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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI V. DURGA RAO & SHRI G. MANJUNATHA
being disposed off, by this consolidated order.
The assessee has more or less filed common grounds of appeal for both assessment years, therefore, for the sake of brevity, grounds of appeal filed for the assessment year 2013- 14 are reproduced as under:-
“ 1. The order of National Faceless Appeal Centre at Delhi DIN & Order ITBAJNFAC/S/250/2021 -22/1033050289(1) dated 24.05.202 1 for the above assessment year is contrary to law, facts, and in the circumstances of the case.
2. The NFAC has erred in levying late fees for TDS delayed filing of Rs.7,29,276, for Assessment Years 2013-14 by invoking the provisions of section 234E of The Income Tax Act, 1961.
3. The NFAC failed to appreciate that the charging section of levy of late fee u/s 234E is a statutory provision effective from the year 2012 but there was no machinery provision u/s 200A of the Act which empowered the AC to make adjustment on account of levy of late fee u/s 234E of the Act.
4. The NFAC failed to appreciate that the consistent judicial trend by virtue of the Jurisdictional Benches of the lncome Tax Appellate Tribunal was completely overlooked and brushed aside and ought to have appreciated that the binding decisions were completely ignored, thereby vitiating the decision on merits.
5. The NFAC failed to appreciate that in the light of the provisions contained u/s 200A(1)(c) of the Act brought into Statute by the Finance Act, 2015 w.e.f.01.06.2015, there was no enabling/machinery provision for making such adjustments while processing the TDS statement / return u/s 200A of the Act.
6. The NFAC failed to appreciate that in the case law “Qatalys Software Technologies (P.) Ltd.v. Union of lndia [2020]” relied upon by the learned Commissioner of Income Tax (Appeal), the issue was to declare section 234E of the Income Tax Act,1961 as Ultra Vires the constitution. However, our plea is that prior to 01.06.2015 the Income Tax Act, had no enabling provision to levy fee u/s 234E. The Learned counsels have argued in various tribunals that prior to 01.06.2015, there was no enabling section under Sec 200A of the Act raising a demand in respect of levy of fee under section 234E of the Act.
7. The NFAC failed to appreciate that in any event the entire levy of late fee was wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.
The appellant further relies on the judgment of ITAT New Delhi in the case of Shri Raj Veer Singh vs. ACIT, CPC-TDS on 09th July 2021 which held that the amendments brought in statute w.e.f. 01 .06.2015 are prospective in nature and as such, notices issued u/s 200A of the Act for computation and intimation of payment of late filing fee u/s.234E of the Act relating to the period of tax deduction prior to 01.06.2015 was not maintainable.
9. The appellant further relies on the judgment of High Court of Karnataka in the case of Fatheraj Singhvi vs.Union of India on 26thAugust 20l6which held that when the amendment made under Section 200A of the Act which has come into effect on 1.6.2015 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 1.6.2015. 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 .
Appellants pray that the learned AO be directed to waive the late fee of Rs. 6,74,512/- u/s 234E and the interest on late filing fee u/s 220 of Rs 54,764/-.”
At the outset, we find that there is a delay of 116 days in both these appeals filed by the assessee. It was submitted that delay in filing of appeals is mainly due to lockdown imposed by the Govt. on account of spread of Covid-19 infections and in view of Hon’ble Supreme Court suo motu Writ Petition No.3 of 2020, if the period of delay is covered within the period specified in the order of the Apex Court , then same needs to be condoned in view of specific problem faced by the public on account of Covid-19 pandemic.
The learned DR, on the other hand, fairly agreed that delay may be condoned in the interest of justice.
Having heard the learned DR and considered reasons given by the assessee, we find that the Hon’ble Supreme Court in suo motu Writ Petition No.3 of 2020, has extended limitation applicable to all proceedings in respect of courts and tribunals across the country on account of spread of Covid-19 infections w.e.f. 15.03.2020, till further orders and said general exemption has been extended from time to time. We further noted that delay noticed by the Registry pertains to the period of general exemption provided by the Hon'ble Supreme Court extending limitation period applicable for all proceedings before Courts and Tribunals and thus, considering facts and circumstances of the case and also in the interest of natural justice, we condone delay in filing both these appeals by the assessee.
Brief facts of the case are that the assessee has filed quarterly TDS return in Form 26Q for the assessment years 2013-14 & 2015-16 beyond due date specified under the Act.
The Assessing Officer issued intimation levying late fee u/s.234E of the Act, for belated filing of quarterly TDS returns.
The assessee has challenged late fee levied by the Assessing Officer before first appellate authority. As per the assessee, it has received intimation for outstanding demand raised by the Assessing Officer for belated filing of TDS returns. The assessee was awaiting assessment order as it has not been served. However, immediately after noticing demand, the assessee took steps to file appeal before the learned CIT(A).
The CIT(A) (NFAC), Delhi, had issued notices dated 06.04.2021 & 27.04.2021 to the assessee to produce copy of order/intimation against which appeal has been filed. However, the assessee has not complied with the notices issued by the CIT(A). Therefore, the learned CIT(A) has proceeded to dispose off the appeals ex-parte vide order dated 24.05.2021 and dismissed appeals filed by the assessee. Aggrieved by the learned CIT(A) order, the assessee is in appeal before us.
7. None appeared for the assessee. We have heard learned DR and perused orders of the authorities below. We find that the learned CIT(A) has disposed off appeals filed by the assessee on technical grounds without providing sufficient opportunity of hearing to the assessee. We find that the issue involved in the present appeals filed by the assessee is on levy of late fee u/s.234E of the Act, for belated filing of quarterly TDS returns beyond prescribed date and this issue is covered by various decisions of the Tribunal and High Courts, including decision of the co-ordinate Bench of ITAT., Chennai. The Tribunal in the case of M/s. M.F. Textiles Pvt.Ltd. Vs. ACIT in & 579/Chny/2021 dated 24.02.2022 had considered an identical issue in light of provisions of section 234E of the Act and also amendment to section 200A by Finance Act, 2015 w.e.f. 01.06.2015 and held that in absence of enabling provision u/s.200A of the Act, the Assessing Officer cannot levy late fee u/s.234E of the Act for belated filing of quarterly TDS return for period prior to 01.06.2015. The relevant findings of the Tribunal in ITA Nos.578 & 579/Chny/2021 dated 24.02.2022 are reproduced as under:-
“ 5. We have heard both the parties, perused the materials available on record and gone through the orders of authorities below. The solitary issue that needs to be resolved in the given facts and circumstances of the case is whether the Assessing Officer can levy late fee prescribed under section 234E of the Act, when the quarterly return filed by the tax deductor for the period prior to 01.06.2015, when the law has been amended by Finance Act enabling the Assessing Officer to compute late fee while processing TDS returns under section 200A of the Act. The provisions of section 234E of the Act has been inserted to the statute by Finance Act with effect from 01.07.2012 and provides levy of late fee for belated filing of quarterly return filed by the tax deductor. The Assessing Officer started levying of late fee under section 234E of the Income Tax Act, 1961 while processing quarterly TDS return and started issuing intimation to the assessees. The issue has been challenged before various Courts by the assessees by writ and challenged the validity of provision of section 234E of the Act. In some cases, some Courts have granted stay of operation of intimation issued by the Department under section 200A of the Act. Therefore, on the basis of judgement of the Hon’ble High Court, the assessees have started challenging the intimation issued by the Assessing Officer before the ld. CIT(A). The ld. CIT(A) did not entertain the appeal filed by the assessee on both counts, including on limitation in filing the appeal as well as on merits of the issue and rejected the arguments taken by the assessee and confirmed late fee levied under section 234E of the Income Tax Act, as per mandate of the statute. In the meantime, the Hon’ble Karnataka High Court in the case of Fatheraj Singhvi v. Union of India [2016] 289 CTR 602 (Karnataka) had considered the issue and after analyzing the provisions of section 234E of the Act and section 200A of the Act and held that in the absence of enabling provision in section 200A of the Act, the Assessing Officer cannot levy late fee under section 234E of the Act, while processing the quarterly TDS return filed for the period of the respective assessment years prior to 01.06.2015. A similar view has been expressed by the Hon’ble Kerala High Court in the case of Olari Little Flower Kuries (P.) Ltd. v. Union of India [2022] 134 taxmann.com 111 (Kerala) after considering the decision of Hon’ble Karnataka High Court in the case of Fatheraj Singhvi v. Union of India [2016] 289 CTR 602 (Karnataka) and held that the provisions of section 200A of the Act were mandated to enable computation of late fee payable under section 234E of the Act, at the time of processing of quarterly TDS return and the said amendment came into effect from 01.06.2015. Thus, the intimation issued by the Assessing Officer under section 200A of the Act to levy late fee for belated return for the period prior to 01.06.2015 is invalid. Subsequent to the decisions of the Hon’ble Karnataka High Court and the Hon’ble Kerala High Court, series of decisions have been rendered by various Benches of the Tribunal and held that late fee under section 234E of the Act cannot be levied for the period prior to 01.06.2015, because, there was no enabling provision to levy such late fee.
6. In the present appeals, on perusal of the facts, we find that the assessment years involved are prior to 01.06.2015. Therefore, we are of the considered view that the late fee charged by the Assessing Officer under section 234E of the Act, while processing quarterly TDS return under section 200A of the Act, is without any authority and invalid. Hence, by respectfully following the decision of the Hon’ble Karnataka High Court in the case of Fatheraj Singhvi v. Union of India [2016] 289 CTR 602 (Karnataka), we are of the considered view that the Assessing Officer cannot levy late fee while processing of TDS return under section 200A of the Act upto the financial year 2014-15. Since, late fee charged in the present case pertaining to the financial year 2013-14, we direct the Assessing Officer to delete the late fee charged under section 234E of the Act in the intimation issued under section 200A of the Act for the processing of quarterly TDS return filed by the assessee.
In the result, both these appeals filed by the assessee are allowed.”
8. We further noted that since, the issue is already covered in favour of the assessee on the issue of levy of late fee u/s.234E of the Act, prior to 01.06.2015, in our considered view, it is requirement of law that reasonable opportunity of hearing must be given to the assessee before passing an order. Since, the CIT(A) has not given sufficient opportunity of hearing to the assessee, we are of the considered view that both these appeals need to be set aside to the file of the CIT(A) to give sufficient opportunity of hearing to the assessee. Hence, we set aside impugned orders passed by the CIT(A) and restore the issue back to the file of CIT(A) to reconsider the issue afresh in accordance with law, after affording reasonable opportunity of hearing to the assessee.
In the result, both these appeals filed by the assessee are treated as allowed for statistical purposes.