High Court of KeralaSingle Judge2022-05-24Writ petition allowed; Ext.P1–Ext.P5 quashed to...

Amaravati v. Income Tax Department and Others (W.P.(C) No. 16664 of 2022)

Case / Petition Number:WP(C) No. 16664 of 2022

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Bechu Kurian Thomas, J.
Judgment Date: 2022-05-24
Court Decision / Holding: The writ petition is allowed. Ext.P1 to Ext.P5 are quashed to the extent they demand late fee under section 234E for the period 2012-13 up to 01.06.2015. The department’s demands for later periods remain unaffected and subject to appropriate statutory provisions.
Final Disposition: Writ petition allowed; Ext.P1–Ext.P5 quashed to the extent of demanding late fee for 2012-13 to 01.06.2015 period; demands for later periods remain subject to law.

Parties to the Case

Appellants / Petitioners

Amaravati

Respondents

Income Tax Officer (TDS), Aaykar Bhavan
Deputy Commissioner of Income Tax, TDS CPC, Aaykar Bhavan, Sector-3, Vaishali, Ghaziabad, Uttar Pradesh
Central Board of Direct Taxes represented by its Chairman, North Block, New Delhi
Union of India represented by its Secretary, Ministry of Finance, Direct Tax Department, New Delhi

Legal Representation & Advocates

Counsels for Petitioners

• P. J. Anilkumar
• K. N. Sreekumaran
• N. Santhosh Kumar

Counsels for Respondents

• Christopher Abraham
• S. Manu S.

Case Synopsis & Summary

Amaravati, a taxpayer-assessee under the Income Tax Act, challenged late fee demands under section 234E for delays in furnishing TDS remittance statements for the financial years 2012-13 to 2014-15. The petitioner contended that the introduction of section 234E by the Finance Act, 2012, was not applicable to periods prior to 01-06-2015, since section 200A (especially clause (c)) and the corresponding computation under 200A(1) were made effective only from that date; Accordingly, there was no jurisdiction to levy late fees for those periods. The department’s intimations under 234E against 26Q statements for those years were challenged as without authority. The respondents argued that the intimations were final, appealable orders under section 246A, and relied on precedents that delay should defeat relief. The court referred to M/s. Sarala Memorial Hospital v. Union of India (W.P.(C) No. 37775 of 2018), which held that the amendment taking effect from 01-06-2015 is prospective, and distinguished older cases (State of Maharashtra v. Digambar; G.C. Gupta v. N.K. Pandey; State of M.P. v. Bhailal Bhai) as not controlling when jurisdiction is in issue. Consequently, the court held that the demands for 2012-13 to 01.06.2015 lacked authority and quashed Ext.P1–Ext.P5 to that extent, allowing the petition.

Provisions of Law Cited

Section 234E of the Income Tax Act, 1961Section 200ASection 200Section 206CSection 246A

Legal Doctrines & Maxims

Total lack of jurisdiction
Delay cannot be relied upon to deny relief when lack of jurisdiction is alleged
Prospective operation of amendments (Section 234E and Section 200A)

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner argued that Section 234E, introduced by the Finance Act, 2012, came into effect from 1 July 2012, and the liability to pay late fees under 234E for non-filing of TDS statements cannot be invoked for periods prior to 01.06.2015 unless the amended provisions (notably 200A(1)(c)) were operative. Since 200A(1)(c) and the related computation under 200A(1)(e) were brought into effect only from 01.06.2015, the demands for 2012-13 to 2014-15 were without authority. The petitioner relied on the binding Sarala Memorial Hospital decision to insist on prospective application and argued that lack of jurisdiction nullifies the department’s actions irrespective of delay.

Contentions of Respondents

The respondents contended that the intimations under 234E for 2012-13 to 2014-15 were issued and became final orders under section 246A; notwithstanding delay, the department argued the petitioner was obligated to comply. They urged that the delay in approaching the court should not automatically nullify the demands and cited precedents to support the position that delay can be a bar in certain contexts; moreover, the amendment creating the liability under 234E and the 200A framework should be applied as per the statutory regime in force for those periods.

Cited Precedents (4)

Case Name	Citation	Treatment	Explanation
State of Maharashtra v. Digambar	AIR 1995 SC 1991	Distinguished	cited to illustrate that delay was treated as a factor in other contexts, but the court found it not controlling where lack of jurisdiction is at issue.
G.C. Gupta and Others v. N.K. Pandey and Others	1988 1 SCC 316	Distinguished	Distinguished on facts; not applicable to the jurisdictional challenge presented.
State of M.P. and Another v. Bhailal Bhai	AIR 1964 SC 1006	Distinguished	Distinguished as not directly governing the jurisdictional question here.
M/s. Sarala Memorial Hospital v. Union of India and Another	W.P.(C) No. 37775 of 2018	Positive	Binding authority cited to support the view that the 2015 amendments are prospective and operative from 01-06-2015.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS TUESDAY, THE 24[TH] DAY OF MAY 2022 / 3RD JYAISHTA, 1944** ## **WP(C) NO. 16664 OF 2022** ## **PETITIONER:** AMARAVATI RPERESENTED BY ITS MANAGING PARTNER MOHANDAS P S AGED 67 YEARS 12/707,PUTHUR ROAD, KOPPAM, PALAKKAD, PIN - 678001 BY ADVS. P.J.ANILKUMAR (A-1768) K.N.SREEKUMARAN N.SANTHOSHKUMAR ## **RESPONDENTS:** 1 INCOME TAX OFFICER (TDS) AAYKAR BHAVAN, PIN - 678101 2 DEPUTY COMMISSIONER OF INCOME TAX TDS CPC,AAYKAR BHAVAN, SECTOR-3,VAISHALI, GAZIABAD,UTTARPRADESH, PIN - 201010 3 CENTRAL BOARD OF DIRECT TAXES REPRESENTED BY ITS CHAIRMAN NORTH BLOCK, NEW DELHI, PIN - 110002 4 UNION OF INDIA REPRESENTED BY ITS SECRETARY MINISTRY OF FINANCE,DIRECT TAX DEPARTMENT,NEW DELHI, PIN - 110001 BY ADVS. CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT SRI.MANU.S, CGC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.05.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **WP(C) NO. 16664 OF 2022** **2** **BECHU KURIAN THOMAS, J. ----------------------------------------W.P.(C) No.16664 of 2022 ---------------------------------------Dated this the 24[th] day of May, 2022** ## **JUDGMENT** As an assessee under the Income Tax Act, 1961, petitioner had deducted TDS, for payments made by him and remitted the same to the Income Tax Department. While filing the statement of returns regarding the remittance of TDS, delay occurred. When the returns were processed, the second respondent, on noticing the delay in filing the statement of TDS remittance, levied late fee under section 234E of the Act. 2. By Ext.P1 to Ext.P5 intimations, petitioner was called upon to pay the late filing fee under section 234E of the Income Tax Act, 1961 (for short,'the Act'). As per the aforesaid intimations, amounts have been demanded as late fee for the periods from 2012-13 to 2014-15 on the basis of **WP(C) NO. 16664 OF 2022** **3** the provisions in section 234E of the Act, which is as follows: _**“234E-Fee for default in furnishing statements:-** (1) Without prejudice to the provisions of the Act, where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of Section 200 or the proviso to subsection (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.”_ 3. According to the petitioner, though section 234E of the Act was introduced by the Finance Act, 2012 with effect from 1st July, 2012, since petitioner is being demanded to pay, by Ext.P1 to Ext.P5, late fee for not filing the statement of tax deduction at source, it is necessary to refer to section 200A of the Act. It was further submitted that Section 200A(1) incorporated clause (c) only with effect from 01.06.2015. Sub-clause (c) to section 200A (1) refers to the fee if any to be computed in accordance with the provisions of section 200A(1)(e). It is the claim of the petitioner that till 01.06.2015 petitioner cannot be mulcted with any liability to pay late fee for non filing of any statement of tax deduction at source. **WP(C) NO. 16664 OF 2022** **4** 4. A statement has been filed by the respondents objecting to the claim of the petitioner. It is averred that the demands of late filing fee under section 234E of the Act were raised by orders issued from 2013 till 2016 and that the demands are still outstanding. The intimations issued by the department were all appealable orders under section 246A of the Act and the petitioner failed to challenge the levy of late fee. In such circumstances, the demands have become final and the petitioner has accepted the demands. Respondents also pleaded that the delay is a ground to refuse an appropriate relief so as to avoid unsettling the settled things. Relying upon the decisions in _**State of Maharashtra v. Digambar**_ (AIR 1995 SC 1991), _**G.C.Gupta and Others v. N.K.Pandey and Others**_ [(1988) 1 SCC 316] and _**State of M.P. And Another v. Bhailal Bhai**_ (AIR 1964 SC 1006), it was asserted that the delay must defeat the claim raised by the petitioner. 5. I have heard Sri.P.J.Anilkumar, learned counsel for the petitioner, Sri.Christopher Abraham, learned Standing Counsel for the respondents 1 to 3 as well as Sri.S.Manu, **WP(C) NO. 16664 OF 2022** **5** learned Assistant Solicitor General of India for the fourth respondent. 6. I have considered the rival contentions. 7. In the decision in _**M/s.Sarala Memorial Hospital**_ _**v. Union of India and Another**_ (W.P.(C) No.37775 of 2018) an identical question arose for consideration. After considering the statutory provisions of section 234E and section 200A of the Act and the implications of the amendment brought in to the Act, it was held that the amendment would take effect only from 1st June, 2015 and is thus prospective in nature. The aforesaid judgment has become final and is binding upon the authorities. Thus the jurisdiction to levy late fee under section 234E arises only from 01-06.2015 and not earlier. 8. As regards the contention on the delay, though the said contention was impressive on first blush, it can be seen that the nature of challenge raised by the petitioner is based upon the lack of jurisdiction of the respondents to impose late fee. Since in matters where total lack of jurisdiction is **WP(C) NO. 16664 OF 2022** **6** alleged, delay cannot be relied upon as a ground to deny the relief, this Court is of the view that the objections of the respondents are without any basis. 9. Further the decisions cited are distinguishable on the facts of those cases itself. In the decision in _**Digambar's**_ case (supra), the delay of 20 years in approaching the High Court for grant of compensation for alleged utilization of the land was held as a decisive factor to disentitle the petitioner therein. Similarly in _**G.C.Gupta's**_ case (supra) the issue related to seniority and petitioners challenged the orders of confirmation and determination of inter se seniority only after 15 years. In the decision in _**Bhailal Bhai's**_ case (supra) the question related to refund of tax claimed belatedly. None of those cases related to a total lack of jurisdiction or authority. 10. In view of the above, the demand in Ext.P1 to Ext.P5 intimations for the period from 2012-13 to 2014-15 is bereft of authority and cannot be legally sustainable. **WP(C) NO. 16664 OF 2022** **7** 11. Accordingly, I quash Ext.P1 to Ext.P5 intimations to the extent it demands late fee under section 234E for the period from 2012-13 till 01.06.2015. The writ petition is therefore allowed as above. **Sd/-** **BECHU KURIAN THOMAS JUDGE** AJM **WP(C) NO. 16664 OF 2022** **8** ## **APPENDIX OF WP(C) 16664/2022** ## **PETITIONER’S EXHIBITS :** |Exhibit P1|TRUE COPY OF THE INTIMATION OF LEVY U/S| |---|---| ||234E, AGAINST 26Q OF Q2 FOR F.Y: 2012-13| ||ISSUED BY THE 2ND RESPONDENT TO THE| ||PETITIONER.| |Exhibit P2|TRUE COPY OF THE INTIMATION OF LEVY U/S| ||234E, AGAINST 26Q OF Q3 FOR F.Y: 2012-13| ||ISSUED BY THE 2ND RESPONDENT TO THE| ||PETITIONER.| |Exhibit P3|TRUE COPY OF THE INTIMATION OF LEVY U/S| ||234E, AGAINST 26Q OF Q2 FOR F.Y: 2013-14| ||ISSUED BY THE 2ND RESPONDENT TO THE| ||PETITIONER.| |Exhibit P4|TRUE COPY OF THE INTIMATION OF LEVY U/S| ||234E, AGAINST 26Q OF Q3 FOR 2013-14| ||ISSUED BY THE 2ND RESPONDENT TO THE| ||PETITIONER.| |Exhibit P5|TRUE COPY OF THE INTIMATION OF LEVY U/S| ||234E, AGAINST 26Q OF Q1 FOR 2014-15| ||ISSUED BY THE 2ND RESPONDENT TO THE| ||PETITIONER.| |Exhibit P6|TRUE COPY OF THE NOTICE NO. ITBA/COM/F/| ||17/2021-22/1037737501(1) DATED| ||13.12.2021 ISSUED BY THE 1ST RESPONDENT| ||REGARDING TDS DUES INCLUDING LATE FEE| ||UNDER 234E.| ## **RESPONDENT’S EXHIBITS :NIL** **//TRUE COPY// PA TO JUDGE**