Case Law Details
Anjani PRS Blends Pvt. Ltd. Vs DCIT (ITAT Hyderabad)
ITAT Hyderabad held that notices issued under section 200A of the Act for computation and intimation for payment of late filing fees under section 234E of the Act relating to the period of tax deduction prior to 01/06/2015 are not maintainable.
Facts- Only issue which needs to be adjudicated in these appeals is the charging of late filing fee u/s 234E of the Income Tax Act, 1961 (‘the Act’) while issuing the intimation u/s 200A of the Act. Assessee is a private limited company, engaged in the business of manufacturing of raw material used for plastic products. Assessee is under legal obligation to deduct tax at source and deposit the same with Government within the prescribed time. Assessee, however, received noticed under section 200A of the Act levying late filing fee for the assessment year 2012-13.
Assessee appealed against such levy before the learned CIT(A), but the learned CIT(A) declined to delete the levy of fee and charging of interest stating that when the assessee files the TDS statements beyond the due date, such a levy of late fee and the interest is consequential and mandatory.
Conclusion- Hon’ble High Court of Karnataka thus explained the position of charging of late filing fees under section 234E of the Act and the mechanism for computation of fees and failure for payment of fees under section 200A of the Act in the light of amendment w.e.f. 01/06/2015, and held such amendment to be prospective in nature and, therefore, notices issued under section 200A of the Act for computation and intimation for payment of late filing fees under section 234E of the Act relating to the period of tax deduction prior to 01/06/2015 were not maintainable. The same were accordingly quashed.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
Aggrieved by the order(s) passed by the learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), in the case of Anjani PRS Blends Private Limited (“the assessee”) for the assessment years 2013-14 & 2014-15, assessee preferred these appeals. For the sake of convenience, we dispose of these appeals by way of this common order.
2. These appeals are filed with a delay of 64 days each and the reason for such delay is attributed to the oversight of the chartered accountant in identifying a suitable counsel to file the appeal in Tribunal, due to the heavy pre-occupation of audit and filing of returns which were extended till 07/11/2022. The delay is 64 days and there is no grievance of Revenue of any prejudice being caused due to this delay. Prima facie we do not find any malafide on the part of the assessee in preferring these appeals with delay. Having regard to the facts and circumstances, we are inclined to condone the delay and proceed to hear the appeal.
3. Only issue which needs to be adjudicated in these appeals is the charging of late filing fee u/s 234E of the Income Tax Act, 1961 (‘the Act’) while issuing the intimation u/s 200A of the Act. Assessee is a private limited company, engaged in the business of manufacturing of raw material used for plastic products. Assessee is under legal obligation to deduct tax at source and deposit the same with Government within the prescribed time. Assessee, however, received noticed under section 200A of the Act levying late filing fee for the assessment year 2012-13.
4. Assessee appealed against such levy before the learned CIT(A), but the learned CIT(A) declined to delete the levy of fee and charging of interest stating that when the assessee files the TDS statements beyond the due date, such a levy of late fee and the interest is consequential and mandatory.
5. Its canvassed before us by the learned AR that where the legislature has inserted clause (c) to section 200A(1) of the Act w.e.f 01/06/2015, then in respect of the TDS statements which were filed under the respective sections of the Act, for the period prior to 01/06/2015, no late filing fee could be charged u/s 234E of the Act, in the intimation issued u/s 200A of the Act. He further submitted that the CIT(A) has overlooked the fact that notices under section 200A of the Act were issued for computing and charging late filing fees under section 234E of the Act for the period of tax deducted prior to 1st day of June, 2015 and the same cannot be charged by issue of notices after 1st day of June, 2015 even where the returns were filed belatedly by the deductor after 1st June, 2015, where it clearly related to the period prior to 01/06/2015.
6. Per contra, learned DR submits that the assessee furnished the returns late and, therefore, as rightly pointed by the learned CIT(A) levy of late fee and penalty under section 200A of the Act is consequential and mandatory.
7. It is, therefore, clear that the only issue that falls for our consideration is whether late fee and consequential interest could be levied in respect of the TDS statements relating to the period prior to 01/06/2015. We find that the said issue has been adjudicated by the Hon’ble Karnataka High Court in the case of Fatheraj Singhvi & Ors vs. Union of India (2016) 289 CTR 0602. The relevant findings of the Hon’ble High Court in paras 21 and 22 read as under:-
“21. However, if Section 234E providing for fee was brought on the state book, keeping in view the aforesaid purpose and the intention then, the other mechanism provided for computation of fee and failure for payment of fee under Section 200A which has been brought about with effect from 1.6.2015 cannot be said as only by way of a regulatory mode or a regulatory mechanism but it can rather be termed as conferring substantive power upon the authority. It is true that, a regulatory mechanism by insertion of any provision made in the statute book, may have a retroactive character but, whether such provision provides for a mere regulatory mechanism or confers substantive power upon the authority would also be a aspect which may be required to be considered before such provisions is held to be retroactive in nature. Further, when any provision is inserted for liability to pay any tax or the fee by way of compensatory in nature or fee independently simultaneously mode and the manner of its enforceability is also required to be considered and examined. Not only that, but, if the mode and the manner is not expressly prescribed, the provisions may also be vulnerable. All such aspects will be required to be considered before one considers regulatory mechanism or provision for regulating the mode and the manner of recovery and its enforceability as retroactive. If at the time when the fee was provided under Section 234E, the Parliament also provided for its utility for giving privilege under Section 271H(3) that too by expressly put bar for penalty under Section 272A by insertion of proviso to Section 272A(2), it can be said that a particular set up for imposition and the payment of fee under Section 234E was provided but, it did not provide for making of demand of such fee under Section 200A payable under Section 234E. Hence, considering the aforesaid peculiar facts and circumstances, we are unable to accept the contention of the learned counsel for respondent-Revenue that insertion of clause (c) to (f) under Section 200A(1) should be treated as retroactive in character and not prospective.
22. It is hardly required to be stated that, as per the well established principles of interpretation of statute, unless it is expressly provided or impliedly demonstrated, any provision of statute is to be read as having prospective effect and not retrospective effect. Under the circumstances, we find that substitution made by clause (c) to (f) of sub-section (1) of Section 200A can be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand under Section 200A for computation and intimation for the payment of fee under Section 234E could not be made in purported exercise of power under Section 200A by the respondent for the period of the respective assessment year prior to 1.6.2015. However, we make it clear that, if any deductor has already paid the fee after intimation received under Section 200A, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest.”
8. Hon’ble High Court of Karnataka thus explained the position of charging of late filing fees under section 234E of the Act and the mechanism for computation of fees and failure for payment of fees under section 200A of the Act in the light of amendment w.e.f. 01/06/2015, and held such amendment to be prospective in nature and, therefore, notices issued under section 200A of the Act for computation and intimation for payment of late filing fees under section 234E of the Act relating to the period of tax deduction prior to 01/06/2015 were not maintainable. The same were accordingly quashed.
9. Same is the view of the Hon’ble Gujarat High Court in the case of Rajesh Kourani vs. UOI reported in (2017) 83 com 137. Further, a Co-ordinate Bench of this Tribunal in the case of Nirmala Infra Projects India (P) Ltd., Vs. Dy.CIT in ITA Nos. 666 to 669/Hyd/2022, dated 12/12/2022 while noticing the above decisions, reached a conclusion that the levy of late fee and the interest in respect of the TDS statements prior to 01/06/2015 cannot be sustained. We accordingly direct the learned Assessing Officer to delete the same.
10. In the result, both the appeals are allowed.
Order pronounced in the open court on this the 28th day of February, 2023.
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