Case Law Details
Ajvin Infotech Pvt Ltd Vs DCIT (ITAT Delhi)
In the given case, two separate appeals by the same assessee are preferred against the common order of the CIT(A) pertaining to second quarter of F.Y. 2013-14 and third quarter of F.Y. 2013-14 .
The issue under consideration is whether penalty u/s 234E will be levied after filing of TDS return or not?
The assessee is having the intention that as per the provisions of Sec. 234E made applicable w.e.f. 1st July, 2012 states that “Amount of late fee shall be paid before delivering a TDS statement”. Thus, it means that any late fee should have been deposited just at the time of delivering TDS statement and not later than this. The authorized TIN-NSDL centre which accepted the TDS statement also accepted these without late fee, as well as the software utility of the TDS department itself accepted these without late fee. Once the TDS statement has been accepted without late fee, then such late fee cannot be recovered later on. TDS statement late fee cannot be recovered for F.Y. 2013-14, as it is not collected at the time of delivering TDS statement to the department.
But as per Finance Act, 2015, attention is drawn to your good self that with effect from 01.06.2015, the Parliament by way of amendment to Section 200A of the Act empowered the Assessing Officer to levy fee under Section 234E of the Act while processing under Section 200A of the Act.
Therefore, according to the Finance Act, 2015, prior to 01.06.2015, your good self had no authority to levy fee, if any, under Section 234E of the Act and thus levy of fee under Section 234E of the Act while processing the statement is beyond the scope of Section 200A of the Act.
In light of the effective date of amendment i.e. 01.06.2015, and considering the decision of the Hon’ble High Court of Karnataka, ITAT direct the Assessing Officer to delete the fee levied u/s 234E of the Act in both the appeals of the assessee.
In the result, both the appeals of the assessee pertaining to second quarter of F.Y. 2013-14 and third quarter of F.Y. 2013-14 are allowed.
FULL TEXT OF THE ITAT JUDGEMENT
These two separate appeals by the same assessee are preferred against the common order of the CIT(A) – 41, New Delhi, dated 27.01.2017 pertaining to A.Y 2014-15 relevant to second quarter of F.Y. 2013-14 and third quarter of F.Y. 2013-14 .
2. The common grievance of the assessee is that the ld. CIT(A) erred in confirming the levy of penalty u/s 234E of the Income tax Act, 1961 [hereinafter referred to as ‘The Act’ for short].
3. None appeared on behalf of the assessee in spite of notice issued nor there in any application for adjournment. Therefore, we decided to proceed ex parte.
4. Having heard the ld. DR who strongly supported the findings of the Assessing Officer. we have carefully perused the orders of the authorities below.
5. The main contention of the assessee, as culled out from the orders of the authorities below are that:
“7. As per the provisions of Sec. 234E made applicable w.e.f. 1st July, 2012 states that “Amount of late fee shall be paid before delivering a TDS statement”. Thus, it means that any late fee should have been deposited just at the time of delivering TDS statement and not later than this. The authorized TIN-NSDL centre which accepted the TDS statement also accepted these without late fee, as well as the software utility of the TDS department itself accepted these without late fee. Once the TDS statement has been accepted without late fee, then such late fee cannot be recovered later on. TDS statement late fee cannot be recovered for F.Y. 2013-14, as it is not collected at the time of delivering TDS statement to the department.
8. AS PER FINANCE ACT 2015 applicable w.e.f. 01.06.2015, , Sub-Sec. 200A is amended to provide that statement of tax deduction at source or correction statement made u/s. 200 shall be processed and sum deductible under Chapter XVII shall be computed after also taking into account the fee, if any, payable in accordance with the provisions of section 234E. The sum payable or refundable shall be determined after adjusting the aforesaid computed sum against any amount paid under section 200 or section 201 or section 234E and any amount paid otherwise by way of tax or interest or fee. ”
Referring to Finance Act, 2015, attention is drawn to your good self that with effect from 01.06.2015, the Parliament by way of amendment to Section 200A of the Act empowered the Assessing Officer to levy fee under Section 234E of the Act while processing under Section 200A of the Act.
Therefore, according to the Finance Act, 2015, prior to 01.06.2015, your good self had no authority to levy fee, if any, under Section 234E of the Act and thus levy of fee under Section 234E of the Act while processing the statement is beyond the scope of Section 200A of the Act.
- Thus, the demand raised by the Ld. Assessing officer which relates to the Section 234E which is charged as late filing of return charging Rs. 200 per day is unjustified and should be deleted.”
6. We have given thoughtful consideration to the orders of the authorities below. We find force in the written contentions of the ld. counsel for the assessee. The Hon’ble High Court of Karnataka in the case of Fatheraj Singhvi & Ors 289 CTR 602 had the occasion to consider similar issue and made the following observations while adjudicating the matter:
“14. We may now deal with the contentions raised by the learned counsel for the appellants. The first contention for assailing the legality and validity of the intimation under Section 200A was that, the provision of Section 200A(l)(c), (d) and (f) have come into force only with effect from 01.06.2015 and hence, there was no authority or competence or jurisdiction on the parroft h e~c o n c e rn e d Officer or the Department to compute and determine the fee under Section 234E in respect of the assessment year of the earlier period and the return filed for the said respective assessment years namely all assessment years and the returns prior to 01.06.2015. It was submitted that, when no express authority was conferred by the statute under Section 200A prior to 01.06.2015 for computation of any fee under Section 234E nor the determination thereof, the demand or the intimation for the previous period or previous year prior to 01.06.2015 could not have been made.”
7. Similar view was taken by the co-ordinate bench in the case of M/s Vkare Bio Sciences Pvt Ltd Vs. DCIT, CPC-TDS, Ghaziabad in which it was held as under:
“The judgement relied upon by the Ld. DR relate to the constitutional validity and vires of the provision of Sec. 234E. Nowhere in the judgments Hon’ble courts have held that the fees u/s 200A read with section 234E shall levied prior to 01.06.2015 because prior to this date has not prescribed levy of fees u/s 200A. Thus, we hold that no fee was leviable to the assessee u/s 234E in violation of section 200(3), because assessee u/s 234E in violation of section 200(3), because assessee had furnished the statement immediately after depositing all the tax without any delay. Accordingly, the demand on account of 234E is cancelled. Accordingly, the appeal of the assessee is allowed.”
8. Moreover, if there is a divergence of opinion between different Hon’ble High Courts on an issue, the one in favour of the assessee needs to be followed as laid down by the Hon’ble Supreme Court in the case of Vegetable Products Ltd 88 ITR 192.
9. In light of the effective date of amendment i.e. 01.06.2015, and considering the decision of the Hon’ble High Court of Karnataka, we direct the Assessing Officer to delete the fee levied u/s 234E of the Act in both the appeals of the assessee.
10. In the result, both the appeals of the assessee in ITA Nos. 2305 & 2306/DEL/2017 are allowed.
The order is pronounced in the open court on 04.03.2020.
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