Income Tax Appellate Tribunal

District Government Pleaders Public Prosecutor vs. ACIT

MANU/IB/0141/2023

29.03.2023

Direct Taxation

Section 200 of the IT Act casts a duty on person deducting tax to pay the same within prescribed time to the credit of the Central Government

The only issue for consideration is the levy of late filing fee on account of delay in filing of TDS statements, by the TDS Central Processing Cell under Section 234E of the Income Tax Act, 1961 on the assessee. The counsel for the assessee submitted that, delay filing of return of TDS owes to lack of information forthcoming from the Government Treasury.

In the instant facts, certain legal professionals have been appointed as public prosecutors to argue/plead cases on behalf of the Government of Gujarat. The professional remuneration is directly credited by the Government of Gujarat to the bank account of the aforesaid public prosecutors. The counsel for the assessee submitted that, it is not in receipt of any advance from the Government of Gujarat, which it then disburses to the public prosecutors. Accordingly, in the instant case, the remuneration is paid directly by the Government of Gujarat and further the Gujarat Government is also responsible for deduction of tax at source and credit of same to the Central Government, in respect of remuneration/professional fee paid to public prosecutors.

Section 200 of the IT Act casts a duty on person deducting tax to pay the same within prescribed time to the credit of the Central Government. Section 200A of the IT Act draws out the procedure for processing of statements of tax deducted at source.

Therefore, from the language of Section 200A of the IT Act, it is clear that responsibility of preparing statement of TDS is on the person who has deducted any sum under Section 200 of the Act. However, in the instant facts, it is unclear as to how the assessee is under an obligation to file TDS return in respect of taxes deducted at source by the Government of Gujarat, especially when the remuneration to the public prosecutors have been given directly by the Gujarat State in their bank accounts.

It is also observed that, the learned CIT(A) while upholding the levy of fee under Section 200A of the Act did not enquire into the aspect whether the assessee was under a legal obligation to file TDS return in respect of TDS so deducted (and subsequently deposited by the Government of Gujarat to the Central Government) and paid directly to the bank account of public prosecutors. The file sent back to the learned CIT(A) to analyze under what capacity the assessee is filing TDS returns and whether the assessee in the first instance, is under an obligation, to file statement of tax deducted at source under Section 200A of the Act. Appeals of the assessee are allowed.

Tags : Delay filing Return Fee

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