TMI Blog2017 (5) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... ee by: Shri Pratik Maniyar Revenue by : Shri Hitendra Ninawe ORDER Per R. K. Panda, AM The above bunch of appeals filed by the assessee are directed against the common order dated 19-11-2015 of the CIT(A)-3, Nashik relating to assessment year 2013-14. 2. The assessee in all these appeals has challenged the order of CIT(A) in confirming the levy of fee payable u/s.234E of the Act. 3. There was a delay of 344 days in filing of the above appeals by the assessee. The assessee has filed a condonation petition explaining the reasons for such delay. The Ld. Counsel for the assessee referring to the condonation petition submitted that the assessee has filed TDS return in form 24Q/26Q for Quarter Nos. 2, 3 and 4 of Financial Year 2012-13 belatedly resulting into receipt of intimation u/s.200A levying penalty u/s.234E of the Act for all the quarters. The assessee filed a single appeal before the CIT(A) against all the intimations for A.Y. 2013-14. The CIT(A) vide order dated 19-11-2015 dismissed the appeal filed against the six intimations in a single order. Accordingly, the assessee filed a single appeal before the Tribunal vide ITA No.88/PUN/2016 against the consolid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion u/s.200A wherein he had determined the late fee for delay in filing of quarterly TDS statements @ ₹ 200/- per day. The assessee filed rectification application u/s.154 which was rejected by the DCIT, CPC (TDS), Ghaziabad. In appeal the CIT(A) upheld the action of the Assessing Officer in levying the late filing fee u/s.234E of the I.T. Act. While doing so, he observed that section 234E has been brought into statute w.e.f. 01-07-2012. The assessee s case pertains to the period during which section 234E was effective. He held that any demand raised u/s.234E is not appealable before CIT(A). For the above proposition, he relied on the decision of Hon ble Bombay High Court in the case of Rashmikant Kundalia Vs. Union of India reported in 2015 (54) taxmann.com 200 (Bombay). 6.1 Even on merit also, he observed that the Assessing Officer was empowered to charge late filing fee u/s.234E. According to him, section 234E of the Act is to be read alongwith the provisions of section 200(3) of the Act. He observed that as per 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 withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oregoing provisions of this Chapter shall pay within the prescribed time, the sum so deducted to the credit of the Central Government or as the Board directs. (2) Any person being an employer, referred to in sub-section (1A) of section 192 shall pay, within the prescribed time, the tax to the credit of the Central Government or as the Board directs. (2A) In case of an office of the Government, where the sum deducted in accordance with the foregoing provisions of this Chapter or tax referred to in sub- section(1A) of section 192 has been paid to the credit of the Central Government without the production of a challan, the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person, by whatever name called, who is responsible for crediting such sum or tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scribed income tax authority or any person so authorized, such statement in such form and verified in such manner and setting forth such particulars and within such time as may be provided. The duty is upon a person deducting any sum in accordance with various provisions under the Chapter and also upon an employer who is making deduction out of the payments made to the employees, then sub-section (3) requires that the deductor is to prepare a statement for such period as may be prescribed, which is to be delivered to the prescribed authority, in such form and verified and setting forth such particulars as may be prescribed. The said statement is to be delivered within such time as may be prescribed. 19. Rule 31A of the Income Tax Rules, 1962 (in short the Rules ) provides that every person who is responsible for deduction of tax under Chapter XVIIB shall in accordance with the provisions of section 200(3) of the Act, deliver or cause to be delivered, the quarterly statements to the Director General of Income 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .-For the purposes of this sub-section, an incorrect claim apparent from any information in the statement shall mean a claim, on the basis of an entry, in the statement- (i) of an item, which is inconsistent with another entry of the same or some other item in such statement; (ii) in respect of rate of deduction of tax at source, where such rate is not in accordance with the provisions of this Act. (2) For the purposes of processing of statements under sub-section (1), the Board may make a scheme for centralised processing of statements of tax deducted at source to expeditiously determine the tax payable by, or the refund due to, the deductor as required under the said sub-section. 20. Section 200A of the Act lays down the manner in which the statements of tax deducted at source are to be processed for issuing the intimation. First of all, the sums deductible under the Chapter are to be computed and interest, if any, shall be computed on the basis of such sums deductible as computed in the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1A of the Rules provided the time limit for the furnishing of statement for tax deduction at source on quarterly basis. Section 234E of the Act levies fees for default in furnishing the statements of tax deducted at source. Such fees is to be paid before delivering or causing to be delivered a statement in accordance with section 200(3) of the Act or proviso to section 206C(3) of the Act. In other words, in case the assessee has defaulted in not delivering the statement or causing to deliver the statement within time prescribed, then he is liable to pay the fees which is so prescribed under the Act and such fees shall not exceed the amount of tax deductible or collectable at source but the same has to be paid along with statement which is to be delivered under the provisions of section 200(3) of the Act. Though the statement of tax deducted at source has to be furnished by the deductor, no doubt, under section 200 of the Act, but the same has to be processed by the prescribed authority as per provisions of section 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 adjustment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atement in accordance with provisions of section 200(3) of the Act or the proviso to section 206C(3) of the Act. However, various regulations and the statutory provisions in this regard point out that undoubtedly, the responsibility of the deductor was to deposit the tax deducted at source in time and if not so, then with interest and consequently, where the tax was not paid in time and interest was not paid in time and then, where the statement of tax deducted at source could not be filed before the prescribed authority within stipulated time, the assessee was liable to levy of fees under section 234E of the Act. However, in case any default occurs due to the non- payment of fees by the assessee in this regard, then the provisions which has to be considered is section 200A(1)(c) of the Act. The power to charge / collect fees as per provisions of section 234E of the Act was vested with the prescribed authority under the Act only on substitution of earlier clause (c) to section 200A of the Act by the Finance Act, 2015 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are (P) Ltd. Vs. DCIT (2015) 121 DTR 81 (Asr) (Trib) had held that the adjustment in respect of levy of fees under section 234E of the Act was indeed beyond the scope of permissible adjustments contemplated under section 200A of the Act. Such a levy could not be effected in the course of intimation under section 200A of the Act and in the absence of any other provisions enabling the demand in respect of this levy having been pointed out, no such levy could be effected. The said proposition has been applied in various decisions of different Benches of Tribunal. Reference was made to the decisions of Chennai Bench of Tribunal in G. Indirani Vs. DCIT (supra), Ahmedabad Bench of Tribunal in M/s. Globe Ecologistics Ltd. Vs. DCIT in ITA Nos.2689-2691/Ahd/2015, ITA No.2692/Ahd/2015, relating to assessment year 2014-15, ITA No.2693/Ahd/2015, relating to assessment year 2013-14 and ITA Nos.2694-2695/Ahd/2014, relating to assessment year 2013-14, vide consolidated order dated 26.11.2015 and Chandigarh Bench of Tribunal in M/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 presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble High Court further held that a person can always approach the court in extraordinary equitable jurisdiction under Article 226/227 of the Constitution as the case may be. The Hon ble High Court therefore, observed that simply because no remedy of appeal was provided for the provisions of section 234E of the Act, the same cannot be said to be onerous and section 234E of the Act was held to be constitutionally valid. The constitutional validity of provisions of section 234E of the Act has also been upheld by the Hon ble Rajasthan High Court in M/s. Dundlod Shikshan Sansthan Anr. Vs. Union of India and Ors (supra). 28. In view of the above said ratio laid down by the Hon ble Bombay High Court, the case of the learned CIT-DR before us was that there is no merit in the present set of appeals filed by the assessee as the Hon ble High court has laid down that no appeal is provided from an order passed under section 234E of the Act and the same merits to be dismissed at the outset. In this regard, he has raised 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pealable under section 246A of the Act; and (iii) deemed as notice of payment under section 156 of the Act. The Finance Bill further provided that intimation generated after the proposed processing of TCS statement shall be at par with the intimation generated after processing of TDS statement and also provided that failure to pay tax specified in the intimation shall attract levy of interest as per provisions of section 220(2) of the Act. Further, amendments were also made in respect of the scheme of payment of TDS / TCS by the Government, deductor / collector which are not relevant for deciding the issue in the present appeal and hence, the same are not being referred to. The Finance Bill further provided that the amendment would take effect from 01.06.2015. 29. The perusal of Memo explaining the provision relating to insertion of clause (c) to section 200A of the Act clarifies the intention of Legislature in inserting the said provision. The provisions of section 234E of the Act were inserted by the Finance 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ikant Kundalia Vs. Union of India (supra) has laid down the proposition that fees under section 234E of the Act is chargeable in the case of present set of appeals, where the Assessing Officer had issued the intimation under section 200A of the Act prior to 01.06.2015. 31. Another aspect of the issue is whether the amendment brought in by the Finance Act, 2015 w.e.f. 01.06.2015 by way of insertion of clause (c) to section 200A(1) of the Act is clarificatory or is prospective in nature and is not applicable to the pending assessments. Undoubtedly, the provisions of section 234E of the Act were inserted by the Finance Act, 2012, under which the liability was imposed upon the deductor in such cases where TDS statements / returns were filed belatedly to pay the fees as per said section. However, in cases, where the assessee has failed to deposit the said fees, then in order to enable the Assessing Officer to collect the said fees chargeable under section 234E of the Act, it is incumbent upon the Legislature to provide 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 200A of the Act were inserted by Finance (No.2) Act, 2009, under which the machinery was provided for the Assessing Officer to process the TDS statements filed by the assessee. The insertion categorically being made w.e.f. 01.06.2015 lays down that the said amendment is prospective in nature and cannot be applied to processing of TDS returns / statements prior to 01.06.2015. 33. We further find that in recent judgment dated 26.08.2016, the Hon ble Karnataka High Court in Writ Appeal Nos.2663-2674/2015(T-IT) Ors in Sri Fatheraj Singhvi Ors Vs. Union of India Ors has quashed the intimation issued under section 200A of the Act levying the fees for delayed filing the TDS statements under section 234E of the Act. The Hon ble High Court notes that the Finance Act, 2015 had made amendments to section 200A of the Act enabling the Assessing Officer to make adjustments while levying fees under section 234E of the Act was applicable w.e.f. 01.06.2015 and has held that it has prospective effect. Accordingly, the 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer to levy or charge while processing the TDS returns w.e.f. 01.06.2015, such provision cannot have retrospective effect as it would be detrimental to the case of tax payer. The Hon ble Delhi High Court was considering the application of amendment to section 40(a)(ia) of the Act by the Finance Act, 2010, under which certain relaxations were given to the application of said section and it was held that the same applies retrospectively to earlier years. However, in the present set of appeals, the issue is against the provision under which a new enabling power is being given to charge fees under section 234E of the Act while processing TDS returns / statements and such power is to be applied prospectively. In any case, the Parliament itself has recognized its operation to be prospective in nature while introducing clause (c) to section 200A(1) of the Act and hence, cannot be applied retrospectively. Similarly, reliance placed upon by the learned CIT-DR on the ratio laid down by the Hon ble Supreme Court in Govinddas Vs. ITO (supra) is misplaced because of the distinguishable facts and issues. 9. The issue arising in the present appeal is identical to the issue before the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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