TMI Blog2018 (11) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... the context of power of AO for levy of fee under section 234E prior to 1.6.2015. In view of the above, AO while processing the TDS statements for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted. - ITA. No. 18, 19 & 20/JP/2017 - - - Dated:- 29-10-2018 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Rohan Sogani Shri Rajeev Sogani (CA) For the Revenue : Smt. Ashwini Hosmani (JCIT) ORDER PER: VIKRAM SINGH YADAV, A.M. These are three appeals filed by the respective assessees against the order of ld. CIT (A)-3, Jaipur dated 16.05.2016 for Assessment Year 2013-14 wherein the assessee has taken the following grounds of appeal:- ITA. No. 18/JP/2017: 1. The Commissioner of Income Tax, (Appeals)-3, Jaipur ( the CIT(A) ) erred in fact and in law in confirming the levy of fees for delay in filing the TDS return u/s 234E of the Income Tax Act, 1961 (the Act) without appreciating the facts and circumstances of the case. The CIT(A) ought to have directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to section 200A(1) of the Act by the Finance Act, 2015 w.e.f 01.06.2015. Since, prior to said substation 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 and henceforth levy of fees u/s 234E in the case is without authority. 2. At the outset, it is noted that there has been a delay in filing the present set of appeals. In its condonation petition, the assessee has submitted that the concern employee who was responsible for TDS return and filing appeals against the orders related to TDS matter was unavailable for 4 months starting 1st August, 2016 and he came back on 1st December, 2016 and thereafter, the assessee has filed the subject appeal. It was submitted that even though the order of the ld. CIT(A) was received by the company on 15.06.2016. However, due to non- availability of the concern employee who was handling the TDS matter, the present appeal could not be filed in time and it was accordingly submitted that there was a reasonable cause for delay in filing the present appeal and in support reliance was placed on the decision of Hon ble Supreme Court in case of Collector Land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g fee u/s 234E of the Act. The ld. CIT(A) however, referring to the decision of the Hon ble Rajasthan High Court in case of M/s Dundlod Shikshan Sansthan v. Union of India [2015] 63 taxmann.com 243 and others vide order dated 28.07.2015 has held that there is no valid reason or justification to interfere with the compensatory fee imposed in late filing of the TDS return. Accordingly, the demand raised by the AO for late filing fee u/s 234E was confirmed. Now, the assessee is in appeal before us. 6. During the course of hearing, the ld. AR submitted that provisions of Section 200A of the IT Act, 1961, inserted w.e.f. 1.4.2010 are special provisions for processing of the TDS statements. The section sets out some exhaustive adjustments, which can be made while processing the statement. 6.1 Section 234E has been inserted by Finance Act, 2012 w.e.f. 1st July, 2012 which provides for levy of Fee for delay in furnishing TDS Statement. Hence, from 1st July, 2012 onwards, a fee can be levied for the delay in submission of TDS Return. 6.2 Section 200A was amended by Finance Act 2015 and w.e.f 1st June, 2015 clause (c) to subsection (1) has been substituted. The updated clause is as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Jaipur, which have also considered the decision of Hon ble Rajasthan High Court in the case of Dundlod Shikshan Sansthan (supra) and have decided in the favour of the assessee. Relevant extracts has been set out here for your convenience. M/s Mentor India Limited vs. DCIT - ITA No.738/JP/2016 ..We find that the Hon ble Jurisdictional High Court in the case of Dundlod Shikshan Sansthan Vs. Union of India (supra) has ITA 738/JP/2016 Ors. ITAs_ M/s Mentor India Ltd. Vs DCIT with other 10 cases 7 also considered the decision of the Hon ble Bombay High Court in the case of Rashmikant Kundalia Vs. Union of India (2015) 229 Taxman 596 wherein the Hon'ble High Court has decided the nature of demand. The Hon'ble High Court has held that Section 234E of the Act is not punitive in nature but a fee which is a fixed charge for the extra service which the department has to prove due to the late filing of the TDS statements. Hence from both the decisions relied upon by the ld. DR, the issue of power of imposing late fee is not decided but the Hon ble Karnataka High Court in the case of Fatheraj Singhvi ors. Vs. Union of India Ors. (supra) has decided the issue in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in Writ Appeal Nos.2663- 2674/2015(T-IT) in Fatheraj Singhvi v. Union of India [2016] 73 taxmann.com 252 has held that prior to 1-6-2015, AO did not have power to charge fees under section 234E while processing TDS returns. Further the Hon ble Court has held that Hon ble Bombay High Court in the case of Rashmikant Kundalia (supra), has not upheld the applicability of section 234E of the Act by the Assessing Officer while processing TDS statement filed by the deductor prior to 01.06.2015. Relevant extract has been set out here for the sake of your convenience: ..30. The Hon'ble Bombay High Court in Rashmikant Kundalia's case (supra) has upheld the constitutional validity of said section introduced by the Finance Act, 2015 w.e.f. 01.06.2015 but was not abreast of the applicability of the said section 234E of the Act by the Assessing Officer while processing TDS statement filed by the deductor prior to 01.06.2015. In such scenario, we find no merit in the plea of learned CIT-DR that the Hon'ble Bombay High Court in Rashmikant Kundalia's case (supra) has laid down the proposition that fees under section 234E of the Act is chargeable in the case of present set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 200A of the Act w.e.f. 1.6.2015 empowering the Assessing officer levying the fees under section 234E of the Act. It is therefore not a case of continuing default where the assessee has defaulted in furnishing the TDS statement even after 1.6.2015 and thereafter, the demand for payment of fees under section 234E has been raised by the Assessing officer. In case of Fatheraj Singhvi (supra), the Hon ble Karnataka High Court has held that the provisions of amended section 200A are prospective in nature. Further, the decision of the Hon ble Rajasthan High Court in case of M/s. Dundlod Shikshan Sansthan and Others (supra) as relied by ld. CIT (A) is in the context of validity of section 234E, but not in the context of power of AO for levy of fee under section 234E prior to 1.6.2015. In view of the above, the Assessing Officer while processing the TDS statements for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted. 8. In ITA No. 19 20/JP/2017, both the parties fairly submitted that the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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