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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH
Before: Shri P.M. Jagtap & Shri Siddhartha Nautiyal
THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH
Before: Shri P.M. Jagtap, Vice President And Shri Siddhartha Nautiyal, Judicial Member Assessment Year 2013-14
Bank of Baroda, The ACIT, Anand CPC, PAN: AAACB1534F Vs TDS, Ghaziabad (Appellant) (Respondent)
Assessee by: None Revenue by: Shri R.R. Makwana, Sr. D.R.
Date of hearing : 25-04-2022 Date of pronouncement : 30-05-2022 आदेश/ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:-
This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-5, Vadodara in Appeal no. CIT(A)-5/10819/2016-17 vide order dated 13/08/2019 passed for the assessment year 2012-13. 2. The assessee has taken the following grounds of appeal:- “1. The order passed by L'nd A.O. is bad in law as there is no enabling provision in the law for raising of demand in respect of levy of fees u/s 234E prior to 01/06/2015. The mechanism provisions were brought into operation w.e.f. 1-Jun-2015. Hence as per various judicial
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pronouncements, the TDS statements which have been filed earlier to 01/06/2015 then no fee is leviable u/s 234E of the Income Tax Act. Therefore Late fee levied u/s 234E and Interest charged u/s 220(2) is illegal and liable to be deleted. (Tax effect of Rs. 68730/-) 2. The order passed by L'nd A.O. is bad on facts since the appellant is suffering consequence of failure of its TDS consultant in complying with TDS related provisions within stipulated time limit. 3. The order passed by L'nd A.O. is bad in law and on facts, since there is no loss either to the revenue for the default of delay in filing statement of TDS nor there is any adverse consequence on deductor or deductee in delay in filing TDS returns. Hence the fees levied and Interest charged is unwarranted causing undue hardship on your appellant. 4. Your appellant craves to add. Amend, alter or modify any of the grounds of appeal on or before the appellate proceedings are completed.”
The brief facts of the case are that the assessee is a branch of nationalised bank, Bank of Baroda. The assessee had filed its TDS statement for the 2ndQuarter of FY 2012- 13 i.e. for the period 1.07.2012 to 30.09.2012 with a delay of 242 days. Consequently, a demand was raised on the assessee for a sum of " 68,730/- (late filing levy of " 48,400 u/s 234E of the Act @ " 200 per day delay for 242 days delay in filing of Form no. 26Q (TDS return) and interest of " 20,328/- u/s 220(2) of the Act). The assessee filed an appeal before Ld. CIT(Appeals) against late filing levy u/s 234E of the Act. The main ground raised by the assessee in his Statement of Facts/Grounds of Appeal was that prior to 01.06.2015, there was no enabling provision for raising of demand in respect of levy of late filing fees u/s 234E of the Act. It was only with effect from 01.06.2015 that section 200A(1)(c) of the Act was amended and it was only in consequence of such amendment in s. 200A(1)(c) that late filing fee could be levied u/s 234E of the Act. In I.T.A No. 1608/Ahd/2019 A.Y. 2013-14 Page No. 3 Bank of Baroda vs. ACIT, CPC, TDS
absence of any enabling provision for levy of late filing fee u/s 234E of the Act for the impugned assessment year AY 2013-14, there is no scope of levy of late filing fees. The Ld. CIT(Appeals) issued several notices of hearing, but the assessee did not cause appearance before Ld. CIT(Appeals) in appellate proceedings. The Ld. CIT(Appeals) dismissed the appeal by holding that the issue is directly covered against the assessee by the jurisdictional Honourable Gujarat High Court in the case of Rajesh Kourani v. Union of India [2017] 83 taxmann.com 137 (Gujarat), where the Gujarat High Court held that section 234E of the Act is a charging provision creating a charge for levying fee for certain defaults in filing statements, and fee prescribed under section 234E could be levied even without a regulatory /machinery provision being found in section 200A for computation of fee. The assessee filed an appeal against the decision of Ld. CIT(Appeals).
Before us, none appeared on behalf of the assessee. The Ld. DR submitted that the issue is directly covered against the assessee by the Hon'ble Gujarat High Court in the case of Rajesh Kourani supra and accordingly prayed for dismissal of assessee’s appeal. We note from the Statement of Facts/Grounds of Appeal that the assessee has relied on Mumbai ITAT decision in the case of Permanent Magnets Ltd v DCIT (ITA 6436/Mum/2018) wherein the Tribunal for assessment year 2015-16 held that for TDS statements which have been filed earlier to 01.06.2015, no late filing fee can be levied u/s 234E of the Act. The assessee stated that delay in filing TDS return was due to error in mentioning TAN in the TDS challan and since the tax deducted by the assessee is deposited within
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stipulated date, there was no delay in depositing TDS, and therefore there was no loss to the revenue. However, we note that the issue under consideration is directly covered against the assessee in the case of Rajesh Kourani v. Union of India [2017] 83 taxmann.com 137 (Gujarat), wherein the Gujarat High Court held even for TDS statements which have been filed prior to 01.06.2015, late filing fee can be levied u/s 234E of the Act, since s. 234E of the Act is a charging section and s. 200A of the Act is a machinery provision providing mechanism for processing a TDS statement and under no circumstances a machinery provision can override or overrule a charging provision. The Hon'ble Gujarat High Court held that even in absence of section 200A of the Act i.e. the machinery provision, with the introduction of section 234E (being the charging provision- inserted w.e.f. 1- 7-2012), it was always open for the Revenue to demand and collect the fee for late filing of the TDS statements u/s 234E of the Act w.e.f. 01-07-2012. The jurisdictional Gujarat High Court observed as below while adjudicating on the issue:
We now come to the petitioner's central challenge viz. of non permissibility to levy fee under section 234E of the Act till section 200A of the Act was amended with effect from 01.06.2015. We have noticed the relevant statutory provisions. The picture that emerges is that prior to 01.07.2012, the Act contained a single provision in section 272A providing for penalty in case of default in filing the statements in terms of section 200 or proviso to section 206C. Such penalty was prescribed at the rate of Rs.100 for every day during which the failure continued. With effect from 01.06.2012, three major
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changes were introduced in the Act. Section 234E as introduced for the first time to provide for charging of fee for late filing of the statements. Such fee would be levied at the rate of Rs.200/- for every day of failure subject to the maximum amount of tax deductible or collectible as the case may be. Section 271H was also introduced for the first time for levying penalty for failure to furnish the statements. Such penalty would be in the range of Rs.10,000/- and Rs.1 lakh. No penalty would be imposed if the tax is deposited with fee and interest and the statement is filed within one year of the due date. With addition to these two provisions prescribing fee and penalty respectively, clause (k) of sub-section (2) of section 272A became redundant and by adding a proviso to the said section, this effect was therefore limited upto 01.07.2012. 17. In essence, section 234E thus prescribed for the first time charging of a fee for every day of default in filing of statement under sub-section (3) of section 200 or any proviso to sub-section (3) of section 206C. This provision was apparently added for making the compliance of deduction and collection of tax at source, depositing it with Government revenue and filing of the statements more stringent. 18. In this context, we may notice that section 200A which pertains to processing of statements of tax deducted at source provides for the procedure once a statement of deduction of tax at source is filed by the person responsible to do so and authorizes the Assessing Officer to make certain adjustments which are prima-facie or arithmetical in nature. The officer would then send an intimation of a statement to the assessee. Prior to 01.06.2015, this provision did not include any I.T.A No. 1608/Ahd/2019 A.Y. 2013-14 Page No. 6 Bank of Baroda vs. ACIT, CPC, TDS
reference to the fee payable under section 234E of the Act. By recasting sub-section (1), the new clause-c permits the authority to compute the fee, if any, payable by the assessee under section 234E of the Act and by virtue of clause-d, adjust the said sum against the amount paid under the various provisions of the Act. 19. In plain terms, section 200A of the Act is a machinery provision providing mechanism for processing a statement of deduction of tax at source and for making adjustments, which are, as noted earlier, arithmetical or prima-facie in nature. With effect from 01.06.2015, this provision specifically provides for computing the fee payable under section 234E of the Act. On the other hand, section 234E is a charging provision creating a charge for levying fee for certain defaults in filing the statements. Under no circumstances a machinery provision can override or overrule a charging provision. We are unable to see that section 200A of the Act creates any charge in any manner. It only provides a mechanism for processing a statement for tax deduction and the method in which the same would be done. When section 234E has already created a charge for levying fee that would thereafter not been necessary to have yet another provision creating the same charge. Viewing section 200A as creating a new charge would bring about a dichotomy. In plain terms, the provision in our understanding is a machinery provision and at best provides for a mechanism for processing and computing besides other, fee payable under section 234E for late filing of the statements.
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Even in absence of section 200A of the Act with introduction of section 234E, it was always open for the Revenue to demand and collect the fee for late filing of the statements. Section 200A would merely regulate the manner in which the computation of such fee would be made and demand raised. In other words, we cannot subscribe to the view that without a regulatory provision being found for section 200A for computation of fee, the fee prescribed under section 234E cannot be levied. Any such view would amount to a charging section yielding to the machinery provision. If at all, the recasted clause (c) of sub-section (1) of section 200A would be in nature of clarificatory amendment. Even in absence of such provision, as noted, it was always open for the Revenue to charge the fee in terms of section 234E of the Act…..
4.1 Accordingly, we note that since the issue is directly covered against the assessee by the jurisdictional Gujarat High Court in the case of Rajesh Kourani supra, respectfully following the above decision, we are hereby dismissing the appeal of the assessee.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court on 30-05-2022 (P.M. JAGTAP) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 30/05/2022
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आदेश क" ""त"ल"प अ"े"षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील"य अ"धकरण, अहमदाबाद