MOHAMMED VAZIRUDDIN EDUCATIONAL SOCIETY,RAJAHMUNDRY vs. INCOME TAX OFFICER, TDS WARD-1, RAJAHMUNDRY

PER BENCH :

All these appeals are filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [the Ld. CIT(A)] in certain orders dated 4/8/2022 arising out of the orders passed U/s.

2 200A of the Income Tax Act, 1961 [the Act]. Since the issues

involved in all the appeals are identical, for the sake of

convenience, these appeals are clubbed, heard together and

disposed off in this consolidated order.

delay of 4 days in filing all the instant appeals before the

Tribunal. In this regard, the Ld. Authorized Representative

brought our attention to the affidavit filed by the and read out

the contents of the affidavit which read as under:

“1……..

2………During the relevant period the chartered accountant was busy in attending to tax audits and therefore he could not prepare the appeal in time.

the affidavit filed by the assessee we are of the considered view

that the delay of 4 days in filing all the present appeals beyond

the prescribed time limit is not attributable to the assessee nor

deliberate. Therefore, we hereby condone the delay of 4 days in

3 filing all the instant appeals and proceed to adjudicate the

appeals on merits.

identical grounds, the grounds raised by the assessee for the AY

2015-16 in ITA No. 190/Viz/2022 are extracted herein below for

the sake of reference:

“1. The CPC-TDS is not correct in levying the late filing fee U/s. 234E of the Income Tax Act, 1961.

2015-16 and 2016-17 relevant to the AYs 2015-16, 2016-17 &

2017-18, the assessee has filed TDS Quarterly returns in Form

No.24Q and 26Q beyond due date specified under the Act.

Subsequently, the Ld. AO assessed TDS quarterly returns filed by

the assessee and passed intimation orders U/s. 200A of the

Income Tax Act, 1961 for the AYs 2015-16, 2016-17 & 2017-18

and levied late filing fee U/s. 234E of the Act on account of

4 delayed filing of the TDS returns for the AYs under consideration.

Aggrieved by the orders of the Ld. AO, the assessee filed appeals

before the Ld. CIT(A) belatedly beyond the prescribed time limit

specified under the Act. Before the Ld. CIT(A), the assessee has

filed petitions explaining the belated filing of the TDS returns

with a prayer for condonation of delay in all the appeals. Before

the Ld. CIT(A) the assessee has also submitted that the delay in

filing the appeals before the First Appellate Authority may be

condoned to advance substantial justice on the ground that the

issues involved on merits regarding levy of late filing fee U/s.

234E of the Act is now covered in favour of the assessee by

various decisions as per which there is no provisions under the

Act to levy late filing fee before insertion of section 200A by

Finance Act, 2015 w.e.f 1/6/2015. The Ld. CIT (A) dismissed

the appeals of the assessee by holding that the explanation given

by the assessee for late filing of the appeal before the First

Appellate Authority does not constitute “sufficient cause”. To

support his view, the Ld. CIT (A) relied on various decisions

which find a place in the order of the Ld. CIT(A). Aggrieved by

the orders of the Ld. CIT (A), the assessee is in appeal before the

Tribunal for the AYs 2015-16, 2016-17 & 2017-18 raising the

grounds mentioned herein above.

Authorized Representative [Ld. AR] that the enabling provision for

computation of fee while processing the statements was inserted

in section 200A only w.e.f 1/6/2015 and therefore, the charging

section i.e., section 234E cannot be enforced prior to 1/6/2015.

The Ld. AR further submitted that the amended provision applies

for all the returns pertaining to the period after 1/6/2015 and

not for the returns pertaining to the period prior to 01/06/2015

notwithstanding the fact that the returns pertaining to the period

prior to 01/06/2015 were filed after 01/06/2015 or processed

after 01/06/2015. The Ld. AR further submitted that in the

present cases, the due date for filing the TDS returns falls before

the specified date of 1/6/2015 and therefore section 234E cannot

be enforced since it is prior to 1/6/2015. The Ld. AR therefore

submitted that the Ld. Revenue Authorities erred in levying and

confirming the levy of late fee U/s. 234E of the Act while

processing the TDS return U/s. 200A of the Act for the relevant

period under consideration. In support of his view the Ld. AR

relied on the judgment of the Hon’ble Karnataka High Court in

the case of Fatheraj Singhvi vs. Union of India [2016] 73

taxmann.com 252 (Karnataka); judgment of the Hon’ble Kerala

6 High Court in the case of United Metals vs. ITO (TDS) reported in

[2022] 137 taxmann.com 115 (Kerala); decision of the Pune

Bench of the Tribunal in the case of Medical Superintendent

Rural Hospital, Nashik vs. DCIT, CPC (TDS), Ghaziabad in ITA

Nos. 651 to 661/Pun/2018, dated 25/10/2018. The Ld. AR

therefore pleaded that the decision of the Ld. Revenue Authorities

may be set-aside and the assessee may be granted relief by

deleting the late fee levied U/s. 234E of the Act.

relied on the orders of the Ld. Revenue Authorities specifically

with respect to the levy / imposition of late fee u/s. 234E of the

Act by the Ld. AO. It is the submission of the Ld. DR that since

the assessee filed its TDS statements beyond the stipulated time

as per the TDS provisions, late fee was levied on account of

default in furnishing the statements beyond the prescribed time

limit under the Act. The Ld. DR further submitted that the fee

charged U/s. 234E is not in lieu of penalty as the fee charged

under section 234E is not in the nature of penalty and is a fee

which the deductor shall be liable to pay in the event of delay in

filing the TDS statements as prescribed. The Ld. DR further

submitted that the Fee charged U/s. 234E is a fixed fee charged

7 in the case of statements are rendered beyond the stipulated time

which is happened in the instant case. The Ld. DR also

submitted that it is rightly observed by the Hon’ble Bombay High

Court in the case of Rashmikant Kundalia vs. Union of India

(supra) “because of late filing of TDS statements Department is

overburdened with extra work which is otherwise not required if

the TDS statements are furnished within the prescribed time limit.”

The Ld. DR also heavily relied on the decision of the Hon’ble

Gujarat High Court in the case of Rajesh Kourani vs. Union of

India (supra) for the proposition that “a machinery provision

(section 200A) cannot override the substantive provision of law”.

The Ld. DR therefore pleaded that since the action taken by the

Ld. Revenue Authorities is in accordance the provisions of the Act

and also in accordance with law, as discussed above, and hence

the order of the Ld. Revenue Authorities need not be disturbed /

interfered with.

available on record as well as the orders of the Ld. Revenue

Authorities. The main question that arises in this appeal is

whether TDS returns pertaining to the period prior to

01/06/2015, if filed after 01/06/2015 and processed after

8 01/06/2015 whether they attract the amended provisions of

Finance Act, 2012 and the specific provision for levy of “fee”

under section 234E of the Act which was inserted w.e.f

1/6/2015. In the present case the due date for filing its TDS

statement for the Q1 of FY 2014-15 in Form No. 26Q is

30/06/2014 which falls within the specified date of 1/6/2015 ie.,

insertion of the new provisions but the assessee filed its TDS

returns on 27/11/2015 ie., beyond the due date for filing the

TDS returns. The Ld. AO treating this filing / furnishing of TDS

statement as a default since it is not filed within the stipulated

time as per the TDS provisions and imposed late fees u/s. 234E

amounting to Rs. 1,00,000/- and passed order U/s. 200A of the

Act dated 01/12/2015. On appeal, the Ld. CIT(A) dismissed the

appeal of the assessee due to belated filing of the appeal and held

that the reasons given by the assessee do not constitute

sufficient and reasonable cause for the belated filing of the

appeals. Aggrieved by the order of the Ld. CIT(A), the assessee

filed the present appeals.

9 9. In the present case, to file the TDS return for the FY 2014-

15, Quarter-1 relevant to the AY 2015-16 is 30/06/2014 but the

assessee filed the return on 27/11/2015. In our considered view

since the enabling provision for computation of fee while

processing the statements was inserted in section 200A only w.e.f

1/6/2015 and therefore, the charging section i.e., section 234E

cannot be enforced to the cases prior to 1/6/2015. Further, we

are of the view that the amended provision applies for all the

returns pertaining to the period after 1/6/2015 and not for the

returns pertaining to the period prior to 01/06/2015

notwithstanding the fact that the returns pertaining to the period

prior to 01/06/2015 were filed after 01/06/2015 or processed

after 01/06/2015.

Singhvi vs. Union of India [2016] 73 taxmann.com 252

(Karnataka) observed that “one may at the first blush say that,

since the section 234E is a charging section for fee, the liability

was generated or had accrued, if there was failure to deliver or

cause to be delivered the statement/s of TDS within the prescribed

time. But section 234E cannot be read in isolation and is required

to be read with the mechanism and the mode provided for its

enforcement……”. The observations and relevant held portions in

the judgment of the Hon’ble Karnataka High Court (supra) are

extracted herein below for reference:

"21. However, if Section 234E providing for fee was brought on the state 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 rather be termed as conferring substantive power upon the authority. It is true that, a regulatory mechanism by insertion of any provision made in the statute book, may have a retroactive character but, whether such provision provides for a mere regulatory mechanism or confers substantive power upon the authority would also be a aspect which may be required to be considered before such provisions is held to be retroactive in nature. Further, when any provision is inserted for liability to pay any tax or the fee by way of compensatory in nature or fee independently simultaneously mode and the manner of its enforceability is also required to be considered and examined. Not only that, but, if the mode and the manner is not expressly prescribed, the provisions may also be vulnerable. All such aspects will be required to be considered before one considers regulatory mechanism or provision for regulating the mode and the manner of recovery and its enforceability as retroactive. If at the time when the fee was provided under Section 234E, the Parliament also provided for its utility for giving privilege under Section 271H(3) that too by expressly put bar for penalty under Section 272A by insertion of proviso to Section 272A(2), it can be said that a particular set up for imposition and the payment of fee under Section 234E was provided but, it did not provide for making of demand of such fee under Section 200A payable under Section 234E. Hence, considering the aforesaid peculiar facts and circumstances, we are unable to accept the contention of the learned counsel for respondent-Revenue that insertion of clause (c) to (f) under Section 200A(1) should be treated as retroactive in character and not prospective. 22. It is hardly required to be stated that, as per the well established principles of interpretation of statute, unless it is expressly provided or impliedly demonstrated, any provision of statute is to be read as having prospective effect and not retrospective effect. Under the circumstances, we find that substitution made by clause (c) to (f) of sub-section (1) of Section 200A can be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand under Section 200A for computation and intimation for the payment of fee under Section 234E could not be made in purported exercise of power under Section 200A by the respondent for the period of the respective assessment year prior to 1.6.2015. However, we make it clear that, if any deductor has already paid the fee after intimation received under Section 200A, the aforesaid

view will not permit the deductor to reopen the said question unless he has made payment under protest."

Metals vs. ITO (TDS) reported in [2022] 137 taxmann.com 115

(Kerala) observed as under:

“Amendment in section 200A by way of incorporating sub-clause (c) to clause (f) which referred to computation of fee payable under section 234E was brought into effect from 1/6/2015, therefore, demand raised for levying late fee under section 234E for period prior to 1/6/2016 would not be sustainable.”

25/10/2018 in the case of Medical Superintendent Rural

Hospital, Nashik vs. DCIT, CPC (TDS) (supra), has observed as

under:

“16…………..the Assessing Officer while processing TDS returns / statements for the period prior to 01/06/2015 was not empowered to charge late filing fees under section 234E of the Act, even in the cases where such TDS returns were filed belatedly after June, 2015 and even in cases where the Assessing Officer processed the said TDS returns after June, 2015. Accordingly……………the demand raised by charging late filing fee u/s 234E of the Act is not valid and the same is deleted.”

assessee had deducted tax at source U/s. 195 of the Act but

belatedly filed the returns on 27/11/2015 under the bonafide

intention that the amended provisions will not attract for levy of

12 late fee U/s. 234E of the Act since the due date for filing the

returns for Q1 of FY 2014-15 is 30/06/2014. Since the period

under consideration is the 1st Quarter of FY 2014-15 ie., prior to

the amendment to section 200A(1) of the Act wherein clause (c)

was inserted w.e.f 01/06/2015 and the assessee had already

deposited the tax at source prior to the amendment to section

200A(1), the levy of late fee u/s. 234E for default in furnishing

the statement beyond the stipulated time is not sustainable in

law. Further, respectfully following the ratio laid down in the

judgment deliverd by the Hon’ble Karnataka High Court in the

case of Fatheraj Singhvi (supra); judgment of the Kerala High

Court in the case of United Metals (supra) and various decisions

of the Tribunal (supra), I am of the view that the levying of late

fee under section 234E for the period prior to 1/6/2015 is not

sustainable in law.

before the said date ie., 01/06/2015, there is no merit in

charging late filing fee U/s. 234E of the Act. Accordingly the Ld.

AO is directed to delete the fee levied U/s. 234E of the Act in the

order passed U/s. 154 r.w.s 200A of the Act Thus, the grounds

raised by the assessee are allowed.

grounds of appeal as well as the issue raised in these three

appeals are identical to that the of the grounds and the issue

raised in the appeal ITA No. 190/Viz/2022, which is

adjudicated in the above paragraphs of this order, our decision

given thereof mutatis mutandis applies to the present appeals

(ITA Nos. 191, 192 & 193/Viz/2022) also. Accordingly, the

appeals filed by the assessee are allowed.

allowed.

आयकर अपील सं./ I.T.A. Nos. 194, 195, 196 & 197/Viz/2022 (AYs’ 2016-17 & 2017-18)

CIT(A), NFAC, Delhi, dated 04/08/2022 for the AY 2016-17 & 2017-18

arising out of the order passed u/s. 200A of the IT Act, 1961, dated

15/02/2018 & 15/12/2018.

return pertaining to the period prior to 01/06/2015 but filed

after 01/06/2015 and processed after 01/06/2015 attract the

14 amended provisions of section 200A read with section 234E

inserted w.e.f 01/06/2015 which is a specific provision for levy of

fee for default in furnishing the TDS statements belatedly.

the 4th Quarter of FY 2015-16 & 2016-17 in Form No. 26Q & 24Q

on 12/02/2018. Accordingly, the Ld. AO vide order passed U/s.

200A, imposed late fees U/s. 234E of the Act. In these cases

since the assessee has filed its TDS returns on 12/02/2018

which is after the date of insertion of specific provision for levy of

late fee U/s. 234E ie., 01/06/2015. Therefore, the action taken

by the Ld. AO in levying the late fee for default in furnishing the

TDS statement beyond the stipulated time is in accordance with

law. Therefore, we have no hesitation to come to a conclusion

that the orders of the Ld. Revenue Authorities invoking the

provisions of section 234E in order to levy late fee for default in

furnishing the TDS statement beyond the stipulated time is in

accordance with law and accordingly the grounds raised by the

assessee are hereby dismissed.

dismissed.

Pronounced in the open Court on the 15th December, 2022.

Sd/- Sd/- (एस बालाकृ�णन) (दु�वू� आर.एल रे�डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सद�य/ACCOUNTANT MEMBER �या�यकसद�य/JUDICIAL MEMBER Dated :15.12.2022 OKK - SPS आदेश क� ��त�ल�प अ�े�षत/Copy of the order forwarded to:- 1. �नधा�रती/ The Assessee– Mohammed Vaziruddin Educational Society, D.No. 75-6-12, Prakash Nagar, Rajahmundry, Andhra Pradesh. 2. राज�व/The Revenue –Income Tax Officer, 4th & 5th Floor, Shiva Towers, D.No. 46-20-15, Danavaipeta, Rajamahendravaram. 3. The Principal Commissioner of Income Tax, 4.आयकर आयु�त (अपील)/ The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, �वशाखापटणम/ DR, ITAT, Visakhapatnam 6.गाड� फ़ाईल / Guard file

आदेशानुसार / BY ORDER

Sr. Private Secretary ITAT, Visakhapatnam