TaxTMI 
TaxTMI 
2023 (4) TMI 20
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....- 13 (Qtr-III onwards) to f.y. 2014-15 (Qtr-I). 2. The controversy arising in the instant appeals, as projected before us by Shri Chordia, the ld. counsel for the assessee, was with reference to the competence of the Assessing Officer (AO) in levying the fee u/s. 234E, which section stands coopted on the statute by Finance Act, 2012, w.e.f. 01/07/2012, on the processing of a statement (filed u/s. 200(3) of the Act) u/s. 200A of the Act, which provision came on the statue only w.e.f. 01/06/2015. That is, the mismatch in the dates of the commencement of the charging and the machinery provision; the latter, s.200A, providing for the determination and recovery of the fee, coming into effect only later. While some Hon'ble High Courts viz. Gujarat (Rajesh Kourani v. UOI [2017] 83 taxmann.com 137); Rajasthan (Dundlod Shikshan Sansthan v. UOI [2015] 63 taxmann.com 243); Madras (Qatalys Software Technologies (P.) Ltd. v. UOI [2020] 115 taxmann.com 345); P&H (Dr. Amrit Lal Mangal vs. UOI [2015] 62 taxmann.com 310), have taken a view in favour of the levy being valid, some others, as Karnataka (Fatheraj Singhvi & Ors. v. UOI in W.P.No. 2662,2663/2015 (T-IT), dated 26/08/2016) and Kerala ....
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....articulars and within such time as may be prescribed: Provided that the person may also deliver to the prescribed authority a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under this sub-section in such form and verified in such manner as may be specified by the authority. 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 sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of amount computed under clause (b) against any amount ....
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....n (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. (emphasis, ours) 3.2 Even as observed by the Bench during hearing, the controversy arising in the instant set of cases is not as is being projected. In all these cases, for which ITA No. 55/JAB/2022 was adopted as the lead case, the levy u/s. 234E is in respect of the correction statements, filed under proviso to s. 200(3), after 01/06/2015. As explained by Sh. Chordia, correction statements were filed after depositing the shortfall in the tax deducted (or collected) at source under various provisions of Chapter-XVII of the Act, even as they may be, as also appears to be the case, also for correcting invalid/no PAN cases (refer para 6 of the Intimation). We shall advert to this aspect of our discussion on the levy u/s. 234E later. For instance, the correction statement in ITA No. 55/JAB/2022 was filed on 27/4/2020, and processed on the same date, i.e., 27/4/2020. Where, then, one may ask, does the issue of retrospectivity of sec.200A, or the contro....
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....n, as indeed during hearing itself, as to what, then, is the controversy in the instant cases about? The Intimations, though stated to be u/s. 154, are, in our considered view, only u/s. 200A(1), made after 01/06/2015, in respect of a statement/s filed after that date and, as afore-noted, at an amount referable to the period after 31/5/2015. We clarify so by way of abundant caution, so as to pre-empt any argument, as indeed was made before us, albeit without reference to the facts, as to the limited scope of an order u/s. 154, precluding any debatable issue. Even as the impugned Intimations stand clarified to be u/s. 200A(1) (also see para 3.3), there is, as also explained hereinbefore, no scope of any debate; all the parameters for the levy u/s. 234E being defined therein, with power having been exercised only qua statements filed on or after 01/06/2015. 3.3 It may be argued, though was not and, in our view, only rightly so, that no late fee could be levied qua a statement u/s. 200(3), which is not in respect of deposit of tax deductible (or collectible) at source, short deducted/collected earlier, or though not so, short deposited. This is as the tax having been deducted or coll....
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.... correcting it, being not u/s. 154, but only u/s. 200. 4.1 We may, without prejudice, and if only for the sake of completeness of our order continue further, discussing a case where the fees levied is with reference to a period prior to 01/06/2015 (though after 30/6/2012). The same would, firstly, even so, fail the levy only to the extent it relates to the period prior to 01/07/2012, and not on or after 01/06/2015. That is, the argument is, even granting so, valid only in part, and shall not, the processing being on or after 01/06/2015, operate to fail the levy in full, but only for the period for which there was no mechanism for its determination and recovery, provided through clause (c) to s. 200A(1), w.e.f. 01/06/2015. 4.2 We may next consider the issue in two parts, i.e., where the levy includes: a) for the period comprised in the period 01/07/2012 to 31/05/2015; and b) the period on or after 01/06/2015. The latter part, which obtains in the instant case/s, stands in fact discussed in the preceding paras, to find it as without any legal impediment. As regards the former (a), the obligation to prepare and deliver a statement, caused under sub-section (3) of s.200, came ....
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....arily be read as liable to be enforced, irrespective of the filing of the statement or its processing. As explained in L. Hazarimal Kuthalia v. ITO [1961] 41 ITR 12 (SC), the exercise of power would be referable to a jurisdiction which conferred validity upon it, and not to a jurisdiction under which it would be nugatory. As explained in Gursahai Saigal v. CIT [1963] 48 ITR 1 (SC), being even otherwise trite law, the provisions of a taxing statute dealing with the machinery for assessment have to be construed by the ordinary rules of construction, that is to say, in accordance with the clear intention of the Legislature, which is to make the charge levied effective. In interpreting the (machinery) provision, the rule is that construction should be preferred which makes the machinery workable. That is, a machinery section should be so construed as to make the charge effective (also see: India United Mills Ltd. v. CEPT [1955] 27 ITR 20 (SC)); the corresponding legal maxim being "ut res valeat potius quam pareat". Further, the rule of strict construction, it is again well-settled, applies only to a taxing provision, i.e., to a provision creating a charge for tax and not that laying do....
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....en as it could be argued that a statement filed without paying the fee in full cannot, strictly speaking, be regarded as in compliance of s. 200(3) r/w s. 234E(3). Also, the processing of an incorrect statement would also be incorrect, which cannot be regarded as valid in law. This also explains the filing of the correction statement, as well as its processing, determining the fee with reference to the date of filing the corrected statement. This, again, supports our view of the processing of the correction statements in the instant cases, and the consequent Intimations, as being only u/s. 200A(1)(c). The law, by requiring its payment prior to the delivery of the statement or even correction of particulars thereof, casts an obligation on the assessee to determine the levy and, thus, as a concomitant, on the AO to process the same, generating the Intimation determining the amount, if any, payable by the assessee-deductor (collector), or even refundable to him in case of excess payment. Such a processing, prior to being specifically provided for u/s. 200A(1)(c), is to be read as u/s. 234E itself. The amendment per clause (c) to s. 200A(1) w.e.f. 01/6/2015 makes explicit what was impl....
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.... decisions by the Apex Court that the machinery provisions are to be read in a manner so as to effectuate the legislative intent, making the charge effective. It is under the circumstances the view that appeals to judicial conscience of the subordinate court that would prevail (Kenal Oil & Export Inds. v. Jt. CIT [2009] 121 ITR 596 (Ahbd)(TM)), which we, for the detailed reasons stated hereinbefore, find to be that as expressed in the case of Rajesh Kourani (supra), the relevant part of which is reproduced hereunder: '19. In plain terms, section 200A of the Act is a machinery provision providing mechanism for processing a statement of deduction of tax at source and for making adjustments, which are, as noted earlier, arithmetical or prima facie in nature. With effect from 01.06.2015, this provision specifically provides for computing the fee payable under section 234E of the Act. On the other hand, section 234E is a charging provision creating a charge for levying fee for certain defaults in filing the statements. Under no circumstances a machinery provision can override or overrule a charging provision. We are unable to see that section 200A of the Act creates any charge in any ....
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.... of the Act was in the nature of privilege to the defaulter if he fails to pay fees then he would be rid of rigor of the penal provision of section 271H of the Act. With both these propositions, with respect, we are unable to concur. Section 200A is not a source of substantive power. Substantive power to levy fee can be traced to section 234E of the Act. Further the fee under section 234E of the Act is not in lieu of the penalty of section 271H of the Act. Both are independent levies. Section 271H only provides that such penalty would not be levy if certain conditions are fulfilled. One of the conditions is that the tax with fee and interest is paid. The additional condition being that the statement is filed latest within one year from the due date.' (emphasis, ours) The difference in view of the Hon'ble Courts, i.e., considering so, is only in whether the charge u/s. 234E for period prior to 01/06/2015, is liable to be determined or not in the absence of a specific provision in its respect. The Hon'ble Courts are, in either case, in agreement on that the issue is as to the existence of the source of power before 01/6/2015. Whichever view one may take in the matter, there is no d....