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2017 (2) TMI 857
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....Act. Since, there are common facts in all these appeals, for the sake of convenience, the facts are extracted from ITA No.179/Vizag/2016. As stated in the CIT(A) order, the brief facts of the case are that the assessee has filed quarterly e-TDS returns in prescribed forms for the respective quarters in respect of tax deducted at source under various TDS provisions of the Act. These quarterly returns have been filed belatedly after the due date specified u/s 200(3) of the Act and Rule 31A of the Income Tax Rules, 1962. These quarterly returns have been processed by the TDS, CPC, Aayakar Bhawan, Sector-3, Vaishali, Ghaziabad, U.P. and intimation u/s 200A of the Act has been issued demanding late filing fee payable u/s 234E of the Act. 3. Aggrieved by the intimation issued by the TDS, CPC, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee contended that the demand raised by the CPC, TDS in respect of late filing fee u/s 234E of the Act, cannot be raised by way of processing of TDS statements, because provisions of section 200A of the Act, does not cover default in payment of late fee u/s 234E of the Act. As per the provisions of section 200A of the....
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....sert enabling provision in section 200A of the Act prospectively. The intention of the Parliament making such amendment prospectively is clearly evident from the memorandum explaining the Finance bill. In the absence of enabling provision in machinery section 200A of the Act, for levy of late fee u/s 234E of the Act before insertion of sub clause (c) to section 200A of the Act, no adjustments can be made in the intimations issued u/s 200A of the Act by the A.O. 6. On the other hand, the Ld. D.R. strongly supporting the order of the CIT(A), submitted that the provisions of section 234E of the Act itself is a code, as per which sub-clause (c) makes it clear that the assessee on its own shall pay late filing fee in case of belated filing of quarterly e-TDS returns. Just because there is no enabling provision in the machinery provisions of section 200A of the Act, the operation of section 234E of the Act for computation of late filing fee cannot be held inoperative. Since, the assessees on its own has to pay the late filing fee before filing TDS statements, computation of late filing fee is only automatic and there is no need of separate provisions for levy of late filing fee. The D....
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....e financial year; (iii) 31St December - 15th January of the financial year; and (iv) 31st Mar 15th May of the following financial year. [Para 8] * It may be recorded that section 200(3) requiring to file formal TDS statement within the aforesaid each quarter inserted on 14-2005 and at the relevant point of time, section 272A(2)(k) provided for the penalty of Rs. 100 per for each day of default in filing TDS statement and such provision also came to be inserted with effect from 14-2 On 14-2010, section 200A was inserted providing for the processing of the TDS statement and the conseq issuance of the intimation to the deductor, the same determined as payable by it or refundable by it. But, the rele aspect is that, in initial provisions of section 200A, there was no reference for fee payable under section 234E. * On 1-7-2012, section 234E providing for levying of fee of Rs. 200 per day for each day of default in filing statement was inserted. [Para 10] * Similarly, section 271H was inserted with effect from 1-7-2012 providing for imposition of penalty for default filing TDS statement and also for furnishing of incorrect information in such TDS statement. The proviso was inse ....
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.... would take out from the rigors of penalty u section 271H but of course subject to the outer limit of one year as prescribed under sub-section (3) of section 2 It can also be said that when the Parliament intended to insert the provisions of section 234E providing for simultaneously the utility of such fee was for conferring the privilege to the defaulter deductor to come out from rigors of penal provision of section 271H. Be it recorded that, prior to section 271H inserted in the statute book. enforceability of requirement to file return under section 200(3) and section 206C(3) was by virtue of section 2721 (k) which provided for the penalty of Rs. 100 per day for each day of default in filing TDS statements. But, M section 234E was inserted with effect from 1-7-2012 simultaneously, a second proviso was added under section 2 (2) with effect from 1- 7-2012.[Para 17] * The aforesaid shows that in the clause (k) if the said failure relates to a statement referred to in sub-section (3 section 200 or the sub-section (3) of section 206C, no penalty shall be imposed for TDS after 1-7-201 2.[Para 18] * Hence, it can be said that, the mechanism provided for enforceability of section ....
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.... and of recovery and its enforceability as retroactive. If at the time when the fee was provided under section 234E, the I also provided for its utility for giving privilege under section 271H(3) that too by expressly putting bar for pen section 272A by insertion of proviso to section 272A(2), it can be said that a particular set up for imposition payment of fee under section 234E was provided but, it did not provide for making of demand of such fee u/s 200A payable under section 234E. Hence, considering the aforesaid peculiar facts and circumstances, the contented respondent-revenue that insertion of clauses (c) to (f) under section 200A( 1) should be treated as retroactive in not prospective is unacceptable. [Para 21] It is hardly required to be stated that, as per the well established principles of interpretation of statute, unless it is provided or impliedly demonstrated, any provision of statute is to be read as having prospective effect and not ret effect. Under the circumstances, it is found that substitution made by clauses (c) to (0 of sub-section (1) of section be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand unc....
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....e to constitutional validity under section 234E. At th may also be recorded that the appellant had also declared that if the impugned notices under section 200A are so far as it relates to computation and intimation for payment of fee under section 234E, the appellantpetitioners press the challenge to the constitutional validity of section 234E. But, they submitted that the question of cor validity of section 234E may be kept open to be considered by the Division Bench and the Judgment of the Sir may not conclude the constitutional validity of section 234E .[Para 25] * Under these circumstances, no further discussion would be required for examining the constitutional validity 234E. Save and except to observe that the question of constitutional validity of section 234E before the Division this Court shall remain open and shall not be treated as concluded.[Para 26] * In view of the aforesaid observations and discussion, the impugned notices under section 200A for computation intimation for payment of fee under section 234E as they relate to for the period of the tax deducted prior to 1-6-2( aside. It is clarified that the present judgment would not be interpreted to mean that e....
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....he statement in accordance with provisions of section 200(3) or the proviso to section 206C(3). However, various regulations and the statutory provisions in this regard point out that undoubtedly, the responsibility of the deductor was to deposit the tax deducted at source in time and if not so, then with interest and consequently, where the tax was not paid in time and interest was not paid in time and then, where the statement of tax deducted at source could not be filed before the prescribed authority within stipulated time, the assessee was liable to levy of fees under section 234E. However, in case any default occurs due to the non-payment of fees by the assessee in this regard, then the provision which has to be considered is section 200A( I )(c). The power to charge/collect fees as per provisions of section 234E was vested with the prescribed authority under the Act only on substitution of earlier clause (c) to section 200A by the Finance Act, 2015 with effect from 1-6-2015. Once any provision of the Act has been made applicable from a respective date, then the requirement of the statute is to apply the said provisions from the said date.[Para 23] * In respect of the issu....
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....erting the said provision. The provisions of section 234E were inserted by the Finance Act, 2012, under which the provision was made for levy of fees for late furnishing TDS/TCS statements. Before insertion of section 234E, the Finance (No.2) Act, 2009 had inserted section 200A, under the said section, mechanism was provided for processing of TDS statements for determining the amount payable or refundable to the deductor, under which the provision was also made for charging of interest. However, since the provisions of section 234E were not on statute when the Finance (No.2) Act, 2009 was passed, no provision was made for determining the fees payable under section 234E at the time of processing the TDS statements. So, when section 234E was introduced, it provided that the person was responsible for furnishing the TDS returns/statements within stipulated period and in default, fees would be charged on such person. The said section itself provided that fees shall not exceed the amount of tax deducted at source or collected at source. It was further provided that the person responsible for furnishing the statements shall pay the said amount while furnishing the statements under sectio....
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....uch fees. In the absence of enabling provisions, the Assessing Officer while processing the TDS statements, even if the said statements are belated, is not empowered to charge the fees under section 234E. The amendment was brought in by the Finance Act, 2015 with effect from 1-6-2015 and such an amendment where empowerment is given to the Assessing Officer to levy or charge the fees cannot be said to be clarificatory in nature and hence, applicable for pending assessments. [Para 30] * The Supreme Court in CIT v. Vatika Township Pvt. Ltd. [2014] 367 ITR 466/227 Taxman 121/49 taxmann.com 249 has explained the general principle concerning retrospectivity and held that of the various rules guiding how a legislation has to be interpreted, one established rule is that unless contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. Idea behind the rule is that current law should govern current activities. The Memo explaining the Finance Bill, 2015 very clearly also recognizes that and refers to the current provisions of sub-section (3) to section 200, under which the deductor is to furnish TDS statements. However, as section 234E was i....
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.... Rashmikant Kundalia's case (supra) has already been referred in this regard, wherein the constitutional validity of section 234E has been upheld.[Para 32] * Accordingly, the amendment to section 200A(1) is procedural in nature and in view thereof, the Assessing Officer while processing the TDS statements/returns in the present set of appeals for the period prior to 1-6- 2015, was not empowered to charge fees under section 234E. Hence, the intimation issued by the Assessing Officer under section 200A in all these appeals does not stand and the demand raised by way of charging the fees under section 234E is not valid and the same is deleted. The intimation issued by the Assessing Officer was beyond the scope of adjustment provided under section 200A and such adjustment could not stand in the eye of law.[Para 33] * Whether any appeal is maintainable against intimation issued under section 20" and/or order passed under section 154 read with section 20" by Assessing Officer in charging fees under section 234E? * In Memorandum explaining the Finance Bill, 2015, the heading was rationalization of provisions relating to Tax Deduction at Source (TDS) and Tax Collection at Sour....