HEAD MASTER, vs. INCOME TAX OFFICER(TDS),

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WP(C)/21088/2023HC KeralaKLHC01046153202330 June 2023Author: HONOURABLE MR.JUSTICE C.S.DIAS5 pages
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What did the High Court hold?

The High Court held that the demand for late filing fee under Section 234E of the Income Tax Act, as reflected in Ext.P1 intimation for the financial year 2013-2014, is unsustainable in law. The Court reasoned that this demand pertains to a period prior to 1.6.2015. Following its earlier judgment in Sarala Memorial Hospital v. Union of India, which interpreted Section 234E and Section 200A of the Act, the Court reiterated that the provision for levying late filing fee under Section 234E is only prospective and cannot be applied before 1.6.2015. Therefore, the intimation demanding such a fee for the financial year 2013-2014 is liable to be quashed. The Court allowed the writ petition, quashing Ext.P1 and restraining the respondents from recovering any amount pursuant to it. No issue was expressly left undecided.

What were the facts?

The petitioner, Head Master of an aided school, is an Income Tax assessee who deducted TDS and remitted it. The petitioner electronically filed its TDS returns with some delay for the financial year 2013-2014. The second respondent, Assistant Commissioner of Income Tax-TDS-CPC, issued an intimation (Ext.P1) demanding late filing fee under Section 234E of the Income Tax Act. The petitioner seeks to quash this intimation, arguing that Section 234E, inserted by the Finance Act, 2012, with effect from 1.7.2012, is prospective and cannot be applied to periods prior to 1.6.2015. The petitioner relies on a previous judgment of the High Court in Sarala Memorial Hospital v. Union of India.

What were the issues?

1. Whether the demand for late filing fee under Section 234E of the Income Tax Act for the financial year 2013-2014 is legally sustainable, considering the provision's effective date and prospective nature? Assessee's Contentions: The petitioner argues that Section 234E of the Income Tax Act, which was inserted with effect from 1.7.2012, is prospective in nature. Therefore, it cannot be applied to levy late filing fees for periods prior to 1.6.2015. The petitioner relies on the High Court's judgment in Sarala Memorial Hospital v. Union of India and another (W.P.(C)No.37775/2018), which has attained finality, for the proposition that the respondents are not empowered to levy late filing fee under Section 234E prior to 1.6.2015. Revenue's Contentions: The judgment records that the learned counsel for the respondents appeared but does not detail their specific arguments. However, the intimation itself (Ext.P1) represents the revenue's action of demanding the late filing fee.

Which sections of the Income-tax Act were involved?

Section 234E,Section 200A

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

WP(C) NO. 21088 OF 2023
W.P.(C)No.37775/2018

Read from the judgment's own cause title. This page is filed under one of them.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.S.DIAS FRIDAY, THE 30TH DAY OF JUNE 2023 / 9TH ASHADHA, 1945 WP(C) NO. 21088 OF 2023 PETITIONER: HEAD MASTER, AGED 51 YEARS, AIDED LOWER PRIMARY SCHOOL, KONGAMPARA, KOZHIPPARA, CHITTUR, PALAKKAD, PIN – 678557 BY ADVS.P.J.ANILKUMAR (A-1768) K.N.SREEKUMARAN N.SANTHOSHKUMAR RESPONDENTS: 1 INCOME TAX OFFICER (TDS), AAYKAR BHAVAN, ENGLISH CHURCH ROAD, PALAKKAD, PIN – 678014 2 ASSISTANT COMMISSIONER OF INCOME TAX-TDS-CPC, AAYKAR BHAVAN, SECTOR-3, VAISHALI, GAZIABAD, UTTARPRADESH, PIN – 201010 3 CENTRAL BOARD OF DIRECT TAXES, REPRESENTED BY ITS CHAIRMAN, NORTH BLOCK, NEW DELHI, PIN – 110002 4 THE UNION OF INDIA, MINISTRY OF FINANCE, DIRECT TAXES DEPARTMENT, NEW DELHI-110001, REPRESENTED BY ITS SECRETARY. BY ADV CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30.06.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 21088 OF 2023 JUDGMENT Dated this the 30th day of June 2023 The writ petition is filed to quash Ext.P1 intimation demanding late filing fee from the petitioner under Section 234E of the Income Tax Act (in short ‘Act’).

2.

The petitioner’s case is that, it is an aided school and an Income Tax assessee. The petitioner had deducted TDS and remitted the same to the first respondent. Subsequently, the petitioner electronically filed its returns with some delay. After processing the returns, the second respondent has issued Ext.P1 intimation to the petitioner, levying late filing fee under Section 234E of the Act for the financial year 2013- 2014. Section 234E was inserted in the Act by the Finance Act, 2012, with effect from 1.7.2012. In Ext.P2 judgment, this Court following its earlier judgment in Sarala Memorial Hospital v. Union of India and another

WP(C) NO. 21088 OF 2023 (W.P.(C)No.37775/2018), which has attained finality, after interpreting Section 234E and 200A of the Act has categorically declared the law that the respondents are not empowered to levy late filing fee under Section 234 E of the Act prior to 1.6.2015. In other words, the above provision is only prospective in nature. Therefore, the demand in Ext.P1 intimation for late filing fee is unsustainable in law. The petitioners is entitled to the benefit of the judgment in Sarala Memorial Hospital (supra). Hence, the writ petition.

3.

Heard Sri.P.J.Anilkumar, the learned counsel appearing for the petitioner and Sri.Christopher Abraham, the learned counsel appearing for the respondents.

4.

On an appreciation of Ext.P1 intimation, it can be gathered that the demand for late filing fee is in respect of the financial year 2013-2014, that is, indisputably for the period prior to 1.6.2015. WP(C) NO. 21088 OF 2023 5. In the light of interpretation given in Sarala Memorial Hospital (supra), I have no hesitation to hold that the demand in Ext.P1 intimation for late filing fee is unsustainable in law and the same is liable to be quashed. Resultantly, I allow the writ petition as follows: (i) Ext.P1 intimation issued by the second respondent is quashed. (ii) The respondents are restrained from recovering any amount from the petitioner pursuant to the quashed Ext.P1 intimation. C.S.DIAS JUDGE jes

WP(C) NO. 21088 OF 2023

Appendix — schedule of exhibits
APPENDIX OF WP(C) 21088/2023 PETITIONER’S EXHIBITS: Exhibit-P1 TRUE COPY OF THE INTIMATION DATED16..01..2015 OF LEVY U/S 234E, AGAINST 24Q OF Q4 FOR F.Y: 2013-14 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. Exhibit-P2 TRUE COPY OF THE JUDGMENT IN JIJI VARGHESE VS INCOME TAX OFFICER (TDS), W.P.(C) 1259/2022 DATED 24..03..2022 .

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