M/S. PIXEL PICTURES PVT LTD vs. UNION OF INDIA

THE COMMISSIONER OF INCOME TAX CENTRAL REVENUE BUILDING QUEENS ROAD, BENGALURU-560 001

THE DEPUTY COMMISSIONER OF INCOME TAX TDS RECONCILIATION ANALYSIS AND CORRECTION ENABLING SYSTEM

Learned counsel appearing for the parties submit that the issue relating to the Constitutional Validity of Section 234E of the Act is squarely covered by the Division Bench judgment of this Court in the case of FATHERAJ SINGHVI & OTHERS V/S. UNION OF INDIA AND OTHERS, reported in (2016) 142 DTR (Kar) 281. The relevant paragraphs 14, 21, 23, 24 and 27 reads thus: “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

However, if Section 234E providing for fee was brought on the statute 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

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.

If the facts of the present cases are examined in light of the aforesaid observation and discussion, it appears that in all matters, the intimation given in purported exercise of power under Section 200A are in respect of fees under Section 234E for the period prior to 1.6.2015. As such, it is on account of the intimation given making demand of the fees in purported exercise of power under Section 200A, the same has necessitated the appellant-original petitioner to challenge the validity of Section 234E of the Act. In view of the reasons recorded by us hereinabove, when the amendment made under Section 200A of the Act which has come into effect on 1.6.2015 is held to be having prospective effect, no computation of fee for the demand or the intimation for the fee under Section 234E could be made for the TDS deducted for the respective assessment year prior to 1.6.2015. Hence,the demand notices under Section 200A by the respondent-authority for intimation for payment of fee under Section 234E can be said as without any authority of

In view of the aforesaid observations and discussion, the impugned notices under Section 200A of the Act for computation and intimation for payment of fee under Section 234E as they relate to for the period of the tax deducted prior to 1.6.2015 are set aside. It is clarified that the present judgment would not be interpreted to mean that even if the payment of the fees under Section 234E already made as per demand/intimation under Section 200A of the Act for the TDS for the period prior to 31 01.04.2015 is permitted to be reopened for claiming refund. The judgment will have prospective effect accordingly. It is further observed that the question of constitutional validity of Section 234E shall remain open to be considered by the Division Bench and shall not get concluded by the order of the learned Single Judge.

Learned counsel Smt.Vani.H appearing for the petitioner would submit that the orders/communications at Annexures-A, B, C, D, E, F, G and H relating to the periods prior to 01.06.2015 issued by the third respondent under Section 200A of the Act deserve to be quashed. However, the learned counsel fairly submit that in as much as the orders/communications at Annexures-J, K, L and M relating to the periods post 01.06.2015, petitioner shall avail the alternative remedy of appeal provided under the Act. Learned counsel further placing reliance on the Co-ordinate Bench decision of this Court in the case of SREE AYYAPPA EDUCATIONAL CHARITABLE TRUST V/S. THE DEPUTY COMMISSIONER OF INCOME TAX, in W.P.No.618/2015 and connected matters (DD 12.12.2017) submitted that that the Co-ordinate Bench of this Court following the Division Bench judgment of this Court in FATHERAJ SINGHVI supra, allowed the writ petitions, setting aside the impugned

On the other hand, learned counsel Sri.K.V.Aravind appearing for the respondents do not dispute the same.

Accordingly, following the judgment referred to above, the writ petitions are allowed and the impugned orders/communications at Annexures – A, B, C, D, E, F, G and H (relating to the periods prior to 01.06.2015) issued under Section 200A of the Act are set aside. The matters are remanded to the Assessing Authority to pass fresh orders in accordance with law, after giving an opportunity of hearing to the petitioner/assessee, in terms of the judgment of the Division Bench referred to above.

As regards the orders/communications at Annexures-J, K, L and M relating to the periods post

If such an appeal is preferred within a period of 30 days from today, the Appellate Authority shall consider the case on merits without objecting to the aspect of limitation and shall decide the matter(s) on merits in accordance with law as expeditiously as possible.