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Before: Shri V. Durga Rao & Shri Manoj Kumar Aggarwal
O R D E R
PER V. DURGA RAO, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 18, Chennai, dated 14.03.2023 relevant to the assessment year 2015-16.
The appeal of the assessee is filed with a delay of 26 days in filing the appeal before the Tribunal. The assessee has filed a petition for condonation of delay in the form of an affidavit mentioning the reasons for delay in filing the appeal. By referring to the above affidavit, the ld. Counsel for the assessee has submitted that there is reasonable cause for the delay and the delay in filing the appeal is neither wilful nor wanton and prayed for condonation of delay and to admit the appeal for adjudication. Against the above submissions, the ld. DR has not raised any serious objection. Considering the affidavit filed for condonation of delay, we hereby condone the delay in filing the appeal and admit the appeal for adjudication.
Brief facts of the case are that the assessee has deducted tax on various payments made during the financial year 2014-15 pertaining to the assessment year 2015-16. The assessee filed statement of tax deducted in the Form for the relevant quarters after the due date(s) prescribed for the purpose. The AO, vide his intimation of outstanding demand, sent notice to the assessee stating the outstanding demand of ₹.58,400/- for the assessment year 2015-16 as late filing fee under section 234E of the Act. On appeal, the ld. CIT(A) dismissed the appeal of the assessee by observing that the levy of late fee under section 234E of the Act is in order and needs no interference.
On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the ld. CIT(A) has erred in not condoning the delay in filing the appeal even though there was sufficient cause for the delay in filing the appeal. It was further submission that the ld. CIT(A) has erred in confirming levy of late filing fee under section 234E of the Act without considering the submissions made by the assessee.
On the other hand, the ld. DR has submitted that the assessee should have filed an appeal against the order of the DCIT(TDS), CPC dated 30.04.2015, whereas, the assessee preferred the appeal before the ld. CIT(A) after a long delay of more than four years and nine months. It was further submission that the appeal filed before the ld. CIT(A) is infructuous and strongly supported the order passed by the ld. CIT(A).
We have heard both the sides, perused the materials available on record and gone through the order passed by the ld. CIT(A). The only issue involved in this appeal is relating to confirmation of late filing fee levied under section 234E of the Act for the delay in filing quarterly statements of deduction of taxes under section 200(3) of the Act. In this case, the ld. CIT(A) has recorded that the assessee should have filed an appeal against the order of the DCIT(TDS), CPC dated 30.04.2015 and whereas, the appeal has been filed after a long delay on 24.02.2020 when the outstanding demand has been raised on 26.06.2019. Therefore, the ld. CIT(A) dismissed the appeal of the assessee on the ground that the appeal is infructuous. On this count, there was no submission from the ld. Counsel for the assessee.
6.1 The ld. CIT(A) has also considered on merits and passed detailed order by observed as under: 6.6 Section 234E was introduced w.e.f. 1/7/2012, to ensure that quarterly statements are filed promptly within the prescribed period of time. This fee is levied for the reason that the assessee is allowed to file TDS statement beyond the prescribed period of time and this fee regularises the late filing of TDS. Section 234E is only for accepting the TDS statement beyond the period of time. There is an obligation on the Income-Tax Department to process the income tax returns filed by the assessees within specified period from the date of the filing. The department can process the income tax return of a person on whose behalf tax has been deducted only when the information relating to the details of tax deducted is furnished by the deductor in a TDS statement within the prescribed time. The timely processing of returns is the bedrock of an efficient tax administration system. The Courts through various judgments have also called upon the department to look into the aspect of timely processing of returns and issue refunds. Hence, timely submission of TDS statement containing the details of person on whose behalf tax is deducted becomes very crucial. Unless and until the department receives the details of tax deduction through the TDS statement, timely processing of income tax returns having claim of TDS is not possible. In case, the department goes ahead and processes the income tax return of the assessee having claim of TDS without giving credit for TDS due to non- filing of TDS details by the deductor, then the grievance of the deductee would be increased. Non-filing or delayed filing of the TDS returns/statements by the deductor has multitude effects eroding the credibility of an efficient tax administration system. As per the existing provisions of the Income-Tax Act, a person responsible for deduction of tax is required to furnish periodical TDS Statements (quarterly) containing the details of deduction of tax made during the quarter by the prescribed due date. It was noticed that a substantial number of the deductors were not furnishing their TDS statements in time, which resulted in delay in granting of credit of TDS to the person on whose behalf tax was deducted and consequently led to delay in issue of refunds to the deductee or raising of infructuous demand against the deductee and thereby increasing the workload of the department and grievances of the assessees. Timely furnishing of TDS statement is critical for processing of income- tax return of the assessee having TDS claim because credit for tax deducted on behalf of the deductee is granted to him only on the basis of information furnished by the deductor in the TDS statement. If there is a delay in grant of credit etc., then it will result in granting refund of the tax deducted on behalf of the deductee by the deductor along with interest at the rate of half a percent every month which is a loss of revenue to the department on account of the lapse of filing the statements by the deductor. It is not uncommon that now a-days, refunds are going to the assessees within a week of filing return also and it was made possible by such levy of late fee u/s 234E discouraging the late filers of TDS statements to encourage them to file them in time, which ensures efficient tax administration by way of quick refunds through computer processing of returns by CPC. If section 234E is not invoked, then, it will derail such robust system processing. Therefore, it is imminent to levy the late fee u/s 234E in the cases of late filers of quarterly statements u/s 200(3). It is after hearing such arguments of the department only, the Hon’ble High Court in the case of Qatalys Software Technologies (P) Ltd. vs. UOI (supra) upheld the levy of late fee u/s 234E while processing TDS quarterly statements even before 1.6.2015. Insertion of clause (c) w.e.f. 1.6.2015 in section 200A(1) only empowers the inclusion of late fee u/s 234E while computer processing of quarterly TDS statements; that does not mean late fee u/s 234E cannot be levied from 1.7.2012 to 31.5.2015, while manually processing the TDS statements u/s 200A(1), more so when section 234E has come into effect from 1.7.2012 itself. 6.7 In view of the above, it is held that the levy of late fee u/s 234E levied by the AO in this case is in order as per law and needs no interference. 6.2 We have perused the detailed and well reasoned order passed by the ld. CIT(A) on merits. Thus, we find no reason to interfere with the order passed by the ld. CIT(A) and accordingly, the ground raised by the assessee is dismissed.
In the result, the appeal filed by the assessee is dismissed. Order pronounced in the open Court on 22nd August, 2023 at Chennai.