ALAPATT FASHION JEWELLERY vs. INCOME TAX OFFICER (TDS)

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WP(C)/777/2023HC KeralaKLHC01001900202311 January 2023Bench: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryAllowed

What did the High Court hold?

The High Court of Kerala, in agreement with its previous judgment in Ext.P6, held that the levy of fees under Section 234E of the Income Tax Act is prospective in nature, taking effect from June 1, 2015. The Court found that the amendment to Section 234E was prospective and therefore, the jurisdiction to levy late fees under this section arises only from June 1, 2015, and not earlier. Consequently, the demand for fees under Section 234E for periods prior to June 1, 2015, was considered bereft of authority and legally unsustainable. The Court quashed the intimations (Exts.P1 to P5) to the extent they demanded fees under Section 234E for the periods prior to June 1, 2015. The Court also noted that in cases of alleged total lack of jurisdiction, delay cannot be a ground to deny relief, distinguishing the present case from precedents where delay was a decisive factor.

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 years 2012-13 and 2013-14. The petitioner contended that Section 234E operates prospectively from June 1, 2015, and therefore, cannot be applied to earlier periods. The petitioner had also filed a statutory appeal which was rejected. The petitioner relied on a previous judgment of the High Court of Kerala in Ext.P6, which held that the amendment to Section 234E was prospective. The respondents are the Income Tax Officer (TDS), Assistant Commissioner of Income Tax (TDS), Central Board of Direct Taxes, and the Union of India.

What were the issues?

1. Whether the levy of fees under Section 234E of the Income Tax Act is prospective or retrospective in nature, specifically concerning the financial years 2012-13 and 2013-14? Assessee's Contentions: - The provisions of Section 234E of the Income Tax Act operate only prospectively, with effect from June 1, 2015, and not for any period prior to that date. - The issue is covered by Ext.P6 judgment of this Court, which held that the amendment to Section 234E is prospective. - The demand for late fee under Section 234E for the period from 2012-13 to 2014-15 is bereft of authority and legally unsustainable. Revenue's Contentions: - The learned Standing Counsel for the respondent-Department fairly submitted that in respect of periods prior to June 1, 2015, the issue stands covered by Ext.P6 judgment of this Court.

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. WEDNESDAY, THE 11TH DAY OF JANUARY 2023 / 21ST POUSHA, 1944 WP(C) NO. 777 OF 2023 PETITIONER/S: ALAPATT FASHION JEWELLERY ALAPATT HERITAGE, MG ROAD NORTH END, ERNAKULAM- REPRESENTED BY SRI.ANTONY FRANCIS ALAPATT, PARTNER, PIN - 682035 BY ADVS. P.J.ANILKUMAR (A-1768) K.N.SREEKUMARAN N.SANTHOSHKUMAR RESPONDENT/S: 1 INCOME TAX OFFICER (TDS) AAYKAR BHAVAN ,I.S.PRESS ROAD, ERNAKULAM, PIN - 682018 2 ASSISTANT COMMISSIONER OF INCOME TAX(TDS) 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 REPRESENTED BY ITS SECRETARY 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. 777 OF 2023 2 JUDGMENT

This writ petition has been filed, challenging the levy of fees under Section 234E of the Income Tax Act, for the financial years 2012-13 and 2013-14 on the ground that the provisions of Section 234E of the Act can operate only prospectively, i.e, with effect from 01.06.2015 and not in respect of any earlier period.

2.

Learned counsel appearing for the petitioner would submit that though a statutory appeal was filed, the same has also been rejected.

3.

Learned counsel appearing for the petitioner further submits that this issue is covered by Ext.P6 judgment of this Court, where this Court held as follows:-

‘’7. In the decision in M/s.Sarala Memorial Hospital v. Union of India and Another (W.P.(C) No.37775 of 2018) an identical question arose for consideration. After considering the statutory provisions of section 234E and section 200A of the Act and the implications of the amendment brought in to the Act, it was held that the amendment would take effect only from 1st June, 2015 and is thus prospective in nature. The aforesaid judgment has become final and is binding upon the authorities. Thus the jurisdiction to levy late fee under section 234E arises only from 01-06.2015 and not earlier.

8.

As regards the contention on the delay, though the said contention was impressive on first blush, it can be seen that the nature of challenge raised by the petitioner is based upon the lack of jurisdiction of the respondents to impose late fee. Since in matters where total lack of jurisdiction is alleged, delay cannot be relied upon as a ground to deny the relief, this Court is of the view that the objections of the respondents are without any basis.

WP(C) NO. 777 OF 2023 3

9.

Further the decisions cited are distinguishable on the facts of those cases itself. In the decision in Digambar's case (supra), the delay of 20 years in approaching the High Court for grant of compensation for alleged utilization of the land was held as a decisive factor to disentitle the petitioner therein. Similarly in G.C.Gupta's case (supra) the issue related to seniority and petitioners challenged the orders of confirmation and determination of inter se seniority only after 15 years. In the decision in Bhailal Bhai's case (supra) the question related to refund of tax claimed belatedly. None of those cases related to a total lack of jurisdiction or authority.

10.

In view of the above, the demand in Ext.P1 to Ext.P9 intimations for the period from 2012-13 to 2014-15 is bereft of authority and cannot be legally sustainable.’’

4.

Learned Standing Counsel appearing for the respondent-Department fairly submits that in respect of the periods prior to 01.06.2015, the issue stands covered by Ext.P6 judgment of this Court.

Having regard to the aforesaid submissions and being in full agreement with the view taken by this Court in Ext.P6 judgment, this writ petition is allowed. Exts.P1, P2, P3, P4 and P5 intimations are quashed to the extent, they demand fee under Section 234E of the Income Tax Act. sd/- GOPINATH P. JUDGE ajt

WP(C) NO. 777 OF 2023 4 APPENDIX OF WP(C) 777/2023 PETITIONER EXHIBITS Exhibit1 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. Exhibit2 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 Exhibit3 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 Exhibit4 TRUE COPY OF THE INTIMATION OF LEVY U/S 234E, AGAINST 26Q OF Q1 FOR 2013-14 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. Exhibit5 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-P6 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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