TMI Blog2022 (8) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... None. For the Revenue : Sh. M. Baranwal, Sr. DR. ORDER Per Bench: The present appeals have been filed by the assessee against the orders of ld. CIT(A)-41, New Delhi dated 31.05.2019. 2. All these appeals have been filed against levy of fee u/s 234E of the Income Tax Act, 1961 after rectifying the orders passed in 04/2014, 03/2015 and 04/2015 on 03.04.2018. Before the ld. CIT(A), the assessee has not applied for condonation of delay, however, the ld. CIT(A) has judiciously adjudicated the issue on merits and held that since the AO has levied late fee u/s 234E only after 01.06.2015 vide intimation dated 03.04.2018, the claim of the assessee for the exemption from levy of late fee was liable to be dismissed. 3. Aggrieved the assessee filed appeal before the Tribunal. 4. None attended on behalf of the assessee nor any adjournment application has been filed. 5. The written submission of the ld. DR is as under: The above mentioned appeals are listed for hearing on 19.07.2022. The common issue which is under consideration in all the above mentioned appeals, is levy of fees u/s 234E of I.T. Act. The order levying penalty has been passed by respective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of Krishak Bharati Cooperative Ltd vs. DCIT [2012] 23 taxmann.com 265 (Delhi) wherein Hon ble Delhi HC considered the decision of Hon ble Supreme Court in the case of Radhasoami Satsang vs. CIT [1992] 60 taxman 248(SC) and has held that the rule of consistency should not create anomaly. Relevant extracts of the decision, para-15 of the order (copy attached) are reproduced as under: It is now necessary to take up the submission that the Tribunal erred in departing from the consistency rule. This is based on the fact that for a period of about 15 years, the income-tax authorities had accepted the assessee s submissions and permitted the annual amortization of the initial lease consideration as advance rent. The assessee here relied on the consistency rule enunciated in Radhasoami Satsang (supra). The Supreme Court observed, in that case that: Where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 234E which was introduced w.e.f. 01.07.2012 by the Finance Bill, 2012. The same is reproduced as under: 234E (I) 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 sub-section (3) of section 200 or the proviso to sub-section (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 (I) shall not exceed the amount of tax deductible or collectible, as the case may be. (3) The amount of fee referred to in sub-section (I) shall be paid before delivering or causing to be delivered a statement in accordance with sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C. (4) The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or the proviso to 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.] 5. Kind attention o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to late furnishing of TDS statement. In order to provide effective deterrence against delay in furnishing of TDS statement, it is proposed (i) to provide for levy of fee of Rs. 200 per day for late furnishing of TDS statement from the due date of furnishing of TDS statement to the date of furnishing of TDS statement. However, the total amount of fee shall not exceed the total amount of tax deductible during the period for which the TDS statement is delayed, and (ii) to provide that in addition to said fee, a penalty ranging from Rs. 10,000 to Rs. 1,00,000 shall also be levied for not furnishing TDS statement within the prescribed time. In view of the levy of fee for late furnishing of TDS statement, it is also proposed to provide that no penalty shall be levied for delay in furnishing of TDS statement if the TDS statement is furnished within one year of the prescribed due date after payment of tax deducted along with applicable interest and fee. In order to discourage the deductors to furnish incorrect information in TDS statement, it is proposed to provide that a penalty ranging from Rs. 10,000 to Rs. 1,00,000 shall be levied for furnishing incorrect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fee, if any, shall be computed in accordance with the provisions of section 234E; (d) the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of the amount computed under clause (b) and clause (c) against any amount paid under section 200or section 201or 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:] Provided that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the statement is filed. Explanation. - For the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llector. Finance (No. 2) Act, 2009 inserted section 200A in the Act which provides for processing of TDS statements for determining the amount payable or refundable to the deductor. However, as section 243E was inserted after the insertion of section 200A in the Act, the existing provisions of section 200A of the Act does not provide for determination of fee payable under section 234E of the Act at the time of processing of TDS statements. It is, therefore, proposed to amend the provisions of section 200A of the Act so as to enable computation of fee payable under section 234E of the Act at the time of processing of TDS statement under section 200A of the Act. Currently, the provisions of sub-section (3) of section 200 of the Act enable the deductor to furnish TDS correction statement and consequently, section 200A of the Act allows processing of the TDS correction statement. However, currently, there does not exist any provision for allowing a collector to file correction statement in respect of TCS statement which has been furnished. It is, therefore, proposed to amend the provisions of section 206C of the Act so as to allow the collector to furnish TCS correction sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of tax deducted/collected by them without production of challan i.e. through book entry [This para has been truncated as not relevant] Under section 192 of the Act, the person responsible for paying (DDO) income chargeable under the head salaries under the Act is authorized to allow certain deductions, exemptions or allowances or set-off of certain loss as per the provisions of the Act for the purposes of estimating income of the assessee or computing the amount of the tax deductible under the said section. [This para has been truncated as not relevant] The existing provisions of sub-section (6) of section 195 of the Act provide that the person referred to in section 195(1) of the Act shall furnish prescribed information. Section 195(1) of the Act provides that any person responsible for paying any interest (other than interest referred to in sections 194LB or 194LC or 194LD of the Act) or any sum chargeable to tax (not being salary income) to a non-resident, not being a company, or to a foreign company, shall deduct tax at the rates in force [This para has been truncated as not relevant] These amendments will take effect from 1st June, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue of chargeability of fee u/s 234E for the period of delay in filing of TDS return/statement before 01.06.2015 i.e. insertion of clause (c) to section 200A have also been examined by various High Courts and have upheld the chargeability of fee u/s 234E and the assessee s appeal have been dismissed. In particular, the decisions of Hon ble Gujarat High Court, Madras High Court Rajasthan High Court may kindly be referred to as cited hereunder. In several cases the period under consideration before Hon ble High Courts included the period prior to 01.06.2015. On the issue involved, reference is made to following case laws (copies attached) and reliance is placed on them :- i) Rajesh Kourani vs. UOI [2017] 83 taxmann.com 137 (Gujarat) ii) Biswajit Das vs. UOI, [2019] 103 taxmann.com 290 (Delhi)] iii) Qatalys Software Technologies (P) Ltd. vs. UOI, [2020] 115 taxmann.com 345 (Madras) ] iv) Dunlod Shikshan Sansthan vs. UOI [2015] 63 taxmann.com 243 (Raj)] v) Rashmikant Kundalia vs. UOI [2015] 54 taxmann.com 200 (Bombay) vi) Lakshminirman Bangalore Pvt. Ltd. vs. DCIT [2015] 60 taxmann.com 144 (Karnataka) vii) Sree Narayana Guru Smaraka Sang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mended section of 200A(1)(c), with effect from 01/06/2015, enables computation of fees chargeable u/s 234E under the purview of 200A. Therefore, if any TDS return is processed after 01/06/2015, then fees chargeable u/s 234E is required to be computed as per section 200A(1)(c) by virtue of the fact that the charging section was already effective since 01/07/2012. Similar will be the scenario if TDS return with default of being delayed is submitted after 01/06/2015 and processing is done thereafter. Since the charging section was already effective on the date of occurrence of default (i.e. the due date filing of TDS return on which TDS return was not filed), any TDS return processed after introduction of clause 200A(1)(c) (i.e. giving effect to computation of fees u/s 234E of the Act) should include computation of fees under section 234E. This also needs consideration by Hon ble ITAT. 10.4 Section 200A speaks about the processing of TDS return/statements and thus the provisions starts only after the filing of such TDS returns/statements, whether in time or delayed, whereas section 234E seeks to levy the fees for the period of delay in filing such TDS returns and statements. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bill 2015. The same have not been considered by Hon ble ITAT. 10.8 As per various judicial decision the ratio is that the legislations which modified accrued rights or imposed disabilities were to be treated as prospective in nature unless they were accounting for an obvious omission, or explaining a former legislation. In the present case, section 200(3) provides for statutory liability for depositing the TDS and furnishing the requisite statement with in due time (the said provision inserted by Finance Act 2004 w.e.f. 01/04/2005). Section 234 E which provides for levy of fees if assessee is in violation of 200(3) or 206C(3) of the Act, is inserted by F.A.2012 w.e.f. 01/07/2012 .Therefore, since both the substantive legislation (section imposing statutory liability as well as the charging section for levy of fees in case of violation of statutory liability) were in effect much earlier from the date of insertion of 200A(3) which is merely a mechanical provision providing for computation, such amendment in procedural section should be considered as clarificatory in nature. 10.9 In the case of Rashmikant Kundalia, Hon ble Bombay High Court has held in para 14 as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Others. The issue has been discussed in great detail in para 16 to 21 and Hon ble High Court has upheld the levy of fee u/s 234E since the day the provisions of section 234E was brought to statute and even prior to 01.06.2015 when section 200A(1) was amended to include clause (c). Hon ble High Court has held that section 200A of the Act is a machinery provision providing mechanism for processing a statement of TDS and for making adjustments whereas section 234E is a charging provision creating a charge for levying fee for certain defaults in filing the statements. W.e.f 01.06.2015 the provision of section 200A specifically provides for computing the fee payable u/s 234E. On this issue, specific reference may kindly be made to para 18, 19 20 of the order where specific findings of Hon ble High Court are recorded. The categorical findings of Hon ble Gujarat High Court, though considered by Hon ble ITAT in its order dt. 29.11.2019, has not been appreciated by Hon ble Tribunal in right perspective when read in conjunction with the provisions, explanatory notes and orders of various other High Courts wherein the validity of provisions of sec.234E has been upheld. 10.11 The iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 234E of the Act cannot be deleted. Accordingly, all the appeals of the assessee are dismissed. 10.13 Similar ratio was pronounced in the case of Government Secondary School Principal Officer Vs ACIT, CPC-TDS (ITAT Jaipur) ITA No. 964/JP/2019, Date of order 24/06/2020. In view of these decisions it is submitted that even if notice u/s 200A is issued before 01/06/2015, the same shall not invalidate the proceedings of processing of TDS return or levy of fees under section 234E of the IT Act for the reason of 234E being mandatory levy occurring on the point of default and on the date of default charging section was very much in existence and was effective. 10.14.1 Hon ble ITAT in its order dt.29.11.2019, has relied upon the decision of Hon ble Karnataka High Court in the case Fateh Raj Singhji Others vs UOI [2016] 289 CTR 602 (Kar). In the case of Fateh Raj Singhji vs UOI Hon ble Karnataka High Court has held in para-22 of its order that It is hardly required to be stated that, as per the well established principles of interpretation of statute, unless it is expressly provided or impliedly demonstrated, any provision is to be read as having prospective effect and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Hon ble ITAT in its order dt.29.11.2019, does not hold ground for consideration. 10.15 On perusal of the decisions of various High courts wherein the constitutional validity of provisions of sec. 234E have been upheld, it may be seen that in several cases the period under consideration before Hon ble High Courts were even the 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(1) of the Act. The same have not been considered by Hon ble ITAT. 11. Without prejudice to the submissions abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levy of fee u/s 234E of the Act is automatic wherever there is a delay in view of statement of tax at source. 5. After considering the impugned orders we find delay in filing of statement in regard third quarter for the financial year 2014-15. The demand has been raised by the department u/s 200 of the Act in terms of failure to comply with section 200A of the Act which deals with the processing of statement of tax deducted at source u/s 200 of the Act. First of all, sub section 3 of section 200 of the Act 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 and prepare such statement for such period as may be prescribed. Provision of section 200A of the Act provides that where the statement of tax deduction at source has been made by the person deducting any sum u/s 200 of the Act, then such statement shall be processed in the manner given therein. Clause (c) of section 200A of the Act 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 prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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