Conceria International (P) Ltd. v. ITO

Case Laws Analysis
REFERRED Qatalys Software Technologies (P.) Ltd. v. UOI 2020 TaxPub(DT) 1618 (Mad-HC)
REFERRED Rajesh Kourani v. UOI 2017 TaxPub(DT) 1953 (Guj-HC)
REFERRED Fatheraj Singhvi v. Union of India 2016 TaxPub(DT) 4175 (Karn-HC)
REFERRED Dundlod Shikshan Sansthan v. UOI 2015 TaxPub(DT) 5497 (Raj-HC)
REFERRED CIT v. B.C. Srinivasa Setty 1981 TaxPub(DT) 0902 (SC)

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The Tax Publishers2023 TaxPub(DT) 7511 (Mad-HC) IN THE MADRAS HIGH COURT MOHAMMED SHAFFIQ, J. Conceria International (P) Ltd. v. ITO W.P. No. 16934 of 2021 & W.M.P. Nos. 17943 & 17945 of 2021 10 November, 2023 Petitioner by: Salai Varun Respondents by: B. Ramaswamy Senior Standing Counsel ORDER The short question that arises for consideration in this writ petition relates to whether late fee under section 234E of the Income Tax Act, 1961 (hereinafter referred to as the Act) can be levied prior to the amendment to the section 200A(1)(c) of the Act vide Finance Act, 2015 with effect from 1-6-2015 whereby the fee to be computed in accordance with the provision of section 234E of the Act stood included while processing the statements of tax deducted at source. 2. Brief Facts: 2.1. The petitioner company is a manufacturer of leather and leather products based in Ranipet District Tamil Nadu. The petitioner also engaged sub contractors and in respect of payments made to sub contractors the petitioner was required to deduct taxes at source in terms of the Act. 2.2. An intimation under section 200A of the Act was issued by the respondent/revenue dated 11-12-2013 for the financial years 2012-13, 2013-14, 2014-15 and 2015-16 intimating the sum due and payable in terms of section 200A of the Act. Thereafter on 19-1-2021 yet another intimation with regard to the outstanding demand of Tax Deducted at Sources of Rs. 6,54,350 was issued for the period 2010-11 to 2015-16. 2.3. The petitioner submitted its response vide Letter dated 29-1-2021 wherein it was stated that the Income Tax Department was not empowered to levy late fee under section 234E of the Act prior to 1-6-2015, while also stating that interest could be waived and hence requested waiver of late fee and interest. The impugned order considering the above letter dated 29-1-2021 was passed stating that there is no power of waiver with regard to late fee under section 234E of the Act and thus the request for waiver stood rejected while also drawing the attention of the petitioner to the judgment of the Madras High Court in the case of Qatalys Software Technologies (P) Ltd. v. UOI (2020) 115 taxmann.com 345 (Mad) : 2020 TaxPub(DT) 1618 (Mad-HC) wherein the validity of the late fee levied under section 234E of the Act was upheld and also to the judgment of the Gujarat High Court in the case of Rajesh Kourani v. Union of India & Ors.(2017) 297 CTR 502 (Guj) : 2017 TaxPub(DT) 1953 (Guj-HC) wherein the late fee under section 234E of the Act was held to be operative with effect from 1-7-2012. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2023 TaxPub(DT) 7511 (Mad-HC)

IN THE MADRAS HIGH COURT

MOHAMMED SHAFFIQ, J.

Conceria International (P) Ltd. v. ITO

W.P. No. 16934 of 2021 & W.M.P. Nos. 17943 & 17945 of 2021

10 November, 2023

Petitioner by: Salai Varun

Respondents by: B. Ramaswamy Senior Standing Counsel

ORDER

The short question that arises for consideration in this writ petition relates to whether late fee under section 234E of the Income Tax Act, 1961 (hereinafter referred to as the Act) can be levied prior to the amendment to the section 200A(1)(c) of the Act vide Finance Act, 2015 with effect from 1-6-2015 whereby the fee to be computed in accordance with the provision of section 234E of the Act stood included while processing the statements of tax deducted at source.

2. Brief Facts:

2.1. The petitioner company is a manufacturer of leather and leather products based in Ranipet District Tamil Nadu. The petitioner also engaged sub contractors and in respect of payments made to sub contractors the petitioner was required to deduct taxes at source in terms of the Act.

2.2. An intimation under section 200A of the Act was issued by the respondent/revenue dated 11-12-2013 for the financial years 2012-13, 2013-14, 2014-15 and 2015-16 intimating the sum due and payable in terms of section 200A of the Act. Thereafter on 19-1-2021 yet another intimation with regard to the outstanding demand of Tax Deducted at Sources of Rs. 6,54,350 was issued for the period 2010-11 to 2015-16.

2.3. The petitioner submitted its response vide Letter dated 29-1-2021 wherein it was stated that the Income Tax Department was not empowered to levy late fee under section 234E of the Act prior to 1-6-2015, while also stating that interest could be waived and hence requested waiver of late fee and interest. The impugned order considering the above letter dated 29-1-2021 was passed stating that there is no power of waiver with regard to late fee under section 234E of the Act and thus the request for waiver stood rejected while also drawing the attention of the petitioner to the judgment of the Madras High Court in the case of Qatalys Software Technologies (P) Ltd. v. UOI (2020) 115 taxmann.com 345 (Mad) : 2020 TaxPub(DT) 1618 (Mad-HC) wherein the validity of the late fee levied under section 234E of the Act was upheld and also to the judgment of the Gujarat High Court in the case of Rajesh Kourani v. Union of India & Ors.(2017) 297 CTR 502 (Guj) : 2017 TaxPub(DT) 1953 (Guj-HC) wherein the late fee under section 234E of the Act was held to be operative with effect from 1-7-2012.