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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
Both the appeals have been filed by the assessee against the order of the Ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi even dated 07.04.2022 in respect of Assessment Years 2018-19 & 2019-20 the Income Tax Act.
Facts are taken from in respect of Assessment Year 2018-19 as a lead case for discussion. The appellant is a development authority established under the Jammu & Kashmir Development Act, 1970 read with development Authority rules 1976 and is fully controlled by the Government of Jammu & Kashmir. The deductor had filed his TDS Quarterly statement of following Quarters as under:-
Delay TDS Due date of Actual date of Date of issue of Amount of Late days statement for filing TDS filing TDS Intimation Fees U/s 234E the Quarter statement statement
2nd 24Q 31-10-2017 02.11.2017 10.11.2017 400.00 2 2nd 26Q 31-10-2017 01.11.2017 18.11.2017 1 200.00 2nd 27EQ 15.10.2017 28.10.2017 03.11.2017 2400.00 12
4th 24Q 15.05.2018 31.08.2018 09.10.2018 92 18400.00
4th 26Q 15.05.2018 19.06.2018 02.07.2018 19 3800.00
TOTAL AMOUNT OF LATE FEE Rs 25,200/- 25,200/- for the delay in filing of Quarterly TDS statements in the intimations issued u/s 200A of the Act, for various quarters of filing for TDS statements in form 24Q, 26Q and 26EQ of the Financial Year 2017-18 (relevant to AY 2018-19) by the DCIT, CPC (TDS), Ghaziabad.
Aggrieved by the order imposing late fee u/s 234E by the DCIT, CPC (TDS), Ghaziabad, the appellant has filed this appeal with the ld. CIT(A) who has confirmed the levy of fee u/s 234E amounting to Rs. 25,200/- for the delay in filing the quarterly TDS statement in the intimation issued u/s 200A of the Act by observing vide paras 5.2 to 5.7 is as under:
“5.2 It is seen that the provision to compute fee as per section 234E in the intimation u/s 200A was provided for by Finance Act, 2015 and the same is effective from 01/06/2015. Therefore, no fees could be levied u/s 234E while issuing intimation u/s 200A before 01-06-2015 as power to charge/collect fees u/s 234E while issuing intimation u/s 200A was vested with revenue only on substitution of clause (c) to section 200A vide Finance act 2015 w.e.f. 01-06- 2015. However, AO is empowered to levy fees u/s 234E if intimation u/s 200A is issued after 01.06.2015 by virtue of the finance Act, 2015.
5.3 The Hon'ble ITAT Amritsar bench in the judgment in the Sibia Healthcare Private Limited vs. Deputy Commissioner of Income Tax has held that in the absence of the enabling provision under section 200A; no such levy could be affected before 1st June, 2015. The material facts of the said case is that there was admittedly a delay in filing of the TDS returns and during the processing of the TDS return, the Assessing Officer (TDS) raised a demand, by way of an 4 & 111/Asr/2023 Gulmarg Development Authority v. ITO(TDS) intimation dated 9th September 2013 issued under section 200A of the Act, for levy of fees under section 234 E for delayed filing of TDS statement. On this, assessee appealed to CIT (A). Aggrieved by the order of CIT (A), assessee appealed to the Tribunal.
Held: The Tribunal viewed that the issue in the said case was whether fees under section 234 E of the Income Tax Act for defaults in furnishing TDS statements shall be levied in intimation under section 200A of the Act. Prior to amendment, there was no enabling provision therein for raising a demand in respect of levy of fees under section 234E. Section 200A permitted computation of amount recoverable from, or payable to, the tax deductor after making the following adjustments: (a) After making adjustment on account of —arithmetical errors and —incorrect claims apparent from any information in the statement.(b) After making adjustment for interest, if any, computed on the basis of sums deductible as computed in the statement. Thus, the issue after amendment was whether 234E levy could be affected in the course of intimation under section 200A even before June 2015. Considering the issue, tribunal highlighted that no other provision enabling a demand in respect of this levy has been pointed out thus, in the absence of the enabling provision under section 200A; no such levy could be affected before 1st June. 2015. Hence, as intimation under section 200A, raising a demand or directing a refund to the tax deductor, shall be passed within one year from the end of the financial year within which the related TDS statement is filed. In the present case. TDS statement was filed on 19th February 2014 such a levy could only have been made within 31st March 2015 and as the time limit has elapsed and the defect is thus not curable even at this stage. Tribunal upheld the grievance of the assessee and deletes the impugned levy of fee under section 234E of the Act. Hence, concluded that the impugned levy of fees under section 234E is unsustainable in law. No late fees u/s 234E to be levied before June 2015 during proceeding under section 200A. Thus, it is clear that from 1st June 2015 in the course of processing of a TDS statement and issuance of intimation under section 200A, an adjustment could also be made in respect of the fees under section 234E. For any cases before June 2015 no such levy shall be applicable during intimation under section 200A. Thus, relief has been provided to all cases where before amendment, 234E was levied during proceeding u/s200A.
5.4 In the case of Smt. G. Indhirani, ITAT A Bench, Chennai has held that prior to there was no enabling provision in Section 200A of the Act for making
5 & 111/Asr/2023 Gulmarg Development Authority v. ITO(TDS) adjustment in respect of the statement filed by the assessee with regard to tax deducted at source by levying fee under Section 234E of the Act. However, after if assessee fails to pay the fee for the period of delay, then the assessing authority has all the powers to levy fee while processing the statement under section 200. The relevant portion of the order of the Hon’ble ITAT is reproduced below-
“8. The next contention of the assessee is that section 234E the Act says that the assessee ‘shall be liable to pay’ by way of fee, therefore, the assessee has to voluntarily pay the fee and the Assessing Officer has no authority to levy fee. The argument of the Ld. Counsel for the assessee is very attractive and fanciful. However, we do not find any substance in that argument. When Section 234E clearly says that the assessee is liable to pay fee for the delay in delivery of the statement with regard to tax deducted at source, the assessee shall pay the fee as provided under Section 234E(1) of the Act before delivery of the statement under Section 200(3) of the Act. If the assessee fails to pay the fee for the periods of delay, then the assessing authority has all the powers to levy fee while processing the statement under Section 200A of the Act by making adjustment after 01.06.2015."
5.5 Similarly, Hon’ble ITAT Delhi Bench in case of Samikaran Learning Pvt. Ltd (ITA Nos.4050 to 4054/Del./2016) and Hon'ble ITAT PUNE in case of Gajanan Constructions vs DCIT, CPC (TDS), (2016) 73 taxman.com 380 (Pune Trib.) has also held that the Assessing Officer is not empowered to levy the fees under section 234E of the Act by way of intimation issued under section 200A of the Act in respect of defaults before 01.06.2015.
5.6 In the case of Sri FatherajSinghvi vs Union of India [2016] reported in 289 CTR 602, the Hon’ble Karnataka High Court held as under:
“In view of the reasons recorded by us hereinabove, when the amendment made under Section 200A of the Act which has come into effect on 1.6.2015 is held to be having prospective effect, no computation of fee for the demand or the intimation for the fee under Section 234E could be made for the TDS deducted for the respective assessment year prior to 1.6.2015. Hence, the demand notices under Section 200A by the respondent-authority for intimation for payment of fee under Section 234E
6 & 111/Asr/2023 Gulmarg Development Authority v. ITO(TDS) can be said as without any authority of law and the same are quashed and set aside to that extent.” Thus, as per the judgement of the Hon’ble Karnataka High Court also the computation of fee for the demand or the intimation for the fee under Section 234E could be made for the TDS deducted for the respective assessment year only after 01.06.2015.
5.7 In view of the above discussions, it can be concluded that fee under section 234E can be levied only in respect of issuance of intimation under section 200A after 01/06/1015. For any case before 01/06/2015, no such levy can be made in the intimation under section 200A of the Act as the enabling provision was not present. In the present case, TDS Quarterly statements were filed after 01/06/2015. Thus, the AO was correct in levy of fee u/s 200A of the I T Act. Accordingly, I do not find any reason to interfere with the intimations issued by CPC (TDS). Therefore, all the grounds of the appeal of the appellant are dismissed.”
The ld. counsel for the assessee has submitted that the CIT(A) has passed the order in arbitrary manner in violation of principles of natural justice without giving assessee an opportunity of being heard vide paras 5.2 to 5.7 of the impugned order relying on judgment of various High Courts on the amendment made u/s 200A of the Act which is given into effect on 1st June, 2015 is held to be having prospective effect, no computation of fee for the demand or the intimation for the fee u/s 234E could be made for the TDS deducted for the respective Assessment Year prior to 01.06.2015.
He alleged that while framing the decision in para 5.9, the CIT(A) has dismissed the appeal that both the dates of filing the TDS quarterly statement and the date of filing of intimation is after 01.06.2015 without appreciated the merits of the case.
Per contra, the ld. CIT-DR supported the impugned order. He argued that the law is settled on the issue as decided in the appeal that from 1st June, 2015, in the course of processing of a TDS statement, in issuance of intimation u/s 200A an adjustment could also be made in respect of fee u/s 234E for cases subsequent to 1st June, 2015. Thus, the appellant assessee do not qualify for any relief as its cases are subsequent to the date of amendment where the levy of late fee u/s 234E of the Act has been enabled in processing of TDS statements u/s 200A of the Act.
We have heard the rival contention, perused the material on record, written submission and the impugned order. Admittedly, there was delay in filing of quarterly TDS statement in the intimation issued u/s 200A of the Act for the various quarters and for that TDS, CPC has imposed a late fee u/s 234E amounting to Rs. 25,200/- for the delay in filing the TDS statement. The ld. CIT(A) has condoned the delay in filing the appeal and after granting sufficient opportunity of being heard decided the appeal after considering the submission and judicial decision cited by the appellant
8 & 111/Asr/2023 Gulmarg Development Authority v. ITO(TDS) assessee on the merits of the case. The Ld. CIT(A) has stated therein that it is clear from the amendment brought in the Income Tax Act that from 1st June, 2015, in the course of proceedings of TDS statement and issuance of intimation u/s 200A, an adjustment could be made in respect of fee u/s 234E of the Act. Meaning thereby, the ld. CIT(A) has held that fee u/s 234E can be levied in respect of issuance of intimation u/s 200A after 01.06.2015 as the enabling provisions made in the law.
In the present case, undisputedly TDS quarterly statement filed after 01.06.2015. The law is settled on the issue as decided in the appeal that from 1st June, 2015, in the course of processing of a TDS statement, in issuance of intimation u/s 200A an adjustment could be made in respect of fee u/s 234E for cases subsequent to 1st June, 2015. Thus, the appellant assessee do not qualify for any relief as its cases are subsequent to the date of amendment in law. In view of that matter, the ld. CIT(A) was justified in confirming the finding of the AO in levy of fee u/s 234E of the Act.
Accordingly, we find no infirmity or perversity in the order of the ld. CIT(A) to the facts on the record and as such the order is upheld. identical to the issues and the fact in & 111/Asr/2023.
Therefore, our observation and finding giving in shall apply to the appeal in in mutatis mutandis. Ordered accordingly.
In the backdrop of the aforesaid discussion, both the captioned appeals are disposed of in the terms indicated as above.
Order pronounced in the open court on 18.07.2023