Chronicle Publication Pvt Ltd, New Delhi vs. ACIT (CPC)-TDS, New Delhi: Dispute Over Late Fee Levy Under Section 234E for AY 2013-14 (Q4)

Chronicle Publication Pvt Ltd, New Delhi vs. ACIT (CPC)-TDS, New Delhi: A Detailed Analysis

Case Number: ITA 6326/DEL/2019

Appellant: Chronicle Publication Pvt Ltd, New Delhi

Respondent: ACIT (CPC)-TDS, New Delhi

Assessment Year: 2013-14 (Q4)

Date of Filing: 2019-07-26

Order Date: 2020-08-31

Pronounced On: 2020-08-31

Order Type: Final Tribunal Order

Introduction

This case involves a dispute between Chronicle Publication Pvt Ltd, New Delhi, and the ACIT (CPC)-TDS, New Delhi. The primary issue in this case pertains to the imposition of late filing fees under Section 234E of the Income-tax Act, 1961, for the assessment year 2013-14, specifically for the fourth quarter (Q4).

Background of the Case

Chronicle Publication Pvt Ltd filed its TDS return for the fourth quarter of the assessment year 2013-14 late. Consequently, the ACIT (CPC)-TDS, New Delhi, imposed a late filing fee under Section 234E of the Income-tax Act. The appellant, Chronicle Publication Pvt Ltd, challenged this imposition, arguing that the levy of fees under Section 234E prior to the amendment in Section 200A(1)(c) of the Act was not permissible.

Legal Provisions Involved

The central legal issue revolves around the applicability of late filing fees under Section 234E of the Income-tax Act, which was inserted by the Finance Act, 2012. The appellant argued that the late fee under Section 234E could not be levied for the period before the amendment to Section 200A(1)(c), which came into effect on June 1, 2015. The amendment to Section 200A empowered the Assessing Officer to levy late fees while processing TDS returns.

Arguments by the Appellant

The appellant’s counsel argued that since the TDS return for the fourth quarter of the assessment year 2013-14 was filed before the amendment to Section 200A(1)(c) became effective, the levy of late fees under Section 234E was unlawful. The appellant cited several decisions of the Income Tax Appellate Tribunal (ITAT) and the Karnataka High Court, which supported the view that such fees could not be levied for periods before the amendment.

Arguments by the Respondent

The respondent, represented by the Senior Departmental Representative (DR), argued that the levy of late fees under Section 234E was valid, even for periods before the amendment. The DR cited the Gujarat High Court’s decision in Rajesh Kourani vs. Union of India, which upheld the imposition of late fees under Section 234E, stating that the provision was compensatory in nature and did not require retrospective application.

Tribunal’s Analysis

The Tribunal examined the conflicting decisions from various High Courts and the ITAT. The Tribunal noted that while the Gujarat High Court upheld the levy of late fees under Section 234E, the Karnataka High Court in the case of Fatehraj Singhvi & Ors. vs. Union of India quashed the notices issued under Section 200A for periods before the amendment, stating that the amendment had only prospective effect.

The Tribunal also referred to the Supreme Court’s decision in CIT vs. Vatika Township Pvt. Ltd., which held that unless explicitly stated, legislative provisions are presumed to have prospective effect. Given the prospective nature of the amendment to Section 200A(1)(c), the Tribunal held that the ACIT (CPC)-TDS, New Delhi, could not levy late fees under Section 234E for the period before June 1, 2015.

Conclusion

In its final order, the Tribunal ruled in favor of Chronicle Publication Pvt Ltd, New Delhi. The Tribunal quashed the demand for late filing fees under Section 234E for the fourth quarter of the assessment year 2013-14. The Tribunal emphasized that the amendment to Section 200A(1)(c) of the Income-tax Act, 1961, which allowed for the levy of late fees under Section 234E, could not be applied retrospectively.

This case underscores the importance of understanding the applicability of tax provisions and the impact of amendments on past actions. The Tribunal’s decision aligns with the principle that tax laws should be applied prospectively unless explicitly stated otherwise.

The ruling provides significant relief to taxpayers who filed their TDS returns late for periods before the amendment and faced demands for late fees under Section 234E. It also clarifies the interpretation of the amendment to Section 200A(1)(c) and its application to TDS returns filed before June 1, 2015.

The case serves as a reminder that taxpayers must be aware of the legal provisions governing their obligations, especially in matters involving amendments to the law. It also highlights the role of the judiciary in ensuring that tax laws are applied fairly and in accordance with established principles of statutory interpretation.

Chronicle Publication Pvt Ltd, New Delhi vs. ACIT (CPC)-TDS, New Delhi: Dispute Over Late Fee Levy Under Section 234E for AY 2013-14 (Q4)