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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER
Date of Hearing – 26/11/2024 Date of Order – 28/11/2024
O R D E R PER V. DURGA RAO, J.M.
This appeal by the assessee is against the impugned order dated 05/01/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2012–13.
The assessee has raised following grounds:–
“1. Whether the Hon'ble CIT(A) is justified in affirming the levy of late filing penalty u/s 234E of the Income Tax Act for the relevant year consideration. 2. Whether the Hon'ble CIT(A) is justified in affirming an order in the contravention of the trite law settled by judicial precedents. 3. Whether the Hon'ble CIT(A) is justified in affirming the penalty u/s 220 of the Income Act.
2 Dammani Industries ITA no.121/Nag./2024 4. The appellant craves leave to add, alter, modify and withdraw any grounds before or during the course of appellate proceedings.”
The short issue that we need to adjudicate in this appeal is, whether or not the learned CIT(A) was justified in affirming the levy of late filing penalty under section 234E of the Income Tax Act, 1961 ("the Act") while processing TDS return under section 200A of the Act.
Facts of the case are, the assessee, for the relevant assessment year, filed its TDS statement in Form no.26Q for the first quarter which was processed on 14/05/2015. Since there was delay on the part of the assessee in belated return before filing of the TDS statement in Form no.26Q, hence, the assessee was liable to pay late filing fee of ` 5,400. When the TDS return was processed by the Central Processing Centre, late filing fee under section 234E of the Act at ` 11,840, which include late payment and interest under section 220(2) of the Act vide intimation under section 200A of the Act.
5. On appeal, the learned CIT(A), while discussing the issue in detail, vide Para–4.3/Page–2 to Para–4.10/Page–7, dismissed the appeal filed by the assessee. The assessee being aggrieved is in further appeal before the Tribunal.
6. The learned A.R. for the assessee submitted that various Co–ordinate Benches of the Tribunal has considered the very same issue and decided the identical issue in favour of the assessee and thus prayed for following the same ratio laid down by the Tribunal in the present case also.
3 Dammani Industries ITA no.121/Nag./2024
7. Per–contra, the learned Departmental Representative relied upon the impugned order of the learned CIT(A).
We have heard the arguments of rival parties, perused the material available on record and gone through the orders of the authorities below. In the present case, the Assessing Officer has levied late fee under section 234E of the Act for the financial year 2015–16 relevant to the assessment year 2016–17, which is prior to 01/06/2015, and the amendment was introduced in the statute which was in operation with effect from 01/06/2015. In this regard, it is relevant to refer to the Co–ordinate Bench decision of the Tribunal, Chennai Bench, Chennai, rendered in S.S.S. Construction v/s ACIT, to 3504/Ch./2019, order dated 22/04/2022, wherein the very same issue has been considered and decided the same in favour of the assessee and against the Revenue. It is pertinent to refer to the observations made by a Co-ordinate Bench of the Tribunal, speaking through the very same Bench of ITAT, Nagpur Bench, Nagpur, has decided exactly similar and identical issue in a batch of the cases decided in Bank of India v/s ITO, 94 & 95/Nag./2023, consolidated order dated 01/05/2024, for the assessment year 2013–14, wherein it was held that the Assessing Officer cannot levy late fee under section 234E of the Act for the reasons stated therein. The relevant observations of the Bench while deciding the in favour of the assessee and against the Revenue are reproduced herein below:–
“7. We have heard the arguments of the rival parties, perused the material available on record and gone through the orders of the authorities below. In the present case, the Assessing Officer has levied late fee under section 234E
4 Dammani Industries ITA no.121/Nag./2024 of the Act for the assessment year 2013–14 and 2014–15. The amendment to the provisions of section 200A of the Act came into effect from 1st June 2015. The Co–ordinate Bench of the Tribunal, Chennai Bench, Chennai, in S.S.S. Construction (supra) has considered this issue by following the judgment of the Hon’ble Karnataka High Court in Fatehraj Singhvi v/s Union of India, [2016] 289 CTR 602 (Kar.) and also considered the judgment of the Hon’ble High Court in Olari Little Flower Kuries Pvt. Ltd. v/s Union of India, [2022] 134 taxmann.com 111 (Ker.) holding that the intimation issued by the Assessing Officer under section 200A of the Act to levy late fee for belated returned filed for the period prior to 1st June 2015 is invalid. Relevant portion, vide Para–4 of the order dated 22/04/2022 (supra), is extracted below:– “4. None appeared for the assessee. We have heard learned DR and perused orders of the authorities below. We find that the learned CIT(A) has disposed off appeals filed by the assessee on technical grounds without condoning delay in filing appeals, although, the assessee has filed petition for to 3504/Chny/2019 condonation of delay. We find that the issue involved in the present appeals filed by the assessee is on levy of late fee u/s.234E of the Act, for belated filing of quarterly TDS returns beyond prescribed date and this issue is covered by various decisions of the Tribunal and High Courts, including decision of the co-ordinate Bench of ITAT., Chennai. The Tribunal in the case of M/s. M.F. Textiles Pvt.Ltd. Vs. ACIT in & 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 u/s.200A of the Act, the Assessing Officer cannot levy late fee u/s.234E of the Act for belated filing of quarterly TDS return for period prior to 01.06.2015. The relevant findings of the Tribunal in ITA Nos.578 & 579/Chny/2021 dated 24.02.2022 are reproduced as under:- "
We have heard both the parties, perused the materials available on record and gone through the orders of authorities below. The solitary issue that needs to be resolved in the given facts and circumstances of the case is whether the Assessing Officer can levy late fee prescribed under section 234E of the Act, when the quarterly return filed by the tax deductor for the period prior to 01.06.2015, when the law has been amended by Finance Act enabling the Assessing Officer to compute late fee while processing TDS returns under section 200A of the Act. to 3504/Chny/2019 The provisions of section 234E of the Act has been inserted to the statute by Finance Act with effect from 01.07.2012 and provides levy of late fee for belated filing of quarterly return filed by the tax deductor. The Assessing Officer started levying of late fee under section 234E of the Income Tax Act, 1961 while processing quarterly TDS return and started issuing intimation to the assessees. The issue has been challenged before various Courts by the assessees by writ and challenged the validity of provision of section 234E of the Act. In some cases, some Courts have granted stay of operation of intimation issued by the Department under section 200A of the Act. Therefore, on the basis of judgement of the Hon'ble High Court, the assessees have started challenging the intimation
5 Dammani Industries ITA no.121/Nag./2024 issued by the Assessing Officer before the ld. CIT(A). The ld. CIT(A) did not entertain the appeal filed by the assessee on both counts, including on limitation in filing the appeal as well as on merits of the issue and rejected the arguments taken by the assessee and confirmed late fee levied under section 234E of the Income Tax Act, as per mandate of the statute. In the meantime, the Hon'ble Karnataka High Court in the case of Fatheraj Singhvi v. Union of India [2016] 289 CTR 602 (Karnataka) had considered the issue and after analyzing the provisions of section 234E of the Act and section 200A of the Act and held that in the absence of enabling provision in section 200A of the Act, the Assessing Officer cannot levy late fee under section 234E of the Act, while processing the quarterly TDS return filed for the period of the respective assessment years prior to 01.06.2015. A similar view has been expressed by the Hon'ble Kerala High Court in the case of Olari Little Flower Kuries (P.) Ltd. v. Union of India [2022] 134 taxmann.com 111 (Kerala) after considering the decision of Hon'ble Karnataka High Court in the case of Fatheraj Singhvi v. Union of India [2016] 289 CTR 602 (Karnataka) and held that the provisions of section 200A of the Act were mandated to enable computation of late fee payable under section 234E of the Act, at the time of processing of quarterly TDS return and the said amendment came into effect from 01.06.2015. Thus, the intimation issued by the Assessing Officer under section 200A of the Act to levy late fee for belated return for the period prior to 01.06.2015 is invalid. Subsequent to the decisions of the Hon'ble Karnataka High Court and the Hon'ble Kerala High Court, series of decisions have been rendered by various Benches of the Tribunal and held that late to 3504/Chny/2019 fee under section 234E of the Act cannot be levied for the period prior to 01.06.2015, because, there was no enabling provision to levy such late fee.
In the present appeals, on perusal of the facts, we find that the assessment years involved are prior to 01.06.2015. Therefore, we are of the considered view that the late fee charged by the Assessing Officer under section 234E of the Act, while processing quarterly TDS return under section 200A of the Act, is without any authority and invalid. Hence, by respectfully following the decision of the Hon'ble Karnataka High Court in the case of Fatheraj Singhvi v. Union of India [2016] 289 CTR 602 (Karnataka), we are of the considered view that the Assessing Officer cannot levy late fee while processing of TDS return under section 200A of the Act upto the financial year 2014-15. Since, late fee charged in the present case pertaining to the financial year 2013-14, we direct the Assessing Officer to delete the late fee charged under section 234E of the Act in the intimation issued under section 200A of the Act for the processing of quarterly TDS return filed by the assessee.
In the result, both these appeals filed by the assessee are allowed."
6 Dammani Industries ITA no.121/Nag./2024 8. We find that the above decision of the Co-ordinate Bench in S.S.S. Construction (supra) is squarely applies to the assessee’s case. Apart from this, the issue is also decided by the Co-ordinate Bench of the Tribunal, Nagpur Bench, in assessee’s own case in Bank of India v/s ACIT, ITA no.104/Nag./2022, etc., order dated 06/06/2022, wherein the Tribunal, Nagpur Bench, Nagpur, has decided the very same issue in favour of the assessee. In view of the above, we are of the opinion that the impugned orders passed by the learned CIT(A) for all the assessment years under consideration deserve to be reversed.
Insofar as the arguments of the learned D.R. in case of DIGP Group Centre CRPF (supra) is concerned, we find that it relates to the assessment year 2016–17, 2017–18, 2018–19 and 2019–20, whereas, the present appeal relates to the assessment year 2013–14 and 2014–15 and hence, the decision of the Co–ordinate Bench of the Tribunal, Nagpur Bench, Nagpur, relied upon by the learned D.R. has no application to the facts of the present case for the assessment year under consideration and thus the arguments of the learned D.R. is rejected. Consequently, the impugned orders passed by the learned CIT(A) for all the years under consideration are hereby reversed and the grounds raised
by the assessee in this appeal are allowed.
10. In the result, appeals filed by the assessees are allowed.”
9. Consistent with the view taken as aforesaid, we set aside the impugned order passed by the learned CIT(A) and allow the grounds of appeal raised by the assessee.
In the result, appeal filed by the assessee IS allowed. Order pronounced in the open Court on 28/11/2024