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High Court of KeralaSingle JudgeWrit petition allowed

Block Development Officer, Block Development Office-Palakkad Rural Development Department, Kalakkad, Palakkad-678015 v. Income Tax Officer (TDS), Aaykar Bhavan, English Church Road, Palakkad-678014; Assistant Commissioner of Income Tax, TDS CPC, Vaishali, Ghaziabad, Uttar Pradesh-201010; Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, New Delhi-110003; Central Board of Direct Taxes, North Block, New Delhi-110002; Union of India, Ministry of Finance, Direct Taxes Department, New Delhi-110001

Case / Petition Number:WP(C) No. 29662 of 2021
Neutral Citation:/

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • Bechu Kurian Thomas
Judgment Date
2022-05-23
Court Decision / Holding
Writ petition allowed. Ext.P1 to Ext.P7 are quashed to the extent they demand late fee under Section 234E for the period 2012-13 to 01.06.2015. The court held that the levy of late fee in those periods is without authority and invalid; no remand to the Tribunal is necessary given the binding finality of the Sarala Memorial Hospital ruling.
Final Disposition
Writ petition allowed

Parties to the Case

Appellants / Petitioners

  • Block Development Officer, Block Development Office-Palakkad-Rural Development Department, Kalakkad, Palakkad-678015 (represented by Smt. Sruthy B)

Respondents

  • Income Tax Officer (TDS), Aaykar Bhavan, English Church Road, Palakkad-678014
  • Assistant Commissioner of Income Tax, TDS CPC, Aayakar Bhavan, Sector-3, Vaishali, Ghaziabad-201010
  • Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, New Delhi-110003
  • Central Board of Direct Taxes, North Block, New Delhi-110002
  • Union of India, Ministry of Finance, Direct Taxes Department, New Delhi-110001

Legal Representation & Advocates

Counsels for Petitioners

  • • K.N. Sreekumaran
  • • P.J. Anilkumar
  • • N. Santhoshkumar

Counsels for Respondents

  • • Sri Manu S. (ASG)
  • • Sri Christopher Abraham (SC)

Case Synopsis & Summary

The writ petition (WP(C) No. 29662 of 2021) by Block Development Officer, Palakkad, challenged intimations issued under Section 234E of the Income Tax Act, demanding late filing fees for TDS statements (Form 24Q) for the financial years 2012-13 to 2014-15. The petitioner argued that 234E was introduced by the Finance Act, 2012 and became effective from 1 July 2012, but Section 200A, which governs computation of late fee, was amended to include new sub-clauses only from 01.06.2015; thus, there could be no liability for late fees for statements prior to that date. The respondents argued that the petitioner, having invoked statutory remedies and heard appeals, could not challenge the intimations under Article 226. The court relied on M/s. Sarala Memorial Hospital v. Union of India and Another (W.P.(C) No. 37775 of 2018), which held that the Section 234E amendment takes effect from 01.06.2015 since Section 200A was made effective from that date. Consequently, the court held that the demands for 2012-13 to 2014-15 were without authority and quashed Ext.P1 to Ext.P7 to that extent. The writ petition was allowed in part. The judgment emphasizes that pre-01.06.2015 demands cannot be sustained, and there was no necessity to remand to the Tribunal.

Provisions of Law Cited

Income Tax Act, 1961 – Section 234EIncome Tax Act, 1961 – Section 200A(1)Income Tax Act, 1961 – Section 200A(1)(c) to (f)Income Tax Act, 1961 – Section 200(3)Income Tax Act, 1961 – Section 206C (proviso to subsection (3))Finance Act, 2012Constitution of India, Article 226

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that the late fee under Section 234E cannot be imposed for periods prior to 01.06.2015 because Section 200A, which governs the computation of late fee under 234E, was amended to include new subsections only from that date. Since 200A(1)(e) (and related subsections) came into effect on 01.06.2015, there was no liability to pay late fees for 2012-13 to 2014-15. The petitioner also argues that supporting legal authorities require quashing of the intimations for those periods as they lack authority.

Contentions of Respondents

The respondents submit that once statutory remedies were invoked and decided against the petitioner, Article 226 challenges to intimations are not maintainable. They rely on prior decisions, including the Sarala Memorial Hospital case, to contend that the amendments to 234E have retrospective applicability in the context of the amended Section 200A, thereby allowing the late fee for applicable periods.

Cited Precedents (1)

Case NameCitationTreatmentExplanation
M/s. Sarala Memorial Hospital v. Union of India and AnotherW.P.(C) No. 37775 of 2018PositiveThe court relied on this decision to hold that Section 234E amendments take effect from 01.06.2015 because Section 200A was made effective from that date; this precedent is binding.

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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 MONDAY, THE 23[RD] DAY OF MAY 2022 / 2ND JYAISHTA, 1944** ## **WP(C) NO. 29662 OF 2021** ## **PETITIONER:** BLOCK DEVELOPMENT OFFICER BLOCK DEVELOPMENT OFFICE-PALAKKAD-RURAL DEVELOPMENT DEPARTMENT, KALLEKAD, PALAKKAD-678015 (REPRESENTED BY SMT.SRUTHY.B) BY ADVS. K.N.SREEKUMARAN P.J.ANILKUMAR (A-1768) N.SANTHOSHKUMAR ## **RESPONDENTS:** 1 INCOME TAX OFFICER (TDS) AAYKAR BHAVAN, ENGLISH CHURCH ROAD, PALAKKAD-678014. 2 ASSISTANT COMMISSIONER OF INCOME TAX, TDS CPC, AAYAKAR BHAVAN, SECTOR-3, VAISHALI, GAZIABAD, UTTARPRADESH-201010. 3 COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE, NEW DELHI-110003. 4 CENTRAL BOARD OF DIRECT TAXES NORTH BLOCK, NEW DELHI-110002, REPRESENTED BY ITS CHAIRMAN. 5 THE UNION OF INDIA MINISTRY OF FINANCE, DIRECT TAXES DEPARTMENT, NEW DELHI-110001, REPRESENTED BY ITS SECRETARY. ## **OTHER PRESENT:** ASG,SRI.MANU.S, SC,SRI.CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.05.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **WP(C) NO. 29662 OF 2021** **2** ## **BECHU KURIAN THOMAS, J.** **----------------------------------------W.P.(C) No. 29662 of 2021** **---------------------------------------Dated this the 23[rd] day of May, 2022** ## **JUDGMENT** By Ext.P1 to Ext.P7 intimations, petitioner has been called upon to pay the late filing fee under section 234E of the Income Tax Act, 1961 (for short,'the Act'). 2. As per the aforesaid intimations, amounts have been demanded as late fee for the periods from 2012-13 to 201415 on the basis of 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. Though section 234E of the Act was introduced by the Finance Act, 2012 with effect from 1st July, 2012, since **WP(C) NO. 29662 OF 2021** **3** petitioner is being demanded by Ext.P1 to Ext.P7 late fee for not filing the statement of tax deduction at source, it is necessary to refer to section 200A of the Act. Section 200A(1) incorporated clause (c) to clause (f) with effect from 01.06.2015. Sub-clause 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. Challenging the demands, petitioner had preferred appeals which were dismissed as per Ext.P8 and Ext.P9 orders. 4. Respondents contended that in the circumstances of the case, since statutory appeals were preferred by the petitioner and the appeals were decided against him, petitioner cannot, thereafter, turn around and question the demands under Article 226 of the Constitution of India. 5. I have heard Sri.K.N.Sreekumar, learned counsel for the petitioner, Sri.Christopher Abraham, learned Standing **WP(C) NO. 29662 OF 2021** **4** Counsel for the respondents 1 to 4 as well as Sri.S.Manu, learned Assistant Solicitor General of India for the fifth respondent. 6. 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 and the implications of the amendment brought in to the Act, it was held that the amendment under section 234E would take effect only from 1st June, 2015, since section 200A was made effective only from that date. The aforesaid judgment has become final and is binding upon the authorities. 7. In view of the above, the demand in Ext.P1 to Ext.P7 intimations for the period from 2012-13 to 2014-15 is bereft of authority and cannot be legally sustainable. 8. However, the respondents have raised a contention that pursuant to Ext.P1 to Ext.P7 intimations, petitioner had preferred appeals and those appeals resulted in dismissal. Thus the statutory remedy having been invoked, according **WP(C) NO. 29662 OF 2021** **5** to the respondents, petitioner cannot challenge the intimations issued earlier. 9. This Court had already declared that section 234E has no application prior to 01.06.2015 since section 200A was inserted only from that day. Thus for the period prior to 01.06.2015, respondents had no jurisdiction or authority to impose the late fee. The decision in _**M/s.Sarala Memorial Hospital's**_ case has become final and binding. Since the judgment of the jurisdictional High Court was not considered by the Appellate Authority, Ext.P8 and Ext.P9 are perverse, warranting interference under Article 226 of the Constitution of India. 10. Since the judgment in _**M/s.Sarala Memorial Hospital's**_ case (supra) declared that late fee under Section 234E cannot be imposed prior to 01.06.2015, no purpose will be served by sending the case back to the Tribunal. The levy of late fee is without authority and legally invalid. **WP(C) NO. 29662 OF 2021** **6** 11. Accordingly, I quash Ext.P1 to Ext.P7 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. 29662 OF 2021** **7** ## **APPENDIX OF WP(C) 29662/2021** PETITIONER’S EXHIBITS : |Exhibit P1|TRUE COPY OF THE INTIMATION OF LEVY U/S| |---|---| ||234E AGAINST 24Q OF Q3 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 24Q OF Q4 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 24Q OF Q1 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 24Q OF Q2 FOR F.Y: 2013-14| ||ISSUED BY THE 2ND RESPONDENT TO THE| ||PETITIONER.| |Exhibit P5|TRUE COPY OF THE INTIMATION U/S 234E| ||AGAINST 24Q OF Q3 FOR F.Y: 2013-14| ||ISSUED BY THE 2ND RESPONDENT TO THE| ||PETITIONER.| |Exhibit P6|TRUE COPY OF THE INTIMATION U/S 234E| ||AGAINST 24Q OF Q4 FOR F.Y: 2013-14| ||ISSUED BY THE 2ND RESPONDENT TO THE| ||PETITIONER.| |Exhibit P7|TRUE COPY OF THE INTIMATION U/S 234E| ||AGAINST 24Q OF Q4 FOR F.Y: 2014-15| ||ISSUED BY THE 2ND RESPONDENT TO THE| ||PETITIONER.| |Exhibit P8|TRUE COPY OF THE APPELLATE ORDER FOR THE| ||ASSESSMENT YEAR 2013-14 (RELEVANT| ||FINANCIAL YEAR 2012-13) ISSUED BY 3RD| ||RESPONDENT TO THE PETITIONER.| **WP(C) NO. 29662 OF 2021** **8** Exhibit P9 TRUE COPY OF THE APPELLATE ORDER FOR THE ASSESSMENT YEAR 2014-15 (RELEVANT FINANCIAL YEAR 2013-14) ISSUED BY 3RD RESPONDENT TO THE PETITIONER. //TRUE COPY// PA TO JUDGE