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Income Tax Appellate Tribunal, “RANCHI BENCH, RANCHI
Before: Shri Sanjay Garg & Shri Rajesh Kumar
order : April 28, 2023 ORDER Per Sanjay Garg, Judicial Member: Both the appeals have been preferred by the assessee against the separate orders dated 15.03.2022 of the National Faceless Appeal Centre [hereinafter referred to as the ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). The Assessee in both the appeals has agitated the levy of late filing fees u/s 234E of the Act along with interest thereupon levied u/s 220(2) of the Act. Since, common issues are involved in all the appeals, hence these have heard together and are being disposed of by this common order. The appeal in for assessment year 2013-14 is taken as lead case for the purpose of narration of facts.
The brief facts of the case are that the assessee deducted tax at source (TDS) in respect of certain payments. As per the provisions of 1 I.T.A. Nos.13&14/Ran/2022 Assessment Years: 2013-14 & 2014-15 Sri Sita Ram Rai section 200(3) of the Act read with Rule 31A of the Income Tax Rules 1952, a deductor must file quarterly returns/ statements of the Tax deducted at source (TDS). The assessee filed returns of the TDS belatedly. The Income Tax Authorities processed the return for the relevant quarter u/s 200A of the Act. Since, there was delay in filing the TDS statements, the demand for fees for late filing of TDS statements as prescribed u/s 234E of the Act was raised by the concerned Income Tax Authorities under an intimation issued u/s 200A of the Act. The period of TDS statement/TDS return pertained to the period prior to 01.06.2015 upon which the late fees u/s 234E was levied.
Earlier, there was no provision u/s 200A of the Act for levying/demanding of fees u/s 234E of the Act while processing TDS return u/s 200A of the Act. It was only on 01.06.2015 that the statute was amended and clause (c) was inserted to section 200A, whereby, it was provided that while processing TDS return u/s 200A of the Act, fees, if any, shall be computed in accordance with the provisions of section 234E of the Act.
The ld. counsel, in this respect, has relied upon the decision of the Hon’ble Karnataka High Court in the case of “Fatehraj Singhvi vs. Union of India” 73 Taxmann.com 252 order dated 26.08.2016, wherein, the Hon’ble High Court has held that the amendment in section 200A by way of insertion of clause (c) is prospective only with effect from 01.06.2015 and that the demand of fees u/s 234E of the Act prior to 01.06.2015 cannot be made in an intimation issued u/s 200A of the Act since there was no enabling provision of section 200A of the Act for raising a demand in respect of levy of fees u/s 234E of the Act. The Hon’ble Karnataka High Court in this respect observed 2 Assessment Years: 2013-14 & 2014-15 Sri Sita Ram Rai that when the statute confers no express power u/s 200A before 01.06.2015 on the authority either to compute any fees u/s 234E or to raise demand in this respect while processing return u/s 200A, the demand for the period prior to 01.06.2015, raised in an intimation u/s 200A, could not be sustained.
The ld. counsel, in this respect, has also placed reliance on the decision of the Kerala High Court in the case “M/s Sarala Memorial Hospital vs. Union OF India” in WP(C) No.37775 of 2018 decided on 18.12.2018 and further upon the various decisions of the co-ordinate Benches of the Tribunal, following the aforesaid decisions of the hon’ble Karnataka High Court and hon’ble Kerala High Court.
On the other hand, the ld. DR has strongly relied upon the decision of the Hon’ble Gujarat High Court in the case of “Rajesh Kourani vs. Union OF India” reported in [2017 83 taxmann.com 137(Gujarat)], wherein, the Hon’ble High Court has held that section 200A is a machinery provision providing mechanism for processing a statement of deduction of tax at source and for making adjustments which are merely arithmetical or prima facie in nature and does not create any charge in any manner. Section 234E is a charging provision creating a charge for levying fee for certain defaults in filing statements and that fee prescribed u/s 234E could be levied even without a regulatory provision being found in section 200A for computation of fee.