Case Law Details

Case Name : P3P Ventures (P) Ltd. Vs DCIT (ITAT Delhi)
Appeal Number : ITA.Nos. 7593, 7494, 7595, 7596, 7597 & 7598, 7599, 7600/Del./2017
Date of Judgement/Order : 28/05/2018
Related Assessment Year : 2014-2015 & 2015-2016
Courts : All ITAT (5948) ITAT Delhi (1348)

P3P Ventures (P) Ltd. Vs DCIT (ITAT Delhi)

Conclusion: When TDS returns/statements had been filed by assessee for each quarter online and orders had been served upon assessee online for payment of the late fees, assessee was not justified in contending that it had not received any communication in respect of late fee imposed under section 234E neither any such communication came to the knowledge prior to the notice of outstanding demand issued by DCIT (TDS).

Held: Assessee filed the TDS return/statements quarterly through online belatedly. A.O imposed late fees under section 234E for delay in filing the quarterly TDS statements as per Section 200A. Assessee submitted that after filing of the TDS returns, it had not received any communication in respect of late fee imposed under section 234E neither any such communication came to the knowledge prior to the notice of outstanding demand issued by DCIT (TDS). It was held levy of fee under section 234E for default in furnishing statements was mandatory. Assessee used the same email ID which had been used for filing of the return for each quarter in the year under reference. When TDS returns/statements had been filed by assessee for each quarter online and orders had been served upon assessee online for payment of the late fees, then the assessee was required to take steps within the reasonable period as per law.  Thus, the appeals were not maintainable before Tribunal.

FULL TEXT OF THE ITAT JUDGMENT

All the appeals by assessee are directed against the common order of the Ld. CIT(A)-2, Gurgaon, dated 09th October, 2017, for A.Ys. 2014-2015 and 2015-2016, confirming the order of levying late fees under section 234E of the I.T. Act for late furnishing of TDS statements for different quarters in both assessment years under appeals.

2. Briefly, the facts of the case are that the Ld. CIT(A) decided all the appeals together and noted that all the appeals are delayed appeals having delay of 686 to 860 days, The details of delay of each of these appeals are mentioned at page-2 of the impugned order.

3. The assessee submitted before the Ld. CIT(A) that after filing of the TDS returns of the above period, the assessee has not received any communication from AO TDS in respect of late fee imposed under section 234E neither any such communication came to the knowledge of the assessee prior to the notice of outstanding demand reference no.6926 of Rs. 2,88,870/- issued by DCIT (TDS), Gurgaon, requiring the reply by 06.02.2017. The assessee approached the notice issuing authority with the letter filed on 01.03.2017 for issue of certified copies of the order through which the impugned demand has been created as the assessee is not aware of any such demand so that the appeal can also be filed for the same. The A.O. told that the order is available online so the same can be down loaded at the end of the assessee. The assessee downloaded the orders on 02.03.2017 and filed the appeals immediately before Ld. CIT(A). Therefore, same are within time. However, the assessee on safe side filed the applications for condonation of delay. The Ld. CIT(A), considering the explanation of assessee, dismissed the appeals of the assessee holding them to be time barred. The Ld. CIT(A) also held that the demand raised under section 234E is not appealable, therefore, the appeals of the assessee are not maintainable. The appeal of assessee was accordingly dismissed. The findings of the Ld. CIT(A) in paras 2 to 3 of the impugned order are reproduced as under :

“2. I have carefully considered the appellant’s request for condonation of delay. It is evident that there is a delay almost 2 to 3 years in filing these appeals. The contention of the appellant that the order imposing late fee was not received by the appellant is without any merit. These orders are served through online and there is no reason why these orders did not reach the appellant. This issue was discussed with the AR of the appellant during the course of appellate proceedings. It was also pointed out that the same E-mail ID must have been used by the appellant for filing return of each of the quarters in the years after the periods under reference and therefore the appellant could not claim that he had not used E-mail ID at which the orders were sent. The contention of the appellant with regard to the reasons for delay is therefore not acceptable. The sufficient cause for delay can be one which is beyond the control of the petitioner. The cause which can be avoided by due care and attention could not be a sufficient cause as held by the Hon’ble Supreme Court in the case of Ramlal V/s Rawa Coal Field Ltd. AIR 962 Supreme Court 361. Reference in this regard may be made to the case of K.G.N.M.M.W. Educational Research & Analysis Society v. Income-tax Officer, Jhalawar [2015] 54 taxmann.com 329 (Jaipur – Trib.) Reference in this regard may also be made to the decision of the Hon’ble Mumbai Tribunal in the case of ITO V/s SG Jaheri and Company (2004) 89 TTJ (Mumbai TRIB) 895. Reference in this regard may also be made to the decision of the Hon’ble Punjab & Haryana High Court in the case of CIT Vs Ram Mohan Kabra 257 ITR 773 in which even delay of few days was not condoned. In this case, it was held as under:

“Whether the Legislature spells out a period of limitation and provides for power to condone the delay as well, such delay can be condoned only for sufficient and- good reasons supported by cogent and proper evidence. It is a settled principle of law that provisions relating to the specified period of limitation must be applied with their rigour and effective consequences. Authorities exercising judicial powers in discharge of their statutory functions, inevitably have to be vested with some element of discretion in exercise of such powers. Merely because another view was possible or permissible on the same facts and circumstances, that per se. would not make such controversy a ‘question of law”. So long as such decision of the authority is in conformity principle of law and is apparently a prudent one, the court would normally be reluctant to interfere in such exercise of discretion. Once the concerned authority applies its mind and declines to condone the delay in filing the appeal for good and appropriate reasons, it cannot give rise to a question of law.

Held : that specific reasons had been given by the Tribunal for refusal to Condone the delay in filing the appeal which were not only logical but reflected the conduct of the Department before the authorities in not producing the record inspite of seeking time. No question of law arose from the order.”

2.1. Keeping in view the aforesaid facts and the case laws discussed above, the appellant’s request for condonation of delay is rejected.

2.3. Moreover, demand raised u/s 234E is not appealable before CIT(A). Reference in this regard may be made to the decision of the Hon’ble High Court of Bombay in the case of Rashmikant Kundalia Vs Union of India 2015 (54) Taxman.com 200 (Bombay). In this order dated 06/02/2015, Hon’ble High Court while considering the issue of constitutional validity of section 234E in para 18 of the order held as under:-

“18. We are therefore clearly of the view that the fee sought to be levied under section 234E of the Income Tax Act, 1961 is not in the guise of a tax that is sought to be levied on the deductor. We also do not find the provisions of section 234E as being onerous on the ground that the section does not empower the Assessing Officer to condone the delay in late filing of the TDS return/statements, or that no appeal is provided for from an arbitrary order passed under section 234E. It must be noted that a right of appeal is not a matter of right but is a creature of the statute, and if the Legislature deems it fit not to provide a remedy of appeal, so be it. Even in such a scenario it is not as if the aggrieved party is left remediless. Such aggrieved person can always approach this Court in its extraordinary equitable jurisdiction under Article 226 / 227 of the Constitution of India, as the case may be. We therefore cannot agree with the argument of the Petitioners that simply because no remedy of appeal is provided for, the provisions of section 234E are onerous. Similarly, on the same parity of reasoning, we find the argument regarding condonation of delay also to be wholly without any merit.”(emphasis supplied)

In view of the aforesaid order of the Hon’ble Bombay High Court the appeal of the appellant is not maintainable.

2.3. Further, it has been held by the Hon’ble High Court of Gujarat in the case of Rajesh Kourani V/s Union of India (2017) 83 taxman.com 137 that section 200A is a machinery provision that provides for a mechanism for processing and computing besides others, fee payable u/s 234E for late filing of statement. It cannot override or overrule the charging provision like section 234E. In this case, the Hon’ble High Court had considered the various decisions of the Hon’ble ITATs as also the decision of the Hon’ble Karnataka High Court in the case of Fatheraj Singvi V/s Union of India (2016) 73 taxman.com 252. The Hon’ble High Court held that even in the absence of section 200A of the Act with the introductions of section 234E, it was always open for the revenue to demand and collect the fee for late filing of the statements. Thus, the view that without a regulatory provision being found in section 200A for computation of fee, the fee prescribed u/s 234E cannot be levied is unacceptable.

2.4. The appeals filed being delayed appeals are not maintainable. All these appeals are accordingly dismissed.

3. In the result, the appeals of the appellant are dismissed.”

4. I have considered the rival submissions and perused the material available on record. Section 234E of the I.T. Act provides as under :

“234E. Fee for default in furnishing statements.—(1) Without prejudice to the provisions of the Act, where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.

(2) The amount of fee referred to in sub-section (1) shall not exceed the amount of tax deductible or collectible, as the case may be.

(3) The amount of fee referred to in sub-section (1) shall be paid before delivering or causing to be delivered a statement in accordance with sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C.

(4) The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.”.

4.1. This provision provides for levy of fees where a person fails to deliver or cause to be deliver a statement within the time prescribed in Section 200(3) of the I.T. Act or provisio to sub-section (3) of Section 206C of the I.T. Act. This provision is without prejudice to the provisions of the Act. Therefore, according to Section 234E of the I.T. Act, fee shall be leviable for default/late in furnishing statements as provided by Law. The assessee admittedly filed the TDS return/statements quarterly through online belatedly. The A.O, therefore, imposed late fees under section 234E of the I.T. Act for delay in filing the quarterly TDS statements as per Section 200A of the I.T. Act. Levy of fee under section 234E for default in furnishing statements is mandatory. No appeal provided against order under section 234E before Ld. CIT(A). According to submissions of the assessee, the A.O. intimated that orders levying fees under section 234E is available on line. Therefore, Ld. CIT(A) correctly noted that assessee used the same email ID which have been used for filing of the return for each quarter in the year under reference. Therefore, Ld. CIT(A) rightly held that the impugned orders have been served upon assessee through online and there is no reason why the orders did not reach the assessee. The contention of assessee has been rightly rejected by the Ld. CIT(A). No sufficient cause have been explained for the delay in filing the appeals before the Ld. CIT(A). Therefore, Ld. CIT(A) correctly held that appeals are time barred and same were accordingly dismissed. It was also noted by the Ld. CIT(A) that the impugned orders were challenged for levy of the fees under section 234E of the I.T. Act, which orders are not appealable before him. In support of his findings, the Ld. CIT(A) relied upon the decision of Hon’ble Bombay High Court in the case of Rashmikant Kundalia vs. Union of India (2015) 54 taxmann.com 200 (Bom.), which have not been rebutted by the assessee. Since the impugned orders are not appealable before Ld. CIT(A), therefore, there is no question for the department serving the impugned orders separately upon the assessee when same are served online. When TDS returns/statements have been filed by assessee for each quarter online and orders have been served upon assessee online for payment of the late fees, then the assessee is required to take steps within the reasonable period as per law. When the appeals are not maintainable before Ld. CIT(A), the same would also be not maintainable before the Tribunal. Considering the above discussion in the light of provisions of Law and in the light of findings recorded by the Ld. CIT(A), I do not find any reason to interfere with the order of the Ld. CIT(A). I confirm the order of Ld. CIT(A) and dismiss all the appeals of the assessee.

5. In the result, all the appeals of the assessee are dismissed.

Order pronounced in the open Court.

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