TaxTMI 
TaxTMI 
2020 (12) TMI 555
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.... filing of TDS returns in Form 24Q for the quarter ended 30th September, 2012without any enabling provision u/s 200A of the Act to impose such penalty u/s234E upto 01.06.2015 as amended by Finance Act 2015 by insertion of subsection(c) to Sec 200A w.e.f. 01.06.2015 and the Assessing Officer has acted beyond the mandate of Income Tax Act on this point. 2. Because the Ld. Commissioner of Income Tax (Appeals) has erred in law and on facts to confirm the addition made by the Assessing Officer by relying on decision of a Gujarat High Court ( i.e. other than the jurisdictional High Court) in the case of Rajesh Kourani vs Union of India & Others in Special Civil Application No. 302of 2014 dated 20.06.2017 given in favor of Revenue without considering the view taken by Karnataka High Court ( i.e. other than the jurisdictional High Court) in the case of Sree Ayyappa Educational Charitable Trust vs DCIT(CPC-TDS), (2017)and Koraga Poojari Ravindravs Union of India, (2017) and various benches of Income Tax Appellate Tribunal in the cases listed below, in deciding the same issue in fav or of the assessee having similar facts as in the appellant's case. 1. ITAT Delhi Bench in case of Dha....
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....d unless it is expressly provided in the machinery provision. Clause (c), (d) and (f) of section 200A(1) have come into effect only w.e.f. 01.06.2015 and hence there was no enabling provision under section 200A for making such adjustment and raising demand in respect of the levy of late fee u/s 234E of the Act. Thus the ld. AR has submitted that once the Amendment is prospective w.e.f. 01.06.2015 then prior to the said amendment, the AO had no jurisdiction to make the adjustment while issuing the intimation u/s 200A of the Act. In support of her contention, the AR has relied the decision of Hon'ble Karnataka High Court in the case of Sri FatherajSinghvi&Ors vs. Union of India reported in (2016) 73 taxman.com 252 / (2016) 289 CTR 602. The ld. AR has further submitted that this issue of authority of AO prior to the amendment has been considered by this Tribunal in a series of decisions and decided in favour of the assessee. She has relied upon the decision of the Agra Benches of Tribunal dated 31.05.2018 in the case of State of Bank of India vs. ITO in ITA Nos.3 to 90 of 2018 as well as the decision of Delhi Benches of Tribunal dated 24.06.2019 in the case of Shri Ashok Kumar vs. ACI....
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....lause (c)is prospective and not retrospective as held by the Hon'ble Karnataka High Court in the case of Sri FatherajSinghvi(supra) in para no.21 to 23 as under: "21. However, if Section 234E providing for fee was brought on the state book, keeping in view the aforesaid purpose and the intention then, the other mechanism provided for computation of fee and failure for payment of fee under Section 200A which has been brought about with effect from 1.6.2015 cannot be said as only by way of a regulatory mode or a regulatory mechanism but it can rather be termed as conferring substantive power upon the authority. It is true that, a regulatory mechanism by insertion of any provision made in the statute book, may have a retroactive character but, whether such provision provides for a mere regulatory mechanism or confers substantive power upon the authority would also be a aspect which may be required to be considered before such provisions is held to be retroactive in nature. Further, when any provision is inserted for liability to pay any tax or the fee by way of compensatory in nature or fee independently simultaneously mode and the manner of its enforceability is also required to be....
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.... an identical issue has been considered by this Tribunal in a series of decisions including the decisions relied upon by the ld. AR of the assessee. In the case of State Bank of India vs. ITO (supra), the Agra Benches of Tribunal has held in para no.8 to 11 as under: 8. Heard the rival contention and perused the material relevant. We find that while deciding the issue against the appellant assessee the ld. CIT(A) has placed reliance on 'Rajesh Kaurani vs. Union of India', 83 Taxmann.com 137 (Guj.) wherein it was held that Section 200A of the Act is a machinery provision providing the mechanism for processing a TDS statement of deduction of tax at source and for making adjustment. The Ld. CIT(A) has further held that this decision was delivered after considering numerous ITAT and High Court decisions and therefore this decision in 'Rajesh Kaurani' (Supra), holds the fields. 9. It is seen that prior 01.06.2015, there was no enabling provision in the Act u/s 200A for raising demand in respect of levy of fee u/s 234E of the Act. The provision of Section 234E of the Act is charging provision i.e. substantive provision which could not be applied retrospectively, unless it is expressl....
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....). It is also not a case where the decision against the assessee has been rendered by the Jurisdictional High Court qua the assessee. 5. In 'Shri Fatehraj Singhvi and Others' (supra) it has been held, inter alia, as follows: "22. It is hardly required to be stated that, as per the well established principles of interpretation of statute, unless it is expressly provided or impliedly demonstrated, any provision of statute is to be read as having prospective effect and not retrospective effect. Under the circumstances, we find that substitution made by clause (c) to (f) of sub-section (1) of Section 200A can be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand under Section 200A for computation and intimation for the payment of fee under Section 234E could not be made in purported exercise of power under Section 200A by the respondent for the period of the respective assessment year prior to 1.6.2015. However, we make it clear that, if any deductor has already paid the fee after intimation received under Section 200A, the aforesaid view will not permit thedeductor to reopen the said question unless he has made payment under p....
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.... of late fee in returns processed prior to01.06.2015 and not return filed prior to 01.06.2015. Section 200A, which has been amended w.e.f. 01.06.2015 also says about processing of returns. The relevant part of Section 200A(i) is reproduced as under: "Processing of statements of tax deducted at source. 200A. (1) Where a statement of tax deduction at source or a correction statement has been made by a person deducting any sum (hereafter referred to in this section as deductor) under section 200, such statement shall be processed in the following manner, namely: (a) .................. (b) .................. (c) the fee, if any, shall be computed in accordance with the provisions of section 234E; (d) ......... (e) ......... (f) ............. Provided that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the statement is filed". 6. In the instant case the quarterly return has been filed on27.12.2014 with a delay of 203 days. According to the learned CIT(A), the rectification order was passed by the CPC and intimated to the assessee by e-mail on 10.03.2016, wherein late fee of Rs. 40,600/- was ch....
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.... field. 4. We do not find the view taken by the Id. CIT(A) to be correct in law. As against Rajesh Kaurani' (supra), 'Shri Fatehraj Singhvi and Others vs.UOT, 73 Taxmann.com 252 (Ker), as also admitted by the Id. CIT(A) himself, decides the issue in favour of the assessee. The only objection of the Id. CIT(A) is that this decision and others to the same effect have been taken into consideration by the Hon'ble Gujarat High Court while passing Rajesh Kaurani' (supra). However, while observing so, the Id. CIT(A) has failed to take into consideration the settled law that where there is a cleavage of opinion between different High Courts on an issue, the one in favour of the assessee needs to be followed. It has so been held by the Hon'ble Supreme Court in 'CIT vs. Vegetable Products Ltd.', 88 ITR 192 (SC). It is also not a case where the decision against the assessee has been rendered by the Jurisdictional High Court qua the assessee. 5. In 'Shri Fatehraj Singhvi and Others' (supra) it has been held, inter alia, as follows: "22. It is hardly required to be stated that, as per the well established principles of interpretation of statute, IT.....
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.... Id DR has opposed the submissions and supported the orders of the authorities below. She relied on the decision of the Hon'ble Jurisdictional High Court rendered in the case of Dundlod Shikshan Sansthan Vs. Union of India (2015) 63 taxmann.com 243 (Raj.). 8. We have heard the rival contentions of both the parties, perused the material available on the record and also gone through the orders of the authorities below. Recently the Coordinate Bench of Jaipur ITAT in the case of M/s. Sandeep Jhanwar Advisory Services Pvt. Ltd. Vs. The TDS CPC, Gaziabad in ITA No. 722 & 723/JP/2016 for the A. Y. 2013 J 4 / Q-3 & 4 has allowed the appeal of the assessee by observing as under:- "3.5. We have heard rival contentions, perused the material available on record and gone through the orders of the authorities below. We have also gone through the case laws relied upon by the Id. Counsel. We find merit into the contention of Id. Counsel that he ITA No.2039/Del/2018 jurisdictional High Court has decided the validity of section 234E, but has not decide the issue of power of AO for levy of tax under section 234E in the judgment rendered in the case of M/ s. Dundlod Shikshan Sansthan and Othe....
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....eld 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 prove due to the late filing of the TDS statements. Hence from both the decisions relied upon by the Id. DR, the issue of power of imposing late fee is not decided but the Hon'ble Karnataka High Court in the case of Fatheraj Singhvi & ors. Vs. Union of India &Ors. (supra) has decided the issue in favour of the assessee and held that the late fee U/s 234E of the Act has raised vide impugned demand notice U/s 200A of the Act. We find force in the contention of the Id. AR of the assessee. If there is conflicting views taken by the two Hon'ble Courts, then the view, ITA No.2039/Del/2018 which favours the assessee should be adopted. In this regard, the Id AR of the assessee has relied on the decision of the Hon'ble Supreme Court in the case of CIT Vs. Vatika Township P. Ltd. (2014) 367 ITR 466 (SC). In view of the decision of the Hon'ble Supreme Court in the case of CIT Vs. Vatika Township (supra), the demand so raised are directed to be deleted. Similarly identical findings have also been given in all the appeals of other assessm....