TaxTMI 
TaxTMI 
2022 (7) TMI 787
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....d levy of late fee was not justified on facts and in law. 2] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal." 4. Briefly, the facts of the case are as under : The Assistant Commissioner of Income Tax, CPC (TDS), Ghaziabad issued an intimation u/s 200A r.w.s. 154 of the Income Tax Act, 1961 ('the Act') for the assessment year 2016-17 levying a late fee under the provisions of section 234E of Rs.93,600/- by stating that the appellant had failed to file the quarterly statement of TDS of first quarter for financial year 2015-16 in Form No.26Q. Accordingly, the ACIT, CPC (TDS) Ghaziabad had levied penalty of late fee of Rs.93,600/- u/s 234E by intimation dated 02.02.2018 passed u/s 200A r.w.s. 154 of the Act. 5. Being aggrieved by the above intimation, an appeal was filed before the ld. CIT(A). The ld. CIT(A) dismissed the appeal on the ground that the assessee had failed to demonstrate sufficient and reasonable cause for delay in filing the quarterly statement of TDS of first quarter for financial year 2015-16 in Form No.26Q. 6. Being aggrieved by the above decision of the ld. CIT(A), the appellant is in appeal before u....
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.... the provisions of fee since creates a counter benefit or reciprocal benefit in favour of the defaulter in the rigors of the penal provision, the provisions of Section 234E would meet with the test of quid pro quo. 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 ....
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....thority under law. Hence, the same can be said as illegal and invalid. 24. If the facts of the present cases are examined in light of the aforesaid observation and discussion, it appears that in all matters, the intimation given in purported exercise of power under Section 200A are in respect of fees under Section 234E for the period prior to 1.6.2015. As such, it is on account of the intimation given making demand of the fees in purported exercise of power under Section 200A, the same has necessitated the appellant-original petitioner to challenge the validity of Section 234E of the Act. In view of the reasons recorded by us hereinabove, when the amendment made under Section 200A of the Act which has come into effect on 1.6.2015 is held to be having prospective effect, no computation of fee for the demand or the intimation for the fee under Section 234E could be made for the TDS deducted for the respective assessment year prior to 1.6.2015. Hence, the demand notices under Section 200A by the respondent-authority for intimation for payment of fee under Section 234E can be said as without any authority of law and the same are quashed and set aside to that extent. 2....
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....tional validity of Section 234E shall remain open to be considered by the Division Bench and shall not get concluded by the order of the learned Single Judge." 9. The ratio of the above decision was followed by the Coordinate Bench of Pune Tribunal in the case of (i) Gajanan Constructions vs. DCIT, 73 taxmann.com 380, (ii) Maharashtra Cricket Association, Pune vs. DCIT, 74 taxmann.com 6 and (iii) Webtrust Co. In (India) Pvt. Ltd. ACIT, CPC (TDS) in ITA Nos.1818 & 1819/PUN/2018 for Assessment Years 2013-14 & 2014-15, order dated 02.11.2021. The decision rendered by the Hon'ble Bombay High Court in the case of Rashmikant Kundalia and Others (supra) does not come to the rescue of the Revenue, inasmuch as, the Hon'ble High Court had only upheld the constitutional validity of the provisions of section 234E of the Act. The Hon'ble High Court had not gone into the issue of retrospective operation of provisions of section 234E of the Act. In the circumstances, we direct the ACIT, CPC (TDS), Ghaziabad to delete the late fee being levied u/s 234E of the Act. 10. In the result, the appeal filed by the assessee in ITA No.1172/PUN/2018 for A.Y. 2016-17 stands allowed. 11. Now comes to ....