SAJEEV MATHEW AND COMPANY vs. THE INCOME TAX OFFICER(TDS) KOCHI (2),

PDF · subscribers
WP(C)/24533/2021HC KeralaKLHC01062197202130 November 2021Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS5 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the demand for late fee under Section 234E for the period from 2011-12 till 01.06.2015 was bereft of authority and not legally sustainable. The Court reasoned that while Section 234E was introduced in 2012, the mechanism for computing and levying such fees for non-filing of TDS statements was enabled by the amendments to Section 200A, which became effective only from 01.06.2015. The Court relied on the precedent set in M/s. Sarala Memorial Hospital v. Union of India and Another, which had already decided that the amendment was prospective. Consequently, the Court quashed the notice (Ext.P1) to the extent it demanded fee under Section 234E for the period from 2011-12 till 01.06.2015. The operative direction was to allow the writ petition to the extent of this relief.

What were the facts?

The petitioner, Sajeev Mathew and Company, received a notice (Ext.P1) dated 24.09.2021, demanding late filing fees under Section 234E of the Income Tax Act, 1961. The demand amounted to Rs. 4,02,150/- for the periods from 2011-12 to 2021-22. The petitioner argued that Section 234E was introduced by the Finance Act, 2012, effective from 1st July 2012, but its application for computing late fees for non-filing of Tax Deducted at Source (TDS) statements was enabled by amendments to Section 200A, specifically the incorporation of clauses (c) to (f) with effect from 01.06.2015. The petitioner contended that no liability for late fees under Section 234E could arise for periods prior to 01.06.2015.

What were the issues?

1. Whether the petitioner is liable to pay late fee under Section 234E of the Income Tax Act, 1961, for failure to furnish TDS statements for the period from 2011-12 up to 01.06.2015? (Question of law and mixed fact and law, turning on Section 234E and Section 200A of the Act). Assessee's Contentions: - The petitioner argued that Section 234E, while introduced in 2012, could only be enforced for computing late fees for non-filing of TDS statements after the amendment to Section 200A(1) which incorporated clauses (c) to (f) with effect from 01.06.2015. - Reliance was placed 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 relevant amendment was prospective and took effect only from 1st June 2015. Revenue's Contentions: - The judgment records that the learned Standing Counsel for the first respondent and the learned Assistant Solicitor General of India appeared, but their specific contentions are not recorded.

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 TUESDAY, THE 30TH DAY OF NOVEMBER 2021/9TH AGRAHAYANA, 1943 WP(C) NO. 24533 OF 2021 PETITIONER: SAJEEV MATHEW AND COMPANY CHERUMATTATHIL PLAZA, OPP.ARAKUZHA ROAD JN., MUVATTUPUZHA, ERNAKULAM-686661, REPRESENTED BY ITS MANAGING PARTNER MR.SAJEEV MATHEW. BY ADVS. SMT.S.K.DEVI SRI.M.RAJ MOHAN SRI.SHANMUGHAM D. JAYAN SMT.P.K.MAYA DEVI RESPONDENTS: 1 THE INCOME TAX OFFICER(TDS) KOCHI (2), INCOME TAX BUILDINGS, I.S.PRESS ROAD, ERNAKULAM-682018. 2 UNION OF INDIA MINISTRY OF FINANCE, DIRECT TAXES DEPARTMENT, REPRESENTED BY ITS SECRETARY, NEW DELHI-110001. R1 BY SRI.CHRISTOPHER ABRAHAM, SC R2 BY SRI.S.MANU, ASGI THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No.24533/21 -:2:- BECHU KURIAN THOMAS, J. ----------------------------------------- W.P.(C) No.24533 of 2021 ---------------------------------------- Dated this the 30th day of November, 2021

JUDGMENT By Ext.P1 notice dated 24.09.2021, 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 demand notice, an amount of Rs.4,02,150/- is demanded for the periods from 2011-12 to 2021-22 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 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 Smt.S.K.Devi, learned counsel for the petitioner, Sri.Christopher Abraham, learned Standing Counsel for the first respondent as well as Sri.S.Manu, learned Assistant Solicitor General of India for the second 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 for the period from 2011-12 to 2015-16 is bereft of authority and cannot be legally sustainable.

7.

Accordingly, I quash Ext.P1 notice to the extent it demands fee under section 234E for the period from 2011-12 till 01.06.2015. The writ petition is therefore allowed as above. BECHU KURIAN THOMAS JUDGE vps

Appendix — schedule of exhibits
APPENDIX OF WP(C) 24533/2021 PETITIONER'S/S' EXHIBITS Exhibit P1 TRUE COPY OF THE NOTICE ITBA/COM/17/2021-22/1035854594(1) DATED 24.09.2021 ISSUED BY THE 1ST RESPONDENT.

More judgments on Section 234E

All 4,792 judgments and leading authorities on Section 234E →

Recent GST High Court judgments

Search GST case law →