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2018 (5) TMI 425
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....December and 196 days for the quarter ending March-2013, the A.O. levied the late fee of Rs. 42,400/-, Rs. 24,000/- & Rs. 39,200/- respectively for the quarters ending Sept, Dec and March 2012-13. The due dates for filing E-statements, date of filing the statement, the delay and the late fee charged u/s 234E of the Act is as under: S.No Q.No Form Type Type of statement Due date of filing Date of filing Days of delay in filing Total TDS Interest chargeable u/s 234E 1 Q2 26Q Correction 15.10.2012 15.05.2013 212 154539 42400 2 Q3 26Q Correction 15.01.2013 15.05.2013 120 115468 24000 3 Q4 26Q Original 15.05.2013 27.11.2013 196 183876 39200 3. Aggrieved by the order of the A.O., the assessee went on appeal before the CIT(A). The Ld. CIT(A) confirmed the late fee levied by the A.O. following the decision of Hon'ble Gujarat High court in Rajesh Kourani Vs. UOI reported in 83 Taxmann.com 137. 4. Aggrieved by the order of the CIT(A), the assessee is in appeal before this Tribunal. During the appeal hearing, the Ld. Authorized Representative of the assessee(AR) argued that though....
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....92 (SC), also expressed the similar view. Therefore requested to adopt the decision in favour of the assessee and allow the relief. 5. On the other hand, the Ld. D.R. relied on the order of the Ld. CIT(A) and argued that Hon'ble Gujarat High court has considered the decision of Hon'ble Karnataka High Court while rendering the judgement, hence, submitted that the Ld.CIT(A) rightly confirmed the addition thus requested to uphold the order of the Ld.CIT(A). 6. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. In this case, the assessee has filed the TDS statements belatedly and the department has levied late fee of Rs. 42,400/- for the quarter ending September, 2012, Rs. 24,000/- for the quarter ending December, 2012 and Rs. 39,200/- for the quarter ending March, 2013. The Ld. A.R. argued that enabling provision i.e. sub clause (c) of sub-section (1) of section 200A is inserted in the Income Tax w.e.f. 1.6.2015, hence, the A.O. is not empowered to charge the late fee prior to 1.6.2015 in the absence of enabling provision. This view is also supported by the decision of coordinate bench of ITAT, Pune rep....
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....ecisions of other High courts, he must take the view which is in favour of the assessee and not against him. Similarly, if the Tribunal has decided a point in favour of the assessee, he cannot be ignore that decision and take a contrary view, because that would equally prejudice the assessee." 7. Similar view was expressed by the Hon'ble Apex Court in the case of CIT Vs. Vegetable Products Limited cited (supra), therefore following the decision of Hon'ble jurisdictional High court, we hold that the decision of Hon'ble Karnataka High court, which is most favourable to the assessee required to be adopted in this case. As discussed earlier, this tribunal in the case of Challapalli Exports Pvt. Ltd. Vs. ITO (TDS) Ward-1 cited (supra) held that the late fee payable u/s 234E of the Act cannot be levied while processing the statements u/s 200A of the Act prior to 01/06/2015. The coordinate bench has considered the decision of Hon'ble Karnataka High Court also while giving the ruling. For ready reference, we extract relevant part of the order of the coordinate bench, which reads as under: "7. We have heard both the parties, perused the materials available on record and gone thr....
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....n 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 in section 272A providing for no penalty under the said section will be imposed after 1-7-2012 for failure to file statement on time possibly because a separate section 271 H was inserted in the Act.[Para 11] * On 1-6-2015, clauses (c) to (f) came to be substituted under section 200A providing that th....
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....ty 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 200(3) or section 206C (3) for filing of the statement by making it penal under section 272A(2)(k) is done away in view of the insertion of section 2 providing for penal provision for such failure to submit return. When the Parliament has simultaneously brought al section 234E, se....
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....oviso 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 u/s 200A for computation and intimation for the payment of fee under section 234E could not be made in purported power under section 200A by the respondent for the period of the respective assessment year prior to 1-6-2015. 1-1 is made clear that, if any deductor....
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....ection 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 even if the payment of the section 234E already made as per demand/intimation under section 200A for the TDS for the period prior to 1.4. to be reopened for claiming refund. The judgement will have prospective effect accordingly. I....
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....nsibility 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 issue raised before us, it is clear that the prescribed authority has been vested with the power to charge fees under section 234E only with regard to levy of fees by the substitution made by Finance (No.....
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....re 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 section 200(3). However, power enabling the Assessing Officer to charge/levy the fee under section 234E while processing the TDS returns/statements filed by a person did not exist when section 234E wa....
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....es 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 inserted after insertion of section 200A, the existing provisions of section 200A did not provide for determination of fees payable under section 234E at the time of processing ....
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.... 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 Source (TCS). The said memorandum * categorically recognized that under the existing provisions of the Act, after processing of TDS statements, an ....
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....ssioner (Appeals) under section 246A(l)(a), then such appealable order passed by the Commissioner (Appeals) under section 250 is further appealable before the Tribunal under section 253. Hence, the present appeals filed by the assessee even on this preliminary issue are admitted. The issue of charging fees under section 234E has already been adjudicated by the Assessing Officer while processing returns/statements in the paras hereinabove and in view thereof, it is held that the Assessing Officer is not empowered to charge the fees under section 234E by way of intimation issued under section 200A in respect of defaults before 1-6-2015, thus, claim of assessee on both the aspects is allowed. [Para 36] * In the result, all the appeals filed by different assessees for different quarters relating to different years are allowed.[Para 37]" 10. In this view of the matter and also respectfully following the ratios of the judgements discussed above, we are of the view that there is no enabling provision in section 200A of the Act, before insertion of sub-clause (c) into section 200A of the Act, by the Finance Act, 2015 w.e.f. 1.6.2015 and hence, no adjustments can be made t....