TaxTMI 
TaxTMI 
2021 (9) TMI 621
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.... to be deleted. 2. That the Ld. CIT (Appeals) erred in not appreciating that in absence of enabling provisions u/s. 200A of the Act, no late fee u/s. 234E can be levied in TDS Statement filed in respect of period prior to 01.06.2015 and the same is liable to be deleted. 3. That the Ld. CIT (Appeals) erred in not appreciating that the provisions of subsection (2) of section 200A of the Act empower the Board ('CBDT') to make a scheme for processing TDS Statements only in respect of tax payable or refund due and not in respect of levying late fee u/s. 234E of the Act. Thus, any intimation issued u/s. 200A levying late fee u/s. 234E is illegal and is liable to be quashed. 4. That the Ld. CIT (Appeals) erred in not appreciating that processing of TDS Statements by TDS-CPC, Ghaziabad in respect of levy of late fee u/s. 234E of the Act is beyond its jurisdiction and that TDS-CPC, Ghaziabad has acted beyond its jurisdiction. Therefore such an order is illegal and is liable to be deleted. 4. Brief facts of this case are that the assessee as tax deductor had filed its TDS Quarterly statement for F.Y.2013-14 with delay and CPC has levied 234E interest as ....
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.... jurisdiction. 5. As per proviso to Sec 200A, "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." As intimation sent after 31/03/2016 for FY 13-14, Q4, 26Q therefore intimation issued is itself wrong. 6. That the interest has been charged on the amount of 234E, whereas late fee is not an amount of tax. Therefore, interest charged on late fee is unlawful and wrong hence liable to be cancelled. 7. That the appellant craves leave to add, amend or withdraw any of the grounds of appeal. 6. He noted inter alia following submissions : "2. Processing of TDS statement pertaining to TDS statement fallen due before 1-6-2015, levying Late fees U/S.234E is against the law:- Section 200A has been amended w.e.f. 01/06/2015 to pass order U/S.200A for the purpose of levying late fees U/S.234E for TDS statements which were due to be filed on or after 1-6-2015 &for TDS deducted on or after 1-6-2015 & thus it is clear that orders levying late fee U/s 234E passed for TDS statement which were due to be filed before 1-6-2015&for TDS deducted before 01/06/2015 a....
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....ospective in nature and hence, notices issued under section 200A of the Act for computation and intimation for payment of late filing fees under section 234E of the Act relating to the period of tax deduction prior to 01.06.2015 were not maintainable and were set aside by the Hon'ble High Court. In view of said proposition being laid down by the Hon'ble High Court of Karnataka (supra), there is no merit in observations of CIT(A) that in the present case, where the returns of TDS were filed for each of the quarters after 1st day of June, 2015 and even the order charging late filing fees was passed after June, 2015, then the same are maintainable, since the amendment had come into effect. The CIT(A) has overlooked the fact that notices under section 200A of the Act were issued for computing and charging late filing fees under section 234E of the Act for the period of tax deducted prior to 1st day of June, 2015. The same cannot be charged by issue of notices after 1st day of June, 2015 even where the returns were filed belatedly by the deductor after 1st June, 2015, where it clearly related to the period prior to 01.06.2015. 16. We hold that the issue raised in the pr....
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.... 18. Further before parting, we may also refer to the order of CIT(A) in the case of Junagade Healthcare Pvt. Ltd., where the CIT(A) had dismissed appeals of assesses being delayed for period of December, 2013 and July, 2014. The CIT(A) while computing delay had taken the date of intimation under section 200A of the Act as the basis, whereas the assessee had filed appeals before CIT(A) against the order passed under section 154 of the Act. The CIT(A) had noted that rectification application was filed in February, 2018 which was rejected by CPC on the same day. The CIT(A) was of the view that there was no merit in condonation of delay, wherein appeals were filed beyond the period prescribed. The assessee had filed appeals against the order passed under section 154 of the Act, hence the time period of appeals filed by assessee before the CIT(A) have to be computed from the date of order passed under section 154 of the Act and not from the date of issue of intimation. Thus, there is no merit in the order of CIT(A) in dismissing the appeals of assessee on this issue. 19. We find similar issue has been decided by us in the case of Medical Superintendent Rural Hospital ....
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.... 234E of the Act was passed after June, 2015. The grounds of appeal raised by assessee are thus, allowed". The levy of late fee u/s 234E in the intimation u/s 200A is contrary to the law laid down by Jurisdictional Tribunal which is binding on the lower authority as per the decision of Hon'ble Bombay High Court in the case of Bank of Baroda v. H.C. Shrivastava [(2002) 256 ITR 385 (Bom)] and thus, the CIT APPEALS had in turn to follow the law laid down by Hon'ble Jurisdictional High Court while levying the late fee u/s 234E in the intimation u/s 200A and therefore, not following the decision of Hon'ble Jurisdictional H.C. was a mistake apparent from record which should have been rectified by way of an order u/s 154 of the Act. Hon'ble Bombay High Court in the para 16 of the said order had stated, "16. At this juncture, we cannot resist from observing that the judgment delivered by the Income Tax Tribunal was very much binding on the Assessing Officer. The Assessing Officer was bound to follow the judgments in its true letter and spirit. It was necessary for the judicial unity and discipline that all the authorities below the Tribunal must accept as binding t....
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....nsideration of the earlier decision." The said view of the Hon'ble Bombay High Court also talks about co-ordinate bench and does not talk about non-jurisdictional High Court. * Therefore, the views of Hon'ble Supreme Court in the case of Vegetable Products (88 ITR 192) (SC) that, "the view, which favours the assessee has to be followed." Reliance in this regard is placed on the decision of the Hon'ble Supreme Court in the case of Smt. TarulataShyam v. CIT [1971] 108 ITR 345 (SC) wherein it was held that there is no scope for importing into the statute words which are not there. Such importation would be, not to construe, but to amend the statute. Thus it is clear that order u/s.200A of the Act has been wrongly passed to levy late fees U/S.234E nor there was any authority as TDS CPC was not empowered to do so. The decision of Hon'ble Supreme Court of India in the case of CIT v. Naga Hills Tea Co. Ltd. [1973] 89 ITR 236 (SC) wherein it was held as under: "......If a provision of a taxing state can be reasonably interpreted in two ways, that interpretation which is favourable to the assessee, has got to be accepted. This is a well ac....
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....ocessed only after 01/06/2015. However, at the same the appellant is also harping on the fact if the period of default is also pertaining prior to 01/06/2015 even then it cannot be processed. The appellant's contention is factually and legally misplaced. Historically, the legal provisions regarding this issue is that in the Finance (No.2) Act, 2009 section 200A was inserted in the Income-tax Act which provided for processing of TDS statements for determining the amount payable or refundable to the deductor. However, as section 234E was inserted after the insertion of section 200A in the Income-tax Act, the existing provisions of section 200A of the Income-tax Act did not provide for determination of fee payable under section 234E of the Income-tax Act at the time of processing of TDS statements. Accordingly, the provisions of section 200A of the Income-tax Act has been amended (w.e.f. 01/06/2015) so as to enable computation of fee payable under section 234E of the Income-tax Act at the time of processing of TDS statement under section 200A of the Income-tax Act. Thus, even if the period is prior to 01/06/2015, the charging sec 234E was very much a part of the statute a....
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.... 01/01/2017 On perusal of the above mentioned details furnished by the CPC TDS, it is crystal clear that the assessee has first filed the regular return on 10/12/2014 which was processed on 13/12/2014. Thus the appellant's contention on this account is not sound as the statement was processed within the year. The appellant's another ground was that the order u/s 154 was not as per law. The appellant in due course again filed the correction statement which was processed on 01/01/2017. In the instant case, the date of rectification order was 01/01/2017. "The appellant's another plea that the rejection of order u/s 154 of the assessee by the AO is bad in law as law in this respect was very clear. However, it is clearly apparent that where on an issue the two High Courts are giving divergent opinions, the issue is definitely debatable and cannot be considered as an apparent mistake from the record. Thus, the rejection by the AO is as per law and hence this plea of deletion of demand u/s 234E by the AO cannot be entertained at the time of passing an order u/s 154. Hence, on this ground, the AO's order is upheld." After going through al....
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....us, in light of the aforesaid amendment, no late fee u/s. 234E of the Act could be levied for the TDS Statements pertaining to tax deducted for the period prior to 01.06.2015. Reliance in this regard is also placed on the following judicial decisions: a. High Court of Karnataka in the case of Fatheraj Singhvi & Ors. vs. Union Of India &Ors. [2016] 73 taxmann.com 252 (Karnataka) held as under: "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 23 4E 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. 27. In view of the afore....
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.... amendment made u/s 200A which came into effect from 1st June, 2015 is held to be having prospective effect and no computation of fee for the demand u/s 234E could be made for the TDS deducted for the respective assessment prior to 1st June, 2015. Therefore, the assessee is also entitled to get the same treatment. In the result, the appeal filed by the assessee is allowed Order pronounced in the open Court on 25.10. 2017." f. Hon'ble Chandigarh ITAT in the case of Sonalac Paint & Coating Ltd. vs. DCIT (2018) 176 DTK 83 (Chd.) after relying on the judgment of Hon'ble Amritsar IT AT in the case of Tata Rice Mills vs. ACIT(TDS)-CPC [ITA No. 395/Asr/2016] has held that late fee u/s. 234E of the Act could not be levied for the returns/quarters prior to 01.06.2015. g. Hon'ble Karnataka High Court in the case of Sree Ayyappa Educational Charitable Trust vs. DCIT &Anr. [2017] [Writ Petition No. 618/2015 c/w. W.P. No. W.P. 5831 & 5990-6001/2015] has held as under: "27. In view of the aforesaid observations and discussion, the impugned notices under Section 200A of the Act for computation and intimation for payment of fee under Section 234E as ....
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....n." 10. Per contra learned Departmental Representative relied upon the orders of the authorities below. 11. Upon careful consideration we find that higher court including that from Hon'ble Karnataka High Court have held that prior to amendment w.e.f. 1.6.2015 interest under section 234E could not be levied. It is undisputed that period of TDS return is prior to the amendment. At that time there was no enabling provision for levying interest under section 234E. Several decisions from High Courts and ITAT were referred before learned CIT(A). Despite this the learned CIT(A)'s rules that there is no ambiguity in law and he upholds the order of interest levy. There is no jurisdictional High Court decision on this issue. No effort has been done by learned CIT(A) to distinguish the case law of Vegetables Products Ltd. (supra) from Hon'ble Supreme Court cited before him. The said case law provides that if two views are possible the view in favour of the assessee has to be adopted. Hence, if as per learned CIT(A) there are divergent views of Hon'ble High Courts, in absence of a Jurisdictional High Court decision, the learned CIT(A) should have followed the ratio from this ....