Navpreet Singh Bhasin, Chandigarh V. ITO, TDS-2, Chandigarh

ITA 1002/CHANDI/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 4261 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 09-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS; Set aside
• Section: 234E; 200A; 73

Judgement Text

1 आयकर य कर , य य , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B’,CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER ITA No. 1002, 1003 & 1004/Chd/2019 (Assessment Years : 2013-14, 14-15 & 15-16) Shri Navpreet Singh Bhasin House No. 3363, Sector 32D, Chandigarh. बनाम The Income Tax Officer, (TDS)-2, Chandigarh थायी लेखा सं./PAN NO: APTPS 4387 N नधा रती क ओर से/Assessee by : Shri S.K. Bhasin, CA राज व क ओर से/ Revenue by : Dr. Ranjeet Kaur, Sr. D.R स ु नवाई क तार ख/Date of Hearing: 31.03.2022 उदघोषणा क तार ख/Date of Pronouncement: 20.04.2022 आदेश/ORDER Per Vikram Singh Yadav, Accountant Member: These are three appeals filed by the assessee against the orders of ld. CIT (Appeals)-2, Chandigarh dated 30.05.2019 for the assessment years 2013-14, 14-15 and 15-16. Since common issues are involved, all these appeals were heard together and are being disposed off by this consolidated order. 2. During the course of hearing, the ld. A/R submitted that it is a case where late filing fee under section 234E has been levied by the CPC while processing the quarterly TDS returns for the 2 ITA No 1002, 1003 & 1004/Chd/2019 Shri Navpreet Singh Bhasin financial years 2012-13, 13-14 & 14-15. It was submitted that there was no provision for levying fee under section 200A for the period prior to 01.06.2015 and the same was subsequently inserted in section 200A(1)(c) with prospective effect from 01.06.2015. Therefore, the fee levied under section 234E needs to be deleted. It was submitted that the matter is squarely covered by various decisions of Coordinate Chandigarh and other Benches of the Tribunal. Further, reliance was also placed on the decision of Hon’ble Karnataka High Court in case of Fatheraj Singhvi vs. Union of India (2016) 73 taxmann.com 252 (Kar.). 3. Per contra, the ld. D/R relied on the decision of Hon’ble Rajasthan High Court in case of Dundlod Shikshan Sansthan vs. Union of India (2015) 63 taxmann.com 243 (Rajasthan) and submitted that the Hon’ble High Court had clearly held that the imposition of fee prior to the amendment was not illegal. It was submitted that the amendment merely laid down a machinery provision and was clarificatory in nature and late filing fee under section 234E can be levied even in the absence of said amendment. It was accordingly submitted that the ld. CIT (A) relying on the decision of Hon’ble Rajasthan High Court has rightly dismissed the appeal filed by the assessee and the respective orders of the ld CIT(A) be upheld and appeals of the assessee be dismissed. 3 ITA No 1002, 1003 & 1004/Chd/2019 Shri Navpreet Singh Bhasin 4. We have heard the rival contentions and perused the material available on record. We find that the issue before the Hon’ble Rajasthan High Court in case of Dundlod Shikshan Sansthan vs. Union of India (supra) was constitutional validity of section 234E of the Act and in that context, it had considered the earlier decision of Hon’ble Bombay High Court in case of Rashmikant Kundalia vs. Union of India, (2015) 229 Taxman 596 (Bombay) wherein the Hon’ble Bombay High Court had decided the nature of levy u/s 234E of the Act. The Hon’ble Bombay High Court has held that section 234E of the Act is not punitive in nature but a fee which is fixed charge for the extra service which the department has to provide due to late filing of TDS statements. It was further held by the Bombay High Court that simply because there was no remedy of filing appeal, the provisions of Section 234E cannot be said to be onerous. Following the same, the Hon’ble Rajasthan High Court held that “it do not find any good ground to take a view different from the one taken by the Bombay High Court in Rashmikant Kundalia's case (supra). The unamended Section 200 referred to the levy on the late filing of returns as penalty. It was thereafter termed as fee, which is a compensatory in nature.” And thereafter, the Hon’ble Rajasthan High Court held that “We do not find that even prior to these amendments the imposition of fee was illegal. We do 4 ITA No 1002, 1003 & 1004/Chd/2019 Shri Navpreet Singh Bhasin not in exercise of the power under Article 226 of the Constitution of India find any valid reasons or justification to interfere with the compensatory fees imposed for late filing of the TDS returns on flat rates. The absence of any provision for condonation of delay and the appeal prior to amendments also did not make the imposition of late fees by Section 234E to be ultra vires.” We, therefore, find that the matter raised for consideration before the Hon’ble Rajasthan High Court was the constitutional validity of section 234E and as far as the issue of powers of the Assessing officer in imposing late fee is concerned, the same was not raised nor considered by the Hon’ble Rajasthan High Court. However, the Hon’ble Karnataka High Court in case of Fatehraj Singhvi vs. UOI (supra) has specifically dealt with the powers of the AO and held that prior to 01.06.2015, the AO did not have power to charge fee under section 234E of the Act while processing the TDS returns and the provision of amended section 200A are prospective in nature. Therefore, in the instant case what is relevant to examine is firstly the period pertaining to which the TDS returns have been filed by the assessee which undisputedly pertains to financial years 2012-13, 13-14 & 14-15. Second, when these TDS returns have been furnished by the assessee with the department whether prior to 1.6.2015 or there has been continuing default and have been filed much after 5 ITA No 1002, 1003 & 1004/Chd/2019 Shri Navpreet Singh Bhasin 1.06.2015 and the actual date of filing of these TDS returns therefore becomes relevant and lastly, when these TDS returns have been processed by the AO and the date of passing of the intimation by virtue of which fee under section 234E and interest demand has been raised on the assessee. However, we find that these facts are not clearly emerging from the records nor the same were brought to our notice during the course of hearing inspite of specific mention by the Bench. In our view, the AO has acquired the jurisdiction to levy the fees as on 1.06.2015 and therefore, any return filed and/or processed after 1.6.2015 will fall within his jurisdiction where on occurrence of any default on part of the assessee, he can levy fee so mandated u/s 234E of the Act. Therefore, irrespective of the period to which the quarterly return pertains, where the return is filed/processed after 1.6.2015, the AO can levy fee under section 234E of the Act. At the same time, in terms of determining the period for which fees can be levied, only saving could be that for the period of delay falling prior to 1.06.2015, there could not be any levy of fees as the assumption of jurisdiction to levy such fees have been held by the Courts to be prospective in nature. However, where the delay continues beyond 1.06.2015, the AO is well within his jurisdiction to levy fees under section 234E for the period starting 1.06.2015 to the date of actual filing of the TDS return. It 6 ITA No 1002, 1003 & 1004/Chd/2019 Shri Navpreet Singh Bhasin is, therefore, essential to bring the correct facts on record before applying the legal proposition in this regard. Therefore, we set aside the matter to the file of the ld. CIT (A) who shall decide the same afresh after bringing relevant facts on record and taking into consideration the aforesaid discussion and after providing reasonable opportunity to the assessee. 5. In the result, all the appeals are allowed for statistical purposes. Order pronounced on 20.04.2022. Sd/- Sd/- ( DIVA SINGH ) (VIKRAM SINGH YADAV) याय क सद य/Judicial Member लेखा सद य/Accountant Member Dated: 20.04.2022 *Das * आदेश क % त&ल'प अ*े'षत/ Copy of the order forwarded to : 1. अपीलाथ+/ The Appellant 2. %,यथ+/ The Respondent 3. आयकर आय ु -त/ CIT 4. आयकर आय ु -त (अपील)/ The CIT(A) 5. 'वभागीय % त न0ध, आयकर अपील य आ0धकरण, च2डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File # $ स / By order, सह (ंज / Assistant Registrar 7 ITA No 1002, 1003 & 1004/Chd/2019 Shri Navpreet Singh Bhasin Draft dictated Sr.PS Draft placed before author Sr.PS Approved Draft comes to the Sr.PS/PS Sr.PS Order signed and pronounced on File sent to the Bench Clerk Sr.PS Date on which file goes to the AR Date on which file goes to the Head Clerk. Date of dispatch of Order. 8 ITA No 1002, 1003 & 1004/Chd/2019 Shri Navpreet Singh Bhasin