In The Decision In M/S.sarala Memorial Hospital v. In View Of The Above, The Demand In Ext.p1 To Ext.p7

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS MONDAY, THE 23 DAY OF MAY 2022 / 2ND JYAISHTA, 1944 WP(C) NO. 29662 OF 2021 PETITIONER: BLOCK DEVELOPMENT OFFICERBLOCK DEVELOPMENT OFFICE-PALAKKAD-RURAL DEVELOPMENT DEPARTMENT, KALLEKAD, PALAKKAD-678015 (REPRESENTED BY SMT.SRUTHY.B)BY ADVS.K.N.SREEKUMARANP.J.ANILKUMAR (A-1768)N.SANTHOSHKUMAR RESPONDENTS: 1INCOME TAX OFFICER (TDS)AAYKAR BHAVAN, ENGLISH CHURCH ROAD, PALAKKAD-678014.2ASSISTANT COMMISSIONER OF INCOME TAX,TDS CPC, AAYAKAR BHAVAN, SECTOR-3, VAISHALI, GAZIABAD, UTTARPRADESH-201010.3COMMISSIONER OF INCOME TAX (APPEALS),NATIONAL FACELESS APPEAL CENTRE, NEW DELHI-110003.4CENTRAL BOARD OF DIRECT TAXESNORTH BLOCK, NEW DELHI-110002, REPRESENTED BY ITS CHAIRMAN.5THE UNION OF INDIAMINISTRY 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 ON23.05.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 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 ofthe 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 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 personfails to deliver or cause to be delivered a statement within thetime prescribed in sub-section (3) of Section 200 or the provisoto subsection (3) of section 206C, he shall be liable to pay, byway of fee, a sum of two hundred rupees for every day duringwhich 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 petitioner is being demanded by Ext.P1 to Ext.P7 late fee fornot filing the statement of tax deduction at source, it isnecessary to refer to section 200A of the Act. Section200A(1) incorporated clause (c) to clause (f) with effectfrom 01.06.2015. Sub-clause to section 200A (1) refers tothe fee if any to be computed in accordance with theprovisions of section 200A(1)(e). It is the claim of thepetitioner that till 01.06.2015 petitioner cannot be mulctedwith any liability to pay late fee for non filing of anystatement of tax deduction at source. Challenging thedemands, petitioner had preferred appeals which weredismissed as per Ext.P8 and Ext.P9 orders. 4. Respondents contended that in the circumstances ofthe case, since statutory appeals were preferred by thepetitioner and the appeals were decided against him,petitioner cannot, thereafter, turn around and question thedemands under Article 226 of the Constitution of India. 5. I have heard Sri.K.N.Sreekumar, learned counsel forthe 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 fifthrespondent. 6. In the decision in M/s.Sarala Memorial Hospital v. Union of India and Another (W.P.(C) No.37775 of2018) an identical question arose for consideration. Afterconsidering the statutory provisions and the implications ofthe amendment brought in to the Act, it was held that theamendment under section 234E would take effect only from1st June, 2015, since section 200A was made effective onlyfrom that date. The aforesaid judgment has become finaland is binding upon the authorities. 7. In view of the above, the demand in Ext.P1 to Ext.P7 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 fifthrespondent. 6. In the decision in M/s.Sarala Memorial Hospital v. Union of India and Another (W.P.(C) No.37775 of2018) an identical question arose for consideration. Afterconsidering the statutory provisions and the implications ofthe amendment brought in to the Act, it was held that theamendment under section 234E would take effect only from1st June, 2015, since section 200A was made effective onlyfrom that date. The aforesaid judgment has become finaland 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 bereftof authority and cannot be legally sustainable. 8. However, the respondents have raised a contentionthat pursuant to Ext.P1 to Ext.P7 intimations, petitioner hadpreferred 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 theintimations issued earlier. 9. This Court had already declared that section 234E has no application prior to 01.06.2015 since section 200Awas inserted only from that day. Thus for the period prior to01.06.2015, respondents had no jurisdiction or authority toimpose the late fee. The decision in M/s.Sarala MemorialHospital's case has become final and binding. Since thejudgment of the jurisdictional High Court was not consideredby the Appellate Authority, Ext.P8 and Ext.P9 are perverse,warranting interference under Article 226 of the Constitutionof India. 10. Since the judgment in M/s.Sarala Memorial Hospital's case (supra) declared that late fee under Section234E cannot be imposed prior to 01.06.2015, no purposewill be served by sending the case back to the Tribunal. Thelevy of late fee is without authority and legally invalid. 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 THOMASJUDGE AJM WP(C) NO. 29662 OF 2021 APPENDIX OF WP(C) 29662/2021 PETITIONER’S EXHIBITS : Exhibit P1TRUE 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 P2TRUE 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 P3TRUE 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 P4TRUE 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 P5TRUE 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 P6TRUE 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 P7TRUE 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 P8TRUE COPY OF THE APPELLATE ORDER FOR THEASSESSMENT YEAR 2013-14 (RELEVANT FINANCIAL YEAR 2012-13) ISSUED BY 3RD RESPONDENT TO THE PETITIONER. Exhibit P9 TRUE COPY OF THE APPELLATE ORDER FOR THEASSESSMENT YEAR 2014-15 (RELEVANT FINANCIAL YEAR 2013-14) ISSUED BY 3RD RESPONDENT TO THE PETITIONER. //TRUE COPY// PA TO JUDGE