KORAGA POOJARI RAVINDRA S/O KORAGA POOJARI vs UNION OF INDIA

The petitioner is aggrieved by the impugned

intimation under Section 200A of the Income Tax Act,

1961 issued by the Centralized Processing Cell (TDS),

Ghaziabad, Uttar Pradesh, by the concerned Deputy

Commissioner of Income Tax regarding the alleged

failure of the petitioner to deduct the Tax at Source and

the levy of interest under Section 234E was made in the

impugned intimation resulting in demand against the

petitioner-assessee.

However, the learned counsels for both the

parties have brought to the notice of the Court that the

Division Bench of this Court in the case of Fatheraj

Singhvi & Ors. Vs. Union of India & Ors, since

reported in (2016) 142 DTR Judgments 281 has held

that no such interest can be levied under Section 234E

of the Act. The relevant paras 23 to 27 are quoted

below for ready reference:-

"23. In view of the aforesaid observation and discussion, since the impugned intimation given by the respondent-Department against all the appellants under Section 200A are so far as they are for the period prior to 1.6.2015 can be said as without any authority under law. Hence, the same can be said as illegal and invalid.

If the facts of the present cases are examined in light of the aforesaid observation and discussion, it appears that in all matters, the intimation given in purported exercise of power under Section 200A are in respect of fees under Section 234E for the period prior to 1.6.2015. As such, it is on account of the intimation given making demand of the fees in purported exercise of power under Section 200A, the same has necessitated the appellant-original petitioner to challenge the validity of Section 234E of the Act. In view of the reasons recorded by us hereinabove, when the amendment made under Section 200A of the Act which has come into effect on 1.6.2015 is held to be having prospective effect, no computation of fee for the demand or the intimation for the fee under Section 234E could be made for the TDS deducted for the respective assessment year prior to 1.6.2015. Hence, the demand notices under Section 200A by the respondent-authority for intimation for payment of fee under Section 234E can be said as without any authority of law and the same are quashed and set aside to that extent.

As such, as recorded earlier, it is on account of the intimation received under Section 200A for making computation and demand of fees under Section 234E, the same has necessitated the appellant to challenge the constitutional validity of Section 234E . When the intimation of the demand notices under Section

200A is held to be without authority of law so far as it relates to computation and demand of fee under Section 234E, we find that the question of further scrutiny for testing the constitutional validity of Section 234E would be rendered as an academic exercise because there would not be any cause on the part of the petitioners to continue to maintain the challenge to constitutional validity under Section 234E of the Act. At this stage, we may also record that the learned counsels appearing for the appellant had also declared that if the impugned notices under Section 200A are set aside, so far as it relates to computation and intimation for payment of fee under Section 234E, the appellant-petitioners would not press the challenge to the constitutional validity of Section 234E of the Act. But, they submitted that the question of constitutional validity of Section 234E may be kept open to be considered by the Division Bench and the Judgment of the learned Single Judge may not conclude the constitutional validity of Section 234E of the Act.

Under these circumstances, we find that no further discussion would be required for examining the constitutional validity of Section 234E of the Act. Save and except to observe that

the question of constitutional validity of Section 234E of the Act before the Division Bench of this Court shall remain open and shall not be treated as concluded.

In view of the aforesaid observations and discussion, the impugned notices under Section 200A of the Act for computation and intimation for payment of fee under Section 234E as they relate to for the period of the tax deducted prior to 1.6.2015 are set aside. It is clarified that the present judgment would not be interpreted to mean that even if the payment of the fees under Section 234E already made as per demand/intimation under Section 200A of the Act for the TDS for the period prior to 01.04.2015 is permitted to be reopened for claiming refund. The judgment will have prospective effect accordingly. It is further observed that the question of constitutional validity of Section 234E shall remain open to be considered by the Division Bench and shall not get concluded by the order of the learned Single Judge.

The appeals are partly allowed to the aforesaid extent. Considering the facts and circumstances, no order as to costs".

The learned counsel for the petitioner

Mr.K.Vishwanatha has argued that the said judgment of

the Division Bench of this Court is binding on the

Respondents and since they have not apparently

appealed against the said judgment before the Hon''ble

Supreme Court, the said judgment deserves to be

implemented by them.

This is not disputed by the learned counsel for

the Revenue Mr.K.V.Aravind.

Accordingly, the writ petitions are allowed and

the impugned Intimation under Section 200A of the Act

issued by the Centralized Processing Cell (TDS) by the

concerned Deputy Commissioner of Income Tax is set

aside. The matter is remanded back to the local

Assessing Authority of the petitioner-assessee to pass

fresh orders in accordance with law, if at all called for

and necessary, after giving an opportunity of hearing to the petitioner-assessee in terms of the judgment of the

Division Bench quoted above.

No order as to costs.