Batra Exports Vs DCIT (ITAT Chandigarh)
Introduction: The recent ruling by the Income Tax Appellate Tribunal (ITAT) Chandigarh in the case of Batra Exports Vs DCIT sheds light on the jurisdiction to levy fees under section 234E of the Income Tax Act, particularly concerning the period prior to June 1, 2015.
Detailed Analysis: The crux of the matter revolves around the retrospective or prospective nature of the amendment introduced by the Finance Act, 2015. Section 234E, which pertains to late filing fees for TDS returns, was amended to empower Assessing Officers (AOs) to levy fees from June 1, 2015, onwards.
The appellant, Batra Exports, challenged the imposition of fees by the DCIT (TDS), Ludhiana, arguing that the relevant TDS returns were filed before June 1, 2015. They contended that the amended law should only apply prospectively, excluding any period preceding June 1, 2015.
The ITAT, relying on precedents and legislative interpretation, upheld the appellant’s argument. It emphasized that the amendment granting AOs the authority to levy fees under section 234E should be construed prospectively. Therefore, any TDS returns filed before June 1, 2015, should not attract late filing fees under section 234E.
This decision aligns with previous rulings by various High Courts and the ITAT, establishing the prospective application of the amended law. The tribunal emphasized that it’s not a case of continued default post-June 1, 2015, warranting the imposition of fees.
Conclusion: The ruling in the Batra Exports Vs DCIT case clarifies the jurisdictional aspect of levying fees under section 234E of the Income Tax Act. It affirms that the amendment introduced by the Finance Act, 2015, operates prospectively, excluding liabilities arising before June 1, 2015. This decision provides clarity to taxpayers and reinforces the principle of prospective application of tax laws.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
Both the above appeals have been filed by the Assessee against the respective order of the Ld. CIT(A)/NFAC, Delhi each dt. 03/12/2021 pertaining to Assessment Year 2014-15.
2. Both the above appeals were heard together and are being disposed off by this consolidated order.
3. At the outset, it is noted that there is delay in filing both the appeals by a day. After considering the affidavit submitted by the assessee, we find that there was reasonable cause for the delay, the same is hereby condoned and both the appeals are admitted for adjudication.
4. In ITA No. 35/Chd/2022 for A.Y 2014-15 , the assessee has raised the following grounds of appeal:
“1. That on the facts and in the circumstances of the case and in law, the learned CIT(A), National Faceless Appeal Centre, Delhi erred in upholding the fee u/s 234E imposed on assessee by the DCIT (TDS), Ludhiana.
2. That on the facts and in the circumstances of the case and in law, the impugned notices u/s 200A of the Act for computation and intimation for payment of fee cannot be issued as the TDS returns relate to quarter ending before 01.06.2015. So, the fee imposed is liable to be quashed.
3. That not only TDS was paid before 01.06.2015 but also TDS Return was filed before 01.06.2015. So, the fee u/s 234E cannot be charged while processing the TDS Return. So, the fee imposed is liable to be quashed.
4. That on the facts and in the circumstances of the case and in law, the learned CIT(A), National Faceless Appeal Centre, Delhi erred in not following Para No. 47.3 and 47.20 of Circular No. 19 of 2015 Dated 27.11.2015 379 ITR (St.) 19 being Explanatory notes to the provisions of Finance Act. 2015 which clearly provides that this provision be applicable w.e.f. 01.06.2015 not to the earlier assessment yeas as the existing provisions of section 200A of Income tax Act. 1961 did not provide for determination of fee payable u/s 234 E of the Act at the time of processing of TDS statements. So, the appeal of the assessee is liable to be accepted. Even this Circular was not distinguished and was not referred to in the decision. So, the fee imposed is liable to be quashed.
5. That on the facts and in the circumstances of the case and in law, the learned CIT(A), National Faceless Appeal Centre, Delhi erred in, not following the judgment of Hon’ble Karnataka High Court in the case of’ Fatheraj Singhvi & Others vs UOI reported at 289 CTR 602, which is higher in authority than ITAT. Reliance is also placed on UOI vs Kamlaksmi Finance Ltd AIR 1992 SC 711, directly on the issue, for judicial discipline. Even, this judgment was not distinguished and was not referred to in the decision. So, the fee imposed is liable to be quashed.
6. That any other relief may kindly be granted to the assessee to whom he is found entitled at the time of hearing of appeal.”
5. Similar grounds of appeal have been taken by the assessee in ITA no. 38/CHD/2022.
6. During the course of hearing, the Ld. AR submitted that the matter may be decided based on the written submission submitted on behalf of the assessee and the contents thereof read as under:
“1. That these appeal were filed on 02.02.2022 by assessee against the order passed by CIT(A), NFAC, Delhi vide order Dated 03.12.2021.
Brief Facts:
2. That the brief facts of the case are that the assessee is a partnership firm and the person responsible is a partner of Firm Batra Exports, Jalalabad West and filed Form No. 26Q (2nS quarter) (01.07.2013 to 30.09.2013) for interest on 03.01.2015 and Form No. 26Q (4th quarter) (01.01.2014 to 31.03.2014) for interest on 02.01.2015. That the above returns were filed before any notice issued by department but voluntarily and while processing TDS returns the AO charged fee u/s 234E for filing late TDS returns.
That the late fees detail for Form No. 26Q is as under:
