M/S. PEOPLE DIAGNOSTIC SPECIALITY HOSPITAL LTD,CHAVARA vs. ACIT, KOLLAM

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ITA 6/COCH/2022Status: DisposedITAT Cochin30 June 2022AY 2015-20164 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 200A was amended with effect from 01.06.2015, enabling the levy of late fees under Section 234E. Therefore, imposing such a fee for a period prior to this amendment is illegal.

What were the facts?

The assessee filed its TDS statement for the 2nd quarter of FY 2014-15 belatedly. The AO levied a late fee under Section 234E, which was confirmed by the CIT(A). The assessee appealed, arguing the levy was illegal for the period before the amendment to Section 200A.

What were the issues?

Whether a late fee under Section 234E can be levied for a period prior to the amendment of Section 200A which empowered such levy.

Which sections of the Income-tax Act were involved?

Section 234E,Section 200A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: Shri George George K. & Shri Laxmi Prasad Sahu

For Respondent: Smt. J.M. Jamuna Devi, Sr. DR
Hearing: 27.06.2022Pronounced: 30.06.2022

This is an appeal filed by the assessee against the DIN &order No. ITBA/NFAC/S/250/2021-22/10336/7969(1) dated 25.06.2021of the learned CIT(A), NFAC, Delhi for AY 2015-16 on the following grounds of appeal: -

“1) The order of the Commissioner of Income tax(Appeal) is against facts, law and circumstances of the case. 2) The Commissioner of Income tax(Appeals) has erred in confirming the levy of late fee u/s.234E of the Income tax Act in the facts and circumstances of the case. 3) The Commissioner of Income tax(Appeals) ought to have found that section 200A was amended with effect from 01-96-2015 granting power to levy late fee u/s.234E of the Income tax Act and hence the imposition of late fee u/s.234E for the period 2 M/s.People Diagnostic and Speciality Hospital Ltd. prior to 01-06-2015 is illegal and the same ought to be deleted. 4) The Commissioner of Income tax(Appeals) failed to take note of the Board Circular No:19 dated 27-11-2015 wherein the issue has been clarified which is in favour of the appellant. 5) The Commissioner of Income tax(Appeals) ought to have found that the issue has been settled in favour of the appellant in the following decisions including that of the jurisdictional High Court of Kerala. a) Sarala Memorial Hospital Vs. Union of India (Ker)(TS-9604- 4C-2018 b) Little Servants of Divine Providence Charitable Trust VS.ITO (TS - 6112 -ITAT - 2016 - Coch) c) Travel Trails India (P)Ltd. VS.ACIT(TS - 5988-ITAT - 2020 - Coch)”

2.

The brief facts of the case are that the assessee, a private limited company filed the TDS statement for the 2nd quarter on 07.11.2014 with a delay of 23 days. The Assessing Officer, CPC processed the same on 21.11.2014 and levied a late fee of Rs.4,600/- for the delay in filing. Aggrieved by the order of the AO the assessee filed appeal before the learned CIT(A). The learned CIT(A) confirmed the order of the AO relying on the decision of the Hon'ble jurisdictional High Court in the case of Sree Narayana Guru Smaraka Sangam Upper Primary School v. Union of India and Others reported in (2017) 392 ITR 457 (Ker.). Aggrieved, assessee is in appeal before the Tribunal.

3.

None appeared on behalf of the assessee. Therefore, we proceeded to dispose off the appeal ex-parte qua the assessee.

4.

The learned D.R. strongly supported the orders of the lower authorities.

5.

We have heard the learned D.R. and perused the material on record. The assessee has filed TDS statement in Form No. 26Q for second quarter belatedly.The Assessing Officer cannot make any adjustment other than 3 M/s.People Diagnostic and Speciality Hospital Ltd.

one prescribed in section 200A of the Income Tax Act, 1961 (hereinafter “the Act). Prior to 01.06.2015, there was no enabling provision in section 200A of the Act for making adjustment in respect of statement filed by the assessee with regard to tax deducted at source by levying fees u/s 234E of the Act. The Parliament for the first time enabled the Assessing Officer to make adjustment by levying fees u/s 234E of the Act with effect from 01.06.2015. The Hon’ble jurisdictional High Court in the case of Olari Little Flower Kuries (P.) Ltd. v. Union of India reported in (2022) 440 ITR 26 (Ker.), has held that since provision of section 200A of the Act was amended to enable computation of fee payable u/s 234E of the Act at the time of processing of return and said amendment came into effect from 01.06.2015 (in view of CBDT Circular No.19 of 2015 dated 17.11.2015) intimations issued u/s 200A of the Act dealing with fee for belated filing of TDS returns for the period prior to 01.06.2015 were invalid and were to be set aside. Therefore, going by the dictum laid down by the Hon’ble jurisdictional High Court judgment in the case of Olari Little Flower Kuries (P.) Ltd. v. Union of India (supra), the levy of late fee for the second quarter for financial year 2014-2015 cannot be sustained in order passed u/s 200A of the Act, prior to 01.06.2015.

6.

The CIT(A) had relied on the judgment of the Hon’ble Kerala High Court in the case of Sree Narayana Guru Smaraka Sangam Upper Primary School v. Union of India and Others (supra). The judgment of the Hon’ble High Court was primarily concerned with the constitutional validity of section 234E of the Act. The Hon’ble Kerala Court was not adjudicating the issue whether the amendment to section 200A of the Act with effect from 01.06.2015 has retrospective effect or not. As mentioned earlier, the amendment to section 200A of the Act whether it applicable from 01.06.2015 has been decided in favour of the assessee by the judgment of the Hon’ble Kerala High Court in the case of Olari Little Flower Kuries (P.) Ltd. v. Union of India (supra). 4 M/s.People Diagnostic and Speciality Hospital Ltd.

7.

In the result, the appeal filed by the assessee is allowed. Dictated and pronounced in the open Court on 30th June, 2022.

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