TMI Blog2018 (3) TMI 1510X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, the ld. AR has reiterated the arguments as made before the ld. CIT(A) and prayed to allow the appeal. 3. On the contrary, the ld Sr. DR has relied on the orders of the authorities below. 4. The Bench have heard both the sides on this issue. The ld. CIT(A) has dealt the issue in detail by holding as under: 4.3 I have carefully considered the facts of the case, findings of the AO and submission of the appellant. I have gone through the grounds of appeal and written submissions carefully. It is seen that the appellant has contended that prior to 01.06,2015, there was no enabling provision in Sec. 200A of the Act for making adjustment in respect of the statement filed by the assessee with regard to tax deducted at source by levying fee u/s 234E of the Act. The parliament for the first time enabled the AO to make adjustment by levying fee u/s 234E of the Act w.e.f. 01.06.2015. In order to comprehend the argument of the appellant, it would be appropriate to reproduce the provisions of Sec. 200A as stood before 01.06.2015, the amendment made in Sec. 200A by the Finance Act, 2015 and the provisions of Sec. 234E. (a) Provisions of Sec. 200A, as they stood prior to 01. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puted in accordance with the provisions of section 234E; (d) the sum payable by, or the amount of refund due to, the deduclor shall be determined after adjustment of the amount computed under clause (b) and clause(c) against any amount paid under section 200 or section 20 J or section 234E and any amount paid otherwise by way of tax or interest or fee: (e) 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 (d); and (f) the amount of refund due to the deductor in pursuance of the determination under clause (d) shall be granted to the deductor. (c) Provisions of Sec. 234E : (1) Without prejudice to the provisions of the Act, where a person fails to deliver or cause to be delivered a statement within the time prescribed in subsection (3) of section 200 or the proviso to subsection (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed charge for the extra service which the Department has to provide due to the late filing of the TDS statements. Respectfully following the above decision of Rajasthan High Court I find that there is no valid reason or justification to interfere with the compensatory fees imposed for late filing of TDS return. Accordingly the demand raised by AO for late filing fees u/s 234E is confirmed. 4.1 The Hon ble Rajasthan High Court in the case of Dundlod Shikshan Sansthan Vs. Union of India (2015) 63 taxmann.com 243 (Raj.) has held as under: The unamended section 200 referred to the levy on the late filing of returns as penalty. It was thereafter termed as fee, which is a compensatory in nature. In Jindal Stainless Ltd. v. State of Haryana [2006] 152 Taxman 561 (SC), the Constitution Bench of the Supreme Court has discussed the purpose of taxing statute. [Para 6] The constitutional validity of the statutory provision is not amenable to be challenged on the ground that the performance insisted upon by the statutory provision is too onerous or that the statute does not leave sufficient time or does not allow reasonable cause to be considered for violation of the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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.] 10. On a perusal of section 200, it is clear that sub-section (3) thereof, and with which we are concerned, inter alia stipulates that any person responsible for deducting any sum by way of tax, on or after 1st April, 2005 in accordance with the foregoing provisions of Chapter XVII or, as the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (3) of Section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012. 12. On a perusal of sub-section (1) of section 234E, it is clear that a fee is sought to be levied inter alia on a person who fails to deliver or cause to be delivered the TDS return/statements within the prescribed time in sub-section (3) of section 200. The fee prescribed is ₹ 200/- for every day during which the failure continues. Sub-section (2) further stipulates that 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. 13. It is not in dispute that as per the existing provisions, a person responsible for deduction of tax (the deductor) is required to furnish periodical quarterly statements containing the details of deduction of tax made during the quarter, by the prescribed due date. Undoubtedly, delay in furnishing of TDS return/statements has a cascading effect. Under the Income Tax Act, there is an obligation on the Income Tax Department to process the income tax returns within the speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 234E. This is nothing but a privilege and a special service to the deductor allowing him to file the TDS return/statements beyond the time prescribed by the Act and/or the Rules. We therefore cannot agree with the argument of the Petitioners that the fee that is sought to be collected under section 234E of the Act is really nothing but a collection in the guise of a tax. 16. We are supported in our view by a judgment of a division bench of the Calcutta High Court in the case of Howrah Tax Payers' Association v. Government of West Bengal [2011] 5 CHN 430. Before the Calcutta High Court, the constitutional validity of imposition of a late fee under section 32(2) of the West Bengal Value Added Tax Act, 2003 came up for consideration. After analysing the provisions of the Bengal Value Added Tax Act, the Calcutta High Court held as under: 10. In case of levying tax there is no quid pro quo between the Tax payer and the State. But element of quid pro quo is a must in case of imposing Fee. By virtue of impugned amendment, a dealer is entitled to get service indirectly from the authority upon payment of late fee. His irregular filing of return is regularised upon paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity should be confined to the contributories alone. The levy does not cease to be a fee merely because there is an element of compulsion or coerciveness present in it, nor is it a postulate of a fee that it must have a direct relation to the actual service rendered by the authority to each individual who obtains the benefit of the service. Quid pro quo in the strict sense was not always a sine qua non for a fee. All that is necessary is that there should be a reasonable relationship between the levy of fee and the services rendered. It was observed that it was not necessary to establish that those who pay the fee must receive direct or special benefit or advantage of the services rendered for which the fee was being paid. It was held that if one who is liable to pay, receives general benefit from the authority levying the fee, the element of service required for collecting the fee is satisfied. (Emphasis supplied) 18. We are therefore clearly of the view that the fee sought to be levied under section 234E of the Income Tax Act, 1961 is not in the guise of a tax that is sought to be levied on the deductor. We also do not find the provisions of section 234E as being onerous on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 21. 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 v. Smt. 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 a manner as to leave no manner of doubt. This violation can, of course, be in different ways e.g. if a State Legislature makes a law which only Parliament can make under List I to the Seventh Schedule, in which case it will violate Article 246(1) of the Constitution, or the law violates some specific provision of the Constitution (other than the directive principles). But before declaring the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 law-making challenged as unconstitutional, he seemed willing to reverse the presumption of constitutionality when laws inhibiting civil liberties were before the court. 80. However, we find no paradox at all. As regards economic and other regulatory legislation judicial restraint must be observed by the court and greater latitude must be given to the legislature while adjudging the constitutionality of the statute because the court d ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
