CICILIA PINTO,MANGALORE vs. ASSISTANT COMMISSIONER OF INCOME TAX, CPC, GHAZIABAD

5. Recovery of amount can be made only when it is legally recoverable. Hence the recovery of late fee is illegal has to be cancelled and quashed.

6. The appellant craves leave to add, alter or withdraw any of the grounds of appeal.

Page 3 of 8 Grounds for A.Y. 2014-15:- 1. The intimation issued by the learned Assessing officer (AO) Assistant Commissioner of Income Tax CPC-TDS Ghaziabad U/s 200A of the Income Tax Act,1961 is erroneous arbitrary and opposed to the facts of the case and the law and is liable to be negated.

2. The learned AO' erred in imposing penalty without interpreting provisions of the section 234E(3) and 200A(1). Therefore levy of late fee is illegal, wrong and not in accordance with lams

4. Section 243E(3):"The amount of fee referred to in sub-section (I) shall be paid before delivering or causing to be delivered a statement in accordance with subsection (3) of section 200 or the proviso to sub-section (3) of section 206C"

5. Therefore, once the TDS statement has been accepted without late fee, then such late fee cannot be recovered later on. In the view of the above late fee cannot be recovered later on by way of any notice, no notice of demand u/s 156 can be issued for this.

Page 4 of 8 (e) an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, him under clause

(d),: and the amount of refund due to the deductor in pursuance of the determination under clause (d) shall be granted to the deductor:"

Page 5 of 8 2. The A.O. levied penalty at Rs.20,544/- for the assessment year 2013-14 and Rs.14,800/- for the assessment year 2014-15, which is the penalty levied u/s 234E of the Act for delay in filing the TDS quarterly status of Q2 (26Q) for these two assessment years. As per provisions of section 234E of the Act, where a person fails to deliver or cause to be delivered, a statement within the time prescribed in section 200(3) of the Act or the proviso to section 206C(3) of the Act, he shall be liable to pay by way of fee, a sum of Rs.200/- for every day during which the failure continues. Accordingly, the A.O. levied penalty for the delay in filing the statement Q2(26Q) in these assessment years as discussed by AO in his order. On appeal, Ld. CIT(A) observed that there is a delay of 902 days in filing appeal before him and the Ld. CIT(A) did not condone the delay on the reason that the assessee has not explained the delay with reasonable information. Against this, the assessee is in appeal before us by way of following common grounds for these two assessment years. At the time of hearing, Ld. A.R. submitted that this issue squarely covered by the judgement of Karnataka High Court in the case of Fatheraj Singhvi Vs. UOI 289 CTR 602, wherein it was held as follows:-

“When the intimation of the demand notices under Section 200A is held to be without authority of law so far as it relates to computation and demand of fee under Section 234E, the question of further scrutiny for testing the constitutional validity of Section 234E would be rendered as an academic exercise because there would not be any cause on the part of the petitioners to continue to maintain the challenge to constitutional validity under Section 234E of the Act. At this stage, the learned counsels appearing for the appellant had also declared that if the impugned notices under Section 200A are set aside, so far as it relates to computation and intimation for payment of fee under Section 234E, the appellant-petitioners would not press the challenge to the constitutional validity of Section 234E of the Act. But, they submitted that the question of constitutional validity of Section 234E may be kept open to be considered by the Division Bench and the Judgment of the learned Single Judge may not conclude the constitutional validity of Section 234E of the Act. (Para

Page 6 of 8 25) Under these circumstances, no further discussion would be required for examining the constitutional validity of Section 234E of the Act. Save and except to observe that the question of constitutional validity of Section 234E of the Act before the Division Bench of this Court shall remain open and shall not be treated as concluded. (Para 26) In view of the aforesaid observations and discussion, the impugned notices under Section 200A of the Act for computation and intimation for payment of fee under Section 234E as they relate to for the period of the tax deducted prior to 1.6.2015 are set aside. It is clarified that the present judgment would not be interpreted to mean that even if the payment of the fees under Section 234E already made as per demand/intimation under Section 200A of the Act for the TDS for the period prior to 01.04.2015 is permitted to be reopened for claiming refund. The judgment will have prospective effect accordingly. It is further observed that the question of constitutional validity of Section 234E shall remain open to be considered by the Division Bench and shall not get concluded by the order of the learned Single Judge. (Para 27) The appeals are partly allowed to the aforesaid extents"

2.1 Accordingly, the Ld. A.R. submitted that the issue may be decided in favour of the assessee.

3. On the other hand, Ld. D.R. submitted that there was inordinate delay in filing the appeal before Ld. CIT(A) and the appeal was not admitted by him, hence there is no question of deciding appeal on merit unless delay in filing appeal before Ld. CIT(A) has been duly condoned by the Tribunal.

4. We have heard both the parties, perused the material available on record and gone through the orders of the authorities below. Admittedly, there was an inordinate delay of 902 days in filing appeals before Ld CIT(A). The Ld CIT(A) has not condoned the delay by observing that the assessee has not adduced any reasonable cause which prevented the assessee from filing the appeal within 30 days time limit and there is inordinate delay in filing the appeal of 902 days in each case and the assessee has not explained it with Page 7 of 8 reasonable causes and accordingly, he dismissed the appeal. Before us, the Ld. A.R. pleaded that issue on merit with regard to the levy of penalty u/s 234E of the Act is squarely covered by the judgement of the jurisdictional High Court in the case of Fatheraj Singhvi (supra). However, the assessee not explained the delay in inordinate delay before the Ld. CIT(A). As such, though the issue is covered in favour of the assessee, the assessee is duty bound to explain the delay in filing the appeal before Ld. CIT(A). The Ld. D.R. conquered the argument with regard to the issue on merit, though there is a delay in filing the appeals. The assessee is duty bound to explain the same. In the present case, the Ld. A.R. was not able to place any material to explain the delay in filing the appeal before Tribunal, being so, we are not in a position to condone the delay in filing the appeals before Ld. CIT(A). As such, we refrain from going into the merit of the issue raised by the assessee in these appeals as there was no ground raised by the assessee with regard to the condonation of delay. The appeals are dismissed in limine.