THE PROFESSIONAL COURIERS vs. INCOME TAX OFFICER TDS

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WP(C)/900/2022HC KeralaKLHC01002243202212 January 2022Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the demand for late fee under Section 234E for the periods 2012-13 and 2013-14, as per Ext.P1 to Ext.P4, was not legally sustainable. The Court noted that while Section 234E was introduced in 2012, the specific provisions for computing the fee under Section 200A(1)(e) were brought into effect only from June 1, 2015. Citing the decision in M/s. Sarala Memorial Hospital v. Union of India and Another, which held that the amendment was prospective, the Court found the demand to be bereft of authority. Consequently, the Court quashed the intimations to the extent they demanded late fee under Section 234E for the period from 2012-13 till 2013-14. The ratio decidendi is that a statutory provision imposing a fee, if its computation mechanism is amended and made effective from a later date, cannot be applied retrospectively to periods before the effective date of the computation mechanism.

What were the facts?

The petitioner, The Professional Couriers, received intimations (Ext.P1 to Ext.P4) demanding late filing fee under Section 234E of the Income Tax Act, 1961. These demands pertained to the periods 2012-13 and 2013-14. The petitioner's contention is that Section 234E, while introduced by the Finance Act, 2012, and Section 200A(1) which incorporates provisions for computing such fees, were amended to include the specific clause for late fee computation (Section 200A(1)(e)) only with effect from June 1, 2015. Therefore, the petitioner argued that no liability for late fees under Section 234E could arise for periods prior to this amendment.

What were the issues?

1. Whether the demand for late fee under Section 234E of the Income Tax Act, 1961, for the periods 2012-13 and 2013-14 is legally sustainable, considering that the relevant provisions for computing such fees were amended to be effective only from June 1, 2015? Assessee's Contention: The petitioner argued that Section 234E was introduced by the Finance Act, 2012, but the mechanism for computing the late fee, as provided in Section 200A(1)(e), was incorporated only with effect from June 1, 2015. Therefore, the petitioner cannot be held liable for late fees for periods prior to June 1, 2015. They relied on the decision in M/s. Sarala Memorial Hospital v. Union of India and Another (W.P.(C) No.37775 of 2018), which held that the amendment was prospective. Revenue's Contention: The judgment records that the respondents were represented by counsel, but their specific contentions are not detailed. However, the fact that they were defending the demand implies they contended for the applicability of Section 234E for the period in question.

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 BECHU KURIAN THOMAS WEDNESDAY, THE 12TH DAY OF JANUARY 2022 / 22ND POUSHA, 1943 WP(C) NO. 900 OF 2022 PETITIONER: THE PROFESSIONAL COURIERS, I, POOLAKATAYIL SHOPPING COMPLEX, CHANDRANAGAR, PALAKKAD, PIN – 678007 BY ADVS. P.J.ANILKUMAR (A-1768) K.N.SREEKUMARAN N.SANTHOSHKUMAR RESPONDENTS: 1 INCOME TAX OFFICER (TDS) AAYKAR BHAVAN, ENGLISH CHRUCH ROAD, PALAKKAD, PIN – 678101 2 DEPUTY COMMISSIONER OF INCOME TAX TDS CPC, AAYKAR BHAVAN, SECTOR-3 , VAISHALI, GAZIABAD,UTTARPRADESH, PIN – 201010 3 CENTRAL BOARD OF DIRECT TAXES NORTH BLOCK, NEW DELHI-110002, REPRESENTED BY ITS CHAIRMAN. W.P.(C) No.900/22 -:2:- 4 UNION OF INDIA, MINISTRY OF FINANCE, DIRECT TAXES DEPARTMENT, NEW DELHI-110001. REPRESENTED BY ITS SECRETARY. BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.01.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No.900/22 -:3:- BECHU KURIAN THOMAS, J. ----------------------------------------- W.P.(C) No.900 of 2022 ---------------------------------------- Dated this the 12th day of January, 2022

JUDGMENT By Ext.P1 to Ext.P4 intimations, petitioner has been called upon to pay the late filing fee under section 234E of the Income Tax Act, 1961 (for short,'the Act').

2.

As per the aforesaid intimations, amounts have been demanded as late fee for the periods from 2012-13 to 2013-14 on the basis of the provisions in section 234E of the Act, which is as follows: “234E-Fee for default in furnishing statements:- (1) Without prejudice to the provisions of the Act, where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of Section 200 or the proviso to sub- section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.”

3.

Though section 234E of the Act was introduced by the Finance Act, 2012 with effect from 1st July, 2012, since petitioner is being demanded by Ext.P1 to Ext.P4 late fee for not filing the statement of tax deduction at source, it is necessary to refer to section 200A of the Act. Section 200A(1) incorporated clause (c) to clause (f) with effect from 01.06.2015. Sub-clause to section 200A (1) refers to the fee if any to be computed in accordance with the provisions of section 200A(1)(e). It is the claim of the petitioner that till 01.06.2015 petitioner cannot be mulcted with any liability to pay late fee for non filing of any statement of tax deduction at source.

4.

I have heard Sri.P.J.Anilkumar, learned counsel for the petitioner, Sri.Christopher Abraham, learned Standing Counsel for the respondents 1 to 3 as well as Sri.S.Manu, learned Assistant Solicitor General of India for the fourth respondent.

5.

Learned counsel for the petitioner brought to my attention the decision in M/s.Sarala Memorial Hospital v. Union of India and Another (W.P.(C) No.37775 of 2018) wherein an identical question arose for consideration. After considering the statutory provisions and the implications of the amendment brought in to the Act, it was held that the amendment would take effect only with effect from 1st June, 2015 and is thus prospective in nature. It is submitted that the aforesaid judgment has become final and is binding upon the authorities.

6.

In view of the above, the demand in Ext.P1 to Ext.P4 intimations for the period from 2012-13 to 2013-14 is bereft of authority and cannot be legally sustainable.

7.

Accordingly, I quash Ext.P1 to Ext.P4 intimations to the extent it demands late fee under section 234E for the period from 2012-13 till 2013-14. The writ petition is therefore allowed as above. BECHU KURIAN THOMAS JUDGE AJM

Appendix — schedule of exhibits
APPENDIX OF WP(C) 900/2022 PETITIONER’S EXHIBITS : Exhibit P1 TRUE COPY OF THE INTIMATION OF LEVY U/S 234E, AGAINST 26Q OF Q2 FOR F.Y: 2012-13 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. Exhibit P2 TRUE COPY OF THE INTIMATION OF LEVY U/S 234E, AGAINST 26Q OF Q3 FOR F.Y: 2012-13 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. Exhibit P3 TRUE COPY OF THE INTIMATION OF LEVY U/S 234E, AGAINST 26Q OF Q4 FOR F.Y: 2012-13 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. Exhibit P4 TRUE COPY OF THE INTIMATION OF LEVY U/S 234E, AGAINST 26Q OF Q2 FOR 2013-14 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. Exhibit P5 TRUE COPY OF THE NOTICE NO. ITBA/COM/F/ 17/2021-22/ 1037038733(1) DATED 18..11..2021 ISSUED BY THE 1ST RESPONDENT REGARDING TDS DUES INCLUDING LATE FEE UNDER 234E. RESPONDENT’S EXHIBITS : NIL AJM //TRUE COPY// PA TO JUDGE

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