2019 (1) TMI 1059 - AT - Income Tax

Tribunal grants Co-operative Society's appeals, allows delay, remands late fee issue to CIT(A) for review

The Tribunal allowed all nine appeals filed by a Co-operative Society for Assessment Years 2013-14 to 2015-16, condoning the delay in filing. The issue of ... Condonation of delay in filing an appeal - levy of Late filing fees u/s 234E - intimations issued u/s 200A - scope of amendment o f Section 200A(1)(c) of the Act vide Finance Act, 2015, w.e.f. 01.06.2015 - default in furnishing the statement of TDS - Held that:- There the levy of late fees under section 234E has not been paid, the case should not be re-opened / appeals. There is nothing in the order of the Hon’ble High Court to imply that appeals cannot be filed on such intimations u/s 200A levying late fee under section 234E. All that the order of the Hon’ble High Court has said is that the cases in which the levy has been paid shall not be re-opened to process refunds. The assessee’s case does not fall under that category, as the assessee has not paid the levy of late fees u/s 234E and therefore the question of re-opening the case on hand in view of these 9 appeals to grant refund would not arise. In the light of the decision of the Hon’ble Apex Court in the case of MST Katiji and Others [1987 (2) TMI 61 - SUPREME COURT] and in the case of Fatheraj Singhvi [2016 (9) TMI 964 - KARNATAKA HIGH COURT] we are of the considered opinion that this is a fit case for condonation of delay by the assessee in filing these 9 appeals before the CIT(A) and accordingly condone the said delay. We also deem it appropriate to remand the issue of levy of fee u/s 234E through intimation under section 200A which is in consideration before us to the file of the CIT(A) for examination and adjudication on merits and in accordance with law. - Appeals filed by the assessee for statistical purposes. Issues Involved:1. Non-admission of appeals by CIT(A) due to delay in filing.2. Legality of levying late fees under section 234E of the Income Tax Act, 1961, via intimation under section 200A prior to its amendment on 01.06.2015.Issue-wise Detailed Analysis:1. Non-admission of Appeals by CIT(A) Due to Delay in Filing:The appellant, a Co-operative Society, faced rejection of its appeals by CIT(A) for the non-admission of appeals due to delays in filing. The appellant contended that the levy of late fees under section 234E was being legally challenged, and they awaited the outcome of these challenges. The CIT(A) rejected the appeals citing that the reasons for the delay did not constitute 'sufficient cause' and referred to the Karnataka High Court's decision in Fatheraj Singhvi v. UOI, which stated that the judgment would not allow reopening cases where fees had already been paid unless under protest.2. Legality of Levying Late Fees Under Section 234E via Intimation Under Section 200A Prior to Amendment:The core issue was whether late fees under section 234E could be levied through intimation under section 200A before the amendment effective from 01.06.2015. The Karnataka High Court in Fatheraj Singhvi v. UOI held that there was no power under section 200A to levy late fees under section 234E before the amendment. The appellant argued that since the High Court quashed such levies, their appeals should be admitted and the levies quashed.Detailed Analysis:1. Non-admission of Appeals by CIT(A):The appellant filed the appeals late because they awaited the outcome of judicial challenges to the levy of late fees under section 234E. The CIT(A) did not find this a 'sufficient cause' and rejected the appeals. However, the Tribunal noted that the Karnataka High Court's decision clarified that the levy of late fees under section 234E through section 200A intimation before 01.06.2015 was illegal. Therefore, the Tribunal found that the appellant had a valid reason for the delay, as they were waiting for the legal position to be clarified.The Tribunal referenced the Supreme Court's principle that 'sufficient cause' should be interpreted to advance substantial justice, citing the case of Collector, Land Acquisition v. MST Katiji and Others. It concluded that the CIT(A) misinterpreted the High Court's judgment and that the delay should be condoned to allow the appeals to be heard on merits.2. Legality of Levying Late Fees Under Section 234E via Intimation Under Section 200A:The Tribunal examined the Karnataka High Court's decision in Fatheraj Singhvi, which held that the intimation under section 200A could not levy late fees under section 234E for periods before 01.06.2015. The Tribunal found that this decision applied to the appellant's case, as the levies in question were for periods prior to the amendment.The Tribunal rejected the Revenue's argument, supported by the Gujarat High Court's decision in Rajesh Kourani v. UOI, that section 234E could be enforced without the regulatory provision in section 200A. The Tribunal emphasized that judicial discipline required following the jurisdictional High Court's decision, which favored the appellant.Conclusion:The Tribunal allowed the appeals for statistical purposes, condoning the delay in filing and remanding the issue of the levy of late fees under section 234E to the CIT(A) for examination and adjudication on merits. The CIT(A) was directed to afford the appellant a reasonable opportunity to present their case.Result:All nine appeals filed by the appellant for Assessment Years 2013-14 to 2015-16 were allowed for statistical purposes.