerance and deference to legislative judgment in broad areas of la ..... X X X X Extracts X X X X X X X X Extracts X X X X
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