TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 513
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns which led to delay in filing the appeals and the same reads as under: "1. I am the Authorized Signatory of the appellant in the abovementioned appeals filed before the Income Tax Appellate Tribunal (ITAT). 2. The appeal pertains to the A.Y. 2017-18. 3. The applicants have filed a detailed appeal against the impugned order dated 04.08.2023 passed by the Ld. CIT (Appeals), NFAC, Delhi, Accordingly, the present appeal ought to have been filed on or before 27.10.2023. However, the appeal will be filed on 11.03.2024. Accordingly, there is a delay of 136 days in filing the present appeals. 4. I hereby declare that the appeal shall be filed beyond the prescribed time limit due to unavoidable circumstances. 5. The reason for the delay is as follows: a. The father of the consultant appointed (CA Aditya Birla, Jalna) to handle my tax matters was diagnosed with pancreatic cancer during the relevant period. b. Despite our best efforts, the consultant's availability was severely impacted due to the need to care for the ailing father. c. Unfortunately, the consultant's father succumbed to the illness on 13.02.2024, leading to further delays in attending to the appeal p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ax Appellate Tribunal. The said delay is bonafide and unintentional. 6. If the delay in filing the present appeal is not condoned, it would not render justice to the applicant-appellant. The Honourable Apex Court in the case of Collector of Land Acquisition vs. MST Katiji - 1987 (28) ELT 185 (SC) held that a justifiable liberal approach should be taken in condoning delay as an ordinary litigant does not stand to benefit by filing an appeal late and refusing to condone the delay can result in a meritorious matter being thrown out at the very threshold and cause justice being defeated. 7. Without prejudice, the applicant submits that the impugned order passed by the Ld. CIT (A) is an exparte order. Therefore, the same shall be set aside since it is in violation of the principles of natural justice. To support his contention, the appellant relies upon the decision of the Honourable Supreme Court in the case of Umanath Pandey and Ors. Vs. State of Uttar Pradesh and Ors. MANU/SC/0401/2009 wherein the Honourable Bench held that Natural justice is the essence of fair adjudication, deeply rooted in tradition and conscience, to be ranked as fundamental. The purpose of following the prin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the averments made in the affidavits by these two assessee's and considering the ratio laid down by the Hon'ble Court in the case of Inder Singh (supra), we are of the view that there was 'reasonable cause' which prevented the assessee's in filing the appeals within the stipulated time. We therefore condone the delay of 160 days and 75 days respectively in filing of appeals by both the above captioned assessee's and admit the appeals for adjudication. 7. The bunch of appeals pertaining to Chate Tutorials Pvt. Ltd. are recalled matters in as much as the earlier exparte order dated 04.06.2024 passed by this Tribunal has been recalled vide M.A.Nos.52 to 56/PUN/2024 order dated 31.12.2024. 8. We first take up bunch of appeals in respect of Chate Tutotials Pvt. Ltd. and ITA No. 476/PUN/2024 as the lead case wherein assessee has raised following common grounds of appeal: "1) That the instant demand is out of the purview of sec 200A and made without jurisdiction: a. Provisions of section 200A(1) provide for the manner of processing of TDS statement and section 200A(2) of the Act provides delegation of powers to CBDT for formulating a scheme. CBDT vide Notification No. 3/2013 dt. 15.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....That once the TDS statement has been accepted without late fees, then such late fees cannot be recovered later on. In view of the above late fee cannot be recovered later on by way of any notice. d. Similar provisions exist for the interest under section 201(1A). Thus, recovery of interest under section 201(1A) after filing the TDS returns is bad as well. 4) That as per the provisions of sec 201(1) of the Act also a Deductor cannot be treated as an assessee in default and TDS return cannot be treated as defective due to non-payment of late fees U/s 234E. a. It is submitted that, the filer is treated as an assessee in default for non-payment of SA tax and interest along with return U/s 139(1). Moreover, the income tax return is also treated as defective U/s 139(9). On the contrary, section 201(1) only treats the assessee in default if the tax amount is unpaid. b. Sec 201(2) of the Act states that if a person has failed to deposit whole or a part of tax then it shall be a charge upon all the assets of that person. Thus, this sub-section also does not cover interest and late fee amount, for the purpose of such charge on assets. This implies that the intention of the law is not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or the assessee referred to the following written submissions : "Kindly refer subject issue. At the outset, the Appellants thank your honor for a kind and patient hearing held on 11.03.2025. 1. At the further outset, it is clarified that all the 18 appeals mentioned above are against on the identical issue and also have identical grounds. The challenge of the Appellant lies not to the levy of interest, or late fees, but to the power of the Centralised Processing Cell determining the same. The Appellants re-iterate the submissions made during the course of personal hearing. The Appellants re-iterate the grounds of appeal taken before the Ld. Commissioner (Appeals) and the Appellate Tribunal. The same shall be treated as part and parcel of the present submission. The same are not being repeated here for the sake of brevity. Hence, the Appellants pray that the impugned order be set aside. The sum and substance of the oral arguments presented before the Hon'ble Bench are again briefly submitted as under: Centralised Processing Cell does not have the Power to determine interest, additional interest and late fees: 2.1 The Indian Constitution adheres to the principles of dividing go....
X X X X Extracts X X X X
X X X X Extracts X X X X
....". Thus, the definition of tax is very clear and unambiguous. This definition does not include any interest/penalty/fees to mean as tax. They are separate concepts under the law. 3.2 Reliance is placed on the decisions of: a. Harshad Shantilal Mehta - (1998) 231 ITR 871 (SC) - (2ndPara on Page 16); b. Oryx Finance and Investment Pvt Ltd - [Income Tax Appeal No. 1 of 2015 - Bom HC) - (Para 18, 19 and 21 on Pages 4 and 5); and c. Dinesh T Tailor - [2010-TIOL-311-HC-MUM-IT] - (Para 11 and 12 on Page 21 and 22). These cases have been annexed in the compilation of cases already presented before the bench. The relevant page numbers and paragraph numbers are marked for ease of reference. 3.3 It is additionally submitted that the distinction between tax, interest and fees can also be made out from the fact that the charging section for tax, i.e. section 4 also mentions only income tax, TDS/TCS. For interest and late fees, there are separate charging sections namely 201(1A), 220(2) and 234E. 3.4 It is also submitted that the legislation has clearly provided for the term 'tax' to include other things in the provisions through explanations wherever deemed necessary so to do. For....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be read into the statute when the language is clear and unambiguous. (Para 7.1 at Page 37 of the compilation). 4.5 It is also imperative here to look for the intention of the statute. The memo of Finance Bill, 2015 which most recently amended the sub section (1) of section 200A only intends to amend the manner in which the Late Fees is to be processed while processing the statement of TDS. In the said amendment there is no corresponding amendment to sub section (2) for the determination of the said late fees/interest by CPC. No Vacuum 5. It is submitted that there is no vaccum for the determination of interest, additional interest and late fees under section 234E. The Income Tax Department has a TDS wing and the jurisdictional hierarchy right the level of Income Tax officer (TDS) is already in place. It is once again reiterated that the challenge by the Appellant is no towards levy, but towards the determination of interest, additional interest and late fees by the CPC. Thus, the determination of interest, additional interest and late fees under section 234E can be done by the jurisdictional TDS officers but not by CPC. 6. In view of the above, the Appellants pray and reite....
X X X X Extracts X X X X
X X X X Extracts X X X X
....done by the CPC u/s 143(1)(a). In turn, the challenge lies to the constitutional validity of the levy of late fees u/s 234E r.w.s 200A(1)(c) by the CPC. 1.3 In short, the constitutional validity of the 200A(1)(c) of the Act is being challenged by the assessee Appellant by posing a constitutional challenge to the scheme as per section 200A(2) vis-à-vis the processing done by the CPC, TDS and would also impact the processing by the CPC u/s 143(1)(a). In turn, the challenge lies to the constitutional validity of the levy of late fees u/s 234E r.w.s 200A(1)(c) by the CPC. 1.4 That, Interest and fees are not a part of 'Tax'. It is submitted by the assessee Appellant, that the term 'Tax' has been defined in the Income Tax Act, 1961 as "means income-tax chargeable under the provisions of this Act" and "includes the fringe benefit tax payable under section 115WA". Thus, the definition of tax is very clear and unambiguous. That, this definition does not include any interest/penalty/fees to mean as tax. That, these are separate concepts under the law. To buttress its case, the assessee Appellant has relied upon the following case laws : a. Harshad Shantilal Meh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the CPC. (ii) That, the late fees u/s 234E is not the same thing as 'tax' and cannot be included therein and accordingly the computation mechanism as envisaged u/s 200A fails with respect to the computation of the same by the CPC. 2. The Case of the Revenue : The constitutional validity of section 234E of the Act has already been upheld by various High Courts and has been followed by the Hon'ble Pune Bench of the ITAT in several cases. The Hon'ble Pune Bench of the ITAT in a plethora of cases has also dealt with the levy of late u/s 234E of the Act while processing by the CPC. In this connection it is to mention that, what the Hon'ble Pune bench of the ITAT has lately followed in several cases is that clause (c) of sub-section (1) of section 200A was introduced with effect from 01/06/2015 and hence any TDS statement that came to be filed on or after 01/06/2015 then the assessee was liable to pay the late fee u/s 234E r.w.s 200A(1)(c) when the Return of Income processed by the CPC. The Hon'ble Pune ITAT has held as under: It shall serve to state that, a person liable to deduct any sum under the provisions of chapter XVII of the Act, is under obligation to deliver or furnis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Income-tax Act, 1961 - Deduction of tax at source - Fees for default in furnishing statements (Scope of provision) - Whether section 200A is a machinery provision providing mechanism for processing a statement of deduction of tax at source and for making adjustments, which are, arithmetical or prima facie in nature and does not create any charge in any manner - Held, yes - Whether with effect from 1-6-2015, this provision specifically provides for computing fee payable under section 234E - Held, yes - Whether however, section 234E is a charging provision creating a charge for levying fee for certain defaults in filing statements and fee prescribed under section 234E could be levied even without a regulatory provision being found in section 200A for computation of fee - Held, yes [Para 20][In favour of revenue] Section 234E, read with section 200A of the Income-tax Act, 1961 and rule31Aof the Income-Tax Rules, 1962 - Deduction of tax at source - Fees for default in furnishing statements (Time to file return of TDS) - Whether in view of fact that multiple agencies are involved in every transaction in Government offices, longer period for Government to file a return of deduction of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee Appellant is that, it is the CPC which processes the ROI is the CPC which processes the TDS statements, which is not the case in reality. As can be seen, the CPC, TDS facilitates the amelioration of the difficulties of the taxpayers in line with the legislative intention in bringing section 234E onto the statute. The interpretation proposed by the assessee Appellant runs contrary to this legislative intention and therefore cannot survive. 2.4 In Gajanan Constructions vs DCIT (2016) 73 taxmann.com 380 (Pune -Trib), the Hon'ble ITAT has held that power to charge/collect fees under section 234E was vested with revenue only on substitution of clause (c) to section 200A vide Finance Act, 2015 with effect from 1-6- 2015, hence prior to 1-6-2015 no fee could have been levied under section 234E while issuing intimation under section 200A. Several other decisions of the Pune ITAT have held accordingly and while doing so have dealt with section 200A(1)(c) r.w.s 200A(2).Therefore, it would be improper to hold otherwise when the earlier orders of the Pune ITAT still hold the field and have not been struck down by the jurisdictional High Court. 2.5 The CBDT Notification dated 15/01/....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... it is clear that subsection (3) thereof, inter alia stipulates that any person responsible for deducting any sum by way of tax, on or after 1-4-2005 in accordance with the foregoing provisions of Chapter XVII or, as the case may be, any person being an employer referred to in sub-section (1A) of section 192 shall, after paying the tax so deducted to the credit of the Central Government within the prescribed time, prepare such statements for such period as may be prescribed and deliver or cause to be delivered to the prescribed income tax authority or the person authorised by such authority, such statements, in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed. The proviso (which was inserted with effect from 1-10-2014) further stipulates that a 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. [Para 10] On a perusal of sub-section (1) of section 234E, it is clear that a fee is sought to be levied inter alia on a person who fails to deliver or cause to be delivered the TDS return/statemen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e 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.[Para 14] Due to late submission of TDS statements the department is burdened with extra work which is otherwise not required if the TDS statements were furnished within the prescribed time. This fee is for the payment of the additional burden forced upon the department. A person deducting the tax (the deductor), is allowed to file his TDS statement beyond the prescribed time provided he pays the fee as prescribed under section 234E. In other words, the late filing of the TDS return/statements is regularised upon payment of the fee as set out in section 234E. This is nothing but a privilege and a special service to the deductor allowing him to file the TDS return/statements beyond the time prescribed by the Act and/or the rules. Therefore, the argument of the petitioners that the fee that is sought to be collected under section 234E is really nothing but a collection in the guise of a tax was not agreeable. [Para 15] Therefore, the fee sought to be levied under section 234E is not in the guise of a tax that is sought to be levied o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... other regulatory legislation it is imperative that the court exercises judicial restraint and grants greater latitude to the legislature whilst judging the constitutional validity of such a statute. This is for the simple reason that the court does not consists of economic and administrative experts and has no expertise in these matters. [Para 20] These well settled principles have been very succinctly set out in the judgment of the Supreme Court in the case of Government of Andhra Pradesh v. Smt. P. Laxmi Devi [2008] 4 SCC 720. Therefore, even looking at it from the perspective as set out in the aforesaid judgment, it is clear that section 234E does not violate any provision of the Constitution and is therefore intra vires, Constitution of India. [Paras 21 & 22]. 2.7 Looking at the issue from another angle, the Supreme Court in CIT vs Bhikaji Dadabhai & Co in 42 ITR 123 (SC) has held that the Supreme Court has regarded penalty as an additional tax imposed upon a person in view of his dishonest or his contumacious conduct (para 9 thereto). In this view of the matter, the levy of fee u/s 234E of the Act which was brought on to the statute to be a deterrent for filing the TDS st....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the moment there is a failure on the part of a person to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to subsection (3) of section 206C. The person committing the above breach/infraction renders himself liable to pay by way of fee a sum of Rs. 200 everyday during which the failure continues. Sub-section (3) in fact provides for a self-assessment/payment of the fee while delivering or causing to deliver a statement in accordance with sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C. Subsection (4) to section 234E also makes it clear that the above provision would be effective from 1-7-2012. Therefore, the submission that section 234E would not be operable/effective unless and until section 200A(1)(c) was introduced overlooks the fact that section 234E(1) is the substantive provision and section 234E(3) provides for a self - declaration/payment for the delay in complying with sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C. [Para 7.2] In the light of the above discussion, the Hon'ble Madras High Court rejected the challenge to the order imposi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ource (and other statements). 200A. (1) Where a statement of tax deduction at source 246 for 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 payable by, or the amount of refund due to, the deductor shall be determined after adjustment of the amount computed under clause (b) and clause (c) against any amount paid under section 200 or section 201 or section 234E and any amount paid otherwise by way of tax or interest or fee; (e) an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, h....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... payable or refund due" the power with the Board to frame the scheme for centralised processing of the statement of TDS is only to the extent of determining the "tax payable or refund due" but not for levying fee u/s. 234E of the Act and charging of interest u/s. 200A(1). He has further referred to plethora of judgments on the basis of which it is contended that tax cannot be equated with interest as well as late fee for delay in filing the return. It is also stated that since Board had no power to give authority to the CPC to determine the late fee u/.s.234E and interest for delay in deposit of TDS u/s. 200A(1), therefore, the late fee levied u/s. 234E of the Act in the case of assessee in all the instant appeals is beyond the jurisdiction of CPC and therefore deserves to be deleted. 15. Ld. Departmental Representative for the Revenue has also argued with equal strength and referring to the written submissions has stated that the issue of levy of fee u/s. 234E has been examined by Hon'ble Courts time and again and the late fee levied for the default in late filing of TDS statements from 01.06.2015 onwards has been confirmed and found to be in accordance with law. He also submitte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uch under sub-section(1) of section117 of the Act; (j) "portal" means the web portal of the authorised agency or the web portal of the Cell, as the case may be; (k) "statement of tax deducted at source" means statement of tax deducted at source furnished under sub-section (3) of section 200 of the Act. (2) The words and expressions used herein but not defined and defined in the Act shall have the meaning respectively assigned to them in the Act. 3. Centralised Processing Cell.- The Board may set up as many Centralised Processing Cells as it may deem necessary and specify their respective jurisdictions. 4. Furnishing of correction statement of tax deducted at source.- (1) A deductor shall furnish the correction statement of tax deducted at source in the form specified by the Director General- (a) at the authorised agency through electronic mode; or (b) online through the portal. (2) The correction statement referred to in sub-paragraph (1) shall be furnished under digital signature or verified through a process in accordance with the procedure, formats, and standards specified by the Director General. 5. Processing of statements.- (1) The Cell shall process the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ls) and an order, if any, giving effect to appellate order shall be passed by such Assessing Officer. 9. No personal appearance at the Cell.- (1) No person shall be required to appear personally or through authorised representative before the authorities at the Cell in connection with any proceedings. (2) The Cell may call for such clarification, evidence or document as may be required for the purposes of the processing of statement of tax deducted at source or for the purposes of the rectification of any order or intimation passed or sent by the Cell under the provisions of the Act. (3) The deductor shall furnish the reply to any communication under sub-paragraph (2) in such format as may be specified by the Director General. 10. Service of notice or communication.- (1) The service of a notice or order or intimation or any other communication by the Cell may be made by delivering or transmitting a copy thereof to the deductor,- (a) by electronic mail; or (b) by placing such copy in the registered electronic account of the deductor on the portal of the Cell; or (c) by any mode mentioned in sub-section (1) of section 282 of the Act. (2) The date of posting of a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....note that similar type of scheme has also been made by the Board for processing of income-tax returns as per provisions of section (1A) of section 143 of the Act which provides that for the processing of returns under subsection (1), the Board may make a scheme for Centralised Processing of returns with a view to expeditiously determine the tax payable or refund due to the assessee as required under the sub-section. 18. Now in terms of the above provisions of section 143(1A) of the Act, the Board made the Centralised Processing returns Scheme 2011 S.O. 16 (E) dated 04.01.2012 and in clause 8 of the Scheme mechanism for processing of the returns is given, which is reproduced below : "8. Processing of Returns. (i) The Centre shall process a valid return of income in the following manner, namely:- (a) the sum payable to, or the amount of refund due to, the person shall be determined after credit of such Tax collected at Source (TCS), Tax Deducted at Source (TDS) and tax payment claims which can be automatically validated with reference to data uploaded through TDS and TCS statements by the deductors or the collectors, as the case may be, and tax payment challans reported throug....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ressed upon that if the words "sum payable" has been mentioned in place of the word of "tax payable" then CPC would have been empowered to levy fee u/s. 234E and interest u/s. 201. At this juncture, we would like to note the observations of Hon'ble Jurisdictional High Court in the case of Rashmikant Kundalia vs Union of India reported in [2015] 54 taxmann.com 200 (Bombay) where the Hon'ble Court held as under : "It is now well settled that even though this Court exercising jurisdiction under article 226 of the Constitution has the power to declare a statute (or any provision thereof) as unconstitutional, it should exercise great restraint before exercising such a power. Really speaking, there is only one ground for declaring an act of the legislature as invalid, and that is if it clearly violates some provision of the Constitution of India in so evident a manner so as to leave no manner of doubt. Before declaring a statute to be unconstitutional, the court must be absolutely sure that there can be no manner of doubt that it violates the provisions of the Constitution of India. If two views are possible, one making the statute constitutional and the other making it unconstitutiona....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts as provided under sub-section (1) of section 200A and even though the words in sub-section (2) of section 200A mentioned is "tax payable but the same has to be read in totality with the intent of section 200A of the Act and therefore it actually is meant to determine the "sum payable or refund due" to the deductor. We therefore are of the considered view that since specific sub-section is already introduced in the Act, i.e. section 200A(2) and the CPC formed by Board is required to process the return as per section 200A(1) of the Act, the words "tax payable" actually connotes sum payable and therefore CPC is well within its jurisdiction to levy late fee u/s. 234E for the delay in filing the quarterly returns of TDS by the assessee as well as interest u/s. 201 of the Act and therefore the legal issue raised in the grounds of appeal raised by the assessee stands dismissed. All the Grounds of appeal raised by the assessee in Chate Tutorials Pvt. Ltd. are dismissed. 24. In respect of Shree Bhaskaracharya Pratishthan, we take ITA No.2356/PUN/2024 the lead case wherein assessee has raised following common grounds of appeal: "The Ld. CIT (Appeals), NFAC has confirmed interest on lat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....his order as one taken up for section 234E. Thus, the order is a non-speaking order and needs to be quashed. 3) That demand of late fees/additional cannot be made under section 156 after the said TDS statement has been delivered. a. As per the provisions of Sec. 234E of the Act, if a person fails to deliver or cause to be delivered a statement within the prescribed time period then he shall be liable to pay Late fees @ Rs. 200/- per day before filing the TDS statement. b. Further, sub-section (3) of section 234E of the Act states that it shall be paid before delivering a TDS statement. It means that any late fees should have been deposited just at the time of delivering TDS statement and not later than this. c. That once the TDS statement has been accepted without late fees, then such late fees cannot be recovered later on. In view of the above late fee cannot be recovered later on by way of any notice. d. Similar provisions exist for the interest under section 201(1A). Thus, recovery of interest under section 201(1A) after filing the TDS returns is bad as well. 4) That as per the provisions of sec 201(1) of the Act also a Deductor cannot be treated as an assessee in de....