K.D.REALITIES PVT. LTD.,MUMBAI vs. ACIT , CPC, TDS, GHAZIABAD

Briefly stated, the assessee company had delayed the filing of the statements of tax deduction at source for the A.Y. 2013-14 to A.Y. 2016-17, as a result whereof, the ACIT, Central Processing Cell-TDS had levied late filing fees under Sec.234E of the Act, as under :

Aggrieved, the assessee assailed the imposition of late filing fees under Sec. 234E before the CIT(A). However, the CIT(A) not finding favour with the contentions advanced by the assessee dismissed all the appeals.

The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The ld. Authorized Representative (for short „A.R‟) for the assessee at the very outset of the hearing of the appeals submitted, that as the section enabling levy of fees under Sec.234E was made available in Sec. 200A with effect from 01.06.2015, therefore, the ACIT, CPC, Ghaziabad had erred in levying fees under the said statutory provision in A.Y. 2013- 14 and 2014-15. Insofar the levy of fees under Sec.234E for A.Y. 2016-17 was concerned, it was submitted by the ld. A.R that no infirmity as regards the levy of fees for the said year did emerge from the order of the ACIT, CPC, Ghaziabad. In order to drive home his aforesaid contention that now when Sec.234E enabling the levy of fees in itself was made available in Sec.200A with effect from 01.06.2015, therefore, no fees under the aforesaid statutory provision could have been validly imposed on the assessee in A.Y. 2013-14 to A.Y. 2015-16, support was drawn from the judgment of the Hon‟ble High Court of Karnataka in the case of Fatehraj Singhavi & Ors. Vs. Union of India & Ors.(2016) 142 DTR 281 (Kar) and the orders of the P a g e | 3 to 6502/Mum/2018 (AYs. 2013-14 to 2016-17) M/s K.D. Realties Pvt. ltd. Vs. Commissioner of Income Tax-Appeals-1 Vs. DCIT-CPC, (TDS) (ITA No.6436 to 6442/Mum/2018, dated 05.08.2019); (ii) ITAT, Pune Bench “B”, Pune in the case of Gajanan Constructions and Ors Vs. DCIT, CPC (TDS), Ghaziabad (ITA No.1292 & 1293/Ph/2015); (iii) ITAT “H” Bench, Mumbai in the case of Kamala Enterprises Vs. ITO (TDS), Mumbai (ITA No. 3324/Mum/2015), dated 31.03.2017; and (iv) ITAT , Agra Bench, Agra, in the case of State Bank of India, Gwalior Vs. ITO (TDS) (ITA No. 03, 06 & 07/Agra/2018, dated 31.05.2018). (copies of orders placed on record). In the aforesaid judicial pronouncements, it was observed, that in the course of processing of statement of tax deducted at source under Sec.200A no fees under Sec.234E could be charged for the period prior to 01.06.2015.

Per contra, the ld. Departmental Representative (for short „D.R‟) relied on the orders of the CIT(A) and submitted, that as the assessee had delayed the filing of the respective statements of tax deduction at source for the aforesaid respective quarters in Forms 26Q/24Q, therefore, the ACIT, CPC had rightly levied fees under Sec.234E in its hands. 6. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements relied upon by them. Admittedly, it is a matter of fact borne from the records, that the assessee had delayed the filing of the statements of tax deduction at source in “Forms 26Q/24Q” for the aforementioned quarters pertaining to the captioned years under consideration i.e A.Y. 2013-14, 2014-15, A.Y. 2015-16 and A.Y 2016-17. We find that the Hon’ble High Court of Karnataka in the case of Fatehraj Singhvi Vs. Union of India (2016) 289 CTR 602 (Kar), had concluded, that the notice under Sec.200A of the Act computing fee under Sec.234E, to the extent the same related to the period of the tax deduction 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 & Coating Ltd. Vs. DCIT (2018) 167 DTR 83 (Chd), wherein it was observed as under:- “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 01.06.2015 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 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 P a g e | 4 ITA Nos. 6499 to 6502/Mum/2018 (AYs. 2013-14 to 2016-17) M/s K.D. Realties Pvt. ltd. Vs. Commissioner of Income Tax-Appeals-1 „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 the captioned years viz. A.Y. 2013-14, 2014-15 and 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.” 7. As regards the levy of fees under Sec.234E for A.Y. 2016-17 is concerned, we find that as the statements of TDS for the first quarter therein involved was to be filed latest by 15.07.2015, i.e. subsequent to the cut off period of 01.06.2015 (the date on which the section enabling levy of fees under Sec.234E was made available in Sec.200A), therefore, no infirmity arises from the imposition of the aforesaid fees in the hands of the assessee. In fact, as observed by us hereinabove, the ld. A.R had admitted that he is not assailing the levy of fees under Sec.234E insofar the delay involved in filing of the statement of TDS for A.Y. 2016-17 is concerned. Accordingly, we are of the considered view that in terms of our aforesaid observations the fees levied by the ACIT, CPC, Ghaziabad under Sec.234E for A.Y. 2013-14, 2014-15 and A.Y. 2015-16 cannot be sustained and is thus deleted. On the other hand, finding no infirmity in the order of the ACIT, CPC as regards levy of fees under Sec.234E for A.Y. 2016- 17, we uphold the same.

Resultantly, the appeals of the assessee for A.Y. 2013-14 in and A.Y. 2015-16 in ITA No. 6501/Mum/2018 are allowed in terms of our aforesaid observations. The appeal of the assessee for A.Y. 2016-17 in ITA No.6502/Mum/2018 is dismissed.