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Income Tax Appellate Tribunal, DELHI BENCHES: ‘B’, NEW DELHI
Before: SHRI N.K.BILLAIYA & SMT. BEENA A PILLAI
ORDER PER BEENA A PILLAI, JUDICIAL MEMBER
Present appeal has been filed by assessee against order dated 02/02/2016 passed by the CIT (A)-41, New Delhi on following grounds of appeal: “1. On the facts and in the circumstances of the case, the appellant prays that the order passed is bad in law as well as on facts of the case.
2. That the appellant prays that the order passed is also erroneous, illegal and against the principles of natural justice and equity.
JD Motor Finance Ltd. Vs. DCIT
That the appellant prays that Ld.CIT(A) erred in confirming penalty levied by Ld.AO amounting to Rs.30,000/- u/s 234E without affording an opportunity of being heard to assessee. The Appellant craves leave to add, amend, alter, vary and/or withdraw any or all the above grounds of appeal
.”
2. Brief facts of the case are as under: Assessee for year under consideration received intimation under section 200 A of the I.T. Act, 1961 (the Act), dated 20/01/2015 passed by CPC-TDS, wherein late fee under section 234E amounting to ₹ 30,000 has been levied. 2.1. Against the said intimation assessee preferred appeal before the Ld.CIT(A). It was submitted that assessee deducted TDS in time and deposited TDS within time allowed, but there was delay in filing the statement of 1st quarter for financial year 2014-15, due to oversight and it was filed on 15/01/2015. 2.2. Ld.CIT(A) after considering arguments advanced by assessee rejected claim by placing reliance upon decision of Hon’ble Rajasthan High Court in case of M/s. Dundold Shikhshan Sansthan vs Union of India reported in (2015) 63 taxman.com 243.
3. Aggrieved by order of Ld.CIT (A) , assessee is an appeal before us now.
4. Ld.AR submitted that levy of penalty under section 234E under section 200 A was effected from 01/06/2015 only. It has been submitted that there was no enabling provision under section 200 A of the Act for levy of penalty under section 234D of the Act before 01/06/2015.
JD Motor Finance Ltd. Vs. DCIT 4.1. Ld.AR submitted that Section 234E has been inserted by Finance Act, 2012 w.e.f. 1st July, 2012 which provides for levy of Fee for delay in furnishing TDS Statement. Hence, from 1st July, 2012 onwards, a fee can be levied for the delay in submission of TDS Return. 4.2. It has been submitted that Section 200A was amended by Finance Act 2015 and w.e.f 1st June, 2015 Clause (c) to sub- section (1) has been substituted. The updated Clause is as under:
"Section 200A - Processing of statements of tax deducted at source. (1) Where a statement of tax deduction at source [or a correction statement] has been made by a person deducting any sum (hereafter referred to in this section as deductor) under section 200, such statement shall be processed in the following manner, namely:— (c) the fee, if any, shall be computed in accordance with the provisions of section 234E;" Further, it is submitted that Ld.CIT(A) has misplaced his reliance on decision of Hon'ble Rajasthan High Court in case of Dundlod Shikshan Sansthan (supra), wherein Hon'ble Court placing reliance on decision of Hon'ble Bombay High Court in case of Rashmikant Kundalia v. Union of India [2015] 54 taxmann.com 200 adjudicated the issue relating to whether fees charged is legal or illegal and has upheld constitutional validity of levy of fees u/s 234E. It has been submitted that Hon’ble Court did not touch upon mechanism to levy fees u/s 234E in TDS Statement processed u/s 200A. It was thus submitted that impugned intimation u/s 200A was processed during period prior to 1.6.2015, and therefore bad in law.
On the contrary, Ld. Sr.DR placed reliance upon orders passed by authorities below.
We have perused submissions advanced by both sides in light of materials available on record.
JD Motor Finance Ltd. Vs. DCIT 6.1. In the present case, undisputedly, assessee filed its TDS return (Form 26Q) for first quarter of financial year 2014-15 on 15.01.2015 and same was processed and intimation under section 200A was issued vide order dated 20.01.2015. Section 200A of the Act has been amended w.e.f. 1.6.2015 empowering Assessing officer to levying fees under section 234E of the Act. It is therefore not a case of continuing default where assessee has defaulted in furnishing TDS statement, even after 1.6.2015 and thereafter, demand for payment of fees under section 234E has been raised by the Assessing Officer. In case of Fatheraj Singhvi reported in (2016) 73 taxman.com 252, Hon'ble Karnataka High Court has held that provisions of amended section 200A are prospective in nature. Further, decision of Hon'ble Rajasthan High Court in case of Dundlod Shikshan Sansthan (supra) relied by Ld.CIT (A) is in the context of validity of section 234E, but not in context of power of Assessing Officer for levy of fee under section 234E prior to 1.6.2015. It is observed that many decisions of this Tribunal has taken similar view by following decision of Hon’ble Karnataka High Court in case of Fatheraj Singhvi (supra). 6.2. In view of above, Assessing Officer while processing TDS statements for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, demand raised by way of charging fees under section 234E by way of intimation under section 200 A of the Act is not valid and same is deleted. 6.3. Accordingly grounds raised by assessee stand allowed.
7. In the result appeal filed by assessee stands allowed. Order pronounced in the open court on 21ST February, 2019.