High Court of KeralaSingle Judge2022-03-24Writ petition allowed; Ext.P1–Ext.P9 quashed to...

Jiji Varghese v. Income Tax Officer (TDS), Aayakar Bhavan, Palakkad; Deputy Commissioner of Income Tax TDS CPC; Central Board of Direct Taxes; Union of India

Case / Petition Number:WP(C) No.1259/22

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Bechu Kurian Thomas J.
Judgment Date: 2022-03-24
Court Decision / Holding: Writ petition allowed. The intimations under section 234E for the period 2012-13 to 01.06.2015 are quashed for want of authority; the liability to pay late fee under 234E would arise only from 01-06-2015 onward, in line with the prospective effect of the 200A amendment.
Final Disposition: Writ petition allowed; Ext.P1–Ext.P9 quashed to the extent of demanding late fee under 234E for the period 2012-13 to 01.06.2015; liability under 234E to be computed from 01.06.2015 onwards as per amendment.

Parties to the Case

Appellants / Petitioners

Jiji Varghese

Respondents

Income Tax Officer (TDS) Aaykarl Bhavan, English Church Road, Palakkad
Deputy Commissioner of Income Tax TDS CPC, Aaykarl Bhavan, Sector-3, Vaishali, Ghaziabad
Central Board of Direct Taxes, North Block, New Delhi
Union of India, Ministry of Finance, Direct Taxes Department, New Delhi

Legal Representation & Advocates

Counsels for Petitioners

• Sri P.J Anil Kumar
• Sri K.N. Sreekumaran
• Sri N. Santhosh Kumar

Counsels for Respondents

• Sri Christopher Abraham, SC
• Sri M. S, ASGI

Case Synopsis & Summary

Jiji Varghese, an assessee under the Income Tax Act, 1961, faced late fee demands under section 234E for delays in remittance of TDS statements for the financial years 2012-13 to 2014-15. The petitioner contends that 234E was introduced by the Finance Act, 2012 with effect from 1 July 2012, but the liability to levy such late fee could be triggered only by amendments to section 200A, specifically clause (c) added from 1 June 2015, which prescribes computing the fee under section 200A(1)(e). Consequently, the petitioner argues that there can be no liability to pay late fee for periods prior to 1 June 2015. The respondents contend that intimations under section 234E for the 2012-13 to 2014-15 periods were issued between 2013 and 2016 and remained outstanding, with the intimations being appealable orders under section 246A; they also rely on precedents to contend that delay can defeat relief. The Kerala High Court refers to M/s. Sarala Memorial Hospital v. Union of India and Another, holding that the 200A amendment is prospective from 01.06.2015, and binds authorities. The court distinguishes earlier decisions (Digambar, Gupta, Bhail Bhai) as distinguishable on facts. It holds that the 2012-13 to 01.06.2015 demands are without authority and quashes those intimations, while leaving open liability from 01.06.2015 onward.

Provisions of Law Cited

Section 234E of the Income Tax Act, 1961Section 200A of the Income Tax Act, 1961Section 200A(1)(c)Clause (c) to Section 200A(1)Proviso to sub-section (3) of Section 206CSection 206CSub-section (3) of Section 200Section 246A of the Income Tax Act, 1961

Legal Doctrines & Maxims

Prospective operation of amendments (amendment to Section 200A)
Total lack of jurisdiction cannot be cured by delay; delay cannot defeat relief

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that Section 234E was introduced in 2012 for default in furnishing statements but its application cannot predate the 2015 amendment journey through Section 200A(1)(c). The reliance on 200A(1)(e) to compute late fee suggests no liability before 01.06.2015. The petitioner cites M/s. Sarala Memorial Hospital v. Union of India (W.P.(C) No. 37775 of 2018) to argue the amendment’s prospective effect. It is urged that intimations for 2012-13 to 2014-15 lack authority and the demands are unsustainable, since the statutory regime governing such charges did not exist for those periods. The petitioner pleads lack of jurisdiction to levy such fee in the absence of applicable amendments and seeks quashing of Ext.P1–P9 accordingly.

Contentions of Respondents

The respondents submit that intimations under 234E for 2012-13 to 2014-15 were issued in 2013-2016 and are appealable under section 246A; the demands are valid within the scheme of 234E, and the amendment to 200A is prospective from 01.06.2015, meaning liability arises from that date onward. They distinguish earlier decisions on delay (Digambar, Gupta, Bhail Bhai) as factually distinguishable and not applicable to jurisdictional questions, and argue that delay cannot be a ground to deny relief where there is jurisdiction to impose the fee.

Cited Precedents (4)

Case Name	Citation	Treatment	Explanation
State of Maharashtra v. Digambar	AIR 1995 SC 1991	Distinguished	The court distinguishes based on facts; delay in approaching the High Court for compensation is not analogous to lack of jurisdiction to impose a levy.
G.C. Gupta and Others v. N.K. Pandey and Others	(1988) 1 SCC 316	Distinguished	Issue concerned inter se seniority; not a direct challenge to a taxation levy or lack of jurisdiction to impose a late fee.
State of M.P. and Another v. Bhailal Bhai	AIR 1964 SC 1006	Distinguished	Belated tax refund context; not directly applicable to the jurisdictional challenge to levy under 234E.
M/s. Sarala Memorial Hospital v. Union of India and Another	W.P.(C) No. 37775 of 2018	Positive	Held the amendment to 200A prospective from 01.06.2015 and binding on authorities; followed by the court to hold 234E liability from that date onward.

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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** **THURSDAY, THE 24[TH] DAY OF MARCH 2022 / 3RD CHAITHRA, 1944** **WP(C) NO. 1259 OF 2022** ## **PETITIONER:** **JIJI VARGHESE IV/1007, GRACE AVENUE, THANA,PUDUPARIYARAM, PALAKKAD- 678733** **BY ADVS. SRI.P.J.ANILKUMAR SRI.K.N.SREEKUMARAN SRI.N.SANTHOSHKUMAR** ## **RESPONDENTS:** **1 INCOME TAX OFFICER (TDS) AAYKAR BHAVAN, ENGLISH CHURCH ROAD, PALAKKAD, PIN - 678101 2 DEPUTY COMMISSIONER OF INCOME TAX TDS CPC,AAYKAR BHAVAN, SECTOR-3, VAISHALI, GAZIABAD, UTTARPRADESH - 201010 3 CENTRAL BOARD OF DIRECT TAXES , NORTH BLOCK, NEW DELHI – 110002, REPRESENTED BY ITS CHAIRMAN 4 UNION OF INDIA MINISTRY OF FINANCE, DIRECT TAXES DEPARTMENT, NEW DELHI, PIN – 110001 REPRESENTED BY ITS SECRETARY** **BY ADVS. SRI.CHRISTOPHER ABRAHAM, SC SRI.MANU.S, ASGI** W.P.(C) No.1259/22 ## **-:2:-** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.03.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) No.1259/22 **-:3:-** ## **BECHU KURIAN THOMAS, J. ----------------------------------------W.P.(C) No.1259 of 2022** **----------------------------------------** Dated this the 24[th] day of March, 2021 ## **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.P9 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 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,_ W.P.(C) No.1259/22 ## **-:4:-** _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 1[st] July, 2012, since petitioner is being demanded to pay, by Ext.P1 to Ext.P9, 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. 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. W.P.(C) No.1259/22 **-:5:-** 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, 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 1[st] 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 **-:6:-** W.P.(C) No.1259/22 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 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.P9 W.P.(C) No.1259/22 ## **-:7:-** intimations for the period from 2012-13 to 2014-15 is bereft of authority and cannot be legally sustainable. 11. Accordingly, I quash Ext.P1 to Ext.P9 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** vps **Corrigendum** Dated 30.03.2022 The words “Dated this the 24[th] day of March, 2021” in the header of the judgment shall be read as “Dated this the 24[th] day of March, 2022”. Sd/- **BECHU KURIAN THOMAS JUDGE** vps W.P.(C) No.1259/22 ## **-:8:-** ## **APPENDIX OF WP(C) 1259/2022** ## **PETITIONER'S/S' EXHIBITS** - **EXHIBIT P1 INTIMATION U/S 234E, AGAINST 26Q OF Q2 FOR F.Y: 2012-13 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER** - **EXHIBIT P2 INTIMATION U/S 234E, AGAINST 26Q OF Q3 FOR F.Y: 2012-13 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER.** - **EXHIBIT P3 INTIMATION U/S 234E, AGAINST 26Q OF Q4 FOR F.Y: 2012-13 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER** - **EXHIBIT P4 INTIMATION U/S 234E, AGAINST 26Q OF Q1 FOR F.Y: 2013-14 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER** - **EXHIBIT P5 INTIMATION U/S 234E, AGAINST 26Q OF Q3 FOR F.Y: 2013-14 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER** - **EXHIBIT P6 INTIMATION U/S 234E, AGAINST 26Q OF Q4 FOR F.Y: 2013-14 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER** - **EXHIBIT P7 INTIMATION U/S 234E, AGAINST 26Q OF Q1 FOR F.Y: 2014-15 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER** - **EXHIBIT P8 INTIMATION U/S 234E, AGAINST 26Q OF Q2 FOR F.Y: 2014-15 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER** - **EXHIBIT P9 INTIMATION U/S 234E, AGAINST 26Q OF Q3 FOR F.Y: 2014-15 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER** - **EXHIBIT P10 NOTICENO.ITBA/COM/F/17/2021-22/ 1037769392(1) ISSUED BY THE 1ST RESPONDENT REGARDING TDS DUES INCLUDING LATE FEE UNDER 234E**