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Income Tax Appellate Tribunal, PANAJI BENCH, PANAJI
Before: HON’BLE SHRI S. S. GODARA & SHRI G. D. PADMAHSHALI
PER G. D. PADMAHSHALI, AM; The assessee by the present appeal challenged the orders of Commissioner of Income Tax (Appeals), Mangalore [for short ‘CIT(A)’] passed u/s 250 of the Income-tax Act, 1961 [for short ‘the Act’], which ascended out of order of intimation processed by the ACIT, CPC-TDS, Ghaziabad [for short ‘AO’] for the assessment year 2015-16 [for short ‘AY’].
The grounds raised
in the present appeal are inconsonance with rule
8. Income Tax Appellate Tribunal Rules, 1963 [for short ‘ITAT, Rules’] for the reason without reproducing them in verbum, it shall purposive to state that, ITAT-Panaji Page 1 of 7
Moodabidre Town Municipality ITA No. 002/PAN/2020 present grievance seeks to adjudicate sole and substantive issue of authorisation of levy of fees u/s 234E for a default in furnishing statement u/s 200(3) in the absence of enabling provision to any statement/assessment year.
Succinctly stated facts of the case are; the appellant assessee for quarter- Q4 delivered 26Q statements for AY 2015-16 on 30/12/2016 i.e. failed to deliver the same within specified time limit in terms of sub-section (3) of section 200. Consequently, against such default, the Ld. AO levied/charged late filing fees u/s 234E of the Act. Aggrieved by the said levy, the assessee carried the matter unsuccessfully before the first appellate authority [for short ‘FAA’], for the reason the appellant is before this Tribunal challenging the very levy of late fees in the absence of authority and enabling provisions.
In the absence of the assessee, with able assistance from the Ld. DR we proceeded to adjudicate the matter ex-parte on merits u/r 24 of ITAT, Rules; and subject to the provisions of rule 18 (supra), perused material placed on record, case laws relied upon by the appellant as well the respondent and duly considered the facts of the case in the light of settled legal position which are forewarned to parties present.
It shall aid to state that, a person liable to deduct any sum under the provisions of chapter XVII of the Act, is under obligation to deliver or furnish a statement u/s 200(3) of the Act within the due date prescribed therein and in the event of default, and is exposed to section 234E of the Act. Although the levy of fees u/s 234E for delay in furnishing statement has been brought into ITAT-Panaji Page 2 of 7
Moodabidre Town Municipality ITA No. 002/PAN/2020 statute w.e.f. 1st July, 2012, the enabling provision of section 200A(1)(c) authorising such levy came into force w.e.f. 1st June, 2015 by Finance Act, 2015, consequently the fees levied for any default prior thereto being sine auctoritate hence unsustainable in the eyes of law. For the sake brevity the applicability of provisions can be adumbrated as;
Provision Enabling for Date of Assessment Year Processing of Statement Effective Levy Charging of Fees Statement u/s furnished runs from u/s 234E 200A(1)(c) u/s 200(3) (Delay) By 31st May, - Any AY, upto 2015 Not Present Not Provided 2012-13 After 1st June, 1st June, 2015 2015 By 31st May, - 2015 2013-14 to Enacted Not Provided 2015-16 After 1st June, 1st June, 2015 2015 - - From 2016-17 Present Provided After 1st June, 1st June, 2015 2015 6. Thus any levy of fees u/s 234E for delayed furnishing in the absence of enabling provision of section 200A(1)(c) of the Act suffers from infirmity and finds force w.e.f. 01/06/2015 in the light of decision of Hon’ble Jurisdictional High Court of Karnataka in ‘Fatheraj Singhvi & Ors Vs UOI’ reported in 289 CTR 602. [Equivalent citation 73 Taxmann.com 252]
In the extant appeal, for quarter-Q4, a ‘26Q statement’ for AY 2015-16 was delivered/furnished on 30/12/2016 by the appellant as against due date of filing 15/05/2015. Thus aforestated statement admittedly delivered beyond the due date prescribed under the Act, consequently the Ld. AO invoking provisions of section 200A(1)(c) levied the fees ₹1,19,000/- for 595 days of default u/s 234E of the Act, computed from the expiry of due date.
ITAT-Panaji Page 3 of 7
Moodabidre Town Municipality ITA No. 002/PAN/2020
In first appellate proceedings, the Ld. CIT(A) after heedful consideration of applicable provisions and submission of the appellant, vide its detailed discussion laid at para 5.7 onwards (placed at page 7-9) has in principle confirmed the levy w.e.f. 01/06/2015 following judicial precedents laid by the Hon’ble Jurisdictional High Court of Karnataka in ‘Fatheraj Singhvi & Ors Vs UOI’ (supra); and is placed as under; ‘5.7 Section 234E is a charging section and is effective from 01.07.2012. As can be seen from the amendment by the Finance Act, 2015, the enabling machinery provision to levy late filing fee u/s.234E, while processing of TDS statement u/s. 200A, was made effective from 01.06.2015. In effect thus, post 1st June 2015, in the course of processing of a TDS statement and issuance of intimation under section 200A, "fee, if any, shall be computed in accordance with the provisions of section 234E".
5.8 In the case of Fatheraj Singhvi Vs. Union of India (73 taxmann.com 252) (Kar), the jurisdictional Hon'ble High Court held as under: 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 (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 2001 for computation and intimation for the payment of fee under Section 234E could not be made in purported ITAT-Panaji Page 4 of 7
Moodabidre Town Municipality ITA No. 002/PAN/2020 exercise of power under Section 2001 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 2004, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest.
In view of the aforesaid observation and discussion, since the impugned intimation given by the respondent-Department against all the appellants under Section 2004 far as they are for the period prior to 1.6.2015 can be said as without any authority law. Hence, the same can be said as illegal and invalid.
5.9 Further, the Hon'ble Jurisdictional ITAT, Bangalore Bench 'SMC-C' Bangalore vide its order in to 475(Bang) 2018 dated 11-05-2018 in the case of The Senior Civil Judge & JMFC, Bantwal, held as under: "In the case of Fatheraj Singhvi & Others Vs. Union of India & Others (Supra). it was held by Hon 'ble Karnataka High Court that since die amendment in clauses (c) to O of section 200A(1) is w.e.f. 01-06-2015, intimation for payment Of fees is.234E cannot be made in purported exercise of powers is.2001 for the period of the A.S, prior to June 1. 2015. Hence, respectfully following this judgment. I delete the demands in all S quarters till 01-06-2015 but since in all these five quarters, the statement was filed by the assessee on 05-12- 2015 for 0.4 of A.Y.2014-15 and in August 2015 for all remaining four quarters of 1.Y. 2015-16, the late fees demanded by the revenue includes some fees for the period after 01-06-2015 also and hence, the late fees for the period from 01-06- 2015 is payable but not for the period up to 31-05-2015. Accordingly, I set aside the order of CIT(A) in all these five quarters and restore the matter back to 10 with the direction that he should quantity the amount of late fees to be paid for each of these five quarters for the ITAT-Panaji Page 5 of 7
Moodabidre Town Municipality ITA No. 002/PAN/2020 delay from 01-06-2015 till the actual date of filing of the statement for the respective quarter. The assessee gets part relief"
5.10 I have gone through the section 200A prior to and after amendment and also the case laws relied on by the AR. The appellant filed the TDS statement on 30.12.2016 (after 01.06.2015). In view of the above discussion and binding decisions, I hereby direct the AO to quantify the amount of late fees to be paid us. 234E for the delay from 01-06-2015 till the actual date of filing of the statement for the quarter, as mentioned below: Due date of Actual date of filing Late fee levied FY Quarter filing regular statement (Rs.) 2014-15 26Q/04 15-05-15 30-12-16 1,19,000/-
5.10 As per the Karnataka High Court decision (supra), if any deductor has already paid the fee, the deductor is not permitted to reopen the said question unless payment is established to be made under protest. In the appeal for 26Q- Q4, it is found that the appellant already paid entire late fee of Rs. 1,19,000/-. The AO is directed to follow the direction of Jurisdictional High Court while giving effect to this order.
5.11 In effect, the appeal is partly allowed.’ (Emphasis supplied)
We have given our thoughtful consideration to the facts of the case and after considering applicable provisions of law in the light of foregoing binding judicial precedents over the decision relied by the appellant, we do not find ITAT-Panaji Page 6 of 7
Moodabidre Town Municipality ITA No. 002/PAN/2020 any infirmity with the action of Ld. NFAC in principle confirming the levy of fees u/s 234E of the Act for the period of delay attributable from 01/06/2015 till the date of furnishing the impugned statement under consideration. Resultantly all seven grounds rendered meritless, thus stands dismissed.
As a shield of last resort to the appellant, the Ld. DR candidly submitted that, the delay in filing statement even if considered attributable to technical glitches encountered by the appellant and same cannot form a reasonable cause. The Ld. DR himself further solidified that, the provision of section 234E is outside the umbrella of section 273B of the Act; therefore present default finds no shelter u/s 273B of the Act. Finding force in the argument of the Ld. DR, we countenanced the action of both the tax authorities below in levying late fee u/s 234E being mandatory and consequential in nature, therefore, the same cannot be deleted on the ground of reasonable cause too.
In result, the appeal of the assessee is DISMISSED. U/r 34 of ITAT Rules, order is pronounced in open court on this Friday 01st day of September, 2023.
-S/d- -S/d- S. S. GODARA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; ददनाांक / Dated : 01st day of September, 2023. आदेश की प्रनिनलनप अग्रेनषि / Copy of the Order forwarded to : 1.अपीलाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The CIT-(A) Mangalore 4. The Pr.CIT, Panaji 5. DR, ITAT, Bench, Panaji 6.गार्डफ़ाइल / Guard File. आदेशानुसार / By Order वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्यायादधकरण, पुणे / ITAT, Pune.
ITAT-Panaji Page 7 of 7