In The Decision In M/S.sarala Memorial Hospital v. Union

PRESENT THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS WEDNESDAY, THE 18 DAY OF MAY 2022 / 28TH VAISAKHA, 1944 WP(C) NO. 1078 OF 2022 PETITIONER: HEADMASTER GOVERNMENT UPPER PRIMARY SCHOOL, DEPARTMENT OF EDUCATION, NALLEPILLY, PALAKKAD – 678553 (REP. BY SRI.SASIDHARAN M.P. BY ADVS. SRI.P.J.ANILKUMAR SRI.K.N.SREEKUMARANSRI.SANTHOSHKUMAR N. RESPONDENTS: 1INCOME TAX OFFICER (TDS)PALAKKAD, PIN - 678014PALAKKAD, PIN - 678014 AAYKAR BAHVAN, ENGLISH CHRUCH ROAD, 2ASSISTANT COMMISSIONER OF INCOME TAX TDS ,CPC, AAYAKAR BHAVAN, SECTOR-3, VAISHALI, GAZIABAD, UTTARPRADESH, PIN - 201010 3COMMISSIONER OF INCOME TAX (APPEALS)NATIONAL FACELESS APPEAL CENTRE, NEW DELHI, PIN - 110003NATIONAL FACELESS APPEAL CENTRE, NEW DELHI, PIN - 110003 4CENTRAL BOARD OF DIRECT TAXESREP. BY ITS CHAIRMANREP. BY ITS CHAIRMAN NORTH BLOCK, NEW DELHI-110002 5 THE UNION OF INDIA MINISTRY OF FINANCE, DIRECT TAXES DEPARTMENT, W.P.(C) No.1078/22 -:2:- NEW DELHI, PIN – 110001 REP. BY ITS SECRETARY BY ADVS. SRI.CHRISTOPHER ABRAHAM, SC INCOME TAX DEPARTMENTSRI.S.MANU, ASGI THIS WRIT PETITION (CIVIL) HAVING COME UP FORADMISSION ON 01.04.2022, THE COURT ON 18.05.2022 DELIVEREDTHE FOLLOWING: W.P.(C) No.1078/22 -:3:- BECHU KURIAN THOMAS, J.----------------------------------------- W.P.(C) No.1078 of 2022 ---------------------------------------- Dated this the 18[th] day of May, 2022 JUDGMENT By Ext.P1 to Ext.P4 intimations, petitioner has been called upon to pay the late filing fee under section 234E of the Income TaxAct, 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 asfollows: “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 the timeprescribed in sub-section (3) of Section 200 or the proviso to sub-section (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 failurecontinues.” 3. 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 by Ext.P1 to Ext.P4 late fee for not filing thestatement of tax deduction at source, it is necessary to refer to W.P.(C) No.1078/22 -:4:- section 200A of the Act. Section 200A(1) incorporated clause (c) toclause (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 theprovisions of section 200A(1)(e). It is the claim of the petitioner thattill 01.06.2015 petitioner cannot be mulcted with any liability to paylate fee for non filing of any statement of tax deduction at source. 4. A statement has been filed by the respondents contendingthat demands for late fee under section 234E of the Act were raisedagainst the petitioner on 25.09.2018. Challenging the demands,petitioner had preferred appeals and the appeals were dismissed asper Ext.P6 to Ext.P9 orders. It was further pleaded that in thecircumstances of the case, since statutory appeals were preferred bythe petitioner and the appeals were decided against him, he cannotthereafter turn around and question the demands under Article 226of the Constitution of India. 5. I have heard Sri.P.J.Anilkumar, learned counsel for the petitioner, Sri.Christopher Abraham, learned Standing Counsel forthe respondents 1 to 4 as well as Sri.S.Manu, learned AssistantSolicitor General of India for the fifth respondent. 6. In the decision in M/s.Sarala Memorial Hospital v. Union W.P.(C) No.1078/22 -:5:- 5. I have heard Sri.P.J.Anilkumar, learned counsel for the petitioner, Sri.Christopher Abraham, learned Standing Counsel forthe respondents 1 to 4 as well as Sri.S.Manu, learned AssistantSolicitor General of India for the fifth respondent. 6. In the decision in M/s.Sarala Memorial Hospital v. Union W.P.(C) No.1078/22 -:5:- of India and Another (W.P.(C) No.37775 of 2018) an identicalquestion arose for consideration. After considering the statutoryprovisions and the implications of the amendment brought in to the Act, it was held that the amendment under section 234E would takeeffect only from 1[st] June, 2015, since section 200A was madeeffective only from that date. The aforesaid judgment has becomefinal and is binding upon the authorities. 7. In view of the above, the demand in Ext.P1 to Ext.P4intimations for the period from 2012-13 to 2014-15 is bereft ofauthority and cannot be legally sustainable. 8. However, the respondents have raised a contention thatpursuant to Ext.P1 to Ext.P4 intimations, petitioner had preferredappeals and those appeals resulted in dismissal. Thus the statutoryremedy having been invoked, according to the respondents,petitioner cannot challenge the intimations issued earlier. 9. Petitioner has thereafter amended the writ petition andincorporated a challenge against the appellate orders. 10. This Court had already declared that section 234E has noapplication prior to 01.06.2015 since section 200A was inserted onlyfrom that day. Thus for the period prior to 01.06.2015, respondents W.P.(C) No.1078/22 -:6:- had no jurisdiction or authority to impose the late fee. The decision in M/s.Sarala Memorial Hospital's case has become final andbinding. Since the judgment of the jurisdictional High Court was notconsidered by the Appellate Authority, Ext.P6, Ext.P7, Ext.P8 andExt.P9 are perverse, warranting interference under Article 226 of theConstitution of India. 11. Since the judgment in M/s.Sarala Memorial Hospital'scase (supra) declared that late fee under Section 234E cannot beimposed prior to 01.06.2015, no purpose will be served by sendingthe case back to the Tribunal. The levy of late fee is withoutauthority and legally invalid. 12. Accordingly, I quash Ext.P1 to Ext.P4 intimations to theextent it demands late fee under section 234E for the period from2012-13 till 01.06.2015. The writ petition is therefore allowed as above. Sd/- vps BECHU KURIAN THOMAS JUDGE W.P.(C) No.1078/22 APPENDIX OF WP(C) 1078/2022 PETITIONER'S/S' EXHIBITS EXHIBIT P1TRUE COPY OF THE INTIMATION OF LEVY U/S234E, AGAINST 24Q OF Q3 FOR F.Y: 2012-13ISSUED BY THE 2ND RESPONDENT TO THEPETITIONER.234E, AGAINST 24Q OF Q3 FOR F.Y: 2012-13ISSUED BY THE 2ND RESPONDENT TO THEPETITIONER. EXHIBIT P2TRUE COPY OF THE INTIMATION OF LEVY U/S234E, AGAINST 24Q OF Q4 FOR F.Y:2012-13ISSUED BY THE 2ND RESPONDENT TO THEPETITIONER.234E, AGAINST 24Q OF Q4 FOR F.Y:2012-13ISSUED BY THE 2ND RESPONDENT TO THEPETITIONER. EXHIBIT P3TRUE COPY OF THE INTIMATION OF LEVY U/S234E, AGAINST 24Q OF Q4 FOR F.Y:2013-14ISSUED BY THE 2ND RESPONDENT TO THEPETITIONER.234E, AGAINST 24Q OF Q4 FOR F.Y:2013-14ISSUED BY THE 2ND RESPONDENT TO THEPETITIONER. EXHIBIT P4TRUE COPY OF THE INTIMATION OF LEVY U/S234E, AGAINST 24Q OF Q1 FOR F.Y:2014-15ISSUED BY THE 2ND RESPONDENT TO THEPETITIONER234E, AGAINST 24Q OF Q1 FOR F.Y:2014-15ISSUED BY THE 2ND RESPONDENT TO THEPETITIONER EXHIBIT P5TRUE COPY OF THE INTIMATION LETTER DATED25.09.2018 ISSUED BY THE 1ST RESPONDENT25.09.2018 ISSUED BY THE 1ST RESPONDENT EXHIBIT P6TRUE COPY OF THE APPELLATE ORDER FOR THEASSESSMENT YEAR 2013-14 AGAINST EXT-P1(RELEVANT FINANCIAL YEAR 2012-13)ISSUED BY 3RD RESPONDENT TO THEPETITIONER. ASSESSMENT YEAR 2013-14 AGAINST EXT-P1(RELEVANT FINANCIAL YEAR 2012-13)ISSUED BY 3RD RESPONDENT TO THEPETITIONER. EXHIBIT P4TRUE COPY OF THE INTIMATION OF LEVY U/S234E, AGAINST 24Q OF Q1 FOR F.Y:2014-15ISSUED BY THE 2ND RESPONDENT TO THEPETITIONER234E, AGAINST 24Q OF Q1 FOR F.Y:2014-15ISSUED BY THE 2ND RESPONDENT TO THEPETITIONER EXHIBIT P5TRUE COPY OF THE INTIMATION LETTER DATED25.09.2018 ISSUED BY THE 1ST RESPONDENT25.09.2018 ISSUED BY THE 1ST RESPONDENT EXHIBIT P6TRUE COPY OF THE APPELLATE ORDER FOR THEASSESSMENT YEAR 2013-14 AGAINST EXT-P1(RELEVANT FINANCIAL YEAR 2012-13)ISSUED BY 3RD RESPONDENT TO THEPETITIONER. ASSESSMENT YEAR 2013-14 AGAINST EXT-P1(RELEVANT FINANCIAL YEAR 2012-13)ISSUED BY 3RD RESPONDENT TO THEPETITIONER. EXHIBIT P7TRUE COPY OF THE APPELLATE ORDER FOR THEASSESSMENT YEAR 2013-14 AGAINST EXT-P2(RELEVANT FINANCIAL YEAR 2012-13) ISSUEDBY 3RD RESPONDENT TO THE PETITIONERASSESSMENT YEAR 2013-14 AGAINST EXT-P2(RELEVANT FINANCIAL YEAR 2012-13) ISSUEDBY 3RD RESPONDENT TO THE PETITIONER EXHIBIT P8TRUE COPY OF THE APPELLATE ORDER FOR THEASSESSMENT YEAR 2014-15 AGAINST EXT-P3(RELEVANT FINANCIAL YEAR 2013-14) ISSUEDBY 3RD RESPONDENT TO THE PETITIONER.ASSESSMENT YEAR 2014-15 AGAINST EXT-P3(RELEVANT FINANCIAL YEAR 2013-14) ISSUEDBY 3RD RESPONDENT TO THE PETITIONER. EXHIBIT P9TRUE COPY OF THE APPELLATE ORDER FOR THEASSESSMENT YEAR :2015-16 AGAINST EXT-P4(RELEVANT FINANCIAL YEAR 2014-15) ISSUEDBY 3RD RESPONDENT TO THE PETITIONERASSESSMENT YEAR :2015-16 AGAINST EXT-P4(RELEVANT FINANCIAL YEAR 2014-15) ISSUEDBY 3RD RESPONDENT TO THE PETITIONER