ORIGIN LOGISTICS PVT. LTD.,MUMBAI vs. ITO (TDS) - 2(1)(1), MUMBAI

The only common issue in dispute in all these appeals relates to levy of late filing fee under section 234E of the Income Tax Act, 1961 (for short "the Act") for different quarters of previous year 2012–13 corresponding to the assessment year 2013–14.

Brief facts are, the assessee is a company and is engaged in providing transport service. The assessee furnished its TDS returns electronically for different quarters of the financial year 2012–13 as provided under section 200(3) of the Act belatedly. While processing the TDS returns under section 200A of the Act, the Central Processing Centre (CPC) charged fee under section 234E of the Act due to late filing of TDS statements / returns. Challenging the levy of late filing fee, the assessee filed application under section 154 of the Act before the Income Tax Officer (TDS) seeking rectification. However, the concerned authority referring to the provisions of section 234E of the Act upheld the levy of late filing fee, thereby, rejecting the application filed for rectification. The aforesaid decision of the Assessing Officer was challenged by the assessee before learned Commissioner (Appeals). However, learned Commissioner (Appeals) also upheld the decision of the Assessing Officer by holding that the issue raised by the assessee being debatable, the application under section 154 of the Act was rightly rejected.

We have heard the parties and perused the material on record. It is the contention of the assessee that the Revenue was not empowered to levy fee under section 234E of the Act while processing the TDS statements under section 200A of the Act. It is submitted, only after introduction of sub–clause (c) to section 200A(1) by the Finance Act, 2015, w.e.f. 1st June 2015, the authority concerned was empowered to levy late filing fee under section 234E of the Act while processing the TDS statement under section 200A of the Act. Thus, it is submitted, since the period for which fee under section 234E of the Act has been levied is prior to introduction of sub–clause (c) of section 200A(1) of the Act, which is applicable prospectively, no fee under section 234E of the Act can be levied.

The learned Departmental Representative relied upon the observations of learned Commissioner (Appeals).

Having considered rival submissions and perused relevant statutory provisions, it is noticed that, though, section 234E of the Act was introduced to the statute w.e.f. 1st July 2012, however, no such corresponding amendment was made to section 200A of the Act empowering the authority concerned to levy fee under section234E of the Act while processing the TDS statements. Only by Finance Act, 2015, introduced w.e.f. 1st June 2015, clause (c) to section 200A(1) of 4 P.B. Construction Company the Act was introduced to the statute empowering the authority concerned to levy fee under section 234E of the Act while processing the TDS statement under section 200A of the Act. Therefore, prior to 1st June 2015, there was no specific provision under section 200A of the Act for levy of late filing fee. We have noted that different Benches of the Tribunal, including Mumbai Benches, have held that prior to 1st June 2015, provisions of section 200A of the Act did not contemplate levy of fee under section 234E of the Act. Therefore, it was held that for late filing of TDS statement for any period prior to 1st June 2015, no fee under section 234E of the Act can be levied. The Hon’ble Karnataka High Court in case of FATHERAJ SINGHVI & ORS. vs. UNION OF INDIA & ORS. (2016) 289 CTR 0602 (Kar), have also expressed identical view. In fact, the Tribunal, Mumbai Bench, in a recent decision in case of Emsons Exim Pvt. Ltd. v/s ITO, ITA no.4406/Mum./2017 & Ors., dated 28th August 2019, by majority view, has held that levy of fee under section 234E of the Act cannot be made in respect of a period prior to 1st June 2015, while processing the TDS statement under section 200A of the Act. Though, the Hon’ble Gujarat High Court in case of RAJESH KOURANI vs. UNION OF INDIA & 4 (2017) 99 CCH 0098 (Guj) has expressed a contrary view, however, following the well settled legal principle that in case of conflicting views being expressed by the Courts on a particular issue, the view favourable to the assessee has to be taken, we are 5 P.B. Construction Company more inclined to follow the view expressed by the Hon’ble Karnataka High Court in case of FATHERAJ SINGHVI & ORS. vs. UNION OF INDIA & ORS.(supra) and by the Tribunal in case of Emsons Exim Pvt. Ltd. (supra). Thus, we hold that since the periods for which fee under section 234E of the Act have been levied are prior to 1st June 2015, the authority concerned was not empowered to levy such fee while processing the TDS statements under section 200A of the Act. Accordingly, the levy of late filing fee under section 234E of the Act is hereby deleted.

In the result, appeals are allowed. Order pronounced in the open Court on 30.12.2019