ITA Nos. 1285, 1286 and 1287/Ahd/2019

Assessment Year: 2014-2015;2015-2016;2016-2017

Decided On: 29.03.2023

Appellants: District Government Pleaders Public Prosecutor Vs. Respondent: ACIT, CPC-TDS, Ghaziabad

Hon'ble Judges/Coram:
Annapurna Gupta, Member (A) and Siddhartha Nautiyal


Siddhartha Nautiyal, Member (J)

1. These three appeals have been filed by the assessee against the order ofld. CIT(A)-8 for assessment years 2014-15, 2015-16 and 2016-17 vide order dated28-05-2019 for all the assessment years under consideration.

2. Since common facts and issues are involved for all the years, the same arebeing disposed by way of by a common order.

3. The only issue for consideration before us is the levy of late filing feeon account of delay in filing of TDS statements, by the TDS Central ProcessingCell u/s. 234E of the Act, on the assessee. The contention of the assesseebefore the ld. CIT(A) was that the assessee is a Government Authority workingunder the Department of Law, State of Gujarat. The assessee appoints variousadvocates on professional basis on behalf of Gujarat Government to plead caseson their behalf in the Ahmedabad Rural Courts, as public prosecutors. Theassessee receives grants from State Government for payment of professional feesand pays the same to advocates who are on their panel. The amount of tax to bededucted is intimated to the State Treasury which is responsible to credit thesame to the Central Government. The assessee has been regularly filing TDSreturns for the TDS so deducted by the Gujarat Government from time to time.However, TDS statements for a few of the quarters for the assessment years underconsideration i.e. assessment years 2014-15, 2015-16 & 2016-17 have beendelayed. Accordingly, the TDS Central Processing Cell has levied late fee of Rs.1,17,573/- for assessment year 2014-15, Rs. 1,21,799/- for assessment year2015-16 and Rs. 1,11,670/- for assessment year 2017-18, under section 234E ofthe Act on the assessee for late filing as TDS Statement. In appeal, the ld.CIT(A) held that from the Scheme introduced by Finance Act, 2012, it can be seenthat the levy of fee u/s. 234E is not in the nature of penalty but the same isin the nature of a compulsory levy and it is for this reason that the same hasbeen included as a part of the processing of the TDS statement as per theprovisions of section 200A of the Act. Accordingly, the CIT(A) held that thereis no infirmity in the action of Assessing Officer in levy of fee u/s. 234E ofthe Act in the instant facts on the assessee, on account of late filing as TDSStatement.

4. The assessee is in appeal before us against the aforesaid order passed byld. CIT(A) confirming the levy of penalty u/s. 234E of the Act on account oflate filing of TDS return in case of some of the quarters for the assessmentyears under consideration before us. The counsel for the assessee submitted thatdelay filing of return of TDS is owing to lack of information forthcoming fromthe Government Treasury. Therefore, the delay in filing of TDS return has beencaused due to reasons beyond the control of the assessee. Accordingly, levyingof late filing fee u/s. 234E may kindly be directed to be vacated.

5. However, on going through the records of the case and the arguments putforward by the counsel for the assessee, we observe that in the instant facts,certain legal professionals have been appointed as public prosecutors toargue/plead cases on behalf of the Government of Gujarat. We have been furtherinformed in this case that the professional remuneration is directly credited bythe Government of Gujarat to the bank account of the aforesaid publicprosecutors. The counsel for the assessee submitted before us that it is not inreceipt of any advance from the Government of Gujarat, which it then disbursesto the public prosecutors. Accordingly, we observe that in the instant case, theremuneration is paid directly by the Government of Gujarat and further theGujarat Government is also responsible for deduction of tax at source and creditof same to the Central Government, in respect of remuneration/professional feepaid to public prosecutors. Therefore, given the above background, it is notclear to us on what is the role of assessee company in filing of TDS returns,especially when the remuneration is being paid to public prosecutors directly bythe Gujarat Government after deducting taxes at source. Section 200 of the Actcasts a duty on person deducting tax to pay the same within prescribed time tothe credit of the Central Government. Section 200A of the Act draws out theprocedure for processing of statements of tax deducted at source. Section 200Aof the Act reads as under:-

"Processing of statements of tax deducted at source.

200A. (1) Where a statement of tax deduction at source or a correction statement has been made by a person deducting any sum (hereafter referred to in this section as deductor) under section 200, such statement shall be processed in the following manner, namely:-

(a) the sums deductible under this Chapter shall be computed after making the following adjustments, namely:-

(i) any arithmetical error in the statement; or

(ii) an incorrect claim, apparent from any information in the statement;

(b) the interest, if any, shall be computed on the basis of the sums deductible as computed in the statement;

(c) the fee, if any, shall be computed in accordance with the provisions of section 234E"

6. Therefore from the language of section 200A of the Act, it is clear thatresponsibility of preparing statement of TDS is on the person who has deductedany sum u/s. 200 of the Act. However, in the instant facts, it is unclear to usas to how the assessee is under an obligation to file TDS return in respect oftaxes deducted at source by the Government of Gujarat, specially when theremuneration to the public prosecutors have been given directly by the GujaratState in their bank accounts. It is also observed that the ld. CIT(A) whileupholding the levy of fee u/s. 200A of the Act did not enquire into the aspectwhether the assessee was under a legal obligation to file TDS return in respectof TDS so deducted (and subsequently deposited by the Government of Gujarat tothe Central Government) and paid directly to the bank account of publicprosecutors. In view of the above discussion, we are hereby restoring the fileback to the ld. CIT(A) to analyze under what capacity the assessee is filing TDSreturns and whether the assessee in the first instance, is under an obligation,to file statement of tax deducted at source u/s. 200A of the Act. In the result,the matter is being restored to the file of ld. CIT(A) with above thedirections.

7. In the result, the appeals of the assessee are allowed for statisticalpurposes for all the years under consideration.

Order pronounced in the open court on 29-03-2023.

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