Patna High Court: In a petition alleging Section 234E of the Income Tax Act, 1961 to be unconstitutional, ultra vires and in contravention of the Constitution of India, Division Bench of Sanjay Karol, CJ., and S. Kumar, J., disposed of the petition refuting all the said allegations and upholding Section 234E as constitutionally valid.
Two fold submissions have been made by the petitioner in the present petition which are (1) constitutional validity of Section 234E of the Income Tax Act, 1961 is challenged; (2) Initiation of proceedings under Section 200A of the Income Tax Act, 1961 is bad in law.
The factual matrix in the present matter is such that a fee for default in furnishing statement under heading Levy of fee in certain cases in chapter XVII-Collection and Recovery-Interest Chargeable has been levied on the petitioner and the same has been challenged.
While dealing with the first issue whereby the constitutional validity of Section 234E of the Income Tax Act, 1961 has been challenged, the Court found no substance in the said contention raised by the petitioner. It is held that under no circumstances can it be implied that the aforementioned statute has was passed by an incompetent legislature or that it has infringed the rights guaranteed under Part III of the Constitution of India. Section 234E is reproduced below for reference-
“234E. Fee for default in furnishing statements.
—(1) Without prejudice to the provisions of the Act, where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.
(2) The amount of fee referred to in sub-section (1) shall not exceed the amount of tax deductible or collectible, as the case may be.
(3) The amount of fee referred to in sub-section (1) shall be paid before delivering or causing to be delivered a statement in accordance with sub-section
(3) of section 200 or the proviso to sub-section (3) of section 206C.
(4) The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of Section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.”
Further, relying on the position adopted by other Indian Courts of law while settling a similar issue in a string of case laws, the Court dismissed this contention raised by the petitioner basis the judgments delivered in the cases of Rashmikant Kundailia v. Union of India, (2015) 373 ITR 0268 (Bom), Dr Amrit Lal Mangal v. Union of India, (2015) 235 Taxman 0410 (P &H) and Biswajit Das v. Union of India, (2019) 413 ITR 0092 (Delhi).
Now with respect to the second contention of the petitioner that the proceedings under Section 200A of the Income Tax Act, 1961 is bad in law, the counsel for the petitioner, D.V. Pathy has submitted that the petitioner will be taking recourse under the statutory remedy that is available to him. He pleads for the issue of limitation to be relaxed.
Counsel of the respondents, Archana Sinha has submitted that the issue of limitation shall not be raised during the proceedings given that the petitioner takes recourse under the statute within a period of thirty days from the date of passing of this order.
In view of the facts, circumstances, authorities cited and the arguments advances, the Court disposed of the petition with the direction that the subject of limitation shall not come into the picture if statutory proceedings are initiated within a period of thirty days from the date of this order.[L.N. Sales Pvt. Ltd. v. Union of India, 2020 SCC OnLine Pat 1232, decided on 20-08-2020]