DIRECTOR PUNJAB AGRICULTURAL UNIVERSITY FRUIT RESEARCH,HOSHIARPUR vs. INCOME TAX OFFICER (TDS), JALANDHAR

Though the Assessee has filed adjournment applications in all these appeal, however it is a fact that the Assessee has already filed written submissions in support of its case, therefore in our considered view considering the issue it would be appropriate to the decide the cases on the basis of material available on record including written submissions of the assessee.

As all the above appeals under consideration involved similar and identical issue therefore, for the sake of brevity, (A.Y. 2012-13) and its facts, shall be taken into consideration as a lead case and result of the same shall apply mutatis mutandis to all appeals under consideration.

The brief facts of the case are that in the instant appeal the Assessee though deducted the TDS and deposited well in time, however filed its TDS Quarterly statement in Form no. 24Q for Quarter 2 of F.Y. 2012-13after the prescribed date, consequently the delay in filing of TDS statement has been occurred, therefore the ITA N0s. 130 to 135/Asr/ 2019 3 (A.Ys.2013-14, 2014-15 & 2015-16) Director Punjab Agricultural Uni. Vs ITO (TDS)

Aggrieved by the intimation u/s 200A wherein fee u/s 234E was levied, the assessee filed first appeal before the Ld. CIT(A) who vide impugned order dated 22-11-2018 dismissed the appeal of the assessee, while relying upon the judgment passed by the Gujrat High Court in the case of Rajesh Kourani vs. UOI [2017] 83 Taxmann.com. 137 (Guj). Being aggrieved, the Assessee preferred the instant appeal against the impugned order and also filed written submissions. The Ld. DR heavily relied upon the order passed by Gujrat High Court in the case of Rajesh Kourani vs. UOI (supra) and supported the orders passed the authorities below.

Having heard the parties at length and perused the material available on record. Issues in the instant case relates to the imposition of late fee for delay in filling of TDS statement(s) prior to amendment by way of finance Act, 2015 which came into effect from 1st June 2015 and as to whether there was enabling provisions for levy of late fee prior to 1st June 2015.

Gujrat High Court in the case of Rajesh Kourani vs. UOI (supra) has held that section 200A of the Act is a machinery provision providing the mechanism for processing a statement of deduction of tax at source and for making adjustments and it was always open for the Revenue to charge fees in terms of section 234E of the Act.

Karnataka High Court in the case of Fatheraj Singhvi & Ors. vs. Union of India ((2016) 289 CTR (KAR) 602 has held that substitution made by Clause (c) to (f) of sub-section (1) of Sec. 200A can be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand u/s 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 prior to 1st June, 2015.

It was fairly submitted by the parties that on the issue involved in these cases, as on today there is no decision of the jurisdictional High Court, however there are judgments of different High Courts on both sides as relied upon by the Ld. CIT(A) while passing the impugned order and by the Assessee before the Bench. The Hon'ble Apex Court in the case of CIT Vs. Vegetable Products 88 ITR 192, has laid down the proposition to the effects "Whenever there are two reasonable constructions of a taxing provision are possible that construction which favours the assessee must be adopted" meaning thereby when there is no decision of the jurisdictional High Court, however two different views of Courts are available on an issue, then the view which favors the assessee or the judgment which favours the assessee should be followed.

Even ITAT, Amritsar Bench in the case of SIBIA HEALTHCARE (P) Ltd. reported as 171 TTJ 145 (Asr) clearly held that intimation issued u/s 200A of the Act for demand of fees u/s 234E was not valid in law, as the same pertains to the period prior to 1st June, 2015.

Coming to the instant case, undisputedly, assessee filed its TDS return (Form 26Q) for second quarter of financial year 2012-13 prior to 1.6.2015 and the same was processed and intimation under section 200A was issued vide Order/Intimation dated 07/05/2014. Section 200A of the Act has been amended w.e.f. 1.6.2015 empowering the Assessing officer to levy late fees under section 234E of the Act, therefore in the peculiar circumstances the Assessing Officer while processing TDS statement for the period prior to and filed prior to 01.06.2015 was not empowered to charge fees under section 234E of the Act. Hence on the aforesaid consideration and analyzation, we are inclined to delete the late fee imposed by the AO and affirmed by the ld. CIT(A). Resultantly the appeal i.e. is allowed.

In view of result of ITAs no. 131/Asr/2019 to 135/Asr/2019 filed by the assessee also stands allowed.