NAVPREET SINGH BHASIN,CHANDIGARH vs. ITO, TDS-2, CHANDIGARH

आदेश/ORDER

Per Vikram Singh Yadav, Accountant Member:

These are three appeals filed by the assessee against the orders of ld. CIT (Appeals)-2, Chandigarh dated 30.05.2019 for the assessment years 2013-14, 14-15 and 15-16. Since common issues are involved, all these appeals were heard together and are being disposed off by this consolidated order.

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financial years 2012-13, 13-14 & 14-15. It was submitted that

there was no provision for levying fee under section 200A for the

period prior to 01.06.2015 and the same was subsequently inserted

in section 200A(1)(c) with prospective effect from 01.06.2015.

Therefore, the fee levied under section 234E needs to be deleted. It

was submitted that the matter is squarely covered by various

decisions of Coordinate Chandigarh and other Benches of the

Tribunal. Further, reliance was also placed on the decision of

Hon’ble Karnataka High Court in case of Fatheraj Singhvi vs. Union

of India (2016) 73 taxmann.com 252 (Kar.).

Rajasthan High Court in case of Dundlod Shikshan Sansthan vs.

Union of India (2015) 63 taxmann.com 243 (Rajasthan) and

submitted that the Hon’ble High Court had clearly held that the

imposition of fee prior to the amendment was not illegal. It was

submitted that the amendment merely laid down a machinery

provision and was clarificatory in nature and late filing fee under

section 234E can be levied even in the absence of said amendment.

It was accordingly submitted that the ld. CIT (A) relying on the

decision of Hon’ble Rajasthan High Court has rightly dismissed the

appeal filed by the assessee and the respective orders of the ld

CIT(A) be upheld and appeals of the assessee be dismissed.

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available on record. We find that the issue before the Hon’ble

Rajasthan High Court in case of Dundlod Shikshan Sansthan vs.

Union of India (supra) was constitutional validity of section 234E of

the Act and in that context, it had considered the earlier decision of

Hon’ble Bombay High Court in case of Rashmikant Kundalia vs.

Union of India, (2015) 229 Taxman 596 (Bombay) wherein the

Hon’ble Bombay High Court had decided the nature of levy u/s

234E of the Act. The Hon’ble Bombay High Court has held that

section 234E of the Act is not punitive in nature but a fee which is

fixed charge for the extra service which the department has to

provide due to late filing of TDS statements. It was further held by

the Bombay High Court that simply because there was no remedy of

filing appeal, the provisions of Section 234E cannot be said to be

onerous. Following the same, the Hon’ble Rajasthan High Court

held that “it do not find any good ground to take a view different

from the one taken by the Bombay High Court in Rashmikant

Kundalia's case (supra). The unamended Section 200 referred to the

levy on the late filing of returns as penalty. It was thereafter termed

as fee, which is a compensatory in nature.” And thereafter, the

Hon’ble Rajasthan High Court held that “We do not find that even

prior to these amendments the imposition of fee was illegal. We do

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not in exercise of the power under Article 226 of the Constitution of

India find any valid reasons or justification to interfere with the

compensatory fees imposed for late filing of the TDS returns on flat

rates. The absence of any provision for condonation of delay and

the appeal prior to amendments also did not make the imposition of

late fees by Section 234E to be ultra vires.” We, therefore, find that

the matter raised for consideration before the Hon’ble Rajasthan

High Court was the constitutional validity of section 234E and as

far as the issue of powers of the Assessing officer in imposing late

fee is concerned, the same was not raised nor considered by the

Hon’ble Rajasthan High Court. However, the Hon’ble Karnataka

High Court in case of Fatehraj Singhvi vs. UOI (supra) has

specifically dealt with the powers of the AO and held that prior to

01.06.2015, the AO did not have power to charge fee under section

234E of the Act while processing the TDS returns and the provision

of amended section 200A are prospective in nature. Therefore, in

the instant case what is relevant to examine is firstly the period

pertaining to which the TDS returns have been filed by the assessee

which undisputedly pertains to financial years 2012-13, 13-14 &

14-15. Second, when these TDS returns have been furnished by the

assessee with the department whether prior to 1.6.2015 or there

has been continuing default and have been filed much after

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1.06.2015 and the actual date of filing of these TDS returns

therefore becomes relevant and lastly, when these TDS returns have

been processed by the AO and the date of passing of the intimation

by virtue of which fee under section 234E and interest demand has

been raised on the assessee. However, we find that these facts are

not clearly emerging from the records nor the same were brought to

our notice during the course of hearing inspite of specific mention

by the Bench. In our view, the AO has acquired the jurisdiction to

levy the fees as on 1.06.2015 and therefore, any return filed and/or

processed after 1.6.2015 will fall within his jurisdiction where on

occurrence of any default on part of the assessee, he can levy fee so

mandated u/s 234E of the Act. Therefore, irrespective of the period

to which the quarterly return pertains, where the return is

filed/processed after 1.6.2015, the AO can levy fee under section

234E of the Act. At the same time, in terms of determining the

period for which fees can be levied, only saving could be that for

the period of delay falling prior to 1.06.2015, there could not be

any levy of fees as the assumption of jurisdiction to levy such fees

have been held by the Courts to be prospective in nature. However,

where the delay continues beyond 1.06.2015, the AO is well within

his jurisdiction to levy fees under section 234E for the period

starting 1.06.2015 to the date of actual filing of the TDS return. It

6 ITA No 1002, 1003 & 1004/Chd/2019 Shri Navpreet Singh Bhasin is, therefore, essential to bring the correct facts on record before

applying the legal proposition in this regard. Therefore, we set aside the matter to the file of the ld. CIT (A) who shall decide the same

afresh after bringing relevant facts on record and taking into

consideration the aforesaid discussion and after providing

reasonable opportunity to the assessee.

Order pronounced on 20.04.2022.

Sd/- Sd/- (VIKRAM SINGH YADAV) ( DIVA SINGH ) �याय�क सद�य/Judicial Member लेखा सद�य/Accountant Member

Dated: 20.04.2022 *Das * आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar

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Draft dictated Sr.PS Draft placed before author Sr.PS Approved Draft comes to the Sr.PS/PS Sr.PS Order signed and pronounced on File sent to the Bench Clerk Sr.PS Date on which file goes to the AR Date on which file goes to the Head Clerk. Date of dispatch of Order.

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