Padma Parakh Vs ITO (TDS) (ITAT Raipur)
No 234E Late Fee Before 01.06.2015 – ITAT Deletes Entire Levy as Department Had No Power Prior to Amendment
Assessee, proprietor of Parakh Nursing Home, was subjected to late filing fee u/s 234E for delay in filing TDS statements for FY 2013-14 (AY 2014-15) amounting to ₹7,080/-, ₹13,911/- & ₹15,530/- for three quarters. CIT(A)/NFAC upheld the levy relying on Bombay High Court in Rashmikant Kundalia, which upheld constitutional validity of section 234E.
Before ITAT, Assessee filed written submissions & argued that although section 234E was inserted from 01.07.2012, there was no enabling provision u/s 200A to compute & levy this fee until 01.06.2015 (Finance Act 2015). Therefore, for periods prior to 01.06.2015, the Department had no jurisdiction to levy fee u/s 234E. It relied on Karnataka High Court in Fatheraj Singhvi (73 taxmann.com 252) & several ITAT decisions holding that levy u/s 234E is only prospective from AY 2016-17.
Revenue supported CIT(A)’s order & relied on Rashmikant Kundalia (Bom HC).
ITAT clarified that Bombay HC only upheld constitutional validity, but did not deal with retrospective application. The issue of prospective applicability was squarely decided by Karnataka HC in Fatheraj Singhvi, holding that section 200A was amended only w.e.f. 01.06.2015 & intimation prior to that was without authority of law.
