M/S ATLAS BRANDS PRIVATE LIMITED V. COMMISSIONER OF INCOME TAX (TDS)

WP/19960/2021

AI Insights

The case involves M/s. Atlas Brands Private Limited, which filed two writ petitions against the Commissioner of Income Tax (TDS) and the Assistant Commissioner of Income Tax, challenging the intimation under Section 200A of the Income Tax Act, 1961, that imposed a late fee under Section 234-E due to delayed filing of e-TDS returns for the financial years 2012-13 and 2013-14. The petitioner argued that the delay in filing was procedural and sought rectification under Section 154, which was denied, leading to appeals that were also dismissed. The Income Tax Appellate Tribunal had remitted the matter back to the Commissioner, pending the outcome of Section 264 proceedings initiated by the petitioner. The court, referencing the judgment in FATHERAJ SINGHVI v. UNION OF INDIA, which restricted the levy of such fees prior to 01.06.2016, found in favor of the petitioner, setting aside the impugned order and condoning the delay in filing the revision application.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 754239 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 12-01-2022
• Assessment Year: misc
• Other Referred Cases: FATHERAJ SINGHVI v. UNION OF INDIA, RAJESH KOURANI v. UNION OF INDIA AND OTHERS
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JEEVAN NEERALGI
• Assessee Lawyers: ASHOK KULKARNI
• Keywords: Condonation of delay; Late fee; Rectification; Revision; E-TDS returns
• Section: 234E; 200A; 154; 264; 220(2)

Judgement Text

"1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF JANUARY 2022 BEFORE THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV WRIT PETITION No.19960/2021 (T-IT) C/W WRIT PETITION No.17489/2021 (T-IT) IN W.P. NO.19960/2021 BETWEEN: M/S. ATLAS BRANDS PRIVATE LIMITED NO.13A, 13B, SINGASANDRA VILLAGE, BEGUR HOBLI, BENGALURU, KARNATAKA - 560 068 REPRESENTED BY ITS MANAGING DIRECTOR SHRI RAMESH S. BULCHANDANI. … PETITIONER (BY SRI ASHOK A. KULKARNI, ADVOCATE) AND: 1. COMMISSIONER OF INCOME TAX (TDS), 4TH FLOOR, HMT BHAVAN NO.59, BELLARY ROAD BENGALURU - 560 032. 2. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRALISED PROCESSING CELL - TDS, TDS CPC, AAYKAR BHAVAN, SECTOR-3, VAISHALI, GHAZIABAD, UTTAR PRADESH - 201 010. … RESPONDENTS (BY SRI JEEVAN J. NEERALGI, ADVOCATE) 2 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF CONSTITUTION OF INDIA, PRAYING TO QUASH THE INTIMATION U/S 200A OF THE ACT ISSUED BY THE R2 BEARING THE NUMBERS AND DATED MARKED AS ENCLOSURES IN THE ANNEXURES-A1 TO A4 AS UNLAWFUL AND ILLEGAL AND ETC. IN W.P. NO.17489/2021 BETWEEN: M/S. ATLAS BRANDS PRIVATE LIMITED NO.13A, 13B, SINGASANDRA VILLAGE, BEGUR HOBLI, BENGALURU, KARNATAKA - 560 068 REPRESENTED BY ITS DIRECTOR / AUTHORISED SIGNATORY SHRI RAMESH S. BULCHANDANI. … PETITIONER (BY SRI ASHOK A. KULKARNI, ADVOCATE) AND: 1. COMMISSIONER OF INCOME TAX (TDS), 4TH FLOOR, HMT BHAVAN NO.59, BELLARY ROAD BENGALURU - 560 032. 2. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRALISED PROCESSING CELL - TDS, TDS CPC, AAYKAR BHAVAN, SECTOR-3, VAISHALI, GHAZIABAD, UTTAR PRADESH - 201 010. … RESPONDENTS (BY SRI JEEVAN J. NEERALGI, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF CONSTITUTION OF INDIA, PRAYING TO QUASH THE INTIMATION U/S 200A OF THE ACT ISSUED BY THE R2 BEARING FOLLOWING DATES MARKED AS ENCLOSURES IN THE ANNEXURES-A1 TO A8 AS UNLAWFUL AND ILLEGAL AND ETC. 3 THESE WRIT PETITIONS COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING: ORDER W.P.No.17489/2021 has been filed seeking for appropriate writ to quash the intimation under Section 200A of the Income Tax Act, 1961 (\"the Act\", for short) issued by the second respondent and have also sought for issuance of writ of certiorari to quash the order dated 07.03.2020 at Annexure-'B'. The said writ petition pertains to the Financial Year 2013-14. 2. W.P.No.19960/2021 has been filed seeking for identical reliefs with respect to the Financial Year 2012-13. Accordingly, both the petitions are disposed off by a common order. 3. The petitioner (common in both the matters) submits that in the course of their business, they have deducted tax as per the provisions of Chapter XVII-B of the Income Tax Act, 1961) for the period from 01.04.2013 to 31.03.2014 and 01.04.2014 to 31.03.2015. It is further 4 submitted that the tax deducted was deposited as required. However, there was delay in filing e-TDS returns and accordingly, by way of intimation under Section 200A of the Act, a late fee under Section 234-E of the Act was levied. 4. The petitioner submits that insofar as intimation under Section 200A, the petitioner had sought for rectification under Section 154 of the Act. It is submitted that rectification orders passed under Section 154 having denied reliefs to the petitioner, the petitioner had challenged the same before the Commissioner of Income Tax (Appeals)-3. It is submitted that the appeals came to be disposed off by order dated 01.08.2018. As the appeals were dismissed, as against the appellate order of Commissioner of Income Tax, petitioner had filed an appeal before the Income Tax Appellate Tribunal. The Income Tax Appellate Tribunal remitted the matter back to the Commissioner of Income Tax (Appeals)-3. While doing so, it had observed that the appeals on remand would be required to be taken up after the proceedings under 5 Section 264 of the Income Tax Act initiated by the petitioner are disposed off since if the levy under Section 234E is deleted by the CIT under Section 264, the question of there being any liability on account of interest under Section 220 (2) would not arise. 5. The learned counsel for petitioner would point out that in the meanwhile 264 proceedings had been initiated by the petitioner. It is submitted that though there was delay in initiating such proceedings, in light of legal position arising from the judgment of this court in the case of FATHERAJ SINGHVI v. UNION OF INDIA reported in (2016) 73 Taxmann.Com 252 (Kar), the Department did not have any authority to seek computation of fee under Section 234E with respect to the period prior to 01.06.2016 and in light of such merits the authority ought to have condoned the delay. 6. It is submitted that as there is no statutory restriction as such, as regards to the extent of delay that could be condoned, the authority ought to have been liberal 6 in condoning the delay in light of the legal position and accordingly has sought for setting aside the order passed under Section 264 whereby the Authority had dismissed the proceedings under Section 264 only on the ground of delay. 7. The learned counsel for revenue would point out that under Section 264, the period of one year is permitted for filing the proceedings. Taking revision of the order in terms of Section 264 (3), the petitioner not having initiated the proceedings within a period of one year and also spent considerable time without approaching the authority, the petitioner is to blame for the lapse. 8. Insofar as legal position that emanates from the judgment of FATHERAJ SINGHVI (supra), the learned counsel for the revenue does not dispute it though it is pointed out that contrary view has been taken by the High Court of Gujarat in the case of RAJESH KOURANI v. UNION OF INDIA AND OTHERS reported in (2017) 297 CTR (Guj) 502. In this regard, taking note that the judgment of Division Bench in the case of FATHERAJ 7 SINGHVI (supra) has attained finality, the law laid down is required to be taken note of by this court as well as the Revisional Authority. 9. In light of the facts and noticing the position of law that would emanate on reading of FATHERAJ SINGHVI (supra), it would serve the interests of justice to set aside the impugned order at Annexure-'G' dated 07.03.2020. The delay as made out is condoned by taking note of the law laid down in the case of FATHERAJ SINGHVI (supra). That apart, it must be noticed that the Department has taken a conservative and hyper technical view, as regards limitation and accordingly the impugned order is set aside by condoning the delay. 10. Accordingly, both the writ petitions in W.P.No.17489/2021 and W.P.No.19960/2021 are allowed. The matters are remitted back to the respondent no.1 with a direction to take up the matter on its merits and dispose off the proceedings under Section 264 pending before the first respondent as per procedure laid down by law. 8 11. The matters being taken afresh pursuant to the direction of this court, matters to be disposed off within a period not later than 8 weeks from the date of receipt of certified copy of the order by the Department. Sd/- JUDGE Np/- "