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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI V. DURGA RAO, HON’BLE & SHRIMANJUNATHA. G, HON’BLE
आयकर अपीलीय अिधकरण, ’सी’ �यायपीठ, चे�ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI �ी वी. दुगा� राव, माननीय �ाियक सद� एवं �ी मंजूनाथा .जी, माननीय लेखा सद� के सम� BEFORE SHRI V. DURGA RAO, HON’BLEJUDICIAL MEMBER AND SHRIMANJUNATHA. G, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./ITA Nos.88 to 90 & 91 to 92/Chny/2023 िनधा�रण वष�/Assessment Years: 2013-14 & 2014-15 M/s.John Buildwell India Pvt. Ltd., v. The Dy. Commissioner- 10/2, Seevalaperi Road, of Income Tax, Palayankottai, CPC-TDS, Tirunelveli-627 002. Ghaziabad. [PAN: AABCJ 9298 D] (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/ Appellant by : None ��यथ� क� ओर से /Respondent by : Mr.P. Sajit Kumar, JCIT : सुनवाईक�तारीख/Date of Hearing 28.02.2023 : घोषणाक�तारीख /Date of Pronouncement 28.02.2023 आदेश / O R D E R PER MANJUNATHA.G, AM:
These five appeals filed by the assessee are directed against separate, but identical orders of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, (NFAC) Delhi, all dated 01.12.2022 and pertains to assessment years 2013-14 & 2014-15. Since, facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are being disposed off, by this consolidated order.
The brief facts of the case are that the assessee is a private limited company, engaged in the business of civil construction. As there was a requirement to deduct tax at source on payments made by them, the -92/Chny/2023 :: 2 ::
appellant deducted and paid the same. The appellant paid the interest due by them on late payment of the tax wherever applicable. However, there was a delay in filing the TDS statements in respect of the quarterly statements namely 24Q and 26Q during various quarters relating to periods prior to 01.06.2015. While processing the TDS statements under section 200A of the Income Tax Act, 1961 the Deputy Commissioner of Income tax, Centralized Processing Cell -TDS, Ghaziabad has levied a late filing fee under section 234E of the Act. The assessee appealed against such levy of the late filing fee in respect of various intimations issued by CPC-TDS relating to the AY 2013-14 and AY 2014-15 before the Commissioner of income Tax (Appeals)-NFAC. The learned Commissioner of Income Tax (Appeals)-NFAC dismissed appeals stating that there is no merit in the grounds of appeal relating to levy of fee u/s.234E of the Act.
None appeared for the assessee. However, the assessee has filed written submissions explaining the facts and arguments in respect of all five appeals and the same has been perused. We have heard the ld. DR and considered the relevant materials on record. The Ld.DR submitted that although, the assessee has filed original statements in Form No.24Q & 26Q for relevant quarters in FY 2012-13 & FY 2013-14, but has filed correction statements after introduction of Sub-clause (C) in Sec.200A of the Income Tax Act, 1961, by the Finance Act, 2015 and thus, late fee levied by the AO u/s.234E of the Act, while processing quarterly TDS returns is in accordance with law and upheld by various courts and -92/Chny/2023 :: 3 ::
Tribunals. We find that there is no provision in the Income Tax Act, 1961 as it stood before 01.06.2015 to levy the fees prescribed under section 234E. The enabling provision in this regard was introduced by the Finance Act, 2015 by substituting clause (c) with a new clause in section 200A which has come into force with effect from 01.06.2015. In view of this the power to levy the fees under section 234E while processing the TDS statement is vested with the Processing Authority only in respect of quarterly statements filed after 01,06.2015. The Memorandum explaining the insertion of provision relating to the insertion of clause (c) to section 20QA of the Act clarifies the intention of the Legislature in inserting the said provision. The Finance Bill further clearly provides that the amendment took effect from 01.06.2015, so there is no indication whatsoever that clause (c) of section 200A is retrospective or clarificatory in nature. The substitution of clause {c} in subsection (1) of section 200A by Finance Act 2015 with effect from 01.06.2015 is clearly a substantive provision and therefore is to be construed to be operative prospectively.
The amendment cannot be neither purport to be merely clarificatory nor is there any material to suggest that it was intended by Parliament. The decision of the Supreme Court in CIT vs Vatika Township Pvt. Limited 2014 367 ITR 466 SC also explained how amendments should be read.
In absence of enabling provision in section 200A before 1-6-2015, the demand notices under section 200A by the respondent authority for intimation for payment of fee under section 234E can be said as without -92/Chny/2023 :: 4 ::
authority of law and are to be set aside. In similar circumstances in the case of Smt G.lndhirani vs DCIT,CPC-TDS (ITA Nos1019,1020 and 1021/Mds/2015), ITAT 'A' Bench Chennai (2015) 60 taxmann.com 312 (Chennai- Trib) and in the recent case of Sam & Co vs ACIT, CPC-TDS, Ghaziabad (ITA No.595/Chny/2021) dt.16.08.2022 of ITAT 'C’ Bench Chennai has held that the fee levied by the Assessing Officer under section 234E of the Act while processing the statement of tax deducted at source is beyond the scope of adjustment provided under Section 200A of the Act. In the case of Fatheraj Singhvi v. Union of India (2016) 73 Taxmann.com 252, the Karnataka High Court has held that the fee under section 234E brought about with effect from 01.06,2015 is prospective, hence no computation of fee for demand or intimation for fee under section 234E could be made for TDS deducted for respective assessment years prior to 01.06.2015. In similar circumstances in the recent case of Karnataka Gramin Bank vs ACIT, CPC-TDS, Ghaziabad (ITA No. 593 to 672/Bang/2Q22) dt.05.09.2022 of ITAT 'C' Bench Bangalore has held that the fee levied by the Assessing Officer under section 234E of the Act while processing the statement of tax deducted at source is beyond the scope of adjustment provided under Section 200A of the Act. In a recent case relating to AY 2015-16, in in the order dated 09.07.2021, the ITAT, Delhi in the case of Shri Raj Veer Singh vs ACIT, CPC-TDS, Vaishali, Ghaziabad has held that the fee levied for periods prior to 01.06.2015 is not sustainable in the eyes of law. -92/Chny/2023 :: 5 ::
In this view of the matter and considering facts and circumstances of the case, we are of the considered view that there is no provision under section 200A of the Act, while processing quarterly TDS statements filed prior to 01.06.2015 to levy late filing fees u/s.234E of the Act. As regards arguments of the ld. DR that correction statements have been filed after 01.06.2015 and intimations have been issued after 01.06.2015 and thus, there is provision for levy of late fee u/s 234E of the Act, we find that once, an assessee filed original quarterly TDS statements before 01.06.2015, then even if correction statements are filed after amendment on 01.06.2015, there is no question of levy of late fee because law provided for filing correction statements to rectify any mistakes in original statements. Thus, we reject arguments of the ld. DR present for the Revenue. We, therefore are of the considered view that late fee charged u/s.234E of the Act, while processing quarterly TDS returns filed prior to 01.06.2015 is not sustainable under the law. Thus, we direct the Assessing Officer to delete late fee charged u/s.234E of the Act.
In the result, all five appeals filed by the assessee are allowed.
Order pronounced on the 28th day of February, 2023, in Chennai.