RIMMALPUDI BHASKARA PATTABHI RAMANA CHOUDARY,RAJAHMUNDRY vs. INCOME TAX OFFICER, TDS WARD-1, RAJAHMUNDRY

PER DUVVURU RL REDDY, Judicial Member :

All the captioned appeals are filed by the assessee against the orders of the Ld. Commissioner of Income Tax (Appeals) [Ld. CIT(A)], National Faceless Appeal Centre (NFAC), Delhi in various orders dated 26/12/2022; 27/12/2022 & 04/01/2023 for the AYs 2013-14 to 2016-17. 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.

I.T.A. No.46 TO 62/Viz/2023

(AY: 2013-14; 2014-15 & 2015-16)

appeals pertaining to AY 2013-14, 2014-15 and 2015-16.

Therefore, for the sake of reference the grounds of appeal raised

in ITA No.46/Viz/2023 are extracted herein below:

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

46/Viz/2023) are that the assessee is an individual and a

Doctor. The assessee is the proprietor of Apex Hospitals,

Rajahmundry. For the FY 2012-13 relevant to the AY 2013-14 the

assessee filed the Quarterly TDS returns belatedly. These

quarterly statements are processed and the Intimations U/s.

200A of the Act were issued to the assessee wherein the Ld. AO

levied late filing fee u/s. 234E of the Income Tax Act, 1961 and

raised the demand. Aggrieved by the order of the Ld. AO, the

assessee preferred an appeal before the Ld. CIT(A).

average inordinate delay of 976 days in filing the appeal before

the Ld. CIT(A)-NFAC. After considering the submissions of the

assessee on the issue of condonation of delay, the Ld. CIT(A)-

NFAC discussed the issue at length and concluded (vide para

6.21 of his order) that in the absence of sufficient cause for huge

delay, dismissed the appeal of the assessee without discussion on

merits or on any other aspect. Aggrieved by the order of the Ld.

CIT(A)-NFAC, the assessee is in appeal before the Tribunal.

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 case (ITA No.46/Viz/2023), the due date for filing the

TDS returns is 15/10/2012 (For Q2 of FY 2012-13) and the TDS

returns were filed on 20/06/2013 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

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

further submitted that since the Ld.CIT(A) relied only the

judgments of the Hon’ble Bombay High Court in the case of

Rashmikat Kundalia (supra) as well as the judgment of the

Hon’ble Gujarat High Court in the case of Rajesh Kourani vs.

Union of India (supra) and ignored the ratio laid down 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 decisions of various Benches of the Tribunal

which is against the spirit and the ratio laid down by the Hon’ble

Supreme Court in the case of CIT vs. M/s. Vegbetable Products

Ltd (1973) 88 ITR 192 (SC) wherein it was held that when there is

difference of opinion between different High Courts on the an

issue, the one which is in favour of the assessee needs to be

followed. 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 decision of the Ld. AO who imposed the levy /

imposition of late fee u/s. 234E of the Act. It is the submission

of the Ld. DR that since the assessee filed its TDS statement

beyond the stipulated time as per the TDS provisions, the late fee

levied on account of default in furnishing the statements beyond

the prescribed time limit is as per the provisions of the IT Act,

1961. 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 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.

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 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

assessee filed his TDS statement for the Quarter-2 of FY 2012-13

on 20/06/2013 whereas the due date for filing the TDS returns is

15/10/2012. 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

of the Act. On appeal, the Ld. CIT(A) did not condone the delay in

filing the appeal before the Appellate Authority and confirmed the

action of the Ld. AO and dismissed the assessee’s appeal.

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, I am 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.”

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. 200A of the Act. Since I hold that the no late

filing fee is to be charged, the consequential interest charged

U/s. 220(2) of the also does not survive. Thus, the grounds

raised by the assessee are allowed.

of appeal as well as the issue raised in these appeals are

identical to that the of the grounds and the issue raised in the

appeal ITA No. 46/Viz/2023, which is adjudicated in the above

paragraphs of this order, my decision given thereof mutatis

mutandis applies to the present appeals (ITA Nos. 47 to

62/Viz/2023) also. Accordingly, the appeals filed by the

assessee are allowed.

are allowed.

ITA Nos. 63 to 67/Viz/2023 (AY: 2016-17)

CIT(A)-NFAC, Delhi dated 04/01/2023 arising out of the orders passed

u/s. 200A of the Act for the AY 2016-17.

his appeals:

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

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

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

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.

taken as lead appeal considering the similarity of the facts in all

the instant appeals, the assessee filed his TDS statement for the

Quarter-4 of FY 2015-16 on 07/06/2016 whereas the due date

for filing of the TDS returns is 15th May, 2016. Accordingly, the

Ld. AO vide order passed U/s. 200A, dated 10/06/2016 imposed

a late fees U/s. 234E of the Act. In this case since the assessee

has filed its TDS returns on 07/06/2016 whereas the due date is

15th May, 2016 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. As well, the Ld. CIT(A), NFAC

without discussing the issue on merits, dismissed the assessee’s

appeal on the issue of condonation of delay. Therefore, I 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.

Pronounced in the open Court on 31st March, 2023.

Sd/- (दु�वू� आर.एल रे�डी) (DUVVURU RL REDDY) �या�यकसद�य/JUDICIAL MEMBER Dated : 31/03/2023 OKK - SPS आदेश क� ��त�ल�प अ�े�षत/Copy of the order forwarded to:- 1. �नधा�रती/ The Assessee– Rimmalpudi Bhaskara Pattabhi Ramana Choudary, D.No.75-6-23, Prakash Nagar, Rajahmundry. 2. राज�व/The Revenue – Income Tax Officer, TDS Ward-1, Income Tax Office, D.No.46-20-15, Danavaipeta, Rajahmundry. 3. The Principal Commissioner of Income Tax,

4.आयकर आयु�त (अपील)/ The Commissioner of Income Tax (Appeals), 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