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TaxTMI 
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TaxTMI 
2022 (8) TMI 260
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....ion of Hon'ble jurisdictional High Court in the case of Rajesh Kourani vs. Union of India (2017) 83 taxmann.com 137 (Guj). Thus, all these appeals were fixed for hearing afresh. 2. In all appeals, the assessee has raised common grounds of appeals, the facts in all appeals are common, thus all the appeals were clubbed, heard together and are decided by common order to avoid the conflicting decisions. With the consent of parties, the facts in ITA No. 505/SRT/2018 (2nd Quarter in TDS statement furnished in Form No. 24-Q for A.Y. 2013- 14) is treated as "lead" case. The assessee has raised the following ground of appeal: (1) On the facts and in the circumstances of the case as also on law learned DCIT, CPC TDS has erred in levying the late fee under section 234E of the Act which is ultra vires and the same has been confirm by Ld. CIT(A) which is required to be deleted since the charges are applicable from 01.06.2015. (2) On the facts and in the circumstances of the case and as also on law learned DCIT, CPC TDS has erred in giving effect to the levy of late fee in the course of intimation under section 200A of the Act. (3) On the facts and in the circum....
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....for TDS deducted prior to 01.06.2015, hence the demand of fee under section 234E is without authority of law. The Ld. AR for the assessee submits that Hon'ble jurisdictional High Court in the case of Rajesh Kourani (supra) while passing the decision has missed the important aspect whether the enforcement of provisions of Section 234E from 01.07.2012 is retrospective in nature or not. Such aspect has been dealt in detail by Hon'ble Karnataka High Court in the case of Fatheraj Singhvi (supra) wherein it was held that as per well settled law of principle of interpretation of statute, unless it is expressly provided or impliedly demonstrated any provision of statute is to be dealt as prospective effect and not retrospective effect. Under these circumstances, it is found that substitution made by Clause-(c) of 9(f) of sub-section (1) of Section 200A can be read as having prospective effect and not having retrospective character of effect. The judgment of Hon'ble Karnataka High Court is supported by decision of Constitutional Bench of Hon'ble Apex Court in the case of J.K.Synthetix Ltd. vs. Commercial Tax Officer (1994) 119 CTR 0222 (SC). In case of W.Ramand Electric Dist....
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....were prior to 01-06- 2015. 8. We find that in case of Rajesh Kourani Vs UOI (supra) the Hon'ble High court while considering the constitutional validity of Section 200A held that fee prescribed under section 234E could be levied even without regulatory provision. In order to appreciate the completeness of this order, the relevant part of decision in Rajesh Kourani (supra) is extracted below:- "5. In the petition, the petitioner has raised following threefold grievances: I. That section 234E of the Act is ultra-vires and unconstitutional II. Rule 31A of the Rules insofar as it prescribes longer period for the Government to file the statements as compared to the other assessees is discriminatory and arbitrary and therefore unconstitutional. III. Prior to 01.06.2015, section 200A did not authorize the Assessing Officer to make adjustment of the fee to be levied under section 234E of the Act. This provision introduced with effect from 01.03.2016 is not retrospective and therefore, for the period between 01.07.2002 i.e. when section 234E was introduced in the Act and 01.06.2015 when proper mechanism was provided under section 200A of the Act fo....
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....hought it fit to grant 15 days additional time to the Government agencies to file the statements. This is therefore not a case of discrimination, but a case of reasonable classification. 9. With respect to the amendment in section 200A, counsel submitted that the charging provision is section 200E of the Act. Section 200A merely provides a mechanism. Such a provision cannot govern the charging provision. Even in absence of amendment in section 200A, the Assessing Officer was always authorized to levy fee in terms of section 200E of the Act. At best, the amendment in the said provision should be seen as clarificatory or providing a mechanism which till then was missing. Counsel referred to the decision of Rajasthan High Court in case of Dundlod Shikshan Sansthan v. Union of India [2015] 63 taxmann.com 243/235 Taxman 446 (Raj.), where, in the context of challenge to the vires to the section 234E of the Act, incidentally this issue also came up for consideration. 10. In order to appreciate the rival contentions, we may take a closer look at the statutory provisions applicable. Section 200 of the Act pertains to duty of the person deducting tax and imposes a duty on a....
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....y be, on or after the 1st day of July, 2012." 13. With effect from 01.07.2012, the legislature also introduced section 271H of the Act providing penalty for failure to furnish statements required to be filed under sub-section (3) of section 200 or under proviso to sub-section (3) of section 206C of the Act. As per sub-section (2) of section 271H in case of default to file the statements, the assessee may be liable to penalty of not less than rupees ten thousand but not more than rupees one lakh. Under sub-section (3) of section 271H however, such penalty would be avoided if the assessee proves that he had paid the tax deducted or collected alongwith interest and he had filed the necessary statement within one year from the time prescribed for filing such statements. We may also record that clause (k) of sub-section (2) of section 272A provides for penalty for failure to deliver the statement within the time specified in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C at a rate of rupees one hundred for every date during which the failure continues. However, with effect from 01.07.2012, a proviso was added limiting the effect of this provisi....
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....ay make a scheme for centralised processing of statements of tax deducted at source to expeditiously determine the tax payable by, or the refund due to, the deductor as required under the said sub-section." With effect from 01.06.2015, sub-section (1) of section 200A was amended. In the amended form, the same provision reads as under: Section 200A(1) "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) the sums deductible under this Chapter shall be computed after making the following adjustments, namely:- (i) any arithmetical error in the statement; or (ii) an incorrect claim, apparent from any information in the statement; (b) the interest, if any, shall be computed on the basis of the sums deductible as computed in the statement; (c) the fee, if any, shall be computed in accordance with the provisions of section 234E; (d) the sum paya....
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....a person other than the person referred to in clause (i) TABLE Sl.No. Date of ending of quarter of financial year Due date Due date (1) (2) (3) (4) 1 30th June 31st July of the financial year 15th July of the financial year 2 30th September 31st October of the financial year 15th October of the financial year 3 31st December 31st January of the financial year 15th January of the financial year 4 31st March 15th May of the financial year immediately following the financial year in which the deduction is made. 15th May of the financial year immediately following the financial year in which the deduction is made." This rule thus, while laying down the last date by which such statements should be filed, draws two categories; in case of deductor is an office of government and in case of a deductor is a person other than the office of the government. Consistently, the office of the government is granted 15 days extra time as compared to the other deductors. For example, the statement for the date of the quarter ending on 30th June, an ordinary deductor would have to file a statement latest by 15th July of....
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....10,000/- and Rs.1 lakh. No penalty would be imposed if the tax is deposited with fee and interest and the statement is filed within one year of the due date. With addition to these two provisions prescribing fee and penalty respectively, clause (k) of sub-section (2) of section 272A became redundant and by adding a proviso to the said section, this effect was therefore limited upto 01.07.2012. 17. In essence, section 234E thus prescribed for the first time charging of a fee for every day of default in filing of statement under sub-section (3) of section 200 or any proviso to sub-section (3) of section 206C. This provision was apparently added for making the compliance of deduction and collection of tax at source, depositing it with Government revenue and filing of the statements more stringent. 18. In this context, we may notice that section 200A which pertains to processing of statements of tax deducted at source provides for the procedure once a statement of deduction of tax at source is filed by the person responsible to do so and authorizes the Assessing Officer to make certain adjustments which are prima-facie or arithmetical in nature. The officer would then....
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....dment. Even in absence of such provision, as noted, it was always open for the Revenue to charge the fee in terms of section 234E of the Act. By amendment, this adjustment was brought within the fold of section 200A of the Act. This would have one direct effect. An order passed under section 200A of the Act is rectifiable under section 154 of the Act and is also appealable under section 246A. In absence of the power of authority to make such adjustment under section 200A of the Act, any calculation of the fee would not partake the character of the intimation under said provision and it could be argued that such an order would not be open to any rectification or appeal. Upon introduction of the recasted clause (c), this situation also would be obviated. Even prior to 01.06.2015, it was always open for the Revenue to calculate fee in terms of section 234E of the Act. The Karnataka High Court in case of Fatheraj Singhvi (supra) held that section 200A was not merely a regulatory provision, but was conferring substantive power on the authority. The Court was also of the opinion that section 234E of the Act was in the nature of privilege to the defaulter if he fails to pay fees then he w....
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....nd that that jurisdiction high court in para-20 of the decision has clearly dissented with the decision of Hon'ble Karnataka High Court in Fatheraj Singhvi Vs UOI (supra) and held that even in absence of section 200A with introduction of section 234E, it was always open for the revenue to demand and collect the fee for late filing of the statements. Section 200A would merely regulate the manner in which the computation of such fee would be made and demand raised. In other words, the view that without a regulatory provision being found for section 200A for computation of fee, the fee prescribed under section 234E cannot be levied is not acceptable. Any such view would amount to a charging section yielding to the machinery provision. If at all, the recasted clause (c) of sub-section (1) of section 200A would be in nature of clarificatory amendment. Even in absence of such provision, as noted, it was always open for the revenue to charge the fee in terms of section 234E. By amendment, this adjustment was brought within the fold of section 200A. This would have one direct effect. An order passed under section 200A is rectifiable under section 154 and is also appealable under sectio....