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Dharam Deep Public School, U/s Dharam Deep Educational and Welfare Society Versus Dy. Commissioner of Income Tax, CPC-TDS, Ghaziabad

2018 (1) TMI 334 - ITAT DELHI

Charging of late filing fees levied u/s 234E by passing the order u/s 200A - scope of amendment to section 200A(1) - Held that:- Identical issue has been adjudicated by this Bench of the ITAT in the case of M/s Samikaran Learning Pvt. Ltd. Vs TDS Officer, Laxmi Nagar, Delhi [2017 (11) TMI 671 - ITAT DELHI] held that as following the referred decision in the case of Gajanan Constructions and others [2016 (10) TMI 92 - ITAT PUNE] we hold that the amendment to section 200A(1) is prospective in natu .....

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issued under section 200A of the Act in respect of defaults before 01.06.2015 - Decided in favour of assessee - ITA No. 3112/Del/2016, ITA No. 3113/Del/2016, ITA No. 3114/Del/2016, ITA No. 3115/Del/2016 And ITA No. 3116/Del/2016, ITA No. 2317/Del/2016, ITA No. 2318/Del/2016 And ITA No. 2319/Del/2016 - Dated:- 5-1-2018 - Sh. N. K. Saini, AM And Smt. Beena A. Pillai, JM For The Assessee : Sh. Nipun Mittal, CA For The Revenue : Sh. Kaushlendra Tiwari, Sr. DR ORDER Per N. K. Saini, AM: These appeals .....

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es levied by the AO u/s 234E of the Income Tax Act, 1961 (hereinafter referred to as the Act) by passing the order u/s 200A of the Act. 4. Facts of the case in brief are that the AO charged the impugned late fees u/s 234E of the Act. 5. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that the assessee was that Section 200A of the Act which deals with processing of statements of tax deducted at source had been subsequently amended by the Finance Act, 2015 which cam .....

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d merit in the submissions of the assessee and confirmed the order passed by the AO. The reliance was placed on the judgment of the Hon ble Bombay High Court in the case of Rashmikant Kundalia Vs Union of India reported at (2015) 54 Taxmann.com 200. 7. Now the assessees are in appeal. The ld. Counsel for the assessee submitted that since the amendment has been inserted u/s 200A of the Act w.e.f. 01.06.2015 and all these cases were of the prior date. Therefore, the AO was not justified in collect .....

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A No.88,89, and 90/JP/2017) vide order dated 09/03/2017, had dismissed the appeal of the assessee. 8. The ld. counsel for the assessee in his rejoinder contended that the facts before Hon ble High Courts were different, therefore, the facts of the cases relied by the ld. CIT DR are not applicable to the facts of the present case and that the Pune Bench of the Tribunal in the case of Gajanan Constructions Vs DCIT, CPC (TDS), (2016) 73 taxman.com 380 duly considered the decisions rendered by Hon b .....

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e material available on the record. It is noticed that an identical issue has been adjudicated by this Bench of the ITAT in the case of M/s Samikaran Learning Pvt. Ltd. Vs TDS Officer, Laxmi Nagar, Delhi in ITA Nos. 4050 to 4054/Del/2016 for the assessment years 2014-15 and 2015-16 vide order dated 09.11.2017 wherein the relevant findings have been given in paras 2.1 to 2.3 which read as under: 2.1. We have considered the rival submissions and perused the material available on record. Before adv .....

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tatement; or (ii) an incorrect claim, apparent from any information in the statement; (b) the interest, if any, shall be computed on the basis of the sums deductible as computed in the statement; [(c) the fee, if any, shall be computed in accordance with the provisions of section 234E; (d) the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of the amount computed under clause (b) and clause (c) against any amount paid undersection 200 or section .....

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d of the financial year in which the statement is filed. Explanation.-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 proces .....

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atement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues. (2) The amount of fee referred to in sub-section (1) shall not exceed the amount of tax deductible or collectible, as the case may be. (3) The amount of fee referred to in sub-section (1) shall be paid before delivering or causing to be delivered a statement i .....

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he Act deals with processing of statement of tax deducted at source, whereas, section 234E of the Act deals with fee for default in furnishing statements. Now, we shall examine the decision of the Pune Bench of the Tribunal in the case of Gajanan Constructions (supra), relied upon by the assessee, therefore, we are reproducing hereunder the relevant portion from the aforesaid order for ready reference and analysis:- This bunch of appeals filed by different assessee are directed against respectiv .....

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A No.1339/PN/2015 for which the assessee has filed a condonation petition. After considering the same, the delay in filing of these appeals is condoned and the appeals are admitted for adjudication. 4. The issue arising in all the appeals before us is against intimation issued under section 200A of the Act and / or order passed under section 154 of the Act in charging fees payable under section 234E of the Act. We therefore take up ITA No.1292/PN/2015 as the lead case. The issue raised in the se .....

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rior to 01.06.2015, late fees charged under section 234E of the Act could not be levied in the intimation issued under section 200A of the Act. 5. In order to adjudicate the issue raised in these appeals, few material facts have to be considered. The assessee was required to deduct tax at source out of payments made on account of salary, interest, etc. for the respective quarters in the accounting period. The Act required the assessee to file quarterly TDS returns intimating the tax deducted at .....

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under section 154 of the Act also. However, the same were dismissed by the respective Assessing Officers. 6. In appeal, the CIT(A) held that the appeal of assessee was not maintainable, in view of the ratio laid down by the Hon'ble Bombay High Court in Rashmikant Kundalia v. Union of India [2015] 54 taxmann.com 200/229 Taxman 596/373 ITR 268. Further, even on merits, the contention of assessee that the Assessing Officer was not empowered to raise the demand under section 234E of the Act by p .....

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ons of section 200(3) of the Act, wherein the duty of person was to file the statement within prescribed time. Reference was made to Rule 31A of the Income Tax Rules, 1962 (in short 'Rules'), which provides the time limit to file the statement of tax deducted at source. He further pointed out that the Act requires quarterly statement to be filed within 15 days of close of the quarter. Thereafter, the learned Authorized Representative for the assessee pointed out that clause (c) to sectio .....

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had been charged under section 234E of the Act. An application for condoning the delay in filing the appeals was also filed as referred to by the learned Authorized Representative. Referring to the order passed by the CIT(A), the learned Authorized Representative for the assessee pointed out that the order of Assessing Officer was not passed under section 234E of the Act but was passed under section 200A of the Act. The CIT(A) had relied on the ratio laid down by the Hon'ble Bombay High Cour .....

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00A(1) of the Act w.e.f. 01.06.2015, there was no mechanism to charge fees by the Assessing Officer. He stressed that where an order has to be passed under section 200A of the Act for charging fees under section 234E of the Act, then the Legislature should provide the machinery for charging the said fees under section 234E of the Act, which was provided w.e.f. 01.06.2015. He further stressed that where the assessee had denied his liability to be assessed, then the right to appeal is provided und .....

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g of late fees under section 234E of the Act by the Assessing Officer while issuing intimation under section 200A of the Act can be charged prior to 01.06.2015. The learned Authorized Representative for the assessee further pointed out that the issue of charging of fees under section 234E of the Act and raising of demand under section 200A of the Act has been adjudicated by series of cases by different Tribunals and copies of same were filed. 9. Further, it was pointed out that the CIT(A) has wr .....

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Assessing Officer had no authority to levy the fees prior to 01.06.2015. He referred to the ratio laid down by the Hon'ble Supreme Court in CIT v. B.C. Srinivasa Setty [1981] 128 ITR 294/5 Taxman 1, which had laid down the proposition that in cases where the cost of acquisition of the assets were Nil, then no capital gains has to be computed in the hands of assessee since there was no mechanism to charge capital gains. He further stressed that the Hon'ble Rajasthan High Court in Dundlod .....

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it was pointed out that casual representation in order would not decide the order in one way or the other. The learned Authorized Representative for the assessee pointed out that the provisions of section 200A of the Act were inserted earlier. However, section 234E of the Act was inserted later and where section 200A of the Act does not provide for levy of fees by the Assessing Officer till before the amendment w.e.f. 01.06.2015, there was no merit in charging the said levy. He further pointed o .....

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at prior to 01.06.2015, where there was no power given under section 200A of the Act to the Assessing Officer to charge the said fees, the present bunch of appeals being filed by different assessee related to the period prior to 01.06.2015 and hence, no fees could be charged under section 234E of the Act. He further pointed out that in CIT v. Vatika Township (P.) Ltd. [2014] 367 ITR 466/227 Taxman 121/49 taxmann.com 249 (SC), the Hon'ble Supreme Court held that any amendment can be considere .....

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ees under section 234E of the Act can be charged under section 200A of the Act, wherein clause (c) was inserted w.e.f. 01.06.2015. He further referred to the Chapter XVIIB of the Act, which provide deduction of tax at source, wherein payer of sum be it is salary, interest or commission, etc. has certain obligations and they have been made responsible, wherein the payments are made or credited to the account of payee, then the duty of the deductor is to deduct tax. Sections 192 to 194LD, 195 to 1 .....

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of the modes of recovery which works on the principle of paying as you earn. He further stated that TDS is source of revenue to the Government to carry out various programmes. Once the tax was deducted, then it was not the deductor's money but it was deducted on account of third party, who claims it as part of his tax payment. The obligation on the deductor was to collect the said tax deducted at source and deposit the same and the deductee had all the rights to claim the benefit of such tax .....

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limit . He referred to the proviso to section 200(3) of the Act, which was inserted w.e.f. 01.10.2014, wherein it is provided that correction statement for rectification can also be issued. 12. The learned DR further pointed out that before insertion of levy of fees under section 234E of the Act, there was provision of levy of penalty under section 272A(2)(k) of the Act. This amendment was w.e.f. 01.04.2005, hence where the statement was not filed by the deductor, penal provisions were attracte .....

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to the sum deducted and clause (b) refers to the interest, if any; and w.e.f. 01.07.2012, new section was introduced i.e. 234E of the Act, under which it was provided that person shall be liable to deposit the tax deducted at source, hence the provisions were mandatory i.e. the liability was on the deductor to furnish the statement and in case of any default in furnishing statement, fees was provided under the said section. He further referred to the second proviso, which was inserted w.e.f. 01 .....

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;shall' and it is further provided that the amount of fees, shall not exceed the tax deducted at source. Referring to sub-section (3), it was pointed out that the amount of fees is to be deposited before delivering the statement. He stressed that the provisions of section 234E of the Act was charging section wherein the liability was upon the assessee that he shall pay and when the same is to be paid is also specified therein. The Legislature in this regard was clear that defaulter itself wo .....

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wherein the constitutional validity was challenged, the learned DR referred to paras 13 to 15 and 18 of the said judgment and pointed out that the right to appeal was the creation of statute and the Hon'ble High Court was dealing with constitutional validity but also considered the purpose for which the said section was introduced. Referring to section 200A(1)(c) of the Act, he stated that though the word used is fees, if any, but that means where there is an error or where no fees has been .....

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further relied on Chennai Bench of Tribunal, wherein it is provided that the Assessing Officer can charge fees under section 234E of the Act. He further contended that by way of an amendment in 2015, the Act has not provided any new levy; the provisions of section 234E of the Act were already there and amendment is only clarificatory. Section 234E of the Act was charging section w.e.f. 01.04.2012 and in case of violation of provisions of the Act, fees was to be levied. Referring to the reliance .....

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82/[2014] 221 Taxman 59/362 ITR 256 the amendment by way of Finance Act, 2010 in section 40(a)(ia) of the Act was the issue, which was held to be charificatory and hence retrospective in nature. He further placed reliance on the ratio laid down by the Hon'ble Supreme Court in Govinddas v. ITO [1976] 103 ITR 123. 14. The learned Authorized Representative for the assessee in rejoinder pointed out that Memo explaining the Finance Bill clearly says that the amendment was w.e.f. 01.06.2015 and it .....

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section 234E of the Act. 15. We have heard the rival contentions and perused the record. The issue arising in this bunch of appeals is against levy of fees under section 234E of the Act. In order to adjudicate the issue, first reference is being made to the relevant provisions of the Act. Under Chapter XVII headed 'collection and recovery of taxes' and under 'clause B', deduction at source, the statute lays down the duty of the payer of certain amounts to deduct tax at source un .....

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sub-section (1A) of section 192 of the Act and paid to the Central Government shall be treated as the tax paid on behalf of the person in respect of whose income such payment of tax has been made. 16. Section 200 of the Act lays down the duty of the person deducting tax, which reads as under:- 200. (1) Any person deducting any sum in accordance with the foregoing provisions of this Chapter shall pay within the prescribed time, the sum so deducted to the credit of the Central Government or as the .....

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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 .....

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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 subsection in such form and verified in such manner as may be specified by the authority. 17. Under section 200(1) of the Act, it is provided that any person deductin .....

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cted in accordance with foregoing provisions of the Chapter, by the office of the Government, then duty is upon the Treasury Officer or the Drawing & Disbursing Officer or any other person, to deliver or cause to be delivered to the prescribed income tax authorities, or to the person authorized by such authority, statement in such form, verified in such manner, setting forth such particulars within such time as may be prescribed. Under section 200(3) of the Act, similar responsibility is on .....

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ment 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 ve .....

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ized 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 subrule (1) may be furnished .....

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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 statement of tax deduction at source or a correction statement has been made by a person deducting any sum (hereafter referred to in this section as deductor) under section 200, such statement shall be processed in the following manner, namely:- (a) the sums deductible under this Chapter shall be computed after making the following adjustments, .....

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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 : Provided that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the statement is filed. Explanation.-For the purpose .....

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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. 19. 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 a .....

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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. 20. 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 .....

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of fees referred to in sub-section (1) shall not exceed the amount of tax deductible or collectable, as the case may be. Sub-section (3) further lays down that the amount of fees referred to in sub-section (1) shall be paid before delivering or causing to be delivered a statement in accordance with sub-section 200(3) of the Act or the proviso to section 206C(3) of the Act. The provisions of said section have been made applicable to a statement to be delivered or cause to be delivered on or afte .....

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as may be prescribed. Rule 31A 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 stateme .....

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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 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 su .....

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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 furnishing the statement were inserted by the Finance Act, 2012 w.e.f. 01.07.2012, the prescribed authority did not have the power to charge the said fees, while processing the quarterly statements/returns under section 200A of the Act. 23. Now, looking .....

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y from the deductor and/or any interest payable on such deduction of tax at source. However, till substitution of clause (c) to section 200A(1) of the Act by the Finance Act, 2015 w.e.f. 01.06.2015, the Assessing Officer was not empowered to charge fees under section 234E of the Act. The case of Revenue on the other hand, was that it was the duty of deductor while furnishing the statement under section 200(3) of the Act to deposit the fees referred to in section 234E(1) of the Act. The learned D .....

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d 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 vest .....

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h 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 taxpayer, 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 .....

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. Prior to said substitution the Assessing Officer had no authority to charge the fees under section 234E of the Act while issuing intimation under section 200A of the Act. Before exercising the authority of charging any sum from any deductor or the assessee, the prescribed authority should have necessary power vested in it and before vesting of such power, no order can be passed by the prescribed authority in charging of such fees under section 234E of the Act, while exercising jurisdiction und .....

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nce of enabling provisions, levy of fees could not be effected in the course of intimation issued under section 200A of the Act prior to 01.06.2015. 25. The Amritsar Bench of Tribunal in Sibia Health Care (P.) Ltd. v. Dy. CIT [2016] 65 taxmann.com 105 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 u .....

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sessment 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 Khanna Watches Ltd. v. Dy. CIT in ITA Nos.731 to 735/CHD/2015, relating to assessment years 2013-14 & 2014-15, order dated 29.10.2015. 26. While deciding the present bunch of appeals, the Revenue had placed reliance on the ratio laid down by the Hon'ble Bombay Hi .....

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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 returns/statements within prescribed time frame, then it lead to an additiona .....

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by the Hon'ble High Court that late filing of TDS returns/statements was regularized by payment of fees as set out in section 234E of the Act. Therefore, the findings of Hon'ble High Court were thus, that the fees sought to be levied under section 234E of the Act was not in the guise of tax sought to be levied on the deductor. The provisions of section 234E of the Act were held to be not onerous on the ground that section does not empower the Assessing Officer to condone the delay in lat .....

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n'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 Dundlod Shikshan Sansthan' case (supra). 27. In view of the abovesaid ratio laid down by the Hon'ble Bombay High .....

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ed 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 quarte .....

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e of the fact that the Finance (No. 2) Act, 2009 inserted section 200A in the Act, which provided for furnishing of TDS statements for determining the amount payable or refundable to the deductor. It further took note that however, as section 234E of the Act was inserted after the insertion of section 200A in the Act, the existing provisions of section 200A of the Act does not provide for determination of fees payable under section 234E of the Act at the time of processing of TDS statements. It .....

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rate the mechanism for computation of fees payable under section 234E of the Act. The Finance Bill further refers to the existing provisions of the Act i.e. after processing of TDS statement, intimation is generated specifying the amount payable or refundable. This intimation generated after processing of TDS statement is (i) subject to rectification under section 154 of the Act; (ii) appealable under section 246A of the Act; and (iii) deemed as notice of payment under section 156 of the Act. Th .....

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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. 28. 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/T .....

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g 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 .....

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f insertion of clause (c) to section 200A(1) of the Act by the Finance Act, 2015 w.e.f. 01.06.2015. Accordingly, we hold that where the Assessing Officer has processed the TDS statements filed by the deductor, which admittedly, were filed belatedly but before insertion of clause (c) to section 200A(1) of the Act w.e.f. 01.06.2015, then in such cases, the Assessing Officer is not empowered to charge fees under section 234E of the Act while processing the TDS returns filed by the deductor. 29. The .....

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) 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. 30. 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. .....

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r 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, applicab .....

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g 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 TDS statements. However, as section 234E of the Act was inserted after insertion of section 200A in the Act, the existing provisions of section 200A of the Act did not provide for determination of fees payable under section 234E of the Act at the time of processing of TDS statements. In this regard, it was thus, propo .....

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of the Act i.e. prior to 01.06.2015, the Assessing Officer at the time of processing the TDS statements did not have power to charge fees under section 234E of the Act and in order to cover up that, the amendment was made by way of insertion of clause (c) to section 200A of the Act. In such scenario, it cannot be said that insertion made by section 200A(1)(c) of the Act is retrospective in nature, where the Legislature was aware that the fees could be charged under section 234E of the Act as pe .....

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n'ble Karnataka High Court in Writ Appeal Nos. 2663-2674/2015(T-IT) in Fatheraj Singhvi v. Union of India [2016] 73 taxmann.com 252 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 app .....

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n this regard, wherein the constitutional validity of section 234E of the Act has been upheld. 33. 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 .....

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t wherein it was held that before 01.06.2015, whether the Assessing Officer had authority to pass a separate order under section 234E of the Act levying fees for delay in filing the TDS statements under section 200(3) of the Act; the Tribunal held 'yes' that the assessing authority had such power and after 01.06.2015, the Assessing Officer was within his limit to levy fees under section 234E of the Act even while processing the TDS statements under section 200A of the Act. In view of the .....

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on'ble Delhi High Court in Naresh Kumar's case (supra). However, in view of our decision in the paras hereinabove, where power is being enshrined upon the Assessing 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 taxpayer. 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 c .....

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g clause (c) to section 200A(1) of the Act and hence, cannot be applied retrospectively. Similarly, reliance placed upon by the learned DR on the ratio laid down by the Hon'ble Supreme Court in Govinddas's case (supra) is misplaced because of the distinguishable facts and issues. 36. Now, coming to the connected issue raised by the learned Authorized Representative for the assessee by way of ground in some of the appeals appeal No. 1 that whether any appeal is maintainable against the in .....

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on 234E of the Act. Without going into various aspects of the issue, we make reference to the Memorandum explaining the Finance Bill, 2015, under which the heading was rationalization of provisions relating to Tax Deduction at Source (TDS) and Tax Collection at Source (TCS). The said memorandum categorically recognized that under the existing provisions of the Act, after processing of TDS statements, an intimation is generated specifying the amount payable or refundable. It was further noted tha .....

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timation is generated under which, if any amount is found to be payable, then such intimation generated after processing of TDS returns is subject to rectification under section 154 of the Act and/or is also appealable under section 246A of the Act, since the demand issued by the Assessing Officer is deemed to be a notice of payment under section 156 of the Act. Since the intimation in question issued by the Assessing Officer was appealable order under section 246A(1)(a) of the Act, therefore, t .....

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der section 200A of the Act, we hold that such intimation issued by the Assessing Officer after processing the TDS returns is appealable. The demand raised by way of charging of fees under section 234E of the Act is under section 156 of the Act and any demand raised under section 156 of the Act is appealable under section 246A(1)(a) and (c) of the Act. Accordingly, we reverse the findings of CIT(A) in this regard. We find support from the similar proposition being laid down by Mumbai Bench of Tr .....

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by the CIT(A) under section 250 of the Act is further appealable before the Tribunal under section 253 of the Act. Hence, we admit the present appeals filed by the assessee even on this preliminary issue. We have already adjudicated the issue of charging fees under section 234E of the Act by the Assessing Officer while processing returns/statements in the paras hereinabove and in view thereof, we hold that the Assessing Officer is not empowered to charge the fees under section 234E of the Act b .....

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om both sides, kept in juxtaposition and analyzed, we find that before us, the assessee has raised a question prior to 01/06/2015, there was no enabling provision in section 200A for raising the demand in respect of levy of fee u/s 234E of the Act. We find that the coordinate Bench of Pune in the case of Gajanan Constructions (supra) has made an elaborate discussion on the issue and decided in favour of the assessee. It is also noted that while coming to a particular conclusion, the Pune Bench o .....

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f general principle concerning application of retrospectively of the amendment, wherein, it was held that a legislation is presumed not to be intended to have a retrospective operation. It is also noted that the Bench followed the decision in the case of Fatheraj Singhvi vs UOI(2016) 73 taxman.com 252 (Kerala)(Para-32) and Kash Realtors Pvt. Ltd. vs ITO (ITA NO.4199(Mum.) of 2015) dated 27/07/2016(para-36). Even if two views are possible/available, as per the decision from Hon ble Apex Court in .....

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