Case Law Details

Case Name : Shri Rohil Singhal Vs Shri Waseem Arshad (ITAT Agra)
Appeal Number : ITA.03,06 And 07/Ag/2018
Date of Judgement/Order : 31/05/2018
Related Assessment Year : 2013-14

Shri Rohil Singhal Vs Shri Waseem Arshad (ITAT Agra)

It is seen that prior 01.06.2015, there was no enabling provision in the Act u/s 200A for raising demand in respect of levy of fee u/s 234E of the Act. The provision of Section 234E of the Act is charging provision i.e. substantive provision which could not be applied retrospectively, unless it is expressly provided in the Act, to levy the late fee for any delay in filing the TDS statement for the period prior to 01.06.2015. The counsel for the assessee has rightly contended that in the absence of enabling provisions u/s 200A of the Act, such levy of late fee is not valid relying on the decisions in the cases of ‘CIT vs. Vatika Township Pvt. Ltd. (2014) 367 ITR 466 (SC), ‘Sudarshan Goyal vs DCIT (TDS)’ ITA No.442/Agr/2017 and Fatehraj Singhvi Vs. UOI (2016) 289 CTR 0602 (Karn) (HC). The decisions relied on by the Ld. DR are distinguishable on facts, as the issue involved in those cases pertains to interest u/s 201(1) and 201(1A) on the amount of TDS whereas in the present cases the issue were pertains to liability of late fee u/s 234E of the Act for delay in filing TDS statement which was inserted from 01.06.2015.

FULL TEXT OF THE ITAT JUDGMENT

This bunch of appeals for AY 2013-14 are directed against the order of ld. CIT(A), Gwalior against upholding levy of fee u/s 234E of the Income Tax Act, 1961(hereinafter short the ‘Act’).

2. There was a delay of 24 days in filing appeals in respect of 37 branches out of 88 branches located at distant places.

3. The counsel for the assessee has submitted that after receipt of the intimation/statement of levy of late fee u/s 234E of the Act, the branches had to report to the respective regional head offices for seeking necessary approval and therefore it is forwarded to the regional head and further to the Zonal head in the respective hierarchy. After giving the necessary approval, the matter travels back to the respective branches to the same hierarchy. Thus, this process takes considerable time causing which caused delay in filing these appeals by the concerned appellate branches. We find that the assessee has reasonable cause for delay in filing the aforesaid 37 appeals out of 88 appeals. Therefore, the delay in filing these appeals is condoned accordingly.

4. Since a common issue is involved in all these appeals relating to levy of late filing fee u/s 234E of the Act, they are being disposed of by this consolidated order for the sake of convenience.

5. In these cases, the appellants have deposited TDS in Central Government account as per TDS provisions of the Act. They are required to file quarterly TDS returns (statements) intimating the tax deducted at source from various payments made to various persons in each quarters for the financial relevant. To ensure timely compliance on the part of the deductors, the provisions for late filing fee u/s 234E has been inserted in clause (c) to section 200A of the Act by the Finance Act, 2015, w.e.f. 1.06.2015. Before the ld. CIT(A), these appellants contended that before making necessary amendment in Section 200A of the Act w.e.f. 01.06.2015, there was no enabling provisions u/s 200A of the Act for raising demand in respect of levy of penalty u/s 234E of the Act and thus in the absence of enabling provision for making such adjustment for levying late fee u/s 234E, no such late fee could be imposed by the AO. In support, the counsel for the applicants placed reliance on the decision in the cases of ‘Sibia Healthcare Pvt. Ltd. Vs. DCiT (TDS) (2015) 121 DTR 81 (ASR) (Trib) and G Indhirani Vs. DCIT (2015) 43 CCH 511 (Chen-Trib) wherein it was held that in the absence of enabling provisions u/s 200A of the Act, such levy of late fee is not valid. The ld. CIT(A) has rejected this contention of the appellants by relying on the decision in the case of ‘Rajesh Kaurani vs. Union of India’, 83 Taxmann.com 137(Guj) and confirmed the levy of late fee u/s 234E of the Act. Aggrieved, appellants are in appeal before us.

6. The counsel for the assessee has submitted a statement of TDS returns (APB, Pge. 5-9) contending that all the TDS returns statements has been filed are in respect of the period prior to the date 01.06.2015 i.e. the date from which clause (c) to sub Section (1) of Section 200A was inserted and incorporating Section 234E of the Act, 1961. He further submitted that prior 01.06.2015, there was no enabling provision in the Act u/s 200A for raising demand in respect of levy of fee u/s 234E of the Act. The provision of Section 234E of the Act is charging provision i.e. substantive provision which could not be applied retrospectively, unless it is expressely provided in the Act, to levy the late fee for any delay in filing the TDS statement for the period prior to 01.06.2015. For this purpose, the appellant rely on the following decisions:

i) ‘CIT vs. Vatika Township Pvt. Ltd. (2014) 367 ITR 466 (SC).

ii) ‘Sudarshan Goyal vs DCIT (TDS)’ ITA No.442/Agr/2017.

iii) Fatehraj Singhvi Vs. UOI (2016) 289 CTR 0602 (Karn) (HC)

iv) ‘Sibia Healthcare Pvt. Ltd. Vs. DCIT (TDS) ITA No.90/Asr/2015.

v) ‘Shri Kaur Chand Jain vs. DCIT’, ITA No.378/ASR/2015.

vi) ‘Gajanan Constructions vs. DCIT’ (2016) 161 ITD 313 (Pune).

7. Per contra, the Ld. DR supported the impugned order with the support of a brief synopsis of case laws.

8. Heard the rival contention and perused the material relevant. We find that while deciding the issue against the appellant assessee the ld. CIT(A) has placed reliance on ‘Rajesh Kaurani vs. Union of India’, 83 com137 (Guj.) wherein it was held that Section 200A of the Act is a machinery provision providing the mechanism for processing a TDS statement of deduction of tax at source and for making adjustment. The Ld. CIT(A) has further held that this decision was delivered after considering numerous ITAT and High Court decisions and therefore this decision in ‘Rajesh Kaurani’ (Supra), holds the fields.

9. It is seen that prior 01.06.2015, there was no enabling provision in the Act u/s 200A for raising demand in respect of levy of fee u/s 234E of the Act. The provision of Section 234E of the Act is charging provision i.e. substantive provision which could not be applied retrospectively, unless it is expressly provided in the Act, to levy the late fee for any delay in filing the TDS statement for the period prior to 01.06.2015. The counsel for the assessee has rightly contended that in the absence of enabling provisions u/s 200A of the Act, such levy of late fee is not valid relying on the decisions in the cases of ‘CIT vs. Vatika Township Pvt. Ltd. (2014) 367 ITR 466 (SC), ‘Sudarshan Goyal vs DCIT (TDS)’ ITA No.442/Agr/2017 and Fatehraj Singhvi Vs. UOI (2016) 289 CTR 0602 (Karn) (HC). The decisions relied on by the Ld. DR are distinguishable on facts, as the issue involved in those cases pertains to interest u/s 201(1) and 201(1A) on the amount of TDS whereas in the present cases the issue were pertains to liability of late fee u/s 234E of the Act for delay in filing TDS statement which was inserted from 01.06.2015.

10. On similar facts, we have decided the same issue in the assessee’s own case ‘Sudershan Goyal vs. DCIT (TDS)’, in ITA No. 442/Agra/2017 dtd. 09.04.2018 authored by one of us (the Ld. J.M.). The relevant part of the order is reproduced as follows:

3. Heard. The ld. CIT(A), while deciding the matter against the assessee, has placed reliance on Rajesh Kaurani vs. UOI, 83 Taxmann.com 137 (Guj), wherein, it has been held that section 200A of the Act is a machinery provision providing the mechanism for processing a statement of deduction of tax at source and for making adjustments. The ld. CIT(A) has held that this decision was delivered after considering numerous ITAT/High Court decisions and so, this decision in Rajesh Kaurani(supra) holds the field.

4. We do not find the view taken by the ld. CIT(A) to be correct in law. As against Rajesh Kaurani(supra), Shri Fatehraj Singhvi and Others vs.UOI, 73 Taxmann.com 252 (Ker), as also admitted by the ld. CIT(A) himself, decides the issue in favour of the assessee. The only objection of the ld. CIT(A) is that this decision and others to the same effect have been taken into consideration by the Hon ble Gujarat High Court while passing Rajesh Kaurani(supra). However, while observing so, the ld. CIT(A) has failed to take into consideration the settled law that where there is a cleavage of opinion between different High Courts on an issue, the one in favour of the assessee needs to be followed. It has so been held by the Honble Supreme Court in CIT vs. Vegetable Products Ltd., 88 ITR 192 (SC). It is also not a case where the decision against the assessee has been rendered by the Jurisdictional High Court qua the assessee.

5. In Shri Fatehraj Singhvi and Others(supra) it has been held, inter alia, as follows:

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.

6. In view of the above, respectfully following Shri Fatehraj Singhvi and Others(supra), Sibia Healthcare Pvt. Ltd. vs. DCIT (TDS), order dated 09.06.2015 passed in ITA No.90/ASR/2015, for A.Y.2013-14, by the Amritsar Bench of the Tribunal, and Shri Kaur Chand Jain vs. DCIT, CPC (TDS) Ghaziabad, order dated 15.09.2016, in ITA No.378/ASR/2015, for A.Y. 2012-13, the grievance of the assessee is accepted as justified. The order under appeal is reversed. The levy of the fee is cancelled.

11. In the above view, respectfully following ‘Shri Fatehraj Singhvi and Ors’ (Supra), ‘Sibia Healthcare Pvt. Ltd. Vs. DCIT (Supra), ‘Shri Kaur Chand Jain vs. DCIT’, (Supra), and our own finding in the case of ‘Sudershan Goyal’ (Supra), we accept the grievance of the assessees as genuine. Accordingly, the orders of the CIT(A) are reversed and the fee so levied under section 234E of the Act is cancelled.

12. In ITA No. 42/Agr/2018, the issue is related to short payment of tax deducted and interest on short payment of TDS as per the ground of appeal raised before the Ld. CIT(A). Whereas, the ld. CIT(A) has wrongly disposed of the issue as related to levy of late fee u/s 234E of the Act. Therefore, this issue is restored back to the Ld. CIT(A) to decide a fresh as per law after affording proper opportunity of being heard to the assessee.

13. In the result, ITA No.42/Agr/2018 is allowed for statistical purposes and all other appeals are allowed.

(Order pronounced in the open court on 31/05/2018)

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