TMI Blog2020 (9) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... set aside the order of the Ld. CIT(A) and the fee levied u/s. 234 E is directed to be deleted. - Decided in favour of assessee. - ITA No.4575/Del/2019 - - - Dated:- 31-8-2020 - Shri R.K. Panda, Accountant Member And Shri Sudhanshu Srivastava, Judicial Member For the Appellant : None For the Respondent : Ms. Rakhi Vimal, SR. DR ORDER PER R.K PANDA, AM: This appeal is filed by the assessee is directed against the order dated 30.04.2019 of the CIT(A), Faridabad confirming the levy of late filing fee u/s 234E by the AO. 2. None appeared on behalf of the assessee. Therefore, this appeal is being decided on the basis of material available on record and after hearing the Ld. DR. 3. The ld. DR strongly supported the order of the CIT(A). She submitted that the issue in this appeal under consideration is levy of fees u/s 234E of the Act. She submitted that the contention that fee u/s 234E is not leviable before 01.06.2015, i.e., the date when clause (c) was inserted in section 200A(1) for the computation of the said fees at the time of processing is not correct. She submitted that the decisions of the Tribunal in the case of Udit Jain is not applicable si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Source (TCS) Provisions which comprise of 6 paras. Para (III) relates to insertion of section 234E in the statute relevant to the issue under consideration. 6. She further drew the attention of the Bench to the Memorandum to the Finance Bill, 2015 which elaborates the rationale for insertion of clause (c) in section 200A(I) in the statute. Para (I) para (III) under the heading L Rationalization of Measures which are relevant to the issue. 7. She also drew the attention of the Bench to the provisions of Section 271H of the Act which was simultaneously inserted with the provisions of section 234E w.e.f. 01.07.2012 by the Finance Act, 2012. She submitted that the applicability interpretation of the provisions of sec. 271H have been discussed by various High Courts in its order while examining the validity of provisions of Sec. 271 H. 8. The ld. DR submitted that in a number of cases, various High Courts have upheld the validity of provisions of section 234E which provides for imposition of fee for delayed filing of statement of TDS. Hon ble High Courts have categorically held that the provisions are not ultra vires and not violative of constitution. The issue of ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue to charge the fees in terms of section 234 E of the Act from the date of its introduction in the statute i.e. 01.07.2012. It may be noted that section 234.E creates an automatic charge on the deductors who have defaulted on this count who are required to pay the fee u/s 234E before delivering such belated TDS/TCS returns /statements in accordance with sub-section (3) of sec. 234E. By amendment [introduction of clause 200A(l)(c)] this adjustment was brought within the fold of section 200A of the IT Act so that the fee u/s 234E can be computed at the time of processing issue of intimation in the event of non-payment of fee before delivering such belated TDS/TCS statements by the defaulting deductors. Any view that inhibits the levy of fees under section 234 E due to the absence of regulatory provision will tantamount to charging section yielding to machinery provision which should not be allowed. This has not been considered by Hon ble ITAT. c). Section 200A entails the procedure for procedure for processing of TDS returns. Amended section of 200A (l)(c), with effect from 01/06/2015, enables computation of fees chargeable u/s 234E under the purview of 200A. Therefore, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of TDS return/statement upto a period of 1 year from the prescribed time is subject to levy of fee u/s 234E. The penalty leviable u/s 271H of the Act is not automatic whereas the fees leviable u/s 234E is mandatory and the AO has no discretion. These are two independent provisions and the findings of Hon ble High Courts in this regard may kindly be referred to. The same have not been considered by Hon ble ITAT. g) Before the insertion of Clause (c) to section 200A(1), section 200A did not provide for computation of fee payable u/s 234E of the Act at the time of processing of TDS statements though the same was mandatorily leviable for the delay in filing of TDS statements. In this sense, insertion of Clause (c) to section 200A(1), is only an addendum to the section to provide for the machinery provision to compute the fee payable u/s 234E at the time of processing of TDS statement and the same is enabling for processes in nature. This is very much evident on perusal of the Memorandum to the Finance Bill 2015. The same have not been considered by Hon ble ITAT. 10. The ld. DR submitted that as per various judicial decisions the ratio is that the legislations which modified accr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and orders of various other High Courts wherein the validity of provisions of sec.234E has been upheld. 12. She submitted that the issue of legality of intimations / orders passed u/s 200A levying fee u/s 234E for late filing of TDS/TCS returns / statements, prior to the amendments made by Finance Act 2015 w.e.f. 01.06.2015, was considered by Hon ble Rajasthan High Court also in the case of Dunlod Shikshan Sansthan vs. UOI reported in [2015] 63 taxmann.com 243 (Raj)]. Para-8 of the order is relevant the same is reproduced as under :- 8. In the present case, the fee was levied under section 200for late filing of the returns, prior to the amendments made by the Finance Act, 2015 with effect from 1.6.2015 in Sections 200A, 246A and 272A providing for computation and appeal. We do not find that even prior to these amendments the imposition of fee was illegal. We do not in exercise of the power under Article 226 of the Constitution of India find any valid reasons or jurisdiction to interfere with the compensatory fees imposed for late filing of the TDS returns on flat rates. The absence of any provision for condonation of delay and the appeal prior to amendments also did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e periods prior to 01.06.2015 i.e. the date when clause (c) was inserted to section 200A(1) by the Finance Act, 2015. Having considered the periods prior to 01.06.2015 having upheld the validity of sec. 234E by Hon ble High Courts, it can t be said that the controversy, being raised now, has escaped the eyes of Hon ble High Courts and therefore there can t be any doubt that there is any iota of ambiguity with respect to the period of default for which the fee u/s 234E is chargeable. In view of the same and categorical findings of Hon ble High Courts, the fee u/s 234E is undoubtedly leviable for the defaults of period in filing TDS/TCS statements/returns, even for the period prior to 01.06.2015 independent to the provisions of Sec.200A(l) of the Act. The same have not been considered by Hon ble ITAT. 16. The ld. DR accordingly submitted that in view of the extant provisions, case laws referred to above and the discussions supra, the appeals of the assessee s be dismissed on merit. It is also submitted that this written submissions may kindly be incorporated reproduced in the order for kind reference. 17. We have considered the rival arguments made by both the sides, peruse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticular issue and in the absence of any decision rendered by the Jurisdictional High Court, then the decision in favour of the assessee needs to be followed as held by Hon ble Supreme Court in Vegetables Products Ltd. [1973] 88 ITR 192(SC). The relevant findings of the Tribunal are as under:- 11. We have heard the rival contentions and perused the record. The issue arising in the present bunch of appeals is against levy of late filing fees under section 234E of the Act while issuing intimation under section 200A of the Act, in the first bunch of appeals. The second bunch of appeals in the case of Junagade Healthcare Pvt. Ltd. is against order of Assessing Officer passed under section 154 of the Act rejecting rectification application moved by assessee against intimation issued levying late filing fees charged under section 234E of the Act. The case of assessee before us is that the issue is squarely covered by various orders of Tribunal, wherein the issue has been decided in respect of levy of late filing fees under section 234E of the Act, in the absence of empowerment by the Act upon Assessing Officer to levy such fees while issuing intimation under section 200A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 character but, whether such provision provides for a mere regulatory mechanism or confers substantive power upon the authority would also be a aspect which may be required to be considered before such provisions is held to be retroactive in nature. Further, when any provision is inserted for liability to pay any tax or the fee by way of compensatory in nature or fee independently simultaneously mode and the manner of its enforceability is also required to be considered and examined. Not only that, but, if the mode and the manner is not expressly prescribed, the provisions may also be vulnerable. All such aspects will be required to be considered before one considers regulatory mechanism or provision for regulating the mode and the manner of recovery and its enforceability as retroactive. If at the time when the fee was provided under Section 234E, the Parliament also provided for its utility for giving privilege under Section 271H(3) that too by expressly put bar for penalty under Section 272A by inser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0A of the Act for computation and intimation for payment of late filing fees under section 234E of the Act relating to the period of tax deduction prior to 01.06.2015 were not maintainable and were set aside by the Hon ble High Court. In view of said proposition being laid down by the Hon ble High Court of Karnataka (supra), there is no merit in observations of CIT(A) that in the present case, where the returns of TDS were filed for each of the quarters after 1st day of June, 2015 and even the order charging late filing fees was passed after June, 2015, then the same are maintainable, since the amendment had come into effect. The CIT(A) has overlooked the fact that notices under section 200A of the Act were issued for computing and charging late filing fees under section 234E of the Act for the period of tax deducted prior to 1st day of June, 2015. The same cannot be charged by issue of notices after 1st day of June, 2015 even where the returns were filed belatedly by the deductor after 1st June, 2015, where it clearly related to the period prior to 01.06.2015. 16. We hold that the issue raised in the present bunch of appeals is identical to the issue raised before the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hcare Pvt. Ltd., where the CIT(A) had dismissed appeals of assessee being delayed for period of December, 2013 and July, 2014. The CIT(A) while computing delay had taken the date of intimation under section 200A of the Act as the basis, whereas the assessee had filed appeals before CIT(A) against the order passed under section 154 of the Act. The CIT(A) had noted that rectification application was filed in February, 2018 which was rejected by CPC on the same day. The CIT(A) was of the view that there was no merit in condonation of delay, wherein appeals were filed beyond the period prescribed. The assessee had filed appeals against the order passed under section 154 of the Act, hence the time period of appeals filed by assessee before the CIT(A) have to be computed from the date of order passed under section 154 of the Act and not from the date of issue of intimation. Thus, there is no merit in the order of CIT(A) in dismissing the appeals of assessee on this issue. 19. We find similar issue has been decided by us in the case of Medical Superintendent Rural Hospital Vs. ACIT(CPC)-TDS (supra) and vide para 15, order dated 21.12.2017 it was held as under:- 15. Further, bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IA was not applicable. The demand has been raised by the department u/s 200 in terms of failure to comply with Section 200A, which deals with the processing of statement of tax deducted at source u/s 200. First of all, sub section 3 of section 200 provides that the person deducting any sum in accordance with provision of chapter XVII shall after paying the tax deducted to the credit of the Central Government within the prescribed time, prepare such statement for such period as may be prescribed. Provision of section 200A provides that where the statement of tax deduction at source has been made by the person deducting any sum u/s 200, then such statement shall be processed in the manner given therein. Clause (c) of section 200A has been substituted by the Finance Act 2015 w.e.f. 1.6.2015 which reads as under:- (c) the fee, if any, shall be computed in accordance with the provisions of section 234E; 6.1. Fee for default u/s 234E provides that, when a person fails to deliver or cause to be delivered a statement within the time prescribed u/s 200(3), then that person shall be liable to pay fee in the manner provided therein. Thus, fee u/s 234E is leviable if the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as leviable to the assessee u/s 234E in violation of section 200(3), because assessee had furnished the statement immediately after depositing all the tax without any delay. Accordingly, the demand on account of 234E is cancelled. 8. Similarly interest u/s 220(2) cannot be levied when fee u/s 234E itself is not leviable. In so far as charging of interest u/s 201(IA), the same cannot be charged as admittedly no order u/s 201(1) has been passed holding the assessee to be assessee in default and, therefore, such an interest is also deleted. 20. Now coming to the facts of the present case before us, the assessee, Udit Jain had deducted tax at source u/s 195 of the Act against purchase of property. The tax was deducted at 18.05.2015 and was even paid on 18.05.2015, though the return in Form No.27A was filed on 23.06.2016. We hold that since the period under consideration is first quarter of Financial Year 2015-16 i.e. prior to the amendment to section 200A(1) of the Act wherein clause (c) was inserted w.e.f. 01.06.2015 and since the assessee had already deposited the tax deducted at source, on the same day of deduction, there was reasonable cause in the hands of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equent development to depart there from. Moreover, our coordinate Benches have followed one approach in view of conflicting decision of different High Courts in the absence of any decision of the Jurisdictional High Court. So far as the levy of fee u/s. 234E for defaults of period in filing TDS/TCS statements / returns even for the period prior to 1.06.2015 is concerned, as mentioned earlier there are conflicting decisions by different High Courts and there is no decision on this issue by the jurisdictional High Court. While Hon ble Karnataka High Court is in favour of the assessee holding that the amendments brought in statute w.e.f. 01.06.2015 are prospective in nature and hence notices issued u/s. 200 A of the Act for computation and intimation in payment of late filing fee u/s.234E of the Act relating to the period of tax deduction prior to 01.06.2015 were not maintainable, the Hon ble Gujarat High Court has decided the issue against the assessee and in favour of the revenue. After considering the above conflicting decisions, the coordinate benches of the Tribunal are taking the view that when there are conflicting decisions, the decision in favour of the assessee should ..... 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