2020 (1) TMI 651 - AT - Income Tax

Bench allows appeals, waives late filing fees pre-2015.

The bench condoned the delay in filing appeals upon payment of a cost of Rs. 5,000 per appeal. Regarding the legality of late filing fees under Section ... Levy of fees u/s 234E - exercise of power under Section 200A - delay filing statements of tax deducted fees u/s 234E for the period prior to 1.6.2015 - diversified views - HELD THAT:- Undisputedly, the TDS returns have been processed before 01/06/2015 which is evident from the fact that impugned order is dated 14/05/2015. Therefore, drawing analogy from the decision of Hon’ble Supreme Court rendered in CIT V/s Vegetable products Ltd. [1973 (1) TMI 1 - SUPREME COURT] we prefer to follow the decision of Hon’ble Karnataka High Court rendered in Fatehraj Singhvi V/s Union of India [2016 (9) TMI 964 - KARNATAKA HIGH COURT] and delete the late filing fees u/s 234E for all the 4 quarters, as imposed by revenue.- Decided in favour of assessee. Issues Involved:1. Delay in filing appeals and condonation thereof.2. Legality of late filing fees under Section 234E of the Income Tax Act, 1961, particularly concerning the period before 01/06/2015.3. Impact of statutory amendments made by the Finance Act, 2015, to Section 200A of the Income Tax Act, 1961.Detailed Analysis:1. Delay in Filing Appeals and Condonation:The appeals by the assessee had a delay of 634 days. The bench, after considering the factual matrix and hearing rival contentions, decided to condone the delay upon payment of a cost of Rs. 5,000 per appeal. The assessee paid the cost, and the appeals were posted for final hearing.2. Legality of Late Filing Fees Under Section 234E:The main contention was whether the late filing fees under Section 234E, levied before the amendment effective from 01/06/2015, were legal. The assessee argued that such fees were illegal before the amendment, relying on favorable judicial pronouncements, including the Hon’ble Karnataka High Court's decision in Fatehraj Singhvi V/s Union of India, which held that the amendment to Section 200A was prospective and not retrospective. Conversely, the revenue relied on the Hon’ble Gujarat High Court's decision in Rajesh Kourani V/s Union of India, which held that Section 234E was a charging provision and could be levied even without the regulatory provision in Section 200A.3. Impact of Statutory Amendments by Finance Act, 2015:The amendment to Section 200A by the Finance Act, 2015, effective from 01/06/2015, introduced clauses (c) to (f), allowing for the computation of fees under Section 234E. The bench noted that the amendment was prospective, and thus, fees under Section 234E could not be levied for periods before 01/06/2015. This view was supported by the Hon’ble Karnataka High Court's decision, which stated that the amendment conferred substantive power and was not merely regulatory.Judgment:The bench preferred the view favorable to the assessee, following the principle laid down by the Hon’ble Supreme Court in CIT V/s Vegetable Products Ltd., which states that in cases of conflicting judgments, the view favorable to the assessee should be adopted. Consequently, the late filing fees under Section 234E for periods before 01/06/2015 were deleted, and the appeals were allowed.Conclusion:The judgment concluded that the levy of late filing fees under Section 234E before the amendment effective from 01/06/2015 was not sustainable. The appeals were allowed, and the fees imposed by the revenue were deleted. The decision aligned with the favorable view of the Hon’ble Karnataka High Court, emphasizing that statutory amendments should be applied prospectively unless explicitly stated otherwise.