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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM
O R D E R Per Bench : These are the six appeals have been filed by the assessee against the order of CIT(A)-1, Bhubaneswar all dated 06.09.2019 for the 1st, 2nd, 3rd & 4th quarters for the Financial Year 2014-2015 relevant to assessment year 2015-2016 and for the 3rd & 4th,Quarters for the Financial Year 2015-2016 relevant to assessment year 2016-2017.
The sole issue involved in all these appeals relating to levy of late filing fees u/s.274E of the Act.
Brief facts of the case are that the assessee is a private limited company and registered under the Companies Act, 1956. The assessee filed the TDS return for the respective quarters belatedly, therefore, the ACIT(CPC-TDS), Ghaziabad raised the following demands for the respective quarters and respective assessment years :-
F.Y. Quarter Due date Actual date Delay in filing Demand of filing of filing raised 2014-2015 26Q-1 15.07.2014 25.09.2015 437 76,540/- 2014-2015 26Q-2 31.10.2014 25.09.2015 329 65,800/- 2014-2015 26Q-3 15.01.2015 25.09.2015 253 50,600/- 2014-2015 26Q-4 15.05.2015 25.09.2015 133 26,600/- 2015-2016 26Q-3 15.01.2016 02.04.2016 78 15,600/- 2015-2016 26Q-4 16.05.2016 12.08.2016 88 17,600/-
Against the above demand raised u/s.234E of the Act, by the CPC(TDS), the assessee appealed before the CIT(A) and the CIT(A) dismissed all the appeals of the assessee holding that the assessee has filed quarterly TDS return in Form No.26Q for 1st, 2nd, 3rd, 4th for A.Y.2015-2016 and 3rd & 4th Quarter for A.Y.2016-2017 belatedly.
5. Further aggrieved, the assessee is in appeals before the Income Tax Appellate Tribunal.
6. At the outset, ld. AR relied on the order of coordinate bench of the Tribunal and submitted that the issue involved in these six appeals is covered by the decision of this Bench of the Tribunal in the case of Glee Pharma Pvt. Ltd., order dated 28.08.2017, wherein the Tribunal has decided the issue in favour of the assessee.
7. Ld. DR, on the other hand, relied on the orders of authorities below.
After hearing the submissions of both the sides and perusing the entire material available on record, we find that the assessee has perusal of the demand notice raised by the CPC(TDS), it is noticed that there is no any short payment, short deduction/collection, interest on payment default u/s.201(1A)/206C(7) of the Act, interest on short payment, interest on deduction/collection default u/s.201(1A)/206C(7) of the Act, interest on short deduction/collection, interest on late deduction/collection, which shows that there was no delay for deduction. Only the assessee did not comply the provisions of Section 234E of the Act, therefore, the CPC(TDS) has raised the demand against the assessee. The issue before us relates to prior to the amendment in Section 234E of the Act. We have also gone through the decision of the coordinate bench of the Tribunal in the case of Glee Pharma Pvt. Ltd. (supra), wherein the Tribunal has decided the issue in favour of the assessee upto the extent of amendment in Section 234E of the Act w.e.f.01.06.2015 after observing as under :-
We have heard the rival submissions, perused the orders of lower authorities and materials available on record. We find that on similar issue, this Bench of the Tribunal has deleted the levy of fee u/s.234 E of the Act in the above stated case, observing as under: “We have heard both parties and perused the records. We find that the only issue permeating from all the 5 appeals is regarding imposition of levy of fee for late filing TDS return u/s 234E of the Act, while processing the statements furnished by the assessee u/s 200A of the Act. At the outset itself, it was pointed out by the Ld. Counsel for the assessee that this issue is no longer res integra since the Hon'ble Karnataka High Court in Fatehraj Singhvi v. Union of India (289 CTR 0602) has held that w.e.f. 01.06.2015, the Parliament by way of an amendment to Section 200A of the Act, has empowered the AO to levy fee u/s 234E of the Act while processing u/s 200A of the Act. Therefore, prior to that date i.e. .2015, the AO had no authority to levy fee u/s 234E of the Act. Therefore, according to the contention of the Ld. Counsel for the assessee, that the AO erred in levying the fee u/s 234E of the Act which been wrongly confirmed by the Ld. CIT(A) and, therefore, the impugned orders of the Ld. CIT(A) need to deleted.
On the other hand, the Ld. CIT(DR) contended that the Punjab and Haryana High Court in Dr. Amrit Lai Mangal vs. Union of India 62 taxmann.com 310 (Punjab & Haryana) has taken a view which is in favour of the Revenue. On a query from the bench as to whether the jurisdictional High Court i.e. Hon'ble Orissa High Court has passed any orders in respect to the LIS before us. The Ld. DR fairly conceded that there is no order of the Hon'ble Orissa High Court on the issue in hand before us. It is well settled that when there is no order of the Jurisdictional High Court on the issue before us, the Tribunal will follow the order of the High Court which is in favour of the assessee (CIT vs. Vegetable Products Ltd. 88 ITR 192 (SC)). In such a scenario, we are inclined to follow the order of the Karnataka High Court which has been brought to our knowledge by the Ld. Counsel for the assessee.
The facts in Fatehraj Singh vs..Union of India (supra), which was decided by the Hon'ble Karnataka High Court was that for financial year 2012-13 and 2013-14, TDS was deducted by the respective assessees and deposited in the Government account. However, as per the Department, there was delay in filing the return/statement with the details of the persons from whom the TDS was deducted including the details and the persons concerned and the transactions etc. The Department issued intimation u/s 200A of the Act, calling upon the respective assessees to pay late filing fee u/s 234E of the Act in purported exercise of the power u/s 200A of the Act. The assessee challenged the levy of the fee and also the vires of the statute (Section 234E). The Hon'ble High Court did not make any finding in respect of the vires of the statute and the said issue was left open. However, the Hon'ble High Court held that prior to 01.06.2015, the AO while issuing intimation u/s 200A does not have the authority under law, to make any order u/s 243E of the Act and was pleased to delete the order of levy of late fee u/s 234E of the Act. The Hon'ble High Court held as follows In para 22 to 24 which is reproduced as under: 22. It is hardly required to be stated that, as per the well established principles of interpretation of statute, unless it is expressly provided or impliedly demonstrated, any provision of statute is to be read as having prospective effect and not retrospective effect. Under the circumstances, we find that substitution made by clause (c) to (f) of sub-section (1) of Section 200A can be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand under Section 200A for computation and intimation for the payment of fee under Section 234E could not be made in purported exercise of power under Section 200A by the respondent for the period of the respective assessment year prior to 1.6.2015. However, we make it clear that, if any deductor has already paid the fee after intimation received under Section 200A, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest.
In view of the aforesaid observation and discussion, since the impugned intimation given by the respondent-Department against all the appellants under Section 200A are so far as they are for the period prior to 1.6.2015 can be said as without any authority under law. Hence, the same can be said as illegal and invalid.
If the facts of the present cases are examined in light of the aforesaid observation and discussion, it appears that in all matters, the intimation given in purported exercise of power under Section 200A are in respect of fees under Section 234E for the period prior to 1.6.2015. As such, it is on account of the intimation given making demand of the fees in purported exercise of power under Section 200A, the same has necessitated the appellant-original petitioner to challenge the validity of Section 234E of the Act. In view of the reasons recorded by us hereinabove, when the amendment made under Section 200A of the Act which has come into effect on 1.6.2015 is held to be having prospective effect, no computation of fee for the demand or the intimation for the fee under Section 234E could be made for the TDS deducted for the respective assessment year prior to 1.6.2015. Hence, the demand notices under Section 200A by the respondent-authority for intimation for payment of fee under Section 234E can be said as without any authority of law and the same are quashed and set aside to that extent.” 8. We take note that the facts of the aforesaid case and the facts before us are similar. Only after 01.06.2015, the AO can levy fee under section 234E of the Act while processing the statement under section 200A of the Act and not before. Therefore, respectfully relying the order of the Hon'ble Karnataka High Court, the impugned intimation of the lower authorities levying fee under section 234E of the Act cannot be sustained in law. Accordingly the intimation under section 200A as confirmed by the Ld. CIT(A) in so far as levy of fee under section 234E is set aside and fee levied u/s 243E in all the appeals are ordered to be deleted. However, the other adjustments made by the AO in the impugned intimation shall stand as such. 6. In the appeals before us, the financial year involved is 2013-14. Therefore, respectfully following the precedent, we set aside the orders of lower authorities and delete the levy of fee u/s.234 E of the Act in all the quarters and allow the appeals filed by the assessee.
Further, the coordinate Bench of the Tribunal in case of Govt.
High School, Unit-VI, Bhubaneswar in dated 14.10.2019, has held as under :-
“7. After hearing the submissions of ld. DR, we noticed that the demand issued by the CPC, Ghaziabad dated 03.06.2015 imposing late fee of Rs.74,400/- u/s.234E of the Act. We further noticed that in the acknowledgement there was no any failure on the part of the assessee has been shown i.e. short payment, short deduction/collection, interest on payment default u/s.201(1A)/206C(7) of the Act, interest on short payment, interest on late payment, interest on deduction/collection default u/s.201(1A)/206C(7) of the Act, interest on short deduction/collection, interest on late deduction/collection. It is, therefore, amply clear that the assessee had deducted TDS on the due amounts and it has been deposited within the time and there is merely a failure for late filing of quarterly TDS return for the Quarter-IV. The assessee is a Government Department and the case is related to financial year 2013-2014 before amendment in the Act. Merely the intimation was generated u/s.200A of the Act on 03.06.2015, cannot be the basis for the levy of fee u/s.234E of the Act. To support our above view, reliance can be placed on the decision of Jodhpur Bench of the Tribunal in the case of Station Headquarters (Army) Vs. ACIT, [2019] 108 taxmann.com 294(Jodhpur-Trib.), wherein the coordinate bench of the Tribunal at para 6 has observed as under :- “6. In the light of the aforesaid decision and respectfully following the same, we note that it appears that in all matters, the intimation given by the AO which are given in purported exercise of power u/s. 200A are in respect of late fees u/s. 234E of the Act for the period prior to 01.06.2015. As such, it is on account of the intimation given making demand of the late fee in purported exercise of powers u/s. 200A of the Act. We note that clause (c) of sec. 200A of the Act empowers the AO to levy late fee was w.e.f. 01.06.2015 and there is no indication [which is either express or implied] while amendment was made that it is retrospective or clarifactory in nature. Since the AO is empowered to levy the late fee for late filing of the statement of TDS/TCS statement and in the Memorandom explaining the introduction of Finance Bill, 2015 clearly took note of the provisions of Chapter XVIIB under which the persons deducting tax i.e. deductor was required to file quarterly tax deduction at source, statements containing the details of deduction of tax made during quarterly by the prescribed due dates. (Similar responsibility is on the persons required to collect tax of certain specified receipt u/s. 206C of the Act). In order to provide effective deterrence against the delay in furnishing TDS/TCS statements, the Finance Act, 2012 inserted sec. 234E of the Act to provide for levy of fees on late furnishing of TDS statements. The Memorandum of Finance Bill, 2015, further took note of the fact that the Finance (No. 2) Act 2009, inserted sec. 200A in the Act, which prescribed for furnishing of TDS statements for determining the amount payable or refundable to the deductor. It further took note that however, as sec. 234E of the Act was inserted after the insertion of sec. 200A in the Act, the existing provisions of sec. 200A of the Act do not provide for determination of late fees payable u/s. 234E of the Act at the time of processing of TDS statement. It was thus, proposed to amend the provisions of sec. 200A of the Act so as to enable the computation of taxes payable u/s. 234E of the Act at the time of processing of TDS statement u/s. 200A of the Act. Taking note of the aforesaid legal history the Memorandum explaining Finance Bill, 2015 took note of the fact that at that time there does not exist any provision in the Act to enable the processing as TCS returns and hence, a proposal was made to insert a provision in this regard and also the post provision was incorporated the mechanism for computation of late fees payable u/s. 234E of the Act. Thus, we note that a perusal of the Memorandum explaining the insertion of provision relating to insertion of clause (c) to sec. 200A 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. Therefore, the AO is not empowered to levy late fees u/s. 234E of the Act before 01.06.2015. Therefore, in the light of the aforesaid discussion and the ratio laid by the Pune Bench in Maharastra Cricket Association (supra), we hold that the amendment [clause (c)] was inserted u/s. 200A of the Act which has been given effect from 01.06.2015 is prospective in nature, and no computation of late fee for the demand or the intimation for the late fee u/s. 234E could be made for the TDS deducted for the respective assessment years prior to 01.06.2015. Therefore, the intimation u/s. 200A of the Act by the AO, TDS for payment of late fee u/s. 234E of the Act for the respective assessment years prior to 01.06.2015 is without any authority of law. In the light of the aforesaid view, we set aside the order of the Ld. CIT(A) and remand the matter back to the file of AO with a direction to AO that the late fee levied for the period of delay of filing return prior to 01.06.2015 need to be deleted. We further clarify that the AO is well within his jurisdiction to levy late fee u/s. 234E of the Act for the period starting only from 01.06.2015 to the date of actual filing of the TDS return. In sum and substance, the levy of late fee u/s. 234E of the Act is valid from the period from 01.06.2015 to the date of actual filing of the TDS return and the balance fees levied earlier to 01.06.2015 is directed to be deleted.” Respectfully following the above observations of the Tribunal in the aforesaid case and looking to the facts and circumstances of the case, we set aside the impugned order passed by the CIT(A) and direct the AO to delete the fee levied u/s.234E of the Act at Rs.74,400/- on account of late fling of TDS return for Quarter-IV. Accordingly, we allow the grounds of appeal raised by the assessee.
10. We have gone through the above observations of the Tribunal and respectfully following the same, we direct the AO to delete the fee levied u/s.234E of the Act for the 1st, 2nd, 3rd & 4th quarters for the Financial Year 2013-2014 relevant to assessment year 2014-2015 on account of late filing of TDS return. However, we reject the plea of the assessee taken in appeal for A.Y.2016-2017 for 3rd & 4th Quarters, as only after 01.06.2015, the AO can levy fee u/s.234E of the Act, while we observe that for Quarter-4(26Q) in F.Y.2015-2016, there was a short payment, interest on short payment, interest on late payment also which has been calculated by the revenue department. In view of the above, both the authorities below have rightly levied the late fee u/s.234E of the Act in the appeals of the assessee for A.Y.2016-2017 for 3rd & 4th Quarters. Accordingly, we allow the appeals of the assessee in & 400/CTK/2019.
In the result, appeals of the assessee in to 398/CTK/2019 are allowed and appeals of assessee in ITA Nos.399 & 400/CTK/2019 are dismissed.