ALAPATT FASHION JEWELLERY vs. INCOME TAX OFFICER (TDS)

WP(C)/799/2023HC KeralaKLHC01001960202311 January 2023Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
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What were the facts?

The petitioner, Alapatt Fashion Jewellery, filed a writ petition challenging the levy of fees under Section 234E of the Income Tax Act for the financial year 2012-13. The petitioner contended that Section 234E is prospective and applicable only from June 1, 2015. The petitioner had previously filed a statutory appeal which was rejected. The respondents include the Income Tax Officer (TDS), Assistant Commissioner of Income Tax (TDS CPC), Commissioner of Income Tax (Appeals) - NFAC, Central Board of Direct Taxes, and the Union of India. The petitioner sought to quash intimations demanding fees under Section 234E for the period 2012-13 to 2014-15.

What did the High Court hold?

The High Court allowed the writ petition. The Court agreed with the submissions made by the petitioner and the fair submission by the respondent-Department. The Court was in full agreement with the view taken in W.P.(C.) No.1259 of 2022. The Court held that the levy of fees under Section 234E of the Income Tax Act for periods prior to June 1, 2015, is not legally sustainable due to the prospective nature of the provision. The intimations (Exts.P1, P2, and P3) demanding fees under Section 234E for the period from 2012-13 to 2014-15 were quashed to the extent they demanded such fees. The ratio decidendi is that the jurisdiction to levy late fees under Section 234E arises only from June 1, 2015, and not for any earlier period. The operative direction was to quash the impugned demand notices.

What were the issues?

1. Whether the levy of fees under Section 234E of the Income Tax Act for the financial year 2012-13 is legally sustainable, considering the petitioner's contention that the provision operates prospectively from June 1, 2015. (Question of law) Assessee's Contention: The petitioner argued that Section 234E of the Income Tax Act, as amended, can only operate prospectively from June 1, 2015, and therefore, no fees can be levied for periods prior to this date. They relied on the judgment of this Court in W.P.(C.) No.1259 of 2022, which held that the amendment to Section 234E and Section 200A of the Act took effect from June 1, 2015, making the levy of late fees under Section 234E only permissible from that date onwards. The petitioner also argued that delay should not be a ground to deny relief in cases of alleged lack of jurisdiction. Revenue's Contention: The Standing Counsel for the respondent-Department fairly submitted that the issue concerning periods prior to June 1, 2015, is covered by the judgment of this Court in W.P.(C.) No.1259 of 2022.

Which sections of the Income-tax Act were involved?

Section 234E,Section 200A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. WEDNE AY, THE 11TH DAY OF JANUARY 2023 / 21ST POUSHA, 1944 WP(C) NO. 799 OF 2023 PETITIONER/S: ALAPATT FASHION JEWELLERY AGED 40 YEARS 5/3410,H1, GALERIYA TRADE CENTRE., MAVOOR ROAD., KOZHIKODE-(REPRESENTED BY SRI. ANTONY FRANCIS ALAPATT, PARTNER ), PIN - 673004 BY ADVS. P.J.ANILKUMAR (A-1768) K.N.SREEKUMARAN N.SANTHOSHKUMAR RESPONDENT/S: 1 INCOME TAX OFFICER (TDS) AAYKAR BHAVAN,MANACHIRA, KOZHIKODE, PIN - 673001 2 ASSISTANT COMMISSIONER OF INCOME TAX TDS CPC,AAYKAR BHAVAN, SECTOR-3, VAISHALI, GAZIABAD, UTTARPRADESH, PIN - 201010 3 COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, NEW DELHI , PIN - 110003 4 CENTRAL BOARD OF DIRECT TAXES -REPRESENTED BY ITS CHAIRMAN NORTH BLOCK ,NEW DELHI, PIN - 110002 5 THE UNION OF INDIA-REPRESENTED BY ITS SECERATARY MINISTRY OF FINANCE, DIRECT TAXES DEPARTMENT,NEW DELHI, PIN - 110001 BY ADVS. CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT SHRI.P.VIJAYAKUMAR, ASG OF INDIA THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 799 OF 2023 2 JUDGME

The order continues below.

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