Madras High Court
Apparel Marketing And Manufacturing ... vs The Principal Chief Commissioner Of ... on 12 September, 2024
Author: Krishnan Ramasamy
Bench: Krishnan Ramasamy
1
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 12.09.2024
CORAM
THE HONOURABLE MR. JUSTICE KRISHNAN RAMASAMY
W.P.No. 4331 of 2024
And
W.M.P.Nos. 4657 & 4658 of 2024
Apparel Marketing and Manufacturing International
Represented by Proprietor
Shrei Ganesh
Nos. 2 & 3, Jothi Theatre Road,
Valipalayam, Tirupur,
Tamilnadu – 641 601. ... Petitioner
..Vs..
1. The Principal Chief Commissioner of Income Tax
Administrative Block,
63, Race Course Road,
Coimbatore,
Tamil Nadu – 641 018.
2. The Chief Commissioner of Income Tax (TDS)
Administrative Block,
63, Race Course Road,
Coimbatore,
Tamil Nadu – 641 018.
3. The Deputy Commissioner of Income Tax
Centralized Processing Cell – TDS
Aayakar Bhawan, Sector -3
Vaishali, Ghaziabad, U.P.-201010.
https://www.mhc.tn.gov.in/judis
2
4. The Income Tax Officer, TDS Ward
No.121, Adams Building, Sixty Feet Road
Tiruppur. ... Respondents
PRAYER: Petition under Article 226 of the Constitution of India, praying
for the issue of a Writ of Certiorari calling for the records on the files of the
third respondent in impugned Demand Intimation Letter Nos.
TDS/1213/26Q/D/10005900353, TDS/1213/26Q/D/10005900354,
TDS/1213/26Q/D/10005900355, TDS/1213/26Q/D/100021851548 dated
03.10.2016 respectively and quash the same as being illegal, void, arbitrary,
unconstitutional, without jurisdiction, without authority of law and contrary
to the principles of natural justice.
***
For Petitioner :: Mr. B.Raveendran
for Mr. K.Thyagarajan
For Respondents :: Dr.B.Ramaswamy
Additional Government Pleader
ORDER
The Writ Petition has been filed challenging the impugned Demand
Intimation Letters, dated 03.10.2016, passed by the third respondent and to
quash the same.
https://www.mhc.tn.gov.in/judis
2. The learned counsel appearing on either side would submit that the
Judgment of this Court reported in 2023 (10) TMI 1141 [ M/s. True Blue
Voice India Private Ltd., and another Vs. the Chief Commissioner of
Income Tax – TDS, Chennai and others] would squarely apply to the facts
of the present case.
3. The relevant portion of the said Judgment is extracted below:-
“10. There is no dispute on the aspect of validity
of the Section 234E of the Act. The only issue that
has to be decided in the present case is as to
whether the late fee can be imposed under Section
234E of the Act, while processing the statement of
TDS under Section 200A of the Act for the subject
assessment years?
11. On considering the submissions of both the
learned counsel and while reading Section 234E of
the Act, it appears that the
Department/respondents can impose the late fee
for the circumstances mentioned under Section
https://www.mhc.tn.gov.in/judis
234E of the Act with effect from 01.07.2012, but
not when they process the TDS under Section 200A
of the Act. In the Finance Bill, 2015, Section
200A(1)(c) of the Act was introduced, which reads
as follows:
“200A. Processing of statements of tax
deducted at source.—
(1) ......................
(a)......................
(b)........................
(c) the fee, if any, shall be computed in
accordance with the provisions of section 234E;”
12. Further, the objects and reasons for
introduction of Section 200A(1)(c) of the Act are
as follows:
“Rationalisation of provisions relating to Tax
Deduction at Source (TDS) and Tax Collection at
Source (TCS)
Under Chapter XVII-B of the Act, a person is
required to deduct tax on certain specified
payment at the specified rate if the payment
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exceeds the specified threshold. The person
deducting tax (‘the deductor’) is required to file a
quarterly Tax Deduction at Source (TDS)
statement containing the details of deduction of tax
made during the quarter by the prescribed due
date. Similarly, under Chapter XVII-BB of the Act,
a person is required to collect tax on certain
specified receipts at the specified rates. The person
collecting tax (‘the collector’) also is required to
file a quarterly Tax Collection at Source (TCS)
statement containing the details of collection of tax
made during the quarter by the prescribed due
date. In order to provide effective deterrence
against delay in furnishing of TDS/TCS statement,
the Finance Act, 2012 inserted section 234E in the
Act to provide for levy of fee for late furnishing of
TDS/TCS statement. The levy of fee under section
234E of the Act has proved to be an effective tool
in improving the compliance in respect of timely
submission of TDS/TCS statement by the deductor
or collector.
Finance (No.2) Act, 2009 inserted section 200A in
the Act which provides for processing of TDS
statements for determining the amount payable or
https://www.mhc.tn.gov.in/judis
refundable to the deductor. However, as section
243E was inserted after the insertion of section
200A in the Act, the existing provisions of section
200A of the Act does not provide for determination
of fee payable under section 234E of the Act at the
time of processing of TDS statements. It is,
therefore, proposed to amend the provisions of
section 200A of the Act so as to enable
computation of fee payable under section 234E of
the Act at the time of processing of TDS statement
under section 200A of the Act.
Currently, the provisions of sub-section (3) of
section 200 of the Act enable the deductor to
furnish TDS correction statement and
consequently, section 200A of the Act allows
processing of the TDS correction statement.
However, currently, there does not exist any
provision for allowing a collector to file correction
statement in respect of TCS statement which has
been furnished. It is, therefore, proposed to amend
the provisions of section 206C of the Act so as to
allow the collector to furnish TCS correction
statement. Currently, there does not exist any
provision in the Act to enable processing of the
https://www.mhc.tn.gov.in/judis
TCS statement filed by the collector as available
for processing of TDS statement. As the
mechanism of TCS statement is similar to TDS
statement, it is proposed to insert a provision in
the Act for processing of TCS statements on the
line of existing provisions for processing of TDS
statement contained in section 200A of the Act.
The proposed provision shall also incorporate the
mechanism for computation of fee payable under
section 234E of the Act.”
13. A reading of the above makes it clear that
since no mechanism was available for
determination of late fee payable under Section
234E of the Act at the time of processing TDS
statements. Thus it was proposed to amend the
provisions of Section 200A of the Act, so as to
enable the computation of fee payable under
Section 234E of the Act at the time of processing of
TDS statement under Section 200A of he Act. Thus,
the said sub-Section 200A(1)(c) of the Act was
came to be inserted with effect from 01.06.2015.
https://www.mhc.tn.gov.in/judis
14. Now the dispute is with regard to the
assessment years 2012- 13, 2013-14, 2014-15 and
the applicability of Section 200A(1)(c) of the Act
for relevant assessment years. There is no dispute
on the aspect that the TDS statement was filed
under Section 200A of the Act and the respondent
had also issued the intimation under Section 200A
of the Act, which means the respondents have
processed the returns under Section 200A of the
Act. When the respondent had started to process
the returns of the petitioner under Section 200A of
the Act, obviously they have to follow the
requirements under Section 200A of the Act.
Section 200A(1)(c) of the Act was introduced with
effect from 01.06.2015. A reading of the objects
and reasons of the same makes it clear that since
no mechanism was available, Section 200A(1)(c)
of the Act was introduced for imposing late fee for
the delay in filing statement of TDS. Therefore,
from the introduction of the said Sub-Section it is
clear that prior to the same, though Section 234E
of the Act was introduced with effect from
01.07.2012, the Authorities were not empowered to
impose the late fee while processing the statement
of TDS under Section 200A of the Act.
https://www.mhc.tn.gov.in/judis
15. The learned counsel for the respondent
advanced his arguments on the aspect of the
imposition of late fee by applying Section
200A(1)(c) of the Act retrospectively. This Court is
not in agreement with the said submissions of the
respondent. Since, there was no provision for
imposing the late fee under Section 234E of the Act
while filing and processing the TDS returns under
Section 200A of the Act, clause (c) to Sub-Section
(1) to Section 200A was introduced with effect
from 01.07.2012. Therefore, the aforesaid
submission made by the learned counsel for the
respondent is rejected by this Court.
16. Further it was stated by the respondent that
they have no power to waive the late fee and only
the Commissioner of Income Tax is empowered to
pass the revised order by proper application of
provision of Section 264C of the Act.
17. In view of the above, it is made clear that the
respondent had imposed the late fee only under
Section 234E of the Act for the assessment years
2012-2013, 2013-2014, 2015-2015. However,
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Section 200A(1)(c) of the Act was not introduced
during the said assessment years. In the absence of
any provisions under Section 200A of the Act,
when they have processed the application for TDS
under Section 200A, no late fee can be imposed
under Section 234E. Hence, in such view of the
matter, this Court feels that the impugned orders
are liable to be set aside.
18. Accordingly, the impugned orders dated
24.09.2021 are set aside and the Department is
directed to consider the reply of the petitioner
dated 16.04.2019 as a revision application, which
was earlier considered as a waiver application,
and pass appropriate orders by taking into
consideration of the order passed by this Court
within a period of eight weeks from the date of
receipt of copy of this order.”
4. In the present case, the respondent had imposed the late fee only
under Section 234E of the Act. However, Section 200A of the Act was not
introduced during the said assessment years and it was introduced only with
effect from 01.06.2015. Therefore, in the absence of any provisions under
https://www.mhc.tn.gov.in/judis
Section 200A of the Act, the respondents ought not to have imposed late fee
under Section 234E while processing the applications for TDS under
Section 200A. Hence, in such view of the matter, this Court is of the
opinion that the impugned Demand Intimation Letters are liable to be set
aside.
5. Accordingly, the impugned demand Intimation Letters dated
03.10.2016 are set aside and the Writ Petition stands disposed of. No costs.
12.09.2024
vsg (4/8)
Index: Yes/No
Internet: Yes/No
Speaking / Non Speaking Order
To
1. The Principal Chief Commissioner of Income Tax
Administrative Block,
63, Race Course Road,
Coimbatore,
Tamil Nadu – 641 018.
https://www.mhc.tn.gov.in/judis
KRISHNAN RAMASAMY, J.,
vsg
2. The Chief Commissioner of Income Tax (TDS)
Administrative Block,
63, Race Course Road,
Coimbatore,
Tamil Nadu – 641 018.
3. The Deputy Commissioner of Income Tax
Centralized Processing Cell – TDS
Aayakar Bhawan, Sector -3
Vaishali, Ghaziabad, U.P.-201010.
4. The Income Tax Officer, TDS Ward
No.121, Adams Building, Sixty Feet Road
Tiruppur.
And
W.M.P.Nos. 4657 & 4658 of 2024
12.09.2024
(4/8)
https://www.mhc.tn.gov.in/judis
