TaxTMI 
TaxTMI 
2022 (8) TMI 1304
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.... the assessee filed appeal before the Tribunal. 4. None attended on behalf of the assessee nor any adjournment application has been filed. 5. The written submission of the ld. DR is as under: "The above mentioned appeals are listed for hearing on 19.07.2022. The common issue which is under consideration in all the above mentioned appeals, is levy of fees u/s 234E of I.T. Act. The order levying penalty has been passed by respective TDS authorities and upheld by Ld. CIT(A). Accordingly, the appellants are in appeal before Hon'ble Tribunal. On this issue Hon'ble ITAT has passed a combined order dt. 29.11.2019 read with corrigendum dt. 11.12.2019 in 3 ITAs [ITA No. 5380/Del/2017, AY 2016-17; No. 5989/Del/2017, AY 2013-14 & 5990/Del/2017, AY 2013-14] with lead case being ITA No. 5380/Del/2017 in the case of Sh. Udit Jain. In its order dt. 29.11.2019, Hon'ble ITAT has allowed appeals of the assessee holding that fees u/s 234E is not leviable before 01.06.2015 i.e. the date when clause (c) was inserted in section 200A(I) for the computation of said fees at the time of processing. In its order Hon'ble ITAT has relied upon the decision of Hon'ble Karnataka High Court in the case of Fate....
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....e "consistency" rule enunciated in Radhasoami Satsang (supra). The Supreme Court observed, in that case that: "Where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. On these reasonings in the absence of any material change justifying the Revenue to take a different view of the matter and if there was no change it was in support of the assessee - we don't think the question should have been reopened and contrary to what have been decided by the Commissioner of income tax in the earlier proceedings, a different and contradictory stand should have been taken." This court notices that there cannot be a wide application of rule of consistency. In Radhasoami Satsang itself, the Supreme Court acknowledged that there is no res-judicata as regards assessment orders, and assessments for one year may not bind the officer for the next year. This is consistent with the view of the Supreme Court that 'there is no such thing as res-judicata ....
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....on (3) of section 206C. (4) The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.]" 5. Kind attention of the Tribunal is also drawn to the Memorandum to the Finance Bill, 2012 which elaborates the rationale / explanatory notes with respect to amendments being brought in the provisions of the 1. T. Act. The rationale for such amendments in TDS/TCS related provisions have been provided under the heading "E. Rationalization of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) Provisions" which comprise of 6 paras. Para (111) relates to insertion of section 234E in the statute & relevant to the issue under consideration. The same are reproduced as under: "E. Rationalization of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) Provisions I. Deemed date of payment of tax by the resident payee .....................................(Not reproduced as not relevant) II. Disallowance of bu....
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.... delay in furnishing of TDS statement if the TDS statement is furnished within one year of the prescribed due date after payment of tax deducted along with applicable interest and fee. In order to discourage the deductors to furnish incorrect information in TDS statement, it is proposed to provide that a penalty ranging from Rs. 10,000 to Rs. 1,00,000 shall be levied for furnishing incorrect information in the TDS statement. Consequential amendment is proposed in section 273B so that no penalty shall be levied if the deductor proves that there was a reasonable cause for the failure. Consequential amendment is also proposed in section 272A to provide that no penalty under this section shall be levied for late filing of TDS statement in respect of tax deducted on or after 1st July, 2012. Amendments on the similar lines for levy of fee and penalty for delay in furnishing of TCS statement and furnishing of incorrect information in the TCS statement are also proposed to be made. These amendments will take effect from 1st July, 2012 and will, accordingly, apply to the TDS or TCS statement to be furnished in respect of tax deducted or collected on or after 1st July, 2012. I....
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.... the statement" shall mean a claim, on the basis of an entry, in the statement- (d) of an item, which is inconsistent with another entry of the same or some other item in such statement; (ii) in respect of rate of deduction of tax at source, where such rate is not in accordance with the provisions of this Act. (2) For the purposes of processing of statements under subsection (1), the Board may make a scheme for centralized 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.] " 7. Kind attention of the Tribunal is also drawn to the Memorandum to the Finance Bill, 2015 which elaborates the rationale for insertion of clause (c) in section 200A(I) in the statute. Para (I) & para (III) under the heading "I. Rationalization of Measures" are relevant to the issue and the same are reproduced as under: Rationalization of provisions relating to Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) Under Chapter XVII-B of the Act, a person is required to deduct tax on certain specified payment at the specified rate if the payme....
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....ent is similar to TDS statement, it is proposed to insert a provision in the Act for processing of TCS statements on the line of existing provisions for processing of TDS statement contained in section 200A of the Act. The proposed provision shall also incorporate the mechanism for computation of fee payable under section 234E of the Act. Under the existing provisions of the Act, after processing of TDS statement, an intimation is generated specifying the amount payable or refundable. This intimation generated after processing of TDS statement is (i) subject to rectification under section 154 of the Act; (ii) appealable under section 246A of the Act; and (iii) deemed as notice of demand under section 156 of the Act. As the intimation generated after the proposed processing of TCS statement shall be at par with the intimation generated after processing of TDS statement, it is, further, proposed to provide that intimation generated after processing of TCS statement shall also be- (i) subject to rectification under section 154 of the Act; (ii) appealable under section 246A of the Act; and (iii) deemed as notice of demand under section 156 of the Act. Further, as the int....
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....he applicability & interpretation of the provisions of sec. 271H have been discussed by various High Courts in its order while examining the validity of provisions of Sec.271H. The Section reads as under: "Penalty for failure to furnish statements, etc. 271H. (1) Without prejudice to the provisions of the Act, the Assessing Officer may direct that a person shall pay by way of penalty, if, he- (a) fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C; or (b) furnishes incorrect information in the statement which is required to be delivered or caused to be delivered under subsection (3) of section 200 or the proviso to sub-section (3) of section 206C. (2) The penalty referred to in sub-section (1) shall be a sum which shall not be less than ten thousand rupees but which may extend to one lakh rupees. (3) Notwithstanding anything contained in the foregoing provisions of this section, no penalty shall be levied for the failure referred to in clause (a) of sub-section (1), if the person proves that after paying tax deducted or collected along with the fee and ....
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....ection 200 A(1)(c), Memorandum to Finance Bill, 2015 and the case-laws on this issue makes following points unambiguously clear that: 10.1 The fee payable u/s 234E is a charging provision and the AO has no discretion at all whereas section 200A is a machinery provision enabling for processing of TDS statements, computation of adjustments, fees and generation of intimation etc. Hon'ble ITAT has not appreciated this obvious difference in its order dt. 29.11.2019, referred supra. 10.2 As apparent from the heading of the section 200A as well as the Memorandum to the- Finance Bill, 2015 which elaborates the rationale for insertion of clause (c) in section 200A(1) in the statute (Para 7 of the written submission) it is absolutely clear that this is merely an enabling section to compute/process the TDS statement. Section 234 E is the charging section requiring automatic payment of fee by the defaulting deductors as per its sub-section (3) as even in the absence of section 200A of the Act with introduction of section 234E, it was always open for the revenue to charge the fees in terms of section 234E of the Act from the date of its introduction in the statute i.e. 01.07.2012. It may ....
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....pensatory in nature to the department for the services provided for regularization of the delay in tiling of a TDS return/statement & is not penal in nature since the Income Tax Department has to expend extra effort & resources for processing delayed TDS returns or statements and also the additional burden of interest to be paid on refunds payable to the assessee on whose account tax deduction has been made. [As held in para 27 by Hon'ble Delhi High Court in the case of Biswajit Das vs. UOI, [2019] 103 taxmann.com 290 (Delhi)] Hon'ble Delhi High Court that the fee imposed u/s 234E of the Act is for all intents & purposes a 'late fee' payable for excepting TDS statement/return at belated point of time. This fact has not been considered by Hon'ble ITAT in its order dt.29.11.2019. 10.6 Section 271H of the Act does not provide for any penalty for delayed filing of TDS return/statement if a person proves that he has paid the TDS amount and also filed TDS statements along with fee and interest before expiry of a period of 1 year from the prescribed time. However, the delay in filing of TDS return/statement upto a period of 1 year from the prescribed time is subject to levy of fee u/s ....
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....uctor by not furnishing the information in time and which he was statutorily bound to furnish. It is in this light, and to compensate for the additional work burden forced upon the Department, that a fee was sought to be levied under section 234E of the Act. Looking at this from this perspective, we are clearly of the view 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 provide due to the late filing of the TDS statements." 10.9 In the case of Qatalys Software Technologies (P) Ltd., it was stated by the appellant before Hon'ble Madras High Court that section 200A of the Act was amended by insertion of clause (c) to enable collection of fee u/s 234E and a question was also raised before Hon'ble High Court that the fee u/s 243E of the Act can be collected only from 01.06.2015. Hon'ble High Court has considered the same and thereafter upheld the validity of the fee chargeable u/s 234E and the appeal was dismissed. Hon'ble High Court has concurred with the findings of various High Courts, including Delhi High Court, on this issue and has held in para 29 as under: "29. It is well settled tha....
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....] 63 taxmann.com 243 (Raj)]. Para-8 of the order is relevant & the same is reproduced as under:- "8. In the present case, the fee was levied under section 200for late filing of the returns, prior to the amendments made by the Finance Act, 2015 with effect from 1.6.2015 in Sections 200A, 246A and 272A providing for computation and appeal. We do not find that even prior to these amendments the imposition of fee was illegal. We do not in exercise of the power under Article 226 of the Constitution of India find any valid reasons or justification to interfere with the compensatory fees imposed for late filing of the TDS returns on flat rates. The absence of any provision for condonation of delay and the appeal prior to amendments also did not make the imposition of late fees by Section 234E to be ultra vires." The findings of Hon'ble Rajasthan High Court has also escaped the consideration by Hon'ble ITAT and accordingly, it is requested that the same may kindly be considered to avoid any miscarriage of justice. 10.12 ITAT Jaipur in the case of Block Development Officer Vs ACIT , date of order 19/06/2010 (ITA Nos. 891, 892, 893, 894, 895 & 896/JP/201 has held that the levy of la....
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....e made in purported exercise of powers under section 200A by the respondent for the respective assessment year prior to 01.06.2015.........." 10.14.2 Further in para 25 of its order Hon'ble High Court has observed that "As such, as recorded earlier, it is on account of the intimation received under section 200A for making computation and demand of fees under section 234E, the same has necessitated the appellant to challenge the constitutional validity of section 234E.................." 10.14.3 On perusal of the order it may be noted that Hon'ble Karnataka High Court set-aside the order levying the fee u/s 234E holding that the amendments in sec 200A, wherein the clause (c) was inserted, can't have any retrospective application. However, two important points can be noted in the order. First Hon'ble Court didn't give any such findings which can be said to have negated the mandatory charging of fees u/s 234E for late filing of TDS/TCS returns / statements which creates an automatic charge on the deductors who have defaulted on this count & who are required to voluntarily pay the fee u/s 234E before delivering such belated TDS/TCS returns /statements in accordance with sub-sectio....
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..... Condonation of delay was not sought by the assessee, so on this count, the appeal before CIT(A) was not maintainable in all cases & Ld. CIT(A) has observed that the appeals deserve to be dismissed. In cases at S. No.7, 13, 15, 7 16. even the regular orders were passed after insertion of clause (c) in sec.200A(1)." 6. We have gone through the submission of the ld. DR. The efforts of the ld. DR, Sh. M. Barnwal are duly appreciated for his detailed analysis and reference to different orders/judgments of various Courts. 7. This issue of levy of late fee U/s 234E has been adjudicated by this tribunal in N number of appeals and has allowed appeals of the assessee holding that fees u/s 234E is not leviable before 01.06.2015 i.e. the date when clause (c) was inserted in section 200A(I) for the computation of said fees at the time of processing. The tribunal relied upon the decision of Hon'ble Karnataka High Court in the case of Fatehraj Singhvi & Others reported in [2016] 289 CTR 602. 8. Similar view has been taken by the Co-ordinate Bench of the ITAT Delhi Bench 'G' in the case of Vkare Bio Sciences Pvt. Ltd. Vs. DCIT(CPC-TDS) in ITA Nos. 2308, 2309 & 2310/Del/2017 vide order dated ....
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....filed as prescribed u/s 200(3) of the Act which in turn provides that the statement to be filed after the payment of tax to the prescribed authority. The relevant rule 31A (4A) provides that for filing of the 'challan cum statement' within seven days from the date of deduction. Now here in this case the demand has been raised purely on the ground that statement has not been furnished for the tax deduction at source. The relevant provision of section 200(3) read with rule 31A (4A) only refers to filing of 'challan cum statement' after the tax has been paid. The word "challan" in the said rule indicates that the tax must stand paid and that is how form 26QB is generated. Thus, here in this case, it cannot be held that there is any violation of section 200(3). In any case, the levy of fee u/s 200A of the Act in accordance with the provision of section 234E has come into the statute w.e.f. 1.6.2015. Since the challan and statement has been filed much prior to this date, therefore, no such tax can be levied u/s 200A. This has been clarified and held by Hon'ble Karnataka High Court in the case of Fatheraj Singhvi & Ors vs. Union of India reported in (2016) 289 CTR 060....