BANK OF INDIA, PANCHGAON,NAGPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX, GHAZIABAD

In the present case, the Assessing Officer has levied the late fee under section 234E for delay in filing of Form no.26Q amounting to ` 22,420, for the financial year 2012–13 2013–14 relevant to the assessment year 2013–14 and 2014–15 respectively. Page | 2

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 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 Page | 3

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 Page | 4 Bank of India, Panchgaon Branch ITA no.93/Nag./2023 ITA no.94/Nag./2023 ITA no.95/Nag./2023 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 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 ITA No. 3495 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 Page | 5 Bank of India, Panchgaon Branch ITA no.93/Nag./2023 ITA no.94/Nag./2023 ITA no.95/Nag./2023 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.

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 Page | 6

In the result, appeals filed by the assessees are allowed.