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Income Tax Appellate Tribunal, LUCKNOW BENCH ‘A’, LUCKNOW
Before: SHRI A.D. JAIN & SHRI T. S. KAPOOR
IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘A’, LUCKNOW BEFORE SHRI A.D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA No.121 to 125/Lkw/2022 Assessment Year: 2014-15 Shivansh Infraestate Pvt. Ltd., Vs. ACIT, 3rd Floor, Block-A, Surajdeep Central Processing Cell-TDS, Complex Ghaziabad, U.P. 201010 Jopling Road, Lucknow PAN: AAQCS 5896P (Appellant) (Respondent) Appellant by Shri Shubham Rastogi,CA Respondent by Shri Harish Gidwani, DR Date of hearing 20/07/2022 Date of pronouncement 26/07/2022 O R D E R PER BENCH:
This is a group of five appeals filed against the separate orders of ld. CIT(A) dated 26.03.2022 and 27.03.2022. Similar grounds have been taken in these appeals and these were heard together therefore for the sake of completeness, the grounds of appeal taken in ITA 121/Lkw/2022 are reproduced below:
“1- That the Ld CIT(Appeals) erred on facts and in law in confirming levy of late fees of Rs. 50,600 u/s 234E of IT Act and interest thereon u/s 220(2) of IT Act Rs. 38,394/- in order passed u/s 154 read with 200A of IT Act pertaining to FY 2014-15 (3rd quarter in Form 26Q) without appreciating that the late fee u/s 234E cannot be charged relating to period of tax deduction prior to 01.06.2015. 2- That the Ld CIT(Appeals) erred on facts and in law in not considering that the mechanism provided for computation of Fees and failure for payment of Fee u/s 200A of IT Act was brought on statue w.e.f 01.06.2015 and thus the said amendment is prospective in nature. 3. That the Ld CIT(Appeals) erred in passing the order, contrary to facts, law and principle of natural justice and without providing sufficient time
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and opportunity to have its say on the reasons relied upon the Ld CIT(Appeals).” 2. The ld. AR at the outset submitted that assessee had deducted tax at source and had deposited the same within prescribed period of time. However, the statement in Form-26Q could not be filed within the prescribed period of times and therefore CPC imposed late fee u/s. 234E of the Act. The ld. AR submitted that admittedly the year involved in these appeals is Assessment Year 2014-15 whereas the effect of charging late fee u/s. 234E came into existence w.e.f. 01.06.2015 and in this respect our attention was invited to various orders of various High Courts and on an order of Lucknow Bench of the Tribunal wherein it has been held that the late fee imposed u/s. 234E is applicable w.e.f. 01.06.2015. The ld. AR, therefore, argued that following the case laws relied on by the assessee the appeals may be allowed and reliance in this respect was placed on the following case laws: 1. Hon'ble Karnataka High Court in Fatheraj Singhvi Vs. Union of India reported in 73 Taxmann.com 252 / 289 CTR 602. 2. Hon'ble Kerala High Court in the case of United metals Vs ITO TDS Reported in 137 taxmann.com 115 (Kerala) 3. Kolkata Tribunal in the case of Bhaskar Roy Vs. ITO TDS Reported in 135 taxmann.com 336 (Kolkata - Trib) 4. Delhi Tribunal in the case of Udit Jain Vs. Assistant Commissioner of Income Tax, ITA No. 5380/Delhi/2017 5. Jurisdictional Lucknow Tribunal in the case of Dr Saumya Singh Vs ACIT in ITA No. 793, 794, & 794/LKW/2017. 6. Pune Tribunal in the case of Gangamai College of Engineering VS ACIT, CPC (TDS), Ghaziabad in ITA NO. 1172/PUN/2018.
The ld. DR, on the other hand, relied on the orders of the authorities below and submitted that the provisions of Section 234E were there in the statute w.e.f. 1.07.2012 and therefore the late fee u/s. 234E is applicable in the year under consideration. Moreover, it was argued that the assessment orders by CPC was also passed after 01.06.2015, therefore, the late fee charged u/s. 234E is applicable in the year under consideration.
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We have heard the rival parties and have perused the material available on record. We find that it is undisputed fact that the assessee has been charged late fee u/s. 234E for various returns filed in the Form-26Q for late filing of the statements. These cases relate to Assessment Year 2014-15. The various Hon'ble High Courts including the Hon'ble Karnataka High Court and Hon'ble Kerala High Court have held that the provisions of Section 234E are applicable w.e.f. 01.06.2015. The relevant findings of Hon'ble Karnataka High Court in the case of ‘Fatheraj Singhvi Vs. Union of India’ (Supra) are in Para 21 to 23 and 26 are reproduced for the sake of completeness: “21. However, if Section 234E providing for fee was brought on the state book, keeping in view the aforesaid purpose and the intention then, the other mechanism provided for computation of fee and failure for payment of fee under Section 200A which has been brought about with effect from 1.6.2015 cannot be said as only by way of a regulatory mode or a regulatory mechanism but it can rather be termed as conferring substantive power upon the authority. It is true that, a regulatory mechanism by insertion of any provision made in the statute book, may have a retroactive character but, whether such provision provides for a mere regulatory mechanism or confers substantive power upon the authority would also be a aspect which may be required to be considered before such provisions is held to be retroactive in nature. Further, when any provision is inserted for liability to pay any tax or the fee by way of compensatory in nature or fee independently simultaneously mode and the manner of its enforceability is also required to be considered and examined. Not only that, but, if the mode and the manner is not expressly prescribed, the provisions may also be vulnerable. All such aspects will be required to be considered before one considers regulatory mechanism or provision for regulating the mode and the manner of recovery and its enforceability as retroactive. If at the time when the fee was provided under Section 234E, the Parliament also provided for its utility for giving privilege under Section 271H(3) that too by expressly put bar for penalty under Section 272A by insertion of proviso to Section 272A(2), it can be said that a particular set up for imposition and the payment of fee under Section 234E was provided but, it did not provide for making of demand of such fee under Section 200A payable under Section 234E. Hence, considering the aforesaid peculiar facts and circumstances, we are unable to accept the contention of the learned counsel for respondent-Revenue that insertion of clause (c) to (f) under Section 200A(1) should be treated as retroactive in character and not prospective. 22. It is hardly required to be stated that, as per the well established principles of interpretation of statute, unless it is expressly provided or impliedly demonstrated, any provision of statute is to be read as having prospective effect and not retrospective effect. Under the circumstances, we find that substitution made by clause (c) to (f) of sub-section (1) of Section
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200A can be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand under Section 200A for computation and intimation for the payment of fee under Section 234E could not be made in purported exercise of power under Section 200A by the respondent for the period of the respective assessment year prior to 1.6.2015. However, we make it clear that, if any deductor has already paid the fee after intimation received under Section 200A, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest. 23. In view of the aforesaid observation and discussion, since the impugned intimation given by the respondent-Department against all the appellants under Section 200A are so far as they are for the period prior to 1.6.2015 can be said as without any authority under law. Hence, the same can be said as illegal and invalid. ………….. ………….. 26. Under these circumstances, we find that no further discussion would be required for examining the constitutional validity of Section 234E of the Act. Save and except to observe that the question of constitutional validity of Section 234E of the Act before the Division Bench of this Court shall remain open and shall not be treated as concluded.”
The Hon'ble Kerala High Court in the case of United Metals vs. ITO TDS,137 taxmann.com 115 (Kerala) has also held similarly and the Lucknow bench of the Tribunal in the case of Dr. Saumya Singh vs. ACIT in ITA No. 793, 794 and 795/Lkw/2017 has also recorded similar findings. 6. In view of these facts and circumstances and following the precedents relied on by the assessee, the appeals filed by the assessee are allowed. 7. In the result, all the appeals filed by the assessee are allowed.
(Order pronounced in the open court on 26/07/2022) Sd/- Sd/- (A.D.JAIN) (T.S.KAPOOR) Vice President Accountant Member Dated: 26/07/2022 Aks
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Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. The CIT(A) 5. D.R., I.T.A.T., Lucknow Asstt. Registrar