SAPNA V.S , vs. INCOME TAX OFFICER ( TDS),

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WP(C)/17311/2023HC KeralaKLHC01037661202303 July 2023Author: HONOURABLE MR.JUSTICE C.S.DIAS6 pages
AI SummaryAllowed

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, 1961, for financial years 2013-14 and 2014-15 is unsustainable in law. The Court relied on its previous judgments, specifically mentioning Sarala Memorial Hospital v. Union of India and another [W.P.(C.) No.37775/2018], which has attained finality. These judgments interpreted Sections 234E and 200A of the Act and declared that the respondents are not empowered to levy late filing fees under Section 234E prior to June 1, 2015. The Court reiterated that the provision is only prospective in nature. Consequently, the intimation (Ext.P1) and the demand notice (Ext.P2) demanding late filing fees for the financial years 2013-14 and 2014-15 were quashed. The respondents were restrained from recovering any late filing fee from the petitioner for these two years. The operative direction was to quash the impugned notices and restrain recovery.

What were the facts?

The petitioner, Sapna V.S., an Assistant Engineer, filed a writ petition challenging an intimation (Ext.P1) and a consequential demand notice (Ext.P2) issued by the Income Tax Officer (TDS). These notices demanded late filing fees under Section 234E of the Income Tax Act, 1961, for financial years 2013-14 and 2014-15. The petitioner argued that Section 234E, as interpreted by this Court in previous judgments (Exts.P3 and P4), is prospective and can only be applied for periods after June 1, 2015, due to the insertion of Section 200A by the Finance Act, 2015. The demand in the impugned notices pertains to periods prior to this date, making them illegal and unsustainable.

What were the issues?

1. Whether the demand for late filing fee under Section 234E of the Income Tax Act, 1961, is legally sustainable for financial years 2013-14 and 2014-15, considering the prospective nature of the provision as interpreted by this Court? Assessee's Contentions: The petitioner argued that Section 234E is prospective in nature and can only be applied for periods after June 1, 2015. This is because Section 200A, which empowers the levy of late filing fees, was inserted by the Finance Act, 2015, effective from June 1, 2015. The petitioner relied on this Court's judgments in Exts.P3 and P4, which categorically held that Section 234E is prospective. Therefore, the demand for late filing fees for financial years 2013-14 and 2014-15 is illegal. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 234E,Section 200A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.S.DIAS MONDAY, THE 3RD DAY OF JULY 2023 / 12TH ASHADHA, 1945 WP(C) NO. 17311 OF 2023 PETITIONER: 1 SAPNA V.S., AGED 42 YEARS ASSISTANT ENGINEER, LSGD EZHOME GRAMA PANCHAYATH, EZHOME P.O, KANNUR-670334 BY ADV RAJESH NAMBIAR RESPONDENTS: 1 INCOME TAX OFFICER (TDS), OFFICE IF THE INCOME TAX OFFICER (TDS) AAYAKAR BHAVAN, KANNOTHUMCHAL, KANNUR -670006 2 UNION OF INDIA, MINISTRY OF FINANCE, DIRECT TAXES DEPARTMENT, NEW DELHI-110001 REPRESENTED BY ITS SECRETARY SRI CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC No.17311 of 2023 2 C.S.DIAS, J. ------------------------- W.P.(C.) No.17311 of 2023 ------------------------- Dated this the 03rd day of July, 2023

JUDGMENT The writ petition is filed to quash Ext.P1 intimation demanding late filing fee from the petitioner and Ext.P2 consequential demand notice issued by the first respondent.

2.

The petitioner's case is that, she is an Assistant Engineer and an Income Tax assessee. The petitioner had submitted her returns as required under Section 200(8) of the Income Tax Act, 1961 (in short, ‘Act’) for the financial years 2014-15 to 2016-17. The same was processed by the first respondent. Subsequently, the first respondent issued Ext.P1 intimation notice to the petitioner demanding late filing fee and thereafter, issued Ext.P2 demand notice. The demand in Exts.P1 and P2 pertain for late filing fee under Section 234E of the Act for the financial years 2013-14 and 2014-15, are illegal and unsustainable in law. A demand under Section 234E can only be made for a period post 01.06.2015 because Section 200A was inserted in the Act by the Finance Act, 2015 w.e.f. 01.06.2015. This Court, by Exts.P3 and P4 judgments, has categorically held that Section 234E is only prospective in nature. Thus, the demand in Exts.P1 and P2 are liable to be quashed and set aside. Hence, the writ petition.

3.

Heard; Sri.Rajesh Nambiar, 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 deciphered that the respondents have made a demand for late filing fee for the financial years 2013-14 and 2014-15, for an amount of Rs.47,440/- and Rs.12,350/- respectively.

5.

This Court in Sarala Memorial Hospital v. Union of India and another [W.P.(C.) No.37775/2018], which has attained finality, interpreting Section 234E and 200A of the Act, has declared the law that the respondents are not empowered to levy late filing fee under Section 234E of the Act prior to 01.06.2015. To put it differently, the above provision is only prospective in nature.

6.

In the above conspectus, I am of the definite view that the demand made by the respondents in Exts.P1 and P2 in respect of financial years 2013-14 and 2014-15 is unsustainable in law and are liable to be quashed. Resultantly, I allow the writ petition as follows: (i) Ext.P1 intimation and Ext.P2 demand notice are quashed. (ii) The respondents are restrained from recovering any late filing fee from the petitioner in respect of the above two years pursuant to Exts.P1 and P2. C. S. DIAS JUDGE SKP/03-07

Appendix — schedule of exhibits
APPENDIX OF WP(C) 17311/2023 PETITIONER’S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE INTIMATION DATED 14.11.2019 EXHIBIT P2 TRUE COPY OF THE DEMAND NOTICE ISSUED PURSUANT TO THE EXT P1 INTIMATION EXHIBIT P3 TRUE COPY OF THE JUDGMENT OF THIS HON'BLE COURT IN W.P(C) 37775/2018 DATED 18.12.2018 EXHIBIT P4 TRUE COPY OF THE JUDGMENT OF THIS HON'BLE IN W.P.(C) 24533/2021 DATED 30.11.2021 RESPONDENTS' EXHIBITS:NIL TRUE COPY P.A. TO JUDGE

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