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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI C.N. PRASAD & SHRI S. RIFAUR RAHMAN
The present appeal has been filed by the assessee challenging the order dated 2nd May 2019, passed by the learned Commissioner (Appeals)–1, Mumbai, for the assessment year 2015–16.
2. The grounds of appeal raised by the assessee are reproduced below:–
“The Grounds of Appeal mentioned hereunder are without prejudice to one another:-
2 M/s. Seth Hirachand Mutha Shaikshanik Trust
On the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeal) erred in confirming the penalty imposed by the learned Income Tax Officer (TDS) u/s 234E in respect of Q-1, 2, 3 & 4 of AY 2015-16, without appreciating that the same is bad in law since there were no enabling provisions available to the Income Tax Officer (TDS) to determine such Late fee for filing the TDS Returns under the law.
Type of Amount of Quarter Return penalty imposed Q1 26Q ` 98,600 Q2 26Q ` 50,000 ` 61,800 Q3 26Q Q4 26Q ` 37,800
2. On the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeal) erred in confirming the interest on late payment and interest u/s. 220(2). Type of Amount of Quarter Return penalty imposed Q1 – ` 33,412 Q2 ` 864 ` 900 Q3 ` 20,047 – Q4 ` 13,365 –
3. On the facts and circumstance of the case, the Learned Commissioner of Income Tax (Appeal) failed to appreciate that the amendment to section 200A with effect from 01.06.2015 is prospective in nature and same is not applicable for the period of respective assessment year prior to 01 .06.2015. The appellant place reliance on Judgment of Honorable Karnataka High Court in Fatheraj Singhvi V. Union of India [2016] 73 taxmann.com 252 (Karnataka).”
From the above grounds of appeal, the short issue that needs to be adjudicated by us is, whether or not the authorities below are justified in levying late filing fees under section 234E of the Income Tax Act, 1961 (for short "the Act").
3 M/s. Seth Hirachand Mutha Shaikshanik Trust
Brief facts of the case are, the assessee is a charitable trust runs its educational institution / school affiliated to CBSE Board. The assessee trust is also registered under the Bombay Public Trusts Act, 1950 and is also granted registration under section 12A of the Act. Since the said TDS return for Q1 (first quarter) for the assessment year 2015–16 was filed belatedly, therefore, the Assessing Officer processed the return and demand was raised under section 234E of the Act which are as follows:–
Type of Amount of Return penalty imposed Q1 26Q ` 98,600 Q2 26Q ` 50,000 Q3 26Q ` 61,800 Q4 26Q ` 37,800
The Assessing Officer has also levied interest on the aforesaid penalty which are as follows:–
Type of Amount of Quarter Return penalty imposed Q1 – ` 33,412 Q2 ` 864 ` 900 Q3 ` 20,047 – Q4 ` 13,365 –
The assessee contested the aforesaid penalty as well interest thereon before the first appellate authority, however, the learned Commissioner (Appeals) confirmed with the view expressed by the 4 M/s. Seth Hirachand Mutha Shaikshanik Trust Assessing Officer and observed that no doubt, the penalty pertains to the period prior to 1st June 2015, but the assessee had filed the quarterly return belatedly on 20th November 2015, Therefore, provisions of section 234E of the Act is applicable. Being aggrieved, the assessee filed appeal before the Tribunal.
The learned Authorised Representative submitted before us that the issue raised in this appeal is covered by various judicial precedents issued by the Tribunal holding that there is no enabling provision under section 200A of the Act to determine fee under section 234E of the Act prior to 1st June 2016 and, therefore, the assessee trust prays for deletion of demand towards late fee and penalty pertaining to assessment year 2015–16.
The learned Departmental Representative relied upon the observations of the Assessing Officer and the learned Commissioner (Appeals).
We have heard the rival contention and perused the material on 8. record. The issue that needs to be addressed here is, whether or not the Assessing Officer could charge late fee under provisions of section 234 E of the Act, where admittedly 1st quarterly TDS returns filed by assessee was delayed. Identical issue arose before the Co–ordinate Bench of the Tribunal, Mumbai “E” Bench, Mumbai, in a group of cases
5 M/s. Seth Hirachand Mutha Shaikshanik Trust being ITA no.4406/Mum./2017, etc., vide order dated 28th August 2019, Emsons Exim Pvt. Ltd. v/s ITO (TDS), wherein the Co–ordinate Bench followed the majority view expressed by the Third Member by observing that the fee under section 234E of the Act can only be charged in respect of delay in filing the statement of TDS for the period after 1st June 2015. Although, the fact remains that the assessee is defaulted in filing the TDS return belatedly prior to 1st June 2015. Since the issue raised in the present case is squarely covered by the aforesaid ratio laid down by the Co–ordinate Tribunal, Mumbai Bench, respectfully following the same, we hold that the authorities below were not justified in levying penalty and the interest thereon. Since the default committed by the assessee is prior to 1st June 2015, the Assessing Officer is not empowered to charge fees under section 234E of the Act by way of intimation issued under section 200A of the Act. Consequently, we set aside the impugned order passed by the learned Commissioner (Appeals) and direct the Assessing Officer to delete the penalty and interest thereon and re–compute the TDS return as per law. Thus, grounds raised by the assessee are allowed.
In the result, appeal is allowed. Order pronounced in the open court on 22.02.2021