TMI Blog2022 (9) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... direct the A.O to delete the late fee levied u/s 234E of the Act from the hands of the assessee. - ITA No. 701/PUN/2021 And 702/PUN/2021 And 703/PUN/2021 - - - Dated:- 14-9-2022 - Shri Inturi Rama Rao, Accountant Member And Shri Partha Sarathi Chaudhury, Judicial Member For the Appellant : Shri Sanket Joshi For the Respondent : Shri M.G. Jasnani ORDER PER SHRI PARTHA SARATHI CHAUDHURY, JM : These three appeals preferred by the assessee emanates from separate orders of the National Faceless Appeal Centre (NFAC), Delhi, all dated 26-08-2021 for A.Y. 2013-14 as per the grounds of appeal on record. 2. The only grievance in all these three appeals is the levy of late fees u/s 234E of the Income-tax Act, 1961 (hereinafter referred to as the Act ) as detailed in the table below: (A) I.T.A. No. 701/PUN/2021 - Q2/26Q Appeal No. FY and Form quarter Demand raised u/s 200A/234E Date of order u/s 200A Date of receipt of intimation as per form, 35 Datge of filing of appeal Delay in filing appeal (No. of days) NFAC/2012-13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch of the Tribunal in a group of cases in ITA No. 1201/PUN/2019 and others in the case of Nisar Mehboob Alam Khan and others, order dated 31-05-2022 on exact identical issue has held as follows: 10. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to the condonation of delay in filing the appeal before the ld. CIT(A). At the outset, the issue in the appeal relates to the levy of late fees u/s 234E of the Act. The provisions of section 234E were inserted w.e.f. 1.6.2012. However, it is only w.e.f. 1.6.2015 an amendment was made u/s 200A providing the changing mechanism for levy of late fees u/s 234E of the Act. Resultantly, the late fee u/s 234E can be levied only prospectively i.e. w.e.f. 1.6.2015 as held by the Hon ble Karnataka High Court in the case of Fatheraj Singhvi vs. Union of India, 73 taxmann.com 252 and this ratio was followed by the Coordinate Bench of Pune Tribunal in the case of (i) Gajanan Constructions vs. DCIT, 73 taxmann.com 380 and (ii) Maharashtra Cricket Association, Pune vs. DCIT, 74 taxmann.com 6. Admittedly, in the present case the late fees u/s 234E was levied for the period prior 1.6.2015 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rthy (1998) 7 SCC 123 (SC) held as follows :- 26. The Supreme Court in N. Balakrishnan v. M. Krishnamurthy [1998] 7 SCC 123 has held that the primary function of a Court is to adjudicate the dispute between the parties and to advance substantial justice; and that rules of limitation are not meant to destroy the right of parties, but they are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. It held that there is no presumption that delay in approaching the Court is always deliberate, and the words sufficient cause under section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice. It held that in every case of delay there can be some lapse on the part of the litigant concerned, but that alone is not enough to turn down his plea and to shut the door against him; and if the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the Court must show utmost consideration to the suitor. It also observed that if the delay is deliberate, then the Court should not accept the explanation. It held that while condoning the delay, the Court should c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fee and 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 character but, whether such provision provides for a mere regulatory mechanism or confers substantive power upon the authority would also be an aspect which may be required to be considered before such provisions is held to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en 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 and 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 period 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 for the demand or the intimation for the fee under Section 234E could be made for the TDS deducted for the respective assessment year prior to 1.6.2015. Hence, the demand notices under Section 200A by the respondent-authority for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted to be reopened for claiming refund. The judgment 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 shall not get concluded by the order of the learned Single Judge. 14. The ratio of the above decision was followed by the Coordinate Bench of Pune Tribunal in the case of (i) Gajanan Constructions vs. DCIT, 73 taxmann.com 380, (ii) Maharashtra Cricket Association, Pune vs. DCIT, 74 taxmann.com 6 and (iii) Webtrust Co. In (India) Pvt. Ltd. ACIT, CPC (TDS) in ITA Nos.1818 1819/PUN/2018 for Assessment Years 2013-14 2014-15, order dated 02.11.2021. The decision rendered by the Hon ble Bombay High Court in the case of Rashmikant Kundalia and Others (supra) does not come to the rescue of the Revenue, inasmuch as, the Hon ble High Court had only upheld the constitutional validity of the provisions of section 234E of the Act. The Hon ble High Court had not gone into the issue of retrospective operation of provisions of section 234E of the Act. In the circumstances, we direct the ACIT, CPC-TDS, Ghaziabad to delete the late fee being levied u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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