ELIND INDUCTION FURNACES P.LTD,MUMBAI vs. DCIT CPC TDS, MUMBAI

आदेश / O R D E R PER R.C.SHARMA (A.M):

raised is against Levy of fees of Rs.14,800/- for 2nd quarter, Rs.8,400/- for 3rd quarter and Rs.6,700/-for 4 Quarter u/s. 234Eof the Act.

4. Nobody appeared on behalf of the assessee.

5. We have gone through the orders of the authorities below and found that the CIT(A) has confirmed the order of the AO after following the decision of the Bombay High Court in the case of Rasmikant Kundalia. Precise observation of CIT(A) was as under:- “I have considered the facts of the case, grounds of appeal and statement of facts The issue stands covered in favour of revenue by Hon'ble Bombay High Court decision in the case of Rashmikant Kundalia vs. Union of India dated 9th February, 2015. The Hon'ble Bombay High Court has held as under:-

6. 234E of the income-tax Act, 1961 inserted by the Finance Act, 2012 provides for SL of a fee of Rs. 200/-for each day’s delay in filing the statement of Tax Deducted Source (TDS) or Tax deducted at source (TCS). A Writ petition to challenge the validity of s. 234B has been filed in the Bombay High Court. The Petition claims that -assesses who are deducting tax at source are discharging an administrative function of the department and that they are an "honorary agent" of the department. It is stated that this obligation is onerous in nature and that there are already numerous penalties prescribed for a default. It i* stated that the fee now levied by s. 234E is "exponentially harsh and burdensome" and also "deceitful, atrocious and obnoxious". It is also claimed that Parliament does not have the jurisdiction or competence to impose such a levy on tax-payers. HELD by the High Court dismissing the Petition: (i) On a perusal of sub-section (1) of section 234E, it is clear that a fee is sought to be levied inter alia on a person who fails to deliver or 3 & 501/Mum/2016 M/s. Elind Induction Furnaces Pvt. Ltd., cause to be delivered the TDS return/statements within the prescribed time in sub-section (3) of section 200. The fee prescribed is Rs.200/- for every day during which the failure continues. Subsection (2) further stipulates that the amount of fee referred to in sub-section (1) shall not exceed the amount of tax-deductible or collectible as the case may be; (ii) It is not in dispute that as per the existing provisions, a person responsible for deduction of tax (the deductor) is required to furnish periodical quarterly statements containing the details of deduction of tax made during the quarter, by the prescribed due date. Undoubtedly, delay in furnishing of TDS return/statements has a cascading effect. Under the Income Tax Act, there is an obligation on the income Tax Department to process the income tax returns within the specified period from the date of filing. The Department cannot accurately process the return on whose behalf tax has been deducted (the deductee) until information of such deductions is furnished by the deductor within the prescribed time. The timely processing of returns is the bedrock of an efficient tax administration system. If the income tax returns, especially having refund claims, are not processed in o timely manner, then (i) a delay occurs m the granting of credit of TDS to the person on whose behalf tax is deducted (the deductee) and consequently leads to delay in issuing refunds to the deductee, or raising of infructuous demands against the deductee; (ii) the confidence of a general taxpayer on the tax administration is eroded; (Hi) the late payment of refund affects the Government financially r*s the Government has to pay interest for delay in granting the refunds; and (iv) the delay in receipt of refunds results into a cash flow crunch, especially for business entities; (iiii) The Legislature took note of the fact that a substantial number of deductors were not furnishing their TDS return/statements within the prescribed time frame which was absolutely essential. This led to an additional work burden upon the Department due to the fault of the deductor by not furnishing the information in time and which he was statutorily bound to furnish. It is in this light, and to compensate for the additional work burden forced upon the Department, that a fee was sought to be levied under section 234E of the Act Looking at this from this perspective, we are clearly of the view that section 234E of the Act is not punitive in nature but a fee which is a fixed charge for the extra service which the Department has to provide due to the late filing of the TDS statements; (iv) .As stated earlier, the late submission of TDS statements means the Department is burdened with extra work which is otherwise not required if the TDS statements Were furnished within the prescribed time. This fee is for the payment of the additional burden forced upon the Deportment. A person deducting the tax (the derivator), is allowed 4 & 501/Mum/2016 M/s. Elind Induction Furnaces Pvt. Ltd., to file his TDS statement beyond the prescribed time provided he pays the fee as prescribed under section 234E of the Act. In other words, the late filing of the TDS return/statements is regularized upon payment of the fee asset out in section 234E. This is nothing but a privilege and a special service to the deductor allowing him to file the TDS return/statements beyond the time prescribed by the Act and/or the Rules. We therefore cannot agree with the argument of the Petitioners that the fee that is sought to be collected under section 234E of the Act is really nothing but a collection in the guise of a tax; (v) We are therefore, clearly of the view that the fee sought to be levied under section 234E of the Income Tax Act, 1961 is not in the guide of a tax that is sought to be levied on the deductor. We also do not find the provisions of section 234E as being onerous on the ground that the section does not empower the Assessing Officer to condone the delay in late filing of the TDS return/statements, or that no appeal is provided for from an arbitrary order passed under section 234E. It must be noted that a right of appeal is,not a matter of right but is a creature of the statute, and if the Legislature deems it fit not to provide a remedy of appeal, so be it. Even in such a scenario it is not as if the aggrieved party is left remediless. Such aggrieved person can always approach this Court in its extra ordinary equitable jurisdiction under Article 226 / 227 of the Const/tut/on of India, as the case may be. We therefore cannot agree with the argument of the Petitioners that simply because no remedy of appeal is provided for, the provisions of section 234E are onerous. Similarly, on the same parity of reasoning, we find the argument regarding condonation of delay also to be wholly without any merit. 3.2 Respectfully following the decision of Hon'ble Jurisdictional High Court (supra) the action of the A-0 in levying the fee u/s. 234E for all quarters is upheld. Ground is dismissed”.

6. Nothing was placed before us so as to persuade as to deviate from the findings recorded by CIT(A) after relying on the decision of the Hon’ble Bombay High Court. Accordingly, we confirm the action of CIT(A) in both the appeals under consideration.