STATE BANK OF INDIA,GWALIOR vs. CIT A, GWALIOR

PER BENCH:

This bunch of appeals for AY 2013-14 are directed against

the order of ld. CIT(A), Gwalior against upholding levy of fee u/s 234E of the Income Tax Act, 1961(hereinafter short the ‘Act’).

37 branches out of 88 branches located at distant places.

receipt of the intimation/statement of levy of late fee u/s 234E of

the Act, the branches had to report to the respective regional

head offices for seeking necessary approval and therefore it is

forwarded to the regional head and further to the Zonal head in

the respective hierarchy. After giving the necessary approval, the

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matter travels back to the respective branches to the same

hierarchy. Thus, this process takes considerable time causing

which caused delay in filing these appeals by the concerned

appellate branches. We find that the assessee has reasonable

cause for delay in filing the aforesaid 37 appeals out of 88

appeals. Therefore, the delay in filing these appeals is condoned

accordingly.

relating to levy of late filing fee u/s 234E of the Act, they are

being disposed of by this consolidated order for the sake of

convenience.

Central Government account as per TDS provisions of the Act.

They are required to file quarterly TDS returns (statements)

intimating the tax deducted at source from various payments

made to various persons in each quarters for the financial

relevant. To ensure timely compliance on the part of the

deductors, the provisions for late filing fee u/s 234E has been

inserted in clause (c) to section 200A of the Act by the Finance

Act, 2015, w.e.f. 1.06.2015. Before the ld. CIT(A), these

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appellants contended that before making necessary amendment

in Section 200A of the Act w.e.f. 01.06.2015, there was no

enabling provisions u/s 200A of the Act for raising demand in

respect of levy of penalty u/s 234E of the Act and thus in the

absence of enabling provision for making such adjustment for

levying late fee u/s 234E, no such late fee could be imposed by

the AO. In support, the counsel for the applicants placed reliance on the decision in the cases of ‘Sibia Healthcare Pvt. Ltd. Vs. DCiT (TDS) (2015) 121 DTR 81 (ASR) (Trib) and G Indhirani Vs. DCIT

(2015) 43 CCH 511 (Chen-Trib) wherein it was held that in the

absence of enabling provisions u/s 200A of the Act, such levy of

late fee is not valid. The ld. CIT(A) has rejected this contention of the appellants by relying on the decision in the case of ‘Rajesh Kaurani vs. Union of India’, 83 Taxmann.com 137(Guj) and confirmed the levy of late fee u/s 234E of the Act. Aggrieved,

appellants are in appeal before us.

TDS returns (APB, Pge. 5-9) contending that all the TDS returns

statements has been filed are in respect of the period prior to the

date 01.06.2015 i.e. the date from which clause (c) to sub Section

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(1) of Section 200A was inserted and incorporating Section 234E

of the Act, 1961. He further submitted that prior 01.06.2015,

there was no enabling provision in the Act u/s 200A for raising

demand in respect of levy of fee u/s 234E of the Act. The

provision of Section 234E of the Act is charging provision i.e.

substantive provision which could not be applied retrospectively,

unless it is expressely provided in the Act, to levy the late fee for

any delay in filing the TDS statement for the period prior to

01.06.2015. For this purpose, the appellant rely on the following

decisions:

‘CIT vs. Vatika Township Pvt. Ltd. (2014) 367 ITR 466 (SC). i) ‘Sudarshan Goyal vs DCIT (TDS)’ ITA No.442/Agr/2017. ii)

iii) Fatehraj Singhvi Vs. UOI (2016) 289 CTR 0602 (Karn) (HC) ‘Sibia iv) Healthcare Pvt. Ltd. Vs. DCIT (TDS) ITA No.90/Asr/2015. ‘Shri Kaur Chand Jain vs. DCIT’, ITA No.378/ASR/2015. v) ‘Gajanan Constructions vs. DCIT’ (2016) 161 ITD 313 vi) (Pune).

the support of a brief synopsis of case laws.

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relevant. We find that while deciding the issue against the appellant assessee the ld. CIT(A) has placed reliance on ‘Rajesh Kaurani vs. Union of India’, 83 Taxmann.com 137 (Guj.) wherein it was held that Section 200A of the Act is a machinery provision

providing the mechanism for processing a TDS statement of

deduction of tax at source and for making adjustment. The Ld.

CIT(A) has further held that this decision was delivered after

considering numerous ITAT and High Court decisions and therefore this decision in ‘Rajesh Kaurani’ (Supra), holds the fields.

provision in the Act u/s 200A for raising demand in respect of levy

of fee u/s 234E of the Act. The provision of Section 234E of the

Act is charging provision i.e. substantive provision which could not

be applied retrospectively, unless it is expressly provided in the

Act, to levy the late fee for any delay in filing the TDS statement

for the period prior to 01.06.2015. The counsel for the assessee

has rightly contended that in the absence of enabling provisions

u/s 200A of the Act, such levy of late fee is not valid relying on

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the decisions in the cases of ‘CIT vs. Vatika Township Pvt. Ltd. (2014) 367 ITR 466 (SC), ‘Sudarshan Goyal vs DCIT (TDS)’ ITA No.442/Agr/2017 and Fatehraj Singhvi Vs. UOI (2016) 289 CTR 0602 (Karn) (HC). The decisions relied on by the Ld. DR are distinguishable on facts, as the issue involved in those cases pertains to interest u/s 201(1) and 201(1A) on the amount of TDS whereas in the present cases the issue were pertains to liability of late fee u/s 234E of the Act for delay in filing TDS statement which was inserted from 01.06.2015.

“3. Heard. The ld. CIT(A), while deciding the matter against the assessee, has placed reliance on ‘Rajesh Kaurani vs. UOI’, 83 Taxmann.com 137 (Guj), wherein, it has been held that section 200A of the Act is a machinery provision providing the mechanism for processing a statement of deduction of tax at source and for making adjustments. The ld. CIT(A) has held that this decision was delivered after considering numerous ITAT/High Court decisions and so, this decision in ‘Rajesh Kaurani’ (supra) holds the field. 4. We do not find the view taken by the ld. CIT(A) to be correct in law. As against ‘Rajesh Kaurani’ (supra), ‘Shri

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Fatehraj Singhvi and Others vs.UOI’, 73 Taxmann.com 252 (Ker), as also admitted by the ld. CIT(A) himself, decides the issue in favour of the assessee. The only objection of the ld. CIT(A) is that this decision and others to the same effect have been taken into consideration by the Hon’ble Gujarat High Court while passing ‘Rajesh Kaurani’ (supra). However, while observing so, the ld. CIT(A) has failed to take into consideration the settled law that where there is a cleavage of opinion between different High Courts on an issue, the one in favour of the assessee needs to be followed. It has so been held by the Hon’ble Supreme Court in ‘CIT vs. Vegetable Products Ltd.’, 88 ITR 192 (SC). It is also not a case where the decision against the assessee has been rendered by the Jurisdictional High Court qua the assessee. In ‘Shri Fatehraj Singhvi and Others’ (supra) it has been 5. held, inter alia, as follows: “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

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deductor to reopen the said question unless he has made payment under protest.” In view of the above, respectfully following ‘Shri 6. Fatehraj Singhvi and Others’ (supra), ‘Sibia Healthcare Pvt. Ltd. vs. DCIT (TDS)’, order dated 09.06.2015 passed in ITA No.90/ASR/2015, for A.Y.2013-14, by the Amritsar Bench of the Tribunal, and ‘Shri Kaur Chand Jain vs. DCIT, CPC Ghaziabad’, (TDS) order dated 15.09.2016, in ITA No.378/ASR/2015, for A.Y. 2012-13, the grievance of the assessee is accepted as justified. The order under appeal is reversed. The levy of the fee is cancelled.” In the above view, respectfully following ‘Shri Fatehraj 11. Singhvi and Ors’ (Supra), ‘Sibia Healthcare Pvt. Ltd. Vs. DCIT (Supra), ‘Shri Kaur Chand Jain vs. DCIT’, (Supra), and our own finding in the case of ‘Sudershan Goyal’ (Supra), we accept the grievance of the assessees as genuine. Accordingly, the orders of the CIT(A) are reversed and the fee so levied under section 234E of the Act is cancelled.

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law after affording proper opportunity of being heard to the

assessee.

purposes and all other appeals are allowed.

(Order pronounced in the open court on 31/05/2018)

Sd/- Sd/- (A.D. Jain) (Dr. Mitha Lal Meena) Judicial member Accountant Member

Dated 31/05/2018 Aks/-DOC