Revenue appeals dismissed for late eTDS filing fee; low tax effect, no CBDT Circular 3/2018 exceptions.

The Tribunal dismissed the Revenue's appeals challenging the deletion of a fee under Section 234E for late filing of eTDS statements, citing low tax effect and lack of coverage under CBDT Circular No. 3/2018 exceptions. The Tribunal did not adjudicate on the merits of the case, applying findings from one appeal to another, resulting in the dismissal of both appeals.

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Issues Involved:
1. Deletion of fee levied under Section 234E for late filing of eTDS statements.
2. Validity and applicability of Section 234E.
3. Distinction between fee under Section 234E and penalty.
4. Applicability of CBDT Circular No. 3/2018 exceptions.

Detailed Analysis:

1. Deletion of Fee Levied Under Section 234E:
The Revenue challenged the deletion of a fee levied under Section 234E for the late filing of eTDS statements. The assessee had filed the TDS statement for the 3rd quarter of FY 2016-17 late, and the fee of Rs. 7,800 was levied under Section 200A(1)(c). The CIT(A)-3, Jaipur deleted this fee, prompting the Revenue to appeal.

2. Validity and Applicability of Section 234E:
The Revenue argued that the fee levied under Section 234E is constitutionally valid and mandatory for the late filing of eTDS statements. This position is supported by various judgments, including those from the Rajasthan High Court and the Bombay High Court, which were upheld by the Supreme Court. The CIT(A) did not challenge the constitutional validity of Section 234E but deleted the fee based on the submission that an SLP against the Bombay High Court's decision was admitted.

3. Distinction Between Fee Under Section 234E and Penalty:
The Revenue contended that the fee under Section 234E is not a penalty but a mandatory fee for late filing of eTDS statements. The CIT(A) treated the fee as a penalty, which the Revenue argued was incorrect. According to Section 246A(1), the fee levied under Section 234E is not considered a penalty and is not an adjustment made under Section 200A(1)/206CB(1), thus not appealable.

4. Applicability of CBDT Circular No. 3/2018 Exceptions:
The Revenue argued that the appeal falls under the exceptions of CBDT Circular No. 3/2018, specifically exceptions 10(a) and 10(e). Exception 10(a) pertains to cases where the constitutional validity of a provision is under challenge. However, the Tribunal found that the CIT(A) did not challenge the constitutional validity of Section 234E. Exception 10(e) relates to cases involving information from external law enforcement agencies. The Tribunal determined that the CPC, which processed the TDS statement, is part of the Income Tax Department and not an external law enforcement agency.

Conclusion:
The Tribunal dismissed the appeals filed by the Revenue due to low tax effect, as the matters were not covered by the exceptions specified in the CBDT Circular No. 3/2018. The contentions on the merits of the case were left open and not adjudicated upon. The Tribunal's findings in ITA No. 519/JP/2019 applied mutatis mutandis to ITA No. 595/JP/2019, resulting in the dismissal of both appeals.

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