TMI Blog2017 (4) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... 1465/PUN/2015, 1753/PUN/2016, 1765/PUN/2016, 1766/PUN/2016, 1781 to 1783/PUN/2016, 1787 to 1789/PUN/2016, 1794 to 1796/PUN/2016, 1799 to 1801/PUN/2016 - - - Dated:- 15-3-2017 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM 1805 1806/PUN/2016, 1826/PUN/2016, 1827/PUN/2016, 1828/PUN/2016, 1829/PUN/2016, 1830/PUN/2016, 1831/PUN/2016, 1832/PUN/2016, 1863/PUN/2016, 1864/PUN/2016, 1865/PUN/2016, 1866/PUN/2016, 2762 /PUN/2016, 2763/PUN/2016, 2802 to 2803/PUN/2016, 2805/PUN/2016, 2807/PUN/2016, 2848 2849/PUN/2016, 2873/PUN/2016, 2885 2886/PUN/2016, 2888/PUN/2016, 2891 2892/PUN/2016, 2872/PUN/2016, 1999/PUN/2016, 2020/PUN/2016, 2101/PUN/2016, 2158 2159/PUN/2016, 2360 to 2362/PUN/2016, 2366/PUN/2016, 2368 to 2371/PUN/2016, 2372 to 2374/PUN/2016, 2382/PUN/2016 For The Assessee : Shri Vilas P. Rudra, M.K. Kulkarni, Shri Suhas Bora, Shri S.N. Puranik For The Revenue : Shri Hitendra Ninawe ORDER PER R.K. PANDA, AM: This bunch of appeals filed by different assessees are directed against respective orders of CIT(A) relating to different assessment years against respective intimation issued under section 200A(3) of the Income-tax Act, 1961 (in short the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er provisions of section 200(3) any person deducting any sum on or after 01-04-2005 and after paying the tax deducted to the credit of the Central Government within the prescribed time will prepare such statement for such period as may be prescribed. Therefore, the person responsible for payment of fees u/s.234E of the Act is a person who is mentioned u/s.200(3) of the Act. Rejecting the various explanations given by the assessee and distinguishing the decisions cited before him the CIT(A) upheld the action of the Assessing Officer in levying the fees payable u/s.234E of the Act for late filing of the TDS returns. 6. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 7. After hearing both the sides we find the issue relating to levy of late fees u/s.234E of the Act while issuing intimation u/s.200A of the Act is decided in favour of the assessee by the decision of the Coordinate Bench of the Tribunal in the case of Maharashtra Cricket Association Vs. DCIT (CPC)-TDS, Ghaziabad. The Tribunal vide order dated 21-09-2016 in ITA Nos.560/PN/2016 561/PN/2016, 1018/PN/2016 to 1023/PN/2016 for Assessment Years 2013-14 and 2014-15 has thoroughly discussed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch manner, setting forth such particulars and within such time as may be prescribed. (3) Any person deducting any sum on or after the 1st day of April, 2005 in accordance with the foregoing provisions of this Chapter or, as the case may be, any person being an employer referred to in sub-section (1A) of section 192 shall, after paying the tax deducted to the credit of the Central Government within the prescribed time, prepare such statements for such period as may be prescribed and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed: Provided that the person may also deliver to the prescribed authority a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under this sub-section in such form and verified in such manner as may be specified by the authority. 18. Under section 200(1) of the Act, it is provided that any person deducting any sum in accordance with the provisions of the Chapte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Systems) or the persons authorized by them i.e. in respect of deductions under various provisions of the Chapter XVIIB. The Rule further provides that the statements referred to in sub-rule (1) are to be delivered quarterly and the stipulated period of due date of filing the said statement in respect of deductor being an office of the Government and the deductor being other than Government, are provided. The sub-rule (3) of Rule 31A of the Rules further provides that the statement referred to in sub-rule (1) may be furnished in any of the following manners i.e. by way of furnishing the statement in paper form or furnishing the statement electronically under digital signature or after verification. Initially, such statement had to be furnished in paper form and later by way of amendment, the procedure for furnishing the statement electronically was provided. Once the statement has been so submitted by the deductor of tax deducted at source, then processing of statement is as per the provisions of section 200A of the Act. The said section was inserted by the Finance (No.2) Act, 2009 w.e.f. 01.04.2010. The said section 200A of the Act reads as under:- 200A. (1) Where a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statements as per clause (a) and (b) under section 200A(1) of the Act. Clauses (c) to (f) reproduced above were substituted for clauses (c) to (e) by the Finance Act, 2015 w.e.f. 01.06.2015. Prior to the substitution, clauses (c) to (e) read as under:- (c) the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of amount computed under clause (b) against any amount paid under section 200 and section 201, and any amount paid otherwise by way of tax or interest; (d) an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, him under clause (c); and (e) the amount of refund due to the deductor in pursuance of the determination under clause (c) shall be granted to the deductor. 21. As per newly substituted clause (c) w.e.f. 01.06.2015, the fees, if any, is to be computed in accordance with the provisions of section 234E of the Act. However, under the earlier clause (c), there was no such provision. 22. Section 234E(1) of the Act provides that where a person fails to deliver or cause to be delivered, a statement within time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 200A of the Act. In case there is any variation in the tax, sum deductible under the Chapter and / or their payment, the Assessing Officer is empowered to make adjustments in this regard and also reject incorrect claim made by the deductor which is apparent from the information in the statement filed by the deductor. Further, the Income-tax authority is authorized to charge interest, if any, and the same shall be computed on the basis of sums deductible in addition to the amount of tax deducted at source, which is to be paid to the account of Treasury by the deductor. In case of any default, interest is to be charged against such deductor and the same is to be computed as per provisions of section 200A(1)(b) of the Act. Further, in addition to both these amounts, clause (c) to section 200A of the Act provides fees to be levied which shall be computed in accordance with the provisions of section 234E of the Act. The said provision to charge fees by the prescribed authority has been substituted for earlier provisions by the Finance Act, 2015 w.e.f. 01.06.2015. Prior to the said substitution though the provisions of section 234E of the Act for payment of fees for default in furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 w.e.f. 01.06.2015. Once any provision of the Act has been made applicable from a respective date, then the requirement of the statute is to apply the said provisions from the said date. 25. In respect of the issue raised before us, it is clear that the prescribed authority has been vested with the power to charge fees under section 234E of the Act only with regard to levy of fees by the substitution made by Finance (No.2) Act, 2015 w.e.f. 01.06.2015. Once the power has been given, under which any levy has to be imposed upon tax payer, then such power comes into effect from the date of substitution and cannot be applied retrospectively. The said exercise of power has been provided by the statute to be from 01.06.2015 and hence, is to be applied prospectively. There is no merit in the claim of Revenue that even without insertion of clause (c) under section 200A(1) of the Act, it was incumbent upon the assessee to pay fees, in case there is default in furnishing the statement of tax deducted at source. Admittedly, the onus was upon the assessee to prepare statements and deliver the same within prescribed time before the prescribed authority, but the power to collect the fees b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Khanna Watches Ltd. Vs. DCIT in ITA Nos.731 to 735/CHD/2015, relating to assessment years 2014-15 2013-14, order dated 29.10.2015. 27. While deciding the present bunch of appeals, the Revenue had placed reliance on the ratio laid down by the Hon ble Bombay High Court in Rashmikant Kundalia Vs. Union of India (supra) wherein, the constitutional validity of section 234E of the Act was challenged. The Hon ble High Court noted the fact that where the deductor was required to furnish periodical quarterly statements containing the details of deduction of tax made during the quarter, by the prescribed due date and the delay in furnishing such TDS returns would have cascading effect. It was further observed by the Hon ble High Court that under the Income-tax Act, where there is an obligation on the Income-tax Department to process the income-tax returns within specified period from the date of filing, the returns could not be accurately processed of such person on whose behalf tax has been deducted i.e. deductee, until information of such deductions is furnished by the deductor within the prescribed time. Since the substantial number of deductors were not filing their TDS return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed two issues that (a) the appeal filed by the assessee is not maintainable and also (b) there is no merit in the claim of the assessee that the Assessing Officer is not empowered to charge fees under section 234E of the Act before insertion of clause (c) to section 200A(1) of the Act by the Finance Act, 2015 w.e.f. 01.06.2015. The learned Authorized Representative for the assessee on the other hand, drew our attention to the Memorandum to the Finance Bill, 2015 while introducing the said clause (c) to section 200A(1) of the Act. The Finance Bill took note of the provisions of Chapter XVIIB, under which the person deducting tax i.e. deductor was required to file quarterly tax deduction at source statement containing the details of deduction of tax made during the quarter by the prescribed due dates. Similar responsibility is on a person required to collect tax of certain specified receipts under section 206C of the Act. In order to provide effective deterrence against the delay in furnishing TDS / TCS statements, the Finance Act, 2012 inserted section 234E of the Act to provide for levy of fees on late furnishing of TDS / TCS statements. The Memo further took note of the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, 2012, under which the provision was made for levy of fees for late furnishing TDS / TCS statements. Before insertion of section 234E of the Act, the Finance (No.2) Act, 2009 had inserted section 200A in the Act, under the said section, mechanism was provided for processing of TDS statements for determining the amount payable or refundable to the deductor, under which the provision was also made for charging of interest. However, since the provisions of section 234E of the Act were not on statute when the Finance (No.2) Act, 2009 was passed, no provision was made for determining the fees payable under section 234E of the Act at the time of processing the TDS statements. So, when section 234E of the Act was introduced, it provided that the person was responsible for furnishing the TDS returns / statements within stipulated period and in default, fees would be charged on such person. The said section itself provided that fees shall not exceed the amount of tax deducted at source or collected at source. It was further provided that the person responsible for furnishing the statements shall pay the said amount while furnishing the statements under section 200(3) of the Act. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovide mechanism for the Assessing Officer to charge and collect such fees. In the absence of enabling provisions, the Assessing Officer while processing the TDS statements, even if the said statements are belated, is not empowered to charge the fees under section 234E of the Act. The amendment was brought in by the Finance Act, 2015 w.e.f. 01.06.2015 and such an amendment where empowerment is given to the Assessing Officer to levy or charge the fees cannot be said to be clarificatory in nature and hence, applicable for pending assessments. 32. The Hon ble Supreme Court in CIT Vs. Vatika Township Pvt. Ltd. (supra) has explained the general principle concerning retrospectivity and have held that of the various rules guiding how a legislation has to be interpreted, one established rule is that unless contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. Idea behind the rule is that current law should govern current activities . The Memo explaining the Finance Bill, 2015 very clearly also recognizes that and refers to the current provisions of sub-section (3) to section 200 of the Act, under which the deductor is to furnish T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble High Court held that intimation raising demand prior to 01.06.2015 under section 200A of the Act levying section 234E of the Act late fees is not valid . However, the Hon ble High Court kept open the issue on constitutional validity of section 234E of the Act. We have already referred to the decision of Hon ble Bombay High Court in Rashmikant Kundalia Vs. Union of India (supra) in this regard, wherein the constitutional validity of section 234E of the Act has been upheld. 34. Accordingly, we hold that the amendment to section 200A(1) of the Act is procedural in nature and in view thereof, the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, the intimation issued by the Assessing Officer under section 200A of the Act in all these appeals does not stand and the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted. The intimation issued by the Assessing Officer was beyond the scope of adjustment provided under section 200A of the Act and such adjustment could not sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Govinddas Vs. ITO (supra) is misplaced because of the distinguishable facts and issues. 8. The issue arising in the present appeal is identical to the issue before the Tribunal in bunch of appeals where it has been held that since the amendment to section 200A(1) of the Act is procedural in nature, therefore, the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Accordingly, intimation issued by the Assessing Officer under section 200A of the Act in all the appeals does not stand and the demand raised by charging the fees under section 234E of the Act is not valid and the same is deleted. The grounds of appeal raised by the assessee are thus, allowed. 9. Identical grounds have been raised by the other assessees in their respective appeals. Following our observations given in the preceding paragraphs we hold that the Assessing Officer was not empowered to charge fees u/s.234E of the Act while issuing intimation u/s.200A of the Act. Accordingly, the order of CIT(A) on this issue is set aside and the grounds raised by the assessees a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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