Issue

The issue involved is as to whether late filing fee u/s 234E of the Act has rightly been charged in the intimation issued u/s 200A/206CB of the Act while processing the TDS returns/statements in respect of TDS statements filed for a period up to 31.03.2015, the enabling clause (c) having been inserted in section 200A w.e.f. 01.06.2015. Earlier, there was no enabling provision in the Act u/s 200A for raising demand in respect of levy of fee u/s 234E?

Case

YASODA GRAH NIRMAN SAHKARI SANSTHA MARYADIT vs. INCOME TAX OFFICER (TDS)

Agra Tribunal pronounced the above case on July 11, 2018

Legislation Referred to

Section 234E

Case pertains to

Asst. Year 2013-14, 2014-15 & 2015-16

Cases Referred to

CIT vs. Vegetable Products Ltd.’, 88 ITR 192 (SC)

Counsel appeared:

Deependra Mohan, CA, K.C. Agarwal, Adv, & Satish Chobey for the Appellant. : Waseem Arshad, Sr. DR by the Respondent.

PER BENCH:-

1. This bunch of appeals is directed against the orders of the ld. CIT(A), Agra, upholding levy of fee u/s 234E of the Income Tax Act, 1961(hereinafter, for short, ‘the Act’).
2. Since a common issue is involved in all these appeals, they are being disposed of by this consolidated order, for the sake of convenience.
3. Briefly, the facts are that late fees have been levied by the AO u/s 234E of the Act. The ld. CIT(A) has confirmed the same, relying on the decision in the case of ‘Rajesh Kaurani vs. Union of India’, 83 Taxmann.com 137(Guj).
4. Thus, the issue involved in all these appeals is as to whether late filing fee u/s 234E of the Act has rightly been charged in the intimation issued u/s 200A/206CB of the Act while processing the TDS returns/statements, the enabling clause (c) having been inserted in Section 200A w.e.f. 01.06.2015. Earlier, there was no enabling provision in the Act u/s 200A for raising demand in respect of levy of fee u/s 234E. As such, as per the assessee, in respect of TDS statements filed for a period up to 31.03.2015, no late fee could be levied in the intimation issued u/s 200A of the Act.
5. On similar facts, we have decided this issue in the case of ‘Sudershan Goyal vs. DCIT (TDS)’, in ITA No. 442/Agra/2017, vide order dated 09.04.2018. The relevant part of the said order is reproduced as follows:

“3. Heard. The ld. CIT(A), while deciding the matter against the assessee, has placed reliance on ‘Rajesh Kaurani vs. UOI’, 83 Taxmann.com 137 (Guj), wherein, it has been held that section 200A of the Act is a machinery provision providing the mechanism for processing a statement of deduction of tax at source and for making adjustments. The ld. CIT(A) has held that this decision was delivered after considering numerous ITAT/High Court decisions and so, this decision in ‘Rajesh Kaurani’ (supra) holds the field.

4. We do not find the view taken by the ld. CIT(A) to be correct in law. As against ‘Rajesh Kaurani’ (supra), ‘Shri FatehrajSinghvi and Others vs.UOI’, 73 Taxmann.com 252 (Ker), as also admitted by the ld. CIT(A) himself, decides the issue in favour of the assessee. The only objection of the ld. CIT(A) is that this decision and others to the same effect have been taken into consideration by the Hon ‘ble Gujarat High Court while passing ‘Rajesh Kaurani’ (supra). However, while observing so, the ld. CIT(A) has failed to take into consideration the settled law that where there is a cleavage of opinion between different High Courts on an issue, the one in favour of the assessee needs to be followed. It has so been held by the Hon ‘ble Supreme Court in ‘CIT vs. Vegetable Products Ltd.’, 88 ITR 192 (SC). It is also not a case where the decision against the assessee has been rendered by the Jurisdictional High Court qua the assessee.
5. In ‘Shri Fatehraj Singhvi and Others’ (supra) it has been held, inter alia, as follows:

“22. 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 of statute is to be read as having prospective effect and not retrospective effect. Under the circumstances, we find that substitution made by clause (c) to (f) of sub-section (1) of Section 200A can be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand under Section 200A for computation and intimation for the payment of fee under Section 234E could not be made in purported exercise of power under Section 200A by the respondent for the period of the respective assessment year prior to 1.6.2015.

However, we make it clear that, if any deductor has already paid the fee after intimation received under Section 200A, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest. ”

6. In view of the above, respectfully following ‘Shri Fatehraj Singhvi and Others’ (supra), ‘Sibia Healthcare Pvt. Ltd. vs. DCIT (TDS)’, order dated 09.06.2015 passed in ITA No.90/ASR/2015, for A.Y.2013-14, by the Amritsar Bench of the Tribunal, and ‘Shri Kaur Chand Jain vs. DCIT, CPC (TDS) Ghaziabad’, order dated 15.09.2016, in ITA No.378/ASR/2015, for A.Y. 2012-13, the grievance of the assessee is accept as justify. The order under appeal is reverse. The levy of the fee is cancel. ”
7. In the above view, respectfully following ‘Shri FatehrajSinghvi and Ors’ (Supra), and our own findings in the case of ‘Sudershan Goyal’ (Supra), we accept the grievance of the assessees as genuine. Accordingly, the orders of the CIT(A) are reversed and the fee so levied under section 234E of the Act is cancelled.
8. In the result, all the appeals are allowed.

(Order pronounced in the open court on 11.07.2018)