2023 (6) TMI 26

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.... U/s. 234E of the Income Tax Act, 1961. 2. The CPC-TDS erred in law to charge the fees U/s. 234E of the Income Tax Act, 1961 by way of intimation issued U/s. 200A of the Income Tax Act, 1961 in respect of defaults before 01/06/2015. 3. The CIT(A) should have seen that there is a reasonable and genuine reason for delay in filing of quarterly statements. 4. Any other ground that may be urged at the time of hearing of the appeal." 3. Brief facts pertaining to the instant appeal (ITA No. 74/Viz/2023) are that the assessee is an Educational Institution and provides education to the students in Annavaram and is run by Annavaram Devasthanam. For the FY 2013-14 relevant to the AY 2014-15 the assessee filed the Quarterly TDS returns after the due date. These TDS returns were processed by the Income Tax Department and intimations u/s. 200A of the Act were issued. In the intimations, the Ld. AO had levied late filing fee u/s. 234E of the Income Tax Act, 1961 and raised the demand. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). On appeal, the Ld. CIT(A)-NFAC observed that as the amendment in section 200A brought in by the Finance Act 20....

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.... United Metals (supra) and decisions of various Benches of the Tribunal which is against the spirit and the ratio laid down by the Hon'ble Supreme Court in the case of CIT vs. M/s. Vegbetable Products Ltd (1973) 88 ITR 192 (SC) wherein it was held that when there is difference of opinion between different High Courts on the an issue, the one which is in favour of the assessee needs to be followed. The Ld. AR therefore pleaded that the decision of the Ld. Revenue Authorities may be set-aside and the assessee may be granted relief by deleting the late fee levied U/s. 234E of the Act. 5. On the other hand, Ld. Departmental Representative heavily relied on the decision of the Ld. CIT(A) who confirmed the levy / imposition of late fee u/s. 234E of the Act by the Ld. AO. It is the submission of the Ld. DR that since the assessee filed its TDS statement beyond the stipulated time as per the TDS provisions, the late fee levied on account of default in furnishing the statements beyond the prescribed time limit is as per the provisions of the IT Act, 1961. The Ld. DR further submitted that the fee charged U/s. 234E is not in lieu of penalty as the fee charged under section 234E is not in th....

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.... enforced to the cases prior to 1/6/2015. Further, I am of the view that the amended provision applies for all the returns pertaining to the period after 1/6/2015 and not for the returns pertaining to the period prior to 01/06/2015 notwithstanding the fact that the returns pertaining to the period prior to 01/06/2015 were filed after 01/06/2015 or processed after 01/06/2015. 8. The Hon'ble Karnataka High Court in the case of Fatheraj Singhvi vs. Union of India [2016] 73 taxmann.com 252 (Karnataka) observed that "one may at the first blush say that, since the section 234E is a charging section for fee, the liability was generated or had accrued, if there was failure to deliver or cause to be delivered the statement/s of TDS within the prescribed time. But section 234E cannot be read in isolation and is required to be read with the mechanism and the mode provided for its enforcement......". The observations and relevant held portions in the judgment of the Hon'ble Karnataka High Court (supra) are extracted herein below for reference: "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 othe....

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....not having retroactive character or effect. Resultantly, the demand under Section 200A for computation and intimation for the payment of fee under Section 234E 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. However, we make it clear that, if any deductor has already paid the fee after intimation received under Section 200A, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest." 9. Further, the Hon'ble Kerala High Court in the case of United Metals vs. ITO (TDS) reported in [2022] 137 taxmann.com 115 (Kerala) observed as under: "Amendment in section 200A by way of incorporating sub-clause (c) to clause (f) which referred to computation of fee payable under section 234E was brought into effect from 1/6/2015, therefore, demand raised for levying late fee under section 234E for period prior to 1/6/2016 would not be sustainable." 10. The Pune Bench of the Tribunal vide its order dated 25/10/2018 in the case of Medical Superintendent Rural Hospital, Nashik vs. DCIT, CPC (TDS) (supra), has observed as under: "16.....