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Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SRI RAJESH KUMAR & PRADIP KUMAR CHOUBEY
order
: November 29th, 2024 ORDER
Per Pradip Kumar Choubey, Judicial Member:
This appeal filed by the assessee pertaining to the Assessment Year (in short ‘AY’) 2013-14 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the ‘Act’) by ld. Commissioner of Income-tax (Appeals)- NFAC, Delhi [in short ld. ‘CIT(A)’] dated 30.07.2024 arising out of the assessment order framed u/s 154 of the Act dated 12.09.2013. 1.1. The brief facts of the case of the appellant are that the assessee being an individual has income from business etc., assessee filed TDS return for Quarter no. 2 for FY 2012-13 and paid TDS of Rs. 33,882/- along with interest I.T.A. No.: 1773/KOL/2024 Assessment Year: 2013-14 Sushil Kumar Berlia. u/s 201A of the Act. The original return was filed on 27.07.2013 which was processed on 12.09.2013 and revised u/s 154 of the Act on 26.01.2024 wherein levy of fee u/s 234E of the Act @ Rs. 200/- per day to the tune of Rs. 33,882/- was imposed. Interest u/s 220(2) of the Act on default amount comes to Rs. 41,912/- has also been imposed and asked the assessee to pay an amount of Rs. 75,790/-. The said order has been challenged by the assessee before the Ld. CIT(A) wherein also the appeal of the assessee has been dismissed. Being aggrieved and dissatisfied with the impugned order, the present appeal has been preferred 1.2. The ld. Counsel for the assessee challenges the impugned order thereby submitting that the order of the Assessing Officer (hereinafter referred to as ld. 'AO') confirmed by the Ld. CIT(A) with regard to the imposing levy of additional fee u/s 234E of the Act and consequential interest u/s 220A for the period prior to 01.06.2015 is bad in law. The ld. Counsel for the assessee submits that the provisions of sec 200A(1)(c)(d)(f) of the Act have come into force by Finance Act, 2015 only with effect from 01.06.2015 and there was no authority or competence or jurisdiction on the part of the concerned officer or the Department to compute and determine the fee u/s 234E of the Act in respect of the assessment of the earlier period and the return filed for the said respective assessment years namely all assessment years and the period prior to 01.06.2015. The ld. Counsel for the assessee cited a decision passed by the Hon,ble Karnataka High Court in the case of Fatehraj Singhvi vs. Union of India reported in [2016] 73 taxmann.com 252 (Kar.). He has also cited a decision passed by the ITAT Kolkata, A Bench in Bhaskar Rao vs. ITO reported in [2022] 135 taxmann.com 336 (Kolkata Trib.) 1.3. Contrary to that, the ld. DR submitted that there were other judicial pronouncements such as Hon,ble Gujarat High Court, Bombay High Court have clearly held that sec 234E levies a fee to regularize said late filing which is a fixed charge for extra service which Department has to provide due to late filing of TDS statement and not in guise of tax nor is it onerous and have Page 2 of 5 I.T.A. No.: 1773/KOL/2024 Assessment Year: 2013-14 Sushil Kumar Berlia. upheld constitutional validity of the provisions of sec 234E of the Act.
We have heard the rival submissions of the Counsels of the respective parties and perused the record. It is the definite case of the assessee that assessee has filed TDS return for Quarter 2 for the FY 2012-13, original return was filed on 27.07.2013 and processed on 12.09.2013 and it is also the definite case of the assessee that the same was revised and rectified u/s 154 of the Act on 26.01.2024 wherein levy of fee u/s 234E of the Act @ Rs. 200/- per day to the tune of Rs. 33,882/- was imposed. We have gone through the order passed by the ITAT Kolkata in Bhaskar Roy case and members have discussed the issue which is as follows- “14. We may now deal with the contentions raised by the learned counsel for the appellants. The first contention for assailing the legality and validity of the intimation under section 200A was that, the provision of section 200A(1)(c), (d) and (f) have come into force only with effect from 1-6-2015 and hence, there was no authority or competence or jurisdiction on the part of the concerned Officer or the Department to compute and determine the fee under section 234E in respect of the assessment year of the earlier period and the return filed for the said respective assessment years namely all assessment years and the returns prior to 1-6-2015. It was submitted that, when no express authority was conferred by the statute under section 200A prior to 1-6-2015 for computation of any fee under section 234E nor the determination thereof, the demand or the intimation for the previous period or previous year prior to 1-6-2015 could not have been made.
Whereas, the learned counsel appearing for the respondent-Department made twofold submissions; 16. One was that, by virtue of section 234E, the liability to pay fee had already accrued since there was failure to submit return either under section 200(3) of the Act or under section 206C (3) of the Act. Section 234E can be said as a charging section generating the liability to pay the fee therefore, irrespective of a fact or the aspect that sub-sections (1c), (1d), 1(e) & (1f) were inserted by way of substitution in section 200A, when the fee was payable the aforesaid insertion of the aforesaid clause and section 200A(1)(c), (d), (e) and (f) would not result into nullifying the liability to pay fee under section 234E of the Act. Hence, in his submission, it cannot be said that the demand or the intimation by way of computation of the fee under section 234E is invalid or unwarranted or is without jurisdiction.” 2.1. Further the Hon,ble Kolkata Bench has held thus:
Section 234E, read with section 200A, of the Income-tax Act, 1961 - Fee - Page 3 of 5 I.T.A. No.: 1773/KOL/2024 Assessment Year: 2013-14 Sushil Kumar Berlia. For default in furnishing statement (Position prior to 1-6-2015) - Assessment years 2013-14 to 2015-16 - Assessee was required to file a statement of tax deduction at source under section 200 in Form No. 24Q - Default summary in case of assessee was passed vide which assessee was intimated about levy of late fee under section 234E - According to assessee, Assessing Officer had levied late fees without any authority of law as levy of fees under 234E could not be made prior to 1-6-2015 since there was no enabling provision in section 200A for raising a demand in respect of levy of fees under section 234E and, therefore, assessee pleaded that late fee levied by Assessing Officer be deleted - Commissioner (Appeals) held that fee prescribed under section 234E could be levied even without a regulatory provision being found in section 200A for computation of fee, hence, late fee levied by Assessing Officer under section 234E was sustainable - However, it was found that amendment in section 200A by way of insertion of clause (c) was only with effect from 1-6-2015 and therefore no fees would be payable by assessee for any period prior to 1-6-2015 - Whether therefore, demand raised by Income Tax Authorities for levying late fee under section 234E for period prior to 1-6-2015 would not be sustainable - Held, yes [Paras 3 and 6][In favour of assessee] 2.2. Hon'ble ITAT, Kolkata Bench after discussing the provisions of Section 234E, 271H and 220A of the Act has come to this conclusion as thus:
“20. In view of the aforesaid observations and discussion, two aspects may transpire one, for section 234E providing for fee and given privilege to the defaulter if he pays the fee and hence, when a privilege is given for a particular purpose which in the present case is to come out from rigours of penal provision of section 271H(1)(a), it cannot be said that the provisions of fee since creates a counter benefit or reciprocal benefit in favour of the defaulter in the rigours of the penal provision, the provisions of section 234E would meet with the test of quid pro quo. ……………………………………………….. ………………………………………………..
We note that there is no decision of the Hon'ble Calcutta High Court on the issue in hand. Therefore, we are inclined to follow the ratio decidendi of the Hon'ble Karnataka High Court in the case of Fatehraj Singhvi (supra) and Sree Ayappa Educational Charitable Trust (supra) in the light of the Hon'ble Supreme Court decision in Vegetable Products (supra) that if there is no jurisdictional High Court's decision on an issue then the view taken in favour of the assessee can be followed. Therefore, we are inclined to hold that the demand raised by the Income-tax Authorities for levying late fee u/s. 234E of the Act for the period prior to 1-6-2015 cannot be sustained and we order accordingly. However, we hasten to add that Hon'ble Karnataka High Court while passing the order had held the order to be Page 4 of 5 I.T.A. No.: 1773/KOL/2024 Assessment Year: 2013-14 Sushil Kumar Berlia. prospective in operation and had clarified that if an assessee had made payment of fees u/s. 234E as per the demand/intimation u/s. 200A of the Act for the period prior to 1-6-2015 then it cannot claim the refund since the Hon'ble Karnataka High Court has held its order to be prospective in operation.
In the result, all the appeals of assessee are allowed.”
Going over the present facts of the case we find that issue in the present cases are the same as already decided by the Kolkata bench in the aforesaid decision, In the result, the appeal filed by the assessee is allowed by setting aside the order of the A.O., confirmed by the CIT(A). Accordingly, imposition of levy of additional fee and consequential interest passed in the order of the learned A.O. is bad in law.