TaxTMI 
TaxTMI 
2017 (11) TMI 69
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction 249(2) of the Income Tax Act, 1961 (in short the Act), the appeal has to be presented within 30 days from the date of service of notice of demand. The appellant has not filed the appeals within the specified period and there was an inordinate delay in filing the appeal. The assessee claims that it has never received the notice but the ld. CIT(A) held that no documentary evidence was submitted to substantiate this argument and he did not accept the submissions of the assessee in this regard and the appeals were dismissed as not admitted. In the written submissions filed by the assessee, it was submitted that as per scheme of Centralized Processing of Statement of TDS Scheme 2013, clause 10 defined the service of notice or communication, which is as under:- "(1) The service of a notice or order or intimation or any other communication by the Cell may be made by delivering or transmitting a copy thereof to the deductor, (a) by electronic mail; or (b) by placing such copy in the registered electronic account of the deductor on the portal of the Cell; or (c) by any mode mentioned in sub-section (1) of section 282 of the Act. (2) The dat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the State as a litigant, are accorded the same treatment and the law is administered in an evenhanded manner. There is no warrant for according a stepmotherly treatment when the State is the applicant praying for condonation of delay. "When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a nondeliberate delay." The fee for default in furnishing statement U/s 234E of the Act can be levied for a person who violates the provisions of Section 200(3) of the Act. The provisions of Section 200(3) of the Act is as under:- (3) Any person deducting any sum on or after the 1st day of April, 2005 in accordance with the foregoing provisions of this Chapter or, as the case may be, any person being an employer referred to in sub-section (1A) of section 192 shall, after paying the tax deducted to the credit of the Central Government within the prescribed time, prepare such statements for such period as may be prescribed and deliver or cause to be delivered to the prescribed income-tax authority6 or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ibed in sub-Section (3) of Section 200 of the Act of Rs. 200 every day during which failure continued but not exceeding the tax deductible was the amount of fee to be levied. The provisions for processing of statement of tax deductible at source were introduced by the Finance Act No. 2 2009 w.e.f. 01/10/2010 wherein the fee for failure to furnish the statement U/s 234E was made appealable by substituting Clause (c) to (f) of Section 200A by the Finance Act 2015 w.e.f. 01/6/2015. It was stated in the written submissions that the fee for late filing the statement U/s 234E can be levied only on the issue of intimation U/s 200A w.e.f. 01/6/2015 only. The Hon'ble Bombay High Court in the case of Rashmikant Kundalia Vs. Union of India (2015) 229 taxman 596 (Bom) while examining the constitutional validity of Section 234E has upheld the validity and also held as under: 9. We have heard the learned counsel, and perused the papers and proceedings in the Petition. Section 200 of the Act deals with the duty of a person deducting tax. It reads thus : "200. Duty of person deducting tax.- (1) Any person deducting any sum in accordance with the foregoing provisions of this chapt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....roviso to sub-section (3) of section 206C and which deal with profits and gains from the business of trading in alcoholic liquor, forest produce, scrap etc. also provide for similar provisions as set out in section 200(3). Though in the present case we are not concerned with section 206C, we are referring to it in passing only because the proviso to sub-section (3) of section 206C finds mentions in section 234E, the constitutional validity of which is challenged before us. 11. Section 234E, the constitutional validity of which is challenged before us, was brought into the Income Tax Act, 1961 with effect from 1st July 2012. The said section reads as under : "G Levy of fee in certain cases 234E. Fee for default in furnishing statements.-(1) Without prejudice to the provisions of the Act, where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of Section 200 or the proviso to sub-section (3) of Section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues. (2) The amount of fee referred to in sub-section (1) shall not ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....te payment of refund affects the Government financially as the Government has to pay interest for delay in granting the refunds; and (iv) the delay in receipt of refunds results into a cash flow crunch, especially for business entities. 14. We find that the Legislature took note of the fact that a substantial number of deductors were not furnishing their TDS return/statements within the prescribed time frame which was absolutely essential. This led to an additional work burden upon the Department due to the fault of the deductor by not furnishing the information in time and which he was statutorily bound to furnish. It is in this light, and to compensate for the additional work burden forced upon the Department, that a fee was sought to be levied under section 234E of the Act. Looking at this from this perspective, we are clearly of the view that section 234E of the Act is not punitive in nature but a fee which is a fixed charge for the extra service which the Department has to provide due to the late filing of the TDS statements. 15. As stated earlier, due to late submission of TDS statements means the Department is burdened with extra work which is otherwise not....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... SCC 345 and which judgment has been referred to by the Calcutta High Court. The Supreme Court, in paragraph 22 stated thus: "22. A three-Judge Bench of this Court in B.S.E. Brokers' Forum v. Securities and Exchange Board of India [(2001) 3 SCC 482] after considering a large number of authorities, has held that much ice has melted in the Himalayas after the rendering of the earlier judgments as there was a sea change in the judicial thinking as to the difference between a tax and a fee since then. Placing reliance on the following judgments of this Court in the last 20 years, namely, Sreenivasa General Traders v. State of A.P. [(1983) 4 SCC 353], City Corpn. of Calicut v. Thachambalath Sadasivan [(1985) 2 SCC 112 : 1985 SCC (Tax) 211], Sirsilk Ltd. v. Textiles Committee [1989 Supp (1) SCC 168 : 1989 SCC (Tax) 219], Commr. & Secy. to Govt., Commercial Taxes & Religious Endowments Deptt. v. Sree Murugan Financing Corpn. [(1992) 3 SCC 488], Secy. to Govt. of Madras v. P.R. Sriramulu [(1996) 1 SCC 345], Vam Organic Chemicals Ltd. v. State of U.P. [(1997) 2 SCC 715], Research Foundation for Science, Technology & Ecology v. Ministry of Agriculture [(1999) 1 SCC 655] and Secu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se no remedy of appeal is provided for, the provisions of section 234E are onerous. Similarly, on the same parity of reasoning, we find the argument regarding condonation of delay also to be wholly without any merit. 19. It is now well settled that even though this Court exercising jurisdiction under Article 226 of the Constitution of India has the power to declare a statute (or any provision thereof) as unconstitutional, it should exercise great restraint before exercising such a power. Really speaking, there is only one ground for declaring an act of the legislature as invalid, and that is if it clearly violates some provision of the Constitution of India in so evident a manner so as to leave no manner of doubt. Before declaring a statute to be unconstitutional, the Court must be absolutely sure that there can be no manner of doubt that it violates the provisions of the Constitution of India. If two views are possible, one making the statute constitutional and the other making it unconstitutional, the former view must always be preferred. The Court must therefore make every effort to uphold the constitutional validity of a statute, even if it requires giving the statutor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o views are possible, one making the provision in the statute constitutional, and the other making it unconstitutional, the former should be preferred vide Kedar Nath Singh v. State of Bihar [AIR 1962 SC 955] . Also, if it is necessary to uphold the constitutionality of a statute to construe its general words narrowly or widely, the court should do so vide G.P. Singh's Principles of Statutory Interpretation, 9th Edn., 2004, p. 497. Thus the word "property" in the Hindu Women's Right to Property Act, 1937 was construed by the Federal Court in Hindu Women's Rights to Property Act, 1937, In re [AIR 1941 FC 72] to mean "property other than agricultural land", otherwise the Act would have become unconstitutional. 68. The court must, therefore, make every effort to uphold the constitutional validity of a statute, even if that requires giving the statutory provision a strained meaning, or narrower or wider meaning, than what appears on the face of it. It is only when all efforts to do so fail should the court declare a statute to be unconstitutional. 78. In para 8 of the Constitution Bench decision in R.K. Garg case [R.K. Garg v. Union of India, (1981) 4 SCC ....