ANJANI PRS BLENDS PRIVATE LIMITED,HYDERABAD vs. DCIT, CIRCLE-1(1), HYDERABAD

These appeals are filed with a delay of 64 days each and the reason for such delay is attributed to the oversight of the chartered accountant in identifying a suitable counsel to file the appeal in Tribunal, due to the heavy pre-occupation of audit and filing of returns which were extended till 07/11/2022. The delay is 64 days and there is no grievance of Revenue of any prejudice being caused due to this delay. Prima facie we do not find any malafide on the part of the assessee in preferring these appeals with delay. Having regard to the facts and circumstances, we are inclined to condone the delay and proceed to hear the appeal. 3. Only issue which needs to be adjudicated in these appeals is the charging of late filing fee u/s 234E of the Income Tax Act, 1961 (‘the Act’) while issuing the intimation u/s 200A of the Act. Assessee is a private limited company, engaged in the business of manufacturing of raw material used for plastic products. Assessee is under legal obligation to deduct tax at source and deposit the same with Government within the prescribed time. Assessee, however, received noticed under section 200A of the Act levying late filing fee for the assessment year 2012-13. 4. Assessee appealed against such levy before the learned CIT(A), but the learned CIT(A) declined to delete the levy of fee and charging of interest stating that when the assessee files the TDS statements beyond the due date, such a levy of late fee and the interest is consequential and mandatory. 5. Its canvassed before us by the learned AR that where the legislature has inserted clause (c) to section 200A(1) of the Act w.e.f 01/06/2015, then in respect of the TDS statements which were filed under the respective sections of the Act, for the period prior to 01/06/2015, no late filing fee could be charged u/s 234E of the Act, in the intimation issued u/s 200A of the Act. He further submitted that the CIT(A) has overlooked the fact that notices under section 200A of the Act were issued for computing and charging late filing fees under section 234E of the Act for the period of tax

Per contra, learned DR submits that the assessee furnished the returns late and, therefore, as rightly pointed by the learned CIT(A) levy of late fee and penalty under section 200A of the Act is consequential and mandatory.

It is, therefore, clear that the only issue that falls for our consideration is whether late fee and consequential interest could be levied in respect of the TDS statements relating to the period prior to 01/06/2015. We find that the said issue has been adjudicated by the Hon'ble Karnataka High Court in the case of Fatheraj Singhvi & Ors vs. Union of India (2016) 289 CTR 0602. The relevant findings of the Hon'ble High Court in paras 21 and 22 read as under:- "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 other mechanism provided for computation of fee and failure for payment of fee under Section 200A which has been brought about with effect from 1.6.2015 cannot be said as only by way of a regulatory mode or a regulatory mechanism but it can rather be termed as conferring substantive power upon the authority. It is true that, a regulatory mechanism by insertion of any provision made in the statute book, may have a retroactive character but, whether such provision provides for a mere regulatory mechanism or confers substantive power upon the authority would also be a aspect which may be required to be considered before such provisions is held to be retroactive in nature. Further, when any provision is inserted for liability to pay any tax or the fee by way of compensatory in nature or fee independently simultaneously mode and the manner of its enforceability is also required to be considered and examined. Not only that, but, if the mode and the manner is not expressly prescribed, the provisions may also be vulnerable. All such aspects will be required to be considered before one considers regulatory mechanism or provision for regulating the mode and the manner of recovery and its enforceability as retroactive. If at the

Same is the view of the Hon'ble Gujarat High Court in the case of Rajesh Kourani vs. UOI reported in (2017) 83 taxmann.com 137. Further, a Co-ordinate Bench of this Tribunal in the case of Nirmala Infra Projects India (P) Ltd., Vs. Dy.CIT in ITA Nos. 666 to 669/Hyd/2022, dated 12/12/2022 while noticing the above decisions, reached a conclusion that the levy of late fee and the interest in respect of the TDS statements prior to 01/06/2015 cannot be sustained. We accordingly direct the learned Assessing Officer to delete the same.

In the result, both the appeals are allowed.