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Income Tax Appellate Tribunal, A BENCH, MUMBAI
order
: 05.08.2022 O R D E R
Per Rahul Chaudhary, Judicial Member
This is a bunch of 8 appeals filed by one Appellant/Assessee against the separate orders of the Commissioner of Income Tax (Appeals)-National Faceless Appeals Centre [hereinafter referred to as „the CIT(A)‟] dismissing 8 separate appeals wherein the Appellant/Assessee had called into question the correctness the levy of late fees under Section 234E of the Income-Tax Act, 1961 [hereinafter referred to as „the Act‟] by way of intimation issued under Section 200A of the Act on to 1998/Mum/2021 Assessment Years: 2014-15 & 2015-16 processing of Statement of Tax Deducted at Source [„TDS Statement‟ in short] of each quarter of Financial Years 2013-14 relevant to the Assessment Year 2014-15 and Financial Year 2014-15 relevant to the Assessment Year 2015-16.
All the appeals were heard together and are being disposed by way of a common order as the issues raised in all the appeals are identical. For the sake of brevity the Grounds raised in Quarter 1 of Financial Year 2013-14 are reproduced herein under:
“1. The Learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre has erred in dismissing the Appeal filed by the Appellant under the pretext that there was delay in filing the Appeal, hence, the delay is not condoned.
The Appellant had filed an appeal before the CIT(A) against the Order passed by the Assessing Officer on 01st March 2014 u/s 200A of the Income Tax Act 1961 on account of late filing fee which was charged u/s 234E amounting to Rs. 38,400/- in Quarter 1 of financial year ended 31st March 2014. The Appeal was filed before the Honourable CIT(A) on 17th August 2019.
The Appellant had filed an Rectification Letter u/s 154 before the Assessing Officer rather than filing an Appeal before CIT(A) as this was a covered matter, that “No Late Fee can be charged u/s 234E for the period prior to 31st March 2014 for Q1.” The Rectification Letter was filed within the due date, specified u/s 154 of the Income Tax Act, 1961. Since, no Rectification Order is passed by the Assessing Officer, within 4 years from the date of passing the Order u/s 200A, then, the Appellant had no other option but to file an Appeal before CIT(A) after the period of 4 years from the date of the order. to 1998/Mum/2021 Assessment Years: 2014-15 & 2015-16 Had the Assessing Officer rejected the Rectification Application, then, the Appeal which was filed before the CIT(A) would have been within the time limit.
Even though there‟s a delay in filing the Appeal before CIT(A) were request your Honour to delete the Late Filing Fee charged by the Assessing Officer u/s 234E amounting to INR 38,400/- and oblige.”
The relevant facts, in brief, are that the Appellant was under obligation to deduct tax at source in respect of amounts paid/payable to various parties and file quarterly TDS Statement in respect of the same. Admittedly, in the present set of appeals, the Appellant filed the TDS Statement belatedly. The Assessing Officer while processing the TDS Statement issued intimation to the Appellant under Section 200A of the Act and levied late filing fee under Section 234E of the Act. The Appellant filed application under Section 154 of the Act for seeking rectification of the aforesaid initiation issued under Section 200A of the Act. Since the aforesaid rectification application was not disposed off by the Assessing Officer, the Appellant filed appeal before the CIT(A). The CIT(A) dismissed the appeals in liminie holding that the appeal were filed by the Appellant after a huge delay and that the Appellant had failed to provide a reasonable explanation for the same.
Being aggrieved, the Appellant is in appeal before us against the order(s) of the CIT(A).
The Learned Authorised Representative for the Appellant appearing before us submitted that the Appellant has explained the circumstances leading to the finding of the to 1998/Mum/2021 Assessment Years: 2014-15 & 2015-16 appeals before the CIT(A). It was submitted before the CIT(A) that the Appellant had filed application seeking rectification of the initiation issued under Section 200A of the Act within the prescribed time of 4 years as per Section 154 of the Act as applicable at the relevant time. However, the rectification application was not decided by the Assessing Officer, and therefore, the Appellant was constrained to file the present appeal. He submitted that on merits the issue is covered in favour of the Appellant/Assessee by the judgment of the Hon‟ble Karnataka High Court in the case of Fatehraj Singhvi Vs. Union of India: 73 Taxmann.com 252 / 289 CTR 602 (Karnataka)[26.08.2016] which has also been followed by the Co-ordinate Benches of the Tribunal in a number of cases. He relied upon paragraph 23 and 24 of the aforesaid judgment of the Hon‟ble Karnataka High Court which read as under:
“23. In view of the aforesaid observation and discussion, since the impugned intimation given by the respondent-Department against all the appellants under Section 200A are so far as they are for the period prior to 1.6.2015 can be said as without any authority under law. Hence, the same can be said as illegal and invalid.
If the facts of the present cases are examined in light of the aforesaid observation and discussion, it appears that in all matters, the intimation given in purported exercise of power under Section 200A are in respect of fees under Section 234E for the period prior to 1.6.2015. As such, it is on account of the intimation given making demand of the fees in purported exercise of power under Section 200A, the same has necessitated the appellant-original petitioner to challenge the validity of Section 234E of the Act. In view of the reasons recorded by us hereinabove, when the amendment made under Section 200A of the Act which has come into effect on to 1998/Mum/2021 Assessment Years: 2014-15 & 2015-16 01.06.2015 is held to be having prospective effect, no computation of fee for the demand or the intimation for the fee under Section 234E could be made for the TDS deducted for the respective assessment year prior to 01.06.2015. Hence, the demand notices under Section 200A by the respondent- authority for intimation for payment of fee under Section 234E can be said as without any authority of law and the same are quashed and set aside to that extent.” 6. Per Contra, Learned Departmental Representative vehemently contended that the CIT(A) was justified in dismissing the appeals filed by the Appellant as there was a huge delay in filing the appeal. He pointed out that the rectification application in each case was filed after inordinate delay which was taken note of by the CIT(A). The Appellant has failed to explain the reason for such delay. As regards merits of the matter the Learned Departmental Representative relied upon the decision of Hon‟ble Gujarat High Court in the case of Rajesh Kourani Vs. Union of India: 297 CTR 502 [20.06.2017] wherein the issue has been decided in favour of the Revenue.
We have considered the rival submissions and perused the material on record. We note that on merits the issue in dispute in present appeals stands decided in favour of the Appellant. In the identical facts and circumstances, in the case of M/s National Laminate Corporation V/s ITO (ITA No. 4902/Mum/2018 dated 10/12/2019) and Lawmen Concepts Pvt. Ltd. Vs. Dy.CIT, CPC-TDS : [10.01.2020] the Mumbai Bench of the Tribunal has, following the judgment of the Karnataka High Court in the case of Fatehraj Singhvi (supra), deleted the late fee levied under Section 234E of the Act. To the same effect are the decisions of ITA Nos. 1991 to 1998/Mum/2021 Assessment Years: 2014-15 & 2015-16 the Co-ordinate Bench of the Tribunal in the case of Smt. G. Indhirani Vs. Deputy Commissioner of Income-tax, CPC-TDS, Uttar Pradesh: [2015] 60 taxmann.com 312 (Chennai - Trib.), Sibia Healthcare (P.) Ltd. Vs. Deputy Commissioner of Income- Tax: [2015] 61 taxmann.com 70 (Amritsar - Trib.) and Kash Realtors (P.) Ltd. v. ITO [ITA No. 4199 (Mum.) of 2015, consolidated order dated 27.07.2016] cited by the Appellant before the CIT(A). However, the CIT(A) has dismissed the appeals without examining the merits on the ground of delay. The delay computed by CIT(A) in respect of all the appeals is tabulated as under: S No. ITA No. Financial Quarter Date of Date of Date of filing Delay Year intimation rectification appeal computed u/s 200A application by CIT(A) 1 1991/Mum/ 2013-14 1 01.03.2014 04.02.2019 17.08.2019 1903 days 21 2 1992/Mum/ 2013-14 2 27.02.2014 04.02.2019 17.08.2019 1968 days 21 3 1993/Mum/ 2013-14 3 17.03.2014 04.02.2019 18.08.2019 1949 days 21 4 1994/Mum/ 2013-14 4 18.09.2015 04.02.2019 18.08.2019 1351 days 21 5 1995/Mum/ 2014-15 5 10.04.2015 04.02.2019 05.11.2019 1511 days 21 6 1996/Mum/ 2014-15 6 10.04.2015 04.02.2019 05.11.2019 1511 days 21 7 1997/Mum/ 2014-15 7 11.04.2015 04.02.2019 06.11.2019 2003 days 21 8 1998/Mum/ 2014-15 8 03.11.2015 04.02.2019 06.11.2019 1432 days 21
The Hon‟ble Supreme Court, in the case of Collector of Land Acquisition Vs. Mst. Katiji & others AIR 1987 1353 (SC) has emphasized that substantial justice should prevail over technical considerations. Every day‟s delay must be explained does not mean that a pedantic approach should be taken. The aforesaid doctrine must be applied in a rational common sense and pragmatic manner, and more so in circumstances where a to 1998/Mum/2021 Assessment Years: 2014-15 & 2015-16 litigant does not stand to benefit by lodging the appeal late as is the case in appeals before us. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. We note that the Appellants challenge to the levy of late fee under Section 234E of the Act goes to the root of the matter and strikes at the very jurisdiction of the Assessing Officer to impose late fee and therefore, in our view, the Appellant cannot be denied the relief merely on the ground of delay in approaching the appellate authority when on merits the issue clearly stands decided in favour of the Appellant. We are of the view of the technicalities should not stand in the way of rendering substantive justice in the facts and circumstances of the present case. The delay in filing the appeals deserves to be condoned keeping in view of the explanation furnished by the Appellant and the nature of issue involved. We have already noted in paragraph 7 above that the issue, on merits, stands decided in favour of the Appellant. The Assessing Officer had power to levy late fee under Section 234E of the Act only from 01.06.2015 and therefore, did not have jurisdiction to levy late fee under Section 234E of the Act in the intimation issued under Section 200A of the Act in respect of TDS Statement filed by an Appellant prior to 01.06.2015. In 7 out of the 8 appeals before us, the TDS Statements have been filed and intimations in respect thereto have been issues under Section 200A of the Act before 01.06.2015. Accordingly, we consider it appropriate and in the interest of justice to allow the appeal and delete the levy of penalty levied under Section 234E of the Act in respect 7 ITA Nos. 1991 to 1998/Mum/2021 Assessment Years: 2014-15 & 2015-16 of these 7 appeals, being ITA No. 1991 to 1997/Mum/2021. As regards the 8th appeals, ITA No. 1998/Mum/2021, pertaining to fourth quarter of Financial Year 2014-2015 relevant to the Assessment Year 2015-16, the TDS Statement have been filed on 29.10.2015, whereas the intimation under Section 200A has been issued on 03.11.2015. Thus, the Assessee is in default as the TDS Statement itself has been filed by the Assessee after 01.06.2015. Therefore, we confirm levy of late fee of INR 37,986/- under Section 234E of the Act and dismiss the appeal filed by the Appellant on merits.
In result, to 1997/Mum/2021 are allowed while ITA No. 1998/Mum/2021 is dismissed.