The Bangalore bench of Income Tax Appellate Tribunal (ITAT) ruled that if there are conflicting views rendered by different High Courts, the view taken by the jurisdictional High Court is binding in the jurisdictional area of the respective High Court.
This is an appeal by the Assessee against the order passed by the National Faceless Appeal Centre (NFAC), Delhi, dated 21.11.2022 relating to assessment year 2012-13.
The assessee, Nagesh Consultants filed a statement of tax deducted at source (TDS) for various quarters in Form No.26Q for Quarter 4 of AY 2013-14 FY 2012-13.
The statement was processed by the respondent. There was a delay in filing the above TDS statement and therefore the AO by intimation under section 200A of the Income-Tax Act, 1961 levied late fee under section 234E of the Income Tax Act. Also a sum of Rs.200/- per day during which the failure continues.
The Assessing Officer (AO) rejected the application under section 154 of Income Tax Act, which is a provision in the act to rectify the mistake. Thus assessee filed an appeal before the NFAC/CIT(A).
However, the NFAC/CIT(A) upheld the levy of interest under section 234E of the Income Tax Act on the ground that if return of TDS is filed after 1.6.2015, then levy of interest under section 234-E is valid.
The tribunal observed the decision of the Karnataka High Court in the case Fatehraj Singhvi where it was mentioned that it would be illegal for returns of TDS in respect of the period prior to 1.6.2015.
Considering the decision, the bench of Laxmi Prasad Sahu (Accountant Member) and N V Vasudevan (Judicial Member) ruled that the present appeals of the Assessee relate to TDS returns filed prior to 1.6.2015 the levy of interest under section 234E of the Income Tax Act would not be valid.
There is a discrepancy in the present case between the rulings of the Gujarat High Court and the Karnataka High Court. Nonetheless, the Karnataka HC is the court with jurisdiction. The Karnataka HC’s decision so takes precedence under the ITAT’s ruling.
The bench stated that relief should not be refused to the taxpayer merely because there was a conflicting decision of a non-jurisdictional high court. Thus ruled that levy of interest under section 234E of the Act in the present case cannot be sustained.
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