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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: HON’BLE SHRI MANU KUMAR GIRI, JM & SHRI S.R. RAGHUNATHA
O R D E R
PER MANU KUMAR GIRI (Judicial Member ) This bunch of six appeals being /Chny/2024 filed by the assessee ‘Gopuram Enterprises Private Limited’ [formerly known as ‘SAVORIT LIMITED’] are directed against separate orders of even date 31.10.2019 passed by the learned Commissioner of Income Tax (Appeals)-17, Chennai, and pertain to the assessment years 2013-14 to 2014-15.
- 2 - 1002 to 1007Chny/2024 2. The assessee has raised similar grounds of appeal for all the assessment years. We will take up ITA No. 1002/Chny/2024 for the assessment year 2013
14. (Q2) as lead case. Grounds of appeal filed in ITA No. 1002/Chny/2024 for the assessment year 2013
14. (Q2) are reproduced as under:-
‘’1) The order of the CIT (A) is erroneous in law and opposed to the facts and circumstances of the case. 2) The prayer before the CIT (A) is to condone the delay. However, the CIT exceeded by passing the impugned order by discussing & arriving the validity of Section 234 E for which he has taken the protections of Section 292 B. In the given case, though the prayer before the CIT (A) is to condone the delay despite adhering the prayer by the CIT (A) has gone beyond the same by stating in the impugned order that Section 234 E will applicable before 01/06/2015 also. 3) It is submitted that, a new section 234 E r.w.s. 200A(1) has been made to provide, for effective deterrence by providing levy of fees @ Rs. 200/- per day during 2012, in case of delayed filing of return. 4) Since, many courts held that there was no enabling provision U/s 200A of the act before 01/06/2015, to levy fees U/s 234E of the act & the said U/s 200A was amended w.e.f. 01/06/2015, which specifically provides levy of late filing fees U/s 234E of the act, while processing the return under section 200A of the act. 5) By the above amendment any notice / intimation / order issued for the period before 01/06/2015, for belated filing of returns will not attract any late fees U/s 234E r.w.s. 200A. 6) It is submitted being the positions of the settled laws the CIT (A) exceeded his jurisdiction & entered the shoes of the judicary which has in numerous decisions upheld the validity of the Section 234 E & also made it clear that it has no effect before 01/06/2015. The citations / orders / judgment mentioned in the CIT (A) is no relevance & not applicable in the given facts of the case. 7) The Mumbai Bench of ITAT in the Case ITA No's. 337, 338, 339, Mum/2022 dated 14/10/2022 has elaborately discussed with regard to the sustainability Section 234 E. Similarly, the Pune Bench of the ITAT in its order dated 25/10/2018 has upheld the Section 234 E by citing the Supreme Court judgments. 8) The CIT (A) ought to have considered Section 234 E of the Act, has no effect prior to 01/06/2015, considering the subject matter case. In the case of Vedabhai alias Vaijayantabai Baburao Patil Vs. Shantaram Baburao Patil [2002] reported in 122 Taxman 114, wherein, the Hon'ble Apex Court observes that, in case of no prejudice to the other side occur there then it has to be considered.
- 3 - 1002 to 1007Chny/2024 9) It is prayed that this Hon'ble Tribunal, may be pleased, to allow amendment, of the Grounds raised herein and adduce additional grounds, at the time of hearing’’.
3. Brief facts of the case are that the assessee has filed quarterly TDS return in Form 26Q for assessment years 2013-14 to 2014-15 beyond due date specified under the Act. The intimation under section 200A of the Income Tax Act, 1961 passed by the ACIT, CPC (TDS), Ghaziabad, passed order levying late fee under section 234E of the Act, for belated filing of quarterly TDS returns. The assessee has challenged late fee levied by the ACIT, CPC Ghaziabad before first appellate authority. The ld.CIT(A) has after elaborate discussion of case laws and provisions of the Act held as under:
‘’6.5 As the constitutional validity of section 234Ehas been upheld by the High Courts, the late fee was required to be levied & collected w.e.f. 01.7.2012. The procedural/technical mistake, defect or omission in not passing a separate order u/s 234E is cured by protection provided uls 292B of the Act. In view of decision in case of Dilip Kumar & Company (Supra) the taxing statute hasto be interpreted strictly upto the threshold. Astwo reasonable constructions are not possible in interpreting section 234E, 200A & 292B, Vegetable Product Ltd. has no application in this appeal.In the faceless regime, the CIT(A)/NFAC has to take identical decision on identical issues in compliance to guarantee provided under article 14 of the constitution. In view these findings, it is held thatthe AO was mandatorily required to levy & collect such fee as mandated u/s 234E of the Act even prior to 01.06.2015 and the defect of not passing aseparate order u/s 234E but instead including the late fee in the intimation u/s 200A, is cured by protection provided u/s 292B of the Act. Accordingly, it is held that the intimation u/s 200A for the AY in question is legally valid. The levy of fee is confirmed. The ground against such levy is dismissed’’. Aggrieved by the learned CIT(A) order, the assessee is in appeal before us.
We have heard ld. Counsel for the assessee and ld.DR. We have perused orders of the authorities below. We find that the issue involved in the present appeals filed by the assessee is on levy of late fee under section 234E - 4 - 1002 to 1007Chny/2024 of the Act, for belated filing of quarterly TDS returns beyond prescribed date and this issue is squarely covered by the decision of Hon’ble Jurisdictional Madras High Court in the case of M/s. True Blue Voice India Private Limited vs. CCIT & Ors (WP Nos. 2700 & 2703 of 2022) dated 09.10.2023 and held as under:-
‘’10. There is no dispute on the aspect of validity of the Section 234E of the Act. The only issue that has to be decided in the present case is as to whether the late fee can be imposed under Section 234E of the Act, while processing the statement of TDS under Section 200A of the Act for the subject assessment years? 11. On considering the submissions of both the learned counsel and while reading Section 234E of the Act, it appears that the Department/respondents can impose the late fee for the circumstances mentioned under Section 234E of the Act with effect from 01.07.2012, but not when they process the TDS under Section 200A of the Act. In the Finance Bill, 2015, Section 200A(1)(c) of the Act was introduced, which reads as follows: “200A. Processing of statements of tax deducted at source.— (1) ...................... (a)...................... (b)........................ (c) the fee, if any, shall be computed in accordance with the provisions of section 234E;”
Further, the objects and reasons for introduction of Section 200A(1)(c) of the Act are as follows: “Rationalisation of provisions relating to Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) Under Chapter XVII-B of the Act, a person is required to deduct tax on certain specified payment at the specified rate if the payment exceeds the specified threshold. The person deducting tax (‘the deductor’) is required to file a quarterly Tax Deduction at Source (TDS) statement containing the details of deduction of tax made during the quarter by the prescribed due date. Similarly, under Chapter XVII-BB of the Act, a person is required to collect tax on certain specified receipts at the specified rates. The person collecting tax (‘the collector’) also is required to file a quarterly Tax Collection at Source (TCS) statement containing the details of collection of tax made during the quarter by the prescribed due date. In order to provide effective deterrence against delay in furnishing of TDS/TCS statement, the Finance Act, 2012 inserted section 234E in the Act to provide for levy of fee for late furnishing of TDS/TCS statement. The levy of fee under section 234E of the Act has proved to be an - 5 - 1002 to 1007Chny/2024 effective tool in improving the compliance in respect of timely submission of TDS/TCS statement by the deductor or collector. Finance (No.2) Act, 2009 inserted section 200A in the Act which provides for processing of TDS statements for determining the amount payable or refundable to the deductor. However, as section 243E was inserted after the insertion of section 200A in the Act, the existing provisions of section 200A of the Act does not provide for determination of fee payable under section 234E of the Act at the time of processing of TDS statements. It is, therefore, proposed to amend the provisions of section 200A of the Act so as to enable computation of fee payable under section 234E of the Act at the time of processing of TDS statement under section 200A of the Act. Currently, the provisions of sub-section (3) of section 200 of the Act enable the deductor to furnish TDS correction statement and consequently, section 200A of the Act allows processing of the TDS correction statement. However, currently, there does not exist any provision for allowing a collector to file correction statement in respect of TCS statement which has been furnished. It is, therefore, proposed to amend the provisions of section 206C of the Act so as to allow the collector to furnish TCS correction statement. Currently, there does not exist any provision in the Act to enable processing of the TCS statement filed by the collector as available for processing of TDS statement. As the mechanism of TCS statement is similar to TDS statement, it is proposed to insert a provision in the Act for processing of TCS statements on the line of existing provisions for processing of TDS statement contained in section 200A of the Act. The proposed provision shall also incorporate the mechanism for computation of fee payable under section 234E of the Act.”
A reading of the above makes it clear that since no mechanism was available for determination of late fee payable under Section 234E of the Act at the time of processing TDS statements. Thus it was proposed to amend the provisions of Section 200A of the Act, so as to enable the computation of fee payable under Section 234E of the Act at the time of processing of TDS statement under Section 200A of he Act. Thus, the said sub-Section 200A(1)(c) of the Act was came to be inserted with effect from 01.06.2015.
Now the dispute is with regard to the assessment years 2012- 13, 2013- 14, 2014-15 and the applicability of Section 200A(1)(c) of the Act for relevant assessment years. There is no dispute on the aspect that the TDS statement was filed under Section 200A of the Act and the respondent had also issued the intimation under Section 200A of the Act, which means the respondents have processed the returns under Section 200A of the Act. When the respondent had started to process the returns of the petitioner under Section 200A of the Act, obviously they have to follow the requirements under Section 200A of the Act. Section 200A(1)(c) of the Act was introduced with effect from 01.06.2015. A reading of the objects and reasons of the same makes it clear that since no mechanism was available, Section 200A(1)(c) of the Act was introduced for imposing late fee for the delay in filing statement of TDS. Therefore, from the introduction of the said Sub-Section it is clear that prior to the same, though Section 234E of the Act was introduced with effect from 01.07.2012, the Authorities were not empowered to impose the late fee while processing the statement of TDS under Section 200A of the Act - 6 - 1002 to 1007Chny/2024 15. The learned counsel for the respondent advanced his arguments on the aspect of the imposition of late fee by applying Section 200A(1)(c) of the Act retrospectively. This Court is not in agreement with the said submissions of the respondent. Since, there was no provision for imposing the late fee under Section 234E of the Act while filing and processing the TDS returns under Section 200A of the Act, clause (c) to Sub-Section (1) to Section 200A was introduced with effect from 01.07.2012. Therefore, the aforesaid submission made by the learned counsel for the respondent is rejected by this Court.
Further it was stated by the respondent that they have no power to waive the late fee and only the Commissioner of Income Tax is empowered to pass the revised order by proper application of provision of Section 264C of the Act.
In view of the above, it is made clear that the respondent had had imposed the late fee only under Section 234E of the Act for the assessment years 2012-2013, 2013-2014, 2015-2015. However, Section 200A(1)(c) of the Act was not introduced during the said assessment years. In the absence of any provisions under Section 200A of the Act, when they have processed the application for TDS under Section 200A, no late fee can be imposed under Section 234E. Hence, in such view of the matter, this Court feels that the impugned orders are liable to be set aside’’ The Co-ordinate Bench of the Tribunal also in the case of M/s. M.F. Textiles Pvt.Ltd. Vs. ACIT in ITA Nos. 578 & 579/Chny/2021 dated 24.02.2022 had considered an identical issue in light of provisions of section 234E of the Act and also amendment to section 200A by Finance Act, 2015 w.e.f. 01.06.2015 and held that in absence of enabling provision under section 200A of the Act, the Assessing Officer cannot levy late fee under section 234E of the Act for belated filing of quarterly TDS return for period prior to 01.06.2015.