2021 (12) TMI 1349 - HC - Income Tax

Court quashes notice for late filing fees pre-amendment, citing prospective nature of law.

The court quashed the notice demanding late filing fees under section 234E of the Income Tax Act for the period from 2011-12 to 01.06.2015, ruling that ... Late filing fee under section 234E - liability to pay late fee for non filing of any statement of tax deduction at source - scope of provisions of section 200A(1)(e) - HELD THAT:- As brought to our attention the decision in M/s.Sarala Memorial Hospital v. Union of India and Another [2018 (12) TMI 1818 - KERALA HIGH COURT] wherein an identical question arose for consideration. After considering the statutory provisions and the implications of the amendment brought in to the Act, it was held that the amendment would take effect only with effect from 1st June, 2015 and is thus prospective in nature. It is submitted that the aforesaid judgment has become final and is binding upon the authorities. In view of the above, the demand in Ext.P1 for the period from 2011-12 to the first quarter of 2015-16 is bereft of authority and cannot be legally sustainable. Issues:Late filing fee under section 234E of the Income Tax Act, 1961 for the periods from 2011-12 to 2019-20.Analysis:The petitioner was called upon to pay the late filing fee under section 234E of the Income Tax Act, 1961 through a notice dated 02.02.2021. The demand was for an amount of Rs.3,26,760/- for the periods from 2011-12 to 2019-20. Section 234E of the Act imposes a fee for default in furnishing statements, and the petitioner was being demanded this fee for not filing the statement of tax deduction at source. Despite the introduction of section 234E by the Finance Act, 2012, the petitioner argued that they cannot be held liable for the late fee before 01.06.2015, citing section 200A(1) of the Act which was incorporated with effect from 01.06.2015.During the hearing, the petitioner's counsel referred to a previous decision in M/s.Sarala Memorial Hospital v. Union of India and Another, where a similar question was considered. The court in that case held that the amendment to the Act would only take effect from 1st June, 2015, making it prospective in nature. The petitioner argued that this judgment is final and binding on the authorities. Based on this argument, the demand notice for the period from 2011-12 to the first quarter of 2015-16 was deemed bereft of authority and legally unsustainable.Consequently, the court quashed the notice to the extent it demanded the fee under section 234E for the period from 2011-12 till 01.06.2015. The writ petition was allowed in part, providing relief to the petitioner for the specified period.