TDS return filed late cannot be declared as non est in law. There is no such provision making it invalid

TDS return filed late cannot be declared non est in law. Like income tax return no such provision exits declaring a return of TDS filed beyond time invalid

ABCAUS Case Law Citation:
ABCAUS 3088 (2019) (07) ITAT

Important Case Laws Cited/relied upon by the parties:
Fatehraj Singhvi v. UOI [2016] 73 taxmann.com 252
Rajesh Kourani v. UOI [2017] 83 taxmann.com 137 (Guj)
Manoj Kumar Jaiswal & others Vs. ACIT, CPCTDS, Ghaziabad

The instant appeal was filed by Assessee company (the appellant) against the common order of the CIT(Appeals) in declaring the TDS returns filed by the assessee as non est owing to

The assessee had filed statement of tax deducted at source (TDS) for various quarters in Form No. 24Q, 26Q, 27Q. The statement was processed by CPC TDS, Bengaluru.

However, there was a delay in filing the above TDS statement and therefore the Assessing Officer (AO) by intimation u/s. 200A of the Income-Tax Act, 1961 (the Act) levied late fee for AY 2013-14 to 2016-17 u/s 234E of the Act.

Aggrieved by the aforesaid orders, the assessee filed appeals before the CITA. The assessee contented that the provisions of section 234E of the Act was inserted by the Finance Act, 2012 w.e.f. 1.7.2012.

It was submitted that clause (c) to (f) of section 200A(1) was substituted by the Finance Act, 2015 w.e.f. 1.6.2015. The assessee challenged the validity of charging of fee u/s. 234E of the Act and contended that AO could levy fee u/s.234E of the Act while processing a return of TDS filed u/s.200(3) of the Act only by virtue of the provisions of Sec.200A(1)(c), (d) & (f) of the Act and those provisions came into force only from 1.6.2015 and therefore the authority issuing intimation u/s. 200A of the Act while processing return of TDS filed u/s.200(3) of the Act, could not levy fee u/s. 234E of the Act in respect of statement of TDS filed prior to 1.6.2015.

The assessee relied on the decision of the Hon’ble High Court wherein it was held that amendment made u/s. 200A providing that fee u/s. 234E of the Act could be computed at the time of processing of return and issue of intimation has come into effect only from 1.6.2015 and had only prospective effect and therefore, no computation of fee u/s.234E of the Act for delayed filing of return of TDS while processing a return of TDS u/s.234E of the Act could have been made for tax deducted at source for the assessment years prior to 1.6.2015.

The CIT(Appeals) accepted the claim of the assessee and he held that in view of the judgment of the Hon’ble High Court late fee u/s. 234E cannot be charged and cancelled the intimation u/s. 200A of the Act in so far as it relates to levy of fee u/s.234E of the Act.

However, the CIT(Appeals), in exercise of his powers of enhancement, proposed to hold that the statement of TDS filed by the assessee was non est in law because it was filed beyond the time prescribed u/s. 200(3) of the Act.

Opposing the proposal of enhancement by the CITA, the assessee took the stand that TDS statement filed without payment of fee is a valid statement. The CIT(A), however, referred to the provisions of section 234E of the Act which lays down the amount of fee referred to sub-section (1) of section 234E shall be paid before delivering or causing to be delivered a statement in accordance with the provisions of sub-section (3) of section 200. The CIT(A) also took a stand that TDS statement filed without payment of fee u/s. 234E of the Act was not a valid statement.

The assessee also contended that u/s 251(1)(c) of the Act, the CIT(A) had no power to enhance and therefore in an appeal challenging the validity of levy of fee u/s. 234E of the Act by the assessee, he could not go into the question, whether TDS return filed by the assessee had to be treated as non est.

The CIT(Appeals), however, held that the CITA had plenary powers in disposing of an appeal and that the CIT(A) was duty bound to correct errors in the orders of lower authorities. The CIT(A), therefore, rejected this contention of the assessee.

The Tribunal noted that an identical issue was dealt in by the Coordinate Bench wherein the Tribunal had held that the TDS return filed beyond time cannot be declared as non est in law and that the CIT(A) does not have powers of enhancement in an appeal against an order u/s 200A of the Act.

The Revenue placed reliance on a decision wherein the another Hon’ble High Court had taken a view that levy of fee u/s. 234E of the Act is possible even without a regulatory provision u/s 200A of the Act and therefore the levy of fee u/s. 234E of the Act w.e.f. 1.7.2012, when those provisions were introduced, was valid.

The Tribunal opined that it was bound to follow the decision of the jurisdictional High Court and therefore the argument advanced by the Revenue could not be accepted. Even otherwise, the issue before the Tribunal was with regard to action of the CIT(A) in treating the return of TDS filed by the assessee as non est and therefore the decision of the Hon’ble Gujarat High Court was not relevant for adjudicating on the issue involved.

The Coordinate Bench of the Tribunal had decided identical issue holding that though the Act contains provision for declaring a return of income filed as invalid u/s.139(9) of the Act, there is no such provision for declaring a return of TDS as invalid. Therefore, it was held that Act does not confer any power to declare the return of TDS filed u/s. 200(3) as non est.

It was noted that the Coordinate Bench also held that in appeal against an order u/s 200A of the Act, the provision of law applicable, in so far as the powers of CIT(A) in an appeal u/s.200A of the Act, was clause (c) of section 251 and that clause empowers the CIT(A) to pass such orders in the appeal as he thinks fit. The Tribunal held that a reading of the aforesaid clause would show that the CIT(Appeals) in the cases to which the said clause applies, can pass such orders as he thinks fit, but that power is circumscribed by the words “in the appeal”. Therefore, the CIT(Appeals) cannot travel beyond the subject matter of the appeal, which was as to whether fee u/s. 234E of the Act can be levied or not; and not the question, whether the return of TDS filed by the assessee is non est in law?

Accordingly, the Tribunal allowed the appeals of the assessee by holding that the conclusion of the CIT(Appeals) holding that return of TDS filed by the assessee is non est in law is not valid in the eyes of law and the said direction was directed to be deleted.

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