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Income Tax Appellate Tribunal, DIVISION BENCH’A’, CHANDIGARH
Before: SHRI N.K. SAINI & SHRI SANJAY GARG
PER N.K. SAINI :
These three appeals by the assessee are directed against the consolidated order of the Ld. CIT(A), Panchkula dt. 29/12/2017.
Since the issues involved are common and the appeals were heard together so these are being disposed off by this common order for the sake of convenience and brevity.
The only grievance of the assessee in these appeals relates to the levy of late fee by invoking the provisions of Section 234E of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’), in intimation passed under section 200A of the Act.
Facts of the case in brief are that the assessee had applied for and was allotted an Industrial Land by Haryana State Industries & Infrastructure Development Coporation(HSIIDC) in Industrial Estate, Manakpur, Jagadhari. The assessee paid a sum of Rs. 32,40,000/- on 05/09/2013 to HSIIDC after the allotment of the land. According to the Assessing Officer the assessee was required to deduct TDS @ 1% from the said payment and deposit the same with the Central Government. The assessee was not aware of the amended
provisions which came into force from 01/06/2013 and as such did not comply the same, however during the course of audit of accounts, discrepancy was apprised to the assessee who immediately deposited the amount of Rs. 32,400/- alongwith the interest due thereon amounting to Rs. 6,804/- on 31/10/2014 when the relevant Form No. 26QB was uploaded. Accordingly the Assessing Officer issued an intimation under section 200A of the Act to the deductor, being late filing free under section 234E of the Act and a demand of Rs. 32,400/-, Rs. 18,690/- and Rs. 16,990/- for the F.Y. 2013-14, 2013-14 and 2014-15 respectively were raised.
Being aggrieved the assesee carried the matter to the Ld. CIT(A) and furnished the written submission which has been incorporated in para 6 of the impugned order for the cost of repetition the same is not reproduced herein.
The Ld. CIT(A) after considering the submission of the assessee upheld the action of the Assessing Officer by observing in para 7 of the impugned order as under:
I have gone through the facts of the case and grounds of appeal along with written submissions filed by the appellant. It is noted that the ACIT, TDS-CPS, has issued intimation dated 03.02.2016 u/s 200A with levy of fee u/s 234E on the ground that the TDS statement was not filed within the time specified in section 200(3) of the Act. In its recent order in Rajesh Kourani Vs Union of India [2017] 83 taxmann.com 137 (Gujarat) the Hon'ble Gujarat High Court has held that the amendment in section 200A by recasting clause (c) of sub-section (1) of section 200A would be in the nature of a clarificatory amendment and further held that as a result an order passed u/s 200A of the Act in levying fees prescribed u/s 234E for late filing of TDS statements would be rectifiable u/s 154 of the Act and is also appealable u/s 246A. 7.1 Regarding the appellant's grounds on charging fee u/s 234E, it is noted that the levy of fee for default in furnishing TDS statements is governed by section 234E of the Act. On perusal of sub section (1) of section 234E, it is clear that a fee is sought to be levied inter-alia on a person who fails to deliver or cause to be delivered the TDS statements within the prescribed time in sub section (3) of section 200 of the Act. So, section 234E is not punitive in nature but a fixed charge by way of fee is levied for late filing of TDS statements. Therefore, on combined reading of section 200A and 234E, it is apparent that the levy of fee for late filing of TDS statements is mandatory. 7.2 Further, charging of fee u/s 234E for delay in filing TDS statements is a mandatory levy of fee provided in the statute whose constitutional validity has been upheld by Hon'ble High Court of Bombay in the case of Rashmi Kant Kundalia Vs. UOI 373 ITR 268 (Bom.). The appellant has not disputed the fact that the statementhas been filed late nor contested the period of delay. The issue of levy of fee u/s 234E of the Act has been discussed in detail by the Hon'ble Gujarat High Court in the case of Rajesh Kourani Vs Union of India [2017] 83 taxmann.com 137 (Gujarat). In the above decision it was held that the fee u/s 234E can be levied even if the processing of TDS statement u/s 200A was prior to the amendment made to Section 200A w.e.f. 01.06.2015, since the amendment is only of clarificatory nature.
Now the assessee is in appeal.
Ld. Counsel for the assessee reiterated the submissions made before the Ld. CIT(A) and further submitted that the assessee deducted the TDS and
deposited the same alongwith interest, however there was delay in furnishing of statement in Form no. 26QB but the same was prior to the insertion of the enabling Section 200A of the Act with effect from 01/06/2015. It was further submitted that this issue is squarely covered by the following decision of the ITAT:
• M/s GNA Udyog Ltd. Vs. Asst. CIT, CPC, TDS Ghaziabad in ITA NO. 126 to 133/ASR/2017 dt. 15/01/2019 (Asr Trib.) • Meghna Gupta Vs. Asstt. CIT, CPC-TDS,Ghaziabad [2018] 99 taxmann.com 334(Delhi Trib) • Medical Superintendent Rural Hospital , DOBI BK Vs. DCIT, CPC(TDS),Ghaziabad [2018] 100 taxmann.com 78 (Pune-Trib)
In her rival submissions Ld. Sr. DR strongly supported the order passed by the Ld. CIT(A).
We have considered the rival submissions and carefully gone through the material available on record. It is noticed that an identical issue having similar facts has been adjudicated by various Benches of the ITAT.
On a similar issue the ITAT Delhi Bench ‘E’ in the case of GNA Udyog Ltd. Vs. Asst. CIT, CPC, TDS Ghaziabad(supra) has held as under:
We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record. Admittedly, it is a matter of fact borne from the records that the assessee had delayed filing of the statements of tax deduction at source in Forms 26Q/27EQ for all the four quarters relevant to assessment year 2015-16. On a perusal of the records, it stands revealed that all of the statements of tax deduction at source were filed by the assessee on 22.09.2015 and the same had thereafter been processed under Sec.200A of the I.T Act on 26.09.2015 and 04.10.2015, as per the details tabulated hereinabove, We find that the Hon’ble High Court of Karnataka in the case of Fatheraj Singhvi & Ors. Vs. Union of India (2016) 289 CTR 602 (Kar.) had concluded that the notice under Sec.200A of the I.T. Act computing fee under Sec.234E, to the extent the same related to the period of the tax deducted prior to 01.06.2015 was liable to be set aside. The aforesaid judgment of the Hon’ble High Court of Karnataka had thereafter been relied upon by the ITAT, Chandigarh in the case of Sonalac Paints & Coatings Ltd. Vs. DCIT (2018) 167 DTR 83 (Chd.). In the aforesaid case it was observed by the Tribunal that levy of fees under Sec.234E while processing the TDS returns under Sec.200A prior to 01.06.2016 was without any authority of law. On the basis of its aforesaid observations, the Tribunal had concluded that the fees levied under Sec.234E prior to 01.06.2015 in the intimations made under Sec. 200A was without authority of law, and as such the fees therein levied was liable to be deleted. Apart therefrom, we find that the issue involved in the appeal before us is also covered by an order of the ITAT, Amritsar in the case of Tata Rice Mills Vs. ACIT (CPC), TDS Ghaziabad (ITA No. 395/ASR/2016; dated 25.10.2017. In the aforementioned case, it was observed by the Tribunal that the assessee had filed its statement of tax deduction at source for the ‘second quarter’ relevant to Financial year 2014- 15 on 19th June, 2015, which was thereafter processed on 23.06.2015 by the ACIT- TDS, CPC and a late fee under Sec. 234E of Rs. 49,400/- was charged in the intimation issued under Sec. 200A of the I.T. Act. It was observed by the Tribunal that as the amendment made under Sec.200A was effective from 01.06.2015 and applicable prospectively, hence no computation of fee under Sec.234E could be made for the TDS deducted prior to 01.06.2015. 7. We have given a thoughtful consideration to the issue before us and finding ourselves as being in agreement with the view taken by the Tribunal in the case of Tata Rice Mills (supra), hence are of the considered view that the ACIT-TDS,
CPC Ghaziabad in the case before us had erred in levying fees under Sec.234E in respect of tax deducted at source for the four quarters prior to 01.06.2015 in respect of A.Y. 2015-16. We thus not being persuaded to subscribe to the view taken by the CIT(A) who had upheld the levy of fees by the A.O, thus set aside his order and vacate the demand raised by the A.O under Sec.234E in the hands of the assessee for all the four quarters for the year under consideration.
Similarly in the case of Meghna Gupta Vs. Asst. CIT, CPC-TDS, Ghaziabad(supra) it has been held as under:
6.1 Fee for default u/s 234E provides that, when a person fails to deliver or cause to be delivered a statement within the time prescribed u/s 200(3), then that person shall be liable to pay fee in the manner provided therein. Thus, fee u/s 234E is leviable if the statement is not filed as prescribed u/s 200(3) which in turn provides that the statement to be filed after the payment of tax to the prescribed authority. The relevant rule 31A(4A) provides that for filing of the 'challan cum statement' within seven days from the date of deduction. Now here in this case the demand has been raised purely on the ground that statement has not been furnished for the tax deduction at source. As stated above, the assessee has duly deposited the tax not at the time of purchase albeit on 5.4.2014 and on the same date, statement has also been filed. The relevant provision of section 200(3) read with rule 31A (4A) only refers to filing of 'challan cum statement' after the tax has been paid. The word "challan" in the said rule indicates that the tax must stand paid and that is how form 26QB is generated. Thus, here in this case, it cannot be held that there is any violation of section 200(3). In any case, the levy of fee u/s 200A in accordance with the provision of section 234E has come into the statute w.e.f. 1.6.2015. Since the challan and statement has been filed much prior to this date, therefore, no such tax can be levied u/s 200A. This has been clarified and held by Hon'ble Karnataka High Court in the case of Fatheraj Singhvi v. Union of India [2016] 73 taxmann.com 252. wherein the lordship had made following observations:— "14. We may now deal with the contentions raised by the learned counsel for the appellants. The first contention for assailing the legality and validity of the intimation under Section 200A was that, the provision of Section 200A(l)(c), (d) and (f) have come into force only with effect from 1.6.2015 and hence, there was no authority or competence or jurisdiction on the part of the concerned Officer or the Department to compute and determine the fee under Section 234E in respect of the assessment year of the earlier period and the return filed for the said respective assessment years namely all assessment years and the returns prior to 1.6.2015. It was submitted that, when no express authority was conferred by the statute under Section 200A prior to 1.6.2015 for computation of any fee under Section 234E nor the determination thereof, the demand or the intimation for the previous period or previous year prior to 1.6.2015 could not have been made." Thus, we hold that no fee was leviable to the assessee u/s 234E in violation of section 200(3), because assessee had furnished the statement immediately after depositing all the tax without any delay. Accordingly, the demand on account of 234E is cancelled. 12. Similar view has been taken by the ITAT Pune Bench’A’ in case of Medical Superintendent Rural Hospital, DOBI BK Vs. DCIT, CPC(TDS), Ghaziabad wherein it has been held as under:
We have heard the rival contentions and perused the record. The issue arising in the present bunch of appeals is against levy of late filing fees under section 234E of the Act while issuing intimation under section 200A of the Act, in the first bunch of appeals. The second bunch of appeals in the case of Junagade Healthcare Pvt. Ltd. is against order of Assessing Officer passed under section 154 of the Act rejecting rectification application moved by assessee against intimation issued levying late filing fees charged under section 234E of the Act. The case of assessee before us is that the issue is squarely covered by various
orders of Tribunal, wherein the issue has been decided in respect of levy of late filing fees under section 234E of the Act, in the absence of empowerment by the Act upon Assessing Officer to levy such fees while issuing intimation under section 200A of the Act. The Tribunal vide order dated 21.09.2016 with lead order in Maharashtra Cricket Association v. Dy. CIT [2016] 74 taxmann.com 6 (Pune - Trib. relating to assessment years 2013-14 and 2014-15 for the respective quarters deliberated upon the issue and held as under:— "34. Accordingly, we hold that the amendment to section 200A(1) of the Act is procedural in nature and in view thereof, the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, the intimation issued by the Assessing Officer under section 200A of the Act in all these appeals does not stand and the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted. The intimation issued by the Assessing Officer was beyond the scope of adjustment provided under section 200A of the Act and such adjustment could not stand in the eye of law." 12. The said proposition has been applied in the next bunch of appeals with lead order in Vidya Vardhani Education & Research Foundation v. Dy. CIT [2017] 88 taxmann.com 894 (Pune - Trib.) and also in Swami Vivekanand Vidyalaya {supra) and Medical Superintendant Rural Hospital v. ACIT [IT Appeal Nos.2072 & 2073 (PUN) of 2017, order dated 21-12-2017], which has been relied upon by the learned Authorized Representative for the assessee. 13. The Hon'ble High Court of Karnataka in the case of Fatheraj Singhvi {supra) had also laid down similar proposition that the amendment to section 200A of the Act w.e.f. 01.06.2015 has prospective effect and is not applicable for the period of respective assessment years prior to 01.06.2015. The relevant findings of the Hon'ble High Court are in paras 21 and 22, which read as under:— "21. However, if Section 234E providing for fee was brought on the state book, keeping in view the aforesaid purpose and the intention then, the other mechanism provided for computation of fee and failure for payment of fee under Section 200A which has been brought about with effect from 1.6.2015 cannot be said as only by way of a regulatory mode or a regulatory mechanism but it can rather be termed as conferring substantive power upon the authority. It is true that, a regulatory mechanism by insertion of any provision made in the statute book, may have a retroactive character but, whether such provision provides for a mere regulatory mechanism or confers substantive power upon the authority would also be a aspect which may be required to be considered before such provisions is held to be retroactive in nature. Further, when any provision is inserted for liability to pay any tax or the fee by way of compensatory in nature or fee independently simultaneously mode and the manner of its enforceability is also required to be considered and examined. Not only that, but, if the mode and the manner is not expressly prescribed, the provisions may also be vulnerable. All such aspects will be required to be considered before one considers regulatory mechanism or provision for regulating the mode and the manner of recovery and its enforceability as retroactive. If at the time when the fee was provided under Section 234E, the Parliament also provided for its utility for giving privilege under Section 271H(3) that too by expressly put bar for penalty under Section 272A by insertion of proviso to Section 272A(2), it can be said that a particular set up for imposition and the payment of fee under Section 234E was provided but, it did not provide for making of demand of such fee under Section 200A payable under Section 234E. Hence, considering the aforesaid peculiar facts and circumstances, we are unable to accept the contention of the learned counsel for respondent-Revenue that insertion of clause (c) to (f) under Section 200A(1) should be treated as retroactive in character and not prospective. 22. It is hardly required to be stated that, as per the well established principles of interpretation of statute, unless it is expressly provided or impliedly demonstrated, any provision of statute is to be read as having prospective effect and not retrospective effect. Under the circumstances, we find that substitution made by clause (c) to (f) of sub-section (1) of Section 200A can be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand under Section 200A for computation and intimation for the payment of fee under Section 234E could not be made in purported exercise of power under Section 200A by the respondent for the period of the respective
assessment year prior to 1.6.2015. However, we make it clear that, if any deductor has already paid the fee after intimation received under Section 200A, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest." 14. The Hon'ble High Court thus held that where the impugned notices given by Revenue Department under section 200A of the Act were for the period prior to 01.06.2015, then same were illegal and invalid. Vide para 27, it was further held that the impugned notices under section 200A of the Act were for computation and intimation for payment of fees under section 234E of the Act as they relate for the period of tax deducted at source prior to 01.06.2015 were being set aside. 15. In other words, the Hon'ble High Court of Karnataka explained the position of charging of late filing fees under section 234E of the Act and the mechanism provided for computation of fees and failure for payment of fees under section 200A of the Act which was brought on Statute w.e.f. 01.06.2015. The said amendment was held to be prospective in nature and hence, notices issued under section 200A of the Act for computation and intimation for payment of late filing fees under section 234E of the Act relating to the period of tax deduction prior to 01.06.2015 were not maintainable and were set aside by the Hon'ble High Court. In view of said proposition being laid down by the Hon'ble High Court of Karnataka {supra), there is no merit in observations of CIT(A) that in the present case, where the returns of TDS were filed for each of the quarters after 1st day of June, 2015 and even the order charging late filing fees was passed after June, 2015, then the same are maintainable, since the amendment had come into effect. The CIT(A) has overlooked the fact that notices under section 200A of the Act were issued for computing and charging late filing fees under section 234E of the Act for the period of tax deducted prior to 1st day of June, 2015. The same cannot be charged by issue of notices after 1st day of June, 2015 even where the returns were filed belatedly by the deductor after 1st June, 2015, where it clearly related to the period prior to 01.06.2015. 16. We hold that the issue raised in the present bunch of appeals is identical to the issue raised before the Tribunal in different bunches of appeals and since the amendment to section 200A of the Act was prospective in nature, the Assessing Officer while processing TDS returns / statements for the period prior to 01.06.2015 was not empowered to charge late filing fees under section 234E of the Act, even in cases where such TDS returns were filed belatedly after June, 2015 and even in cases where the Assessing Officer processed the said TDS returns after June, 2015. Accordingly, we hold that intimation issued by Assessing Officer under section 200A of the Act in all the appeals does not stand and the demand raised by charging late filing fees under section 234E of the Act is not valid and the same is deleted.
Since the facts of the present case are similar to the facts involved in the aforesaid referred to cases, so respectfully following the said orders of the various Benches of ITAT, the demands raised by the Assessing Officer for late filing fee under section 234E for the years under consideration are deleted.
In the result all the above appeals of the assessee are allowed.
(Order pronounced in the open Court on 08/03/2019 )
Sd/- Sd/- (SANJAY GARG) (N.K. SAINI) JUDICIAL MEMBER VICE PRESIDENT Dated : 08/03/2019 AG
Copy to: 1.The Appellant, 2. The Respondent, 3. The CIT(A), 4. The CIT, 5. The DR