TMI Blog2019 (1) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Fatheraj Singhvi [2016 (9) TMI 964 - KARNATAKA HIGH COURT] we are of the considered opinion that this is a fit case for condonation of delay by the assessee in filing these 9 appeals before the CIT(A) and accordingly condone the said delay. We also deem it appropriate to remand the issue of levy of fee u/s 234E through intimation under section 200A which is in consideration before us to the file of the CIT(A) for examination and adjudication on merits and in accordance with law. - Appeals filed by the assessee for statistical purposes. - ITA Nos.1482 to 1490/Bang/2018 - - - Dated:- 17-1-2019 - Shri N. V. Vasudevan, Vice President And Shri Jason P Boaz, Accountant Member For the Appellant : Ms. Pratiksha Pai, CA For the Respondent : Dr. P. V. Pradeep Kumar, Addl. CIT ORDER PER JASON P BOAZ, ACCOUNTANT MEMBER These are a batch of nine appeals directed against the orders of CIT(A)-10, Bangalore, all dated 14.02.2018 for Assessment Years 2012-13 to 2015-16 for non-admission of the assessee s appeals against the intimations issued by the DCIT-TDS-CPC u/s 200A of the Income Tax Act, 1961 (in short the Act ) requiring the assessee to pay late filing fee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to be filed on 15-Oct-2012. There was a delay in filing of TDS returns due to some technical reasons. 3. The TDS Central Processing Cell (Hereafter referred as TDS-CPC) processed the return and issued intimation u/s 200A and levied a late fees of ₹ 22,263 for delay in filing Quarterly TDS statement. The late fee was levied in the intimation itself. The intimation was issued on 05- Sep-2013. 4. The Appellant did not pay the late fee u/s 234E as there was no express provisions to levy the same in the intimation issued u/s 200A. 5. The Appellant was also being informed by its consultants that the levy of late fee u/s 234E in the intimation u/s 200A was already being challenged in the Judicial forums and appellant decided to wait for the outcome of the Judicial proceedings. 6. Subsequently, The Honourable Karnataka High Court in Fatheraj Singhvi Vs U01 (WA 2650/2015, WA34/2016, WA 2648/2015, WA 2652/2015) has held that there was no power under section 200A to levy any late fee u/s 234E prior to amendment of Section 200A on 1-6- 2015. 7. In view of the above judgement of the Honourable Karnataka High Court, the Appellant approached the jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2652/2015) be applied to the case as the facts of the case are similar. 5. The Appellant prays that the levy of late fee u/s 234E through the medium of intimation u/s 200A be quashed as the section does not permit such levy prior to amendment of law on 1-Jun-2015. 6. Such other grounds as may be urged at the time of hearing. 3.2 From a perusal of the statement of facts, grounds of appeal (supra) and the material on record, the issue for consideration in all the appeals before us is against the intimation issued u/s 200Aof the Act requiring the assessee to pay late fees u/s 234E of the Act. The issue raised is in respect of the charging of late fees payable u/s 234E of the Act prior to the amendment to section 200A(1)(c) of the Act while processing the TDS returns. It is the assessee s contention that the legislature had inserted clause (c) to section 200(1) of the Act specifically w.e.f. 01.06.2015 and therefore in respect of TDS statements filed for the period prior to 01.06.2015, late fees u/s 234E of the Act could not be levied in the intimation issued u/s 200A of the Act. 4. Briefly stated, the facts of the case are as under: 4.1 The assessee, a Co-operativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n if the, payment of the fees under Section 234E already made as per demand/intimation , under Section 200A of the Act for the TDS for the period prior to 01.04.2015 is permitted to be reopened for claiming refund. The judgment will have prospective effect accordingly. (Para - 27) 4.4 In view of the above observations of the Hon ble Karnataka High Court, the CIT(A) held that the judgment has prospective effect and does not allow the appellant to file an appeal belatedly against an order which was passed long ago. It was in the light of this observation of the Hon ble High Court, the CIT(A) held that the reason for delay in filing appeals does not constitute sufficient cause . 5.1 Aggrieved by the nine impugned orders of the CIT(A) dated 14.02.2018, the assessee is in appeal before us. In the course of proceedings, the learned AR of the assessee assailed the orders of the CIT(A) in not admitting the appeals of the assessee and thereby not considering and adjudicating on the issues raised in the grounds of appeal. It was submitted that the Hon ble jurisdictional High Court in the case of Fatheraj Singhvi (supra) has quashed the intimation under section 200A of the Act f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention, the learned AR placed reliance on the decision of the Hon ble High Court of Gujarat in the case of Karamchand Premchand P Ltd., Vs. CIT (1975) 101 ITR 46 (Guj.). 5.2.1 Per contra, the learned DR vehemently supported the impugned orders of the CIT(A). On the issue of charge / levy of fee under section 234E of the Act, it was submitted that even without insertion o f clause (c) to section 200A(1) of the Act, it was incumbent on the assessee to pay fees, in case there is a default in furnishing the statement of TDS. According to the learned DR, section 234E of the Act is a charging provision creating a charge for levying fees for default in filing statements and the fee prescribed under section 234E of the Act could be levied even without a regulatory provision being found in section 200A of the Act for computation of the fee. In support of the above contentions, the learned DR placed reliance on the decision of the Hon ble Gujarat High Court in the case of Rajesh Kourani Vs. Union of India (2017) 83 taxmann.com 137 (Guj.). 5.2.2 On the issue of condonation of delay in filing the 9 appeals before the CIT(A), the learned DR supported the decision rendered by the CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 27 thereof, is extracted hereunder: 20. In view of the aforesaid observations and discussion, two aspects may transpire one, for Section 234E providing for fee and given privilege to the defaulter if he pays the fee arid hence, when a privilege is given for a particular purpose which in the present case is to come out from rigors of penal provision of Section 271H(1)(a), it cannot be said that the provisions of fee since creates a. counter benefit or reciprocal benefit in favour of the defaulter in. the rigors of the penal provision, the provisions of Section 234E would meet with the test of quid pro quo. 21. However, if Section 234E providing for fee was brought on the state book, keeping in view the aforesaid purpose and the intention then, the other mechanism provided for computation of fee and failure for payment of fee under Section 200A which has been brought about with effect from 1.6.2015 cannot be said as only by way of a regulatory mode or a regulatory mechanism but it can rather be termed as conferring substantive power upon the authority. It is true that, a regulatory mechanism by insertion of any provision made in the statute book, may have a retroactive c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 200A, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest. 23. In view of the aforesaid observation and discussion, since the impugned intimation given by the respondent-Department against all the appellants under Section 200A are so far as they are for the period prior to 1.6.2015 can be said as without any authority under law. Hence, the same can be said as illegal and invalid. 24. If the facts of the present cases are examined in light of the aforesaid observation aii.d discussion, it appears that in all matters, the intimation given in purported exercise of power under Section 200A are in respect of fees under Section 234E for the neriod prior to 1.6.2015. As such, it is on account of the intimation given making demand of the fees in purported exercise of power under Section 200A, the same has necessitated the appellant-original petitioner to challenge the validity of Section 234E of the Act. In view of the reasons recorded by us hereinabove, when the amendment made under Section 200A of the Act which has come into effect on 1.6.2015 is held to be having prospective effect, no computation of fee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present judgment would not be interpreted to mean that even if the payment of the fees under Section 234E already made as per demand/intimation under Section 200A of the Act for the TDS for the period prior to 01.04.2015 is permitted to be reopened for claiming refund. The ice-77nent will have prospective effect accordingly. It is further observed that the question of constitutional validity of Section 234E shall remain open to be considered by the Division Bench and snail not get concluded by the order of the learned Single Judge. 5.3.3 Considering the above decision of the Hon ble High Court of judicature in the case of Fatheraj Singhvi and Others Vs. Union of India (supra), it is clear that the assessee has a favourable case on merits. When there is a decision of the jurisdictional High Court, judicial discipline and propriety requires that we are duty bound to follow the same and therefore, with due respect, the decision of the Hon ble Gujarat High Court cited by the learned DR (supra) will not prevail. In this view of the matter and in the facts and circumstances of the case, as discussed above, we are of the considered opinion that the aforesaid decision of the Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nguishable. 6.2.2 Similarly, in the case of A. N. Mafatlal (HUF) (supra), the assessee had declared capital gains from transfer of agricultural land in the return of income. After having admitted capital gains in the return, the assessee sought to file appeal against the same belatedly, based on a High Court decision rendered later. However, in the case on hand, the levy of late fee under section 234E of the Act was charged by Revenue and there was lack of clarity on the issue. The said issue was under challenge in Courts and the appeals were filed after the decision was rendered by the jurisdictional High Court (supra). Therefore, the facts are different and distinguishable. 6.3 We also find merit in the contention of the assessee that the CIT(A) has factually misconstrued the observations of the Hon ble Karnataka High Court in the case of Fatheraj Singhvi (supra) that the decision does not mean that where the levy of late fees under section 234E of the Act has not been paid, the case should not be re-opened / appeals. There is nothing in the order of the Hon ble High Court to imply that appeals cannot be filed on such intimations under section 200A levying late fee under se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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