Case Law Details
Sh. Gurpreet Singh Vs ACIT (ITAT Chandigarh)
ITAT held that where the lapse came about due to a mere technical error, like the one in the present case, i.e., inadvertent wrong filing of TDS Statement, i.e., in Form No. 26QB, rather than in the applicable Form No. 27Q, there is no case for levy of late filing fee u/s 234E of the Act.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
This is an appeal filed by the assessee against the order dated 28.04.2022 of the Ld. Commissioner of Income Tax (Appeals), [herein referred to as ‘CIT(A)’], for assessment year 2016-17, conforming the charging of late filing fee of Rs. 3,64,600/- u/s 234E of the Income Tax Act, 1961 (hereinafter called ‘the Act’) in respect of late filing of TDS statement in Form No. 27Q.
2. The following grounds have been raised by the assessee in this
1. That on the facts, circumstances and legal position of the case, the Worthy CIT(A), NFAC in Appeal No. NFAC/2015-16/10020753 dated 28.04.2022 has erred in passing that order in contravention of the provisions of S. 250 of the Income Tax Act, 1961.
2. That on facts, circumstances and legal position of the case, the Worthy CIT(A), NFAC has erred in confirming the charging of late filing fee of Rs. 3,64,600/- charged u/s 234E in respect of late filing of TDS statement even when the appellant had filed TDS statement in time but inadvertently in Form 26QB and on realizing the mistake filed the statement in Form 27Q but now it was obviously filed late.
3. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.
3. The facts are that the assessee is engaged in the business of architecture. The assessee purchased a property for Rs. 29,04,000/- on 27.11.2015 from one Sh. Salinder Singh, a NRI (PAN: EYDPS8237Q) and deducted the TDS of Rs. 5,98,224/- at the prescribed rate, i.e., @ 20.60 percent and deposited the same on 07.12.2015. The assessee filed the TDS statement in Form 26QB on 07.12.2015, instead of in Form 27Q. On coming to knowledge that the deductee was not getting full credit of the TDS deposited, the assessee had made request for refund of TDS on 21.01.2020, which was refunded on 22.12.2020, and the assessee again deposited the same on 29.12.2020 and filed the TDS Return on 11.01.2021 in Form 27Q, as applicable. The Income Tax Department had paid the interest of Rs. 34,151/- . The CPC, TDS imposed the interest on late payment of Rs.4,95,112/- and late filing fees u/s 234E at Rs.3,64,600/-.
4. By virtue of the impugned order, the Ld. CIT(A) deleted the imposition of interest on late payment, but confirmed the chargeability of late filing fee of Rs. 3,64,600/-.
5. Aggrieved, the assessee is in appeal before us.
6. The Ld. Counsel for the assessee has contended that the assessee had purchased the property from S. Sailender Singh,(a NRI having PAN: EYDPS8237Q) for Rs. 29,04,000/- on 27.11.2015 and deposited the TDS at the applicable rate, i.e., 20.60% on 07.12.2015 and filed the TDS return inadvertently, mistakenly, in Form No. 26QB, well in time on 07.12.2015, instead of in Form No. 27Q, u/s 195 of The Income Tax Act, 1961; that when the assessee came to know the facts and confirmed the procedure, he had applied for the refund of the TDS deposited earlier so that he could file the TDS statement in the prescribed Form No. 27Q, which TDS was refunded by the Income Tax Department on 22.12.2020; that the assessee again deposited the same without taking much time, on 29.12.2020; and that the TDS statement in Form No. 27Q was also filed on 11.01.2020 but the Ld. CIT(A), NFAC confirmed the late filing fee u/s 234E of Rs. 3,64,600/-.
7. Reliance has been placed on the decision of the Ahmedabad Bench of the Tribunal in ‘M/s G.B Builders, Ahmedabad Vs. ACIT’ (ITA No. 626 /Ahd/2018, for assessment year 2015-16), order dated 25.4.2022.
8. Per contra, the Ld. DR has placed reliance on the impugned order. Further, she sought to rely on the decision of the Jaipur Bench of the Tribunal in the case of ‘Block Development Officer, Chaksu, Jaipur Vs. ACIT ‘ (ITA Nos. 891, 892, 893, 894, 895 & 896/JP/2019), wherein, it has been held that late fee u/s 234AE of the Act is mandatory and consequential and so, it cannot be deleted on the ground of reasonable
9. Heard. The facts are not disputed. The question is as to whether the Ld. CIT(A) has correctly confirmed the levy of late filing fee of Rs. 3,64,600/- u/s 234AE of the Act. In doing so, the Ld. CIT(A) has relied on the decision of the Hon’ble Kerala High Court in the case of ‘Shree Narayana Guru Smaraka Sangam Upper Primary School Vs. Union of India / DCIT, CPC Ghaziabad’, in WP(C) No. 30229 of 2013, dated 14.12.2016. In this case, it has been held that there is no element of quid pro quo for collecting late fee, and that by incorporating section 234E, late fee has become mandatory. There is no opposition to this view. However, there also cannot be any denial that where the lapse came about due to a mere technical error, like the one in the present case, i.e., inadvertent wrong filing of TDS Statement, i.e., in Form No. 26QB, rather than in the applicable Form No. 27Q, there is no case for levy of late filing fee u/s 234E of the Act.
10. The Ld. CIT(A) has also sought to rely on the decision of the Hon’ble Bombay High Court in the case of ‘Rashmikant Kundalia and Others Vs. Union of India’, 373 ITR 268 (Bom.), wherein, it was held that section 234E of the Act is not punitive in nature but a fee which is fixed charge for the extra service which the Department has to provide due to late filing of TDS statements. Again the proposition laid down cannot be controverted. However, this decision too does not deal with the facts at hand. It is only l that it was due to inadvertent error that the TDS statement was filed in the wrong Form. Had it not been so, there would not have been any question of levy of interest u/s 234E of the Act, which was deleted by the Ld. CIT(A) himself.
11. The Ld. CIT(A) has not also taken into consideration the fact that had the intention of the assessee been otherwise, it would not have deposited the entire TDS amount. Mere technical breach cannot lead to the assessee being penalized.
12. The Ld. CIT(A) has further not considered the fact that actually, no loss has been caused to the Revenue.
13. The case of ‘M/s G.B Builders Vs. ACIT’ (supra) is to the same Therein also, it was held that a mere technical inadvertent error did not invite levy of late filing fee u/s 234E of the Act.
14. The case of ‘Block Development Officer, Chaksu, Jaipur Vs. ACIT’ (supra), on the other hand, is not of much aid to the Department. There, the assessee had not filed any TDS Statement at all and it was on the facts of that particular case, that the Tribunal has confirmed the levy of late filing fee u/s 234E of the Act.
15. In the above facts and circumstances, finding merit in the grievance sought to be raised by the assessee by way of the Grounds of appeal taken, the same is accepted. The order under appeal is, therefore, reversed.
16. In the result, the appeal is allowed.
Order pronounced on 15.09.2022.
