Sh Sri Gyan Vikas Kendra, Jalandhar V. The Assistant commissioner of Income Tax, Ghaziabad

ITA 110/ASR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7828 (ITAT-AMRITSAR)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-07-2017
• Assessment Year: 2014-2015
• Appeal Filed On: 27-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAHUL DHAWANLD
• Assessee Lawyers: A P SINGH LD
• Keywords: Retrospective amendment; Right to appeal
• Section: 12A; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. T.S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A NO.110(ASR)/2017 ASSESSMENT YEAR:2014- 15 SRI SRI GYAN VIKAS KENDRA, 64, OLD JAWAHAR MARKET, JALANDHAR. PAN:AADTS -5371E VS. ASST. CIT, CENTRALIZED PROCESSING CELL, GHAZIABAD. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. A.P. SINGH (LD. C.A) RESPONDENT BY: SH. RAHUL DHAWAN (LD. D.R) DATE OF HEARING:30.08.2017 DATE OF PRONOUNCEMENT:31.08.2017 ORDER PER N.K.CHOUDHRY: THE INSTANT APPEAL HAS BEEN FILED BY THE ASSESSEE, BY FEE LING AGGRIEVED AGAINST THE ORDER DATED 08.12.2016 PASSED BY THE LD. CIT- 2, JALANDHAR IN APPEAL NO.166/15-16, FOR ASST. YEAR: 2014-15. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL. 1 . THAT THE ORDER OF THE CIT (APPEALS) IS AGAINST THE LAW & FACTS OF THE CASE. 2. THAT THE CIT (APPEALS) HAD GRAVELY ERRED IN LA W & FACTS OF THE CASE IN SUSTAINING THE ORDER OF THE ASSISTANT COMMISSI ONER OF INCOME TAX (CENTRALIZED PROCESSING CELL-TDS) 3. THAT THE CIT (APPEALS ) HAD GRAVELY ERRED IN U PHOLDING THE ORDER OF ASSISTANT COMMISSIONER OF INCOME TAX (CENTRALIZED P ROCESSING CELL-TDS) WHO HAD LEVIED LATE FILING FEE U/S 234E I N THE HANDS OF THE ASSESSEE AND RAISED A DEMAND OF RS.1,71,000/- ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 2 4. THAT THE CIT (APPEALS) WHILE SUSTAINING THE D EMAND OF RS.1,71,000/- SO RAISED BY THE ASSISTANT COMMISSION ER OF INCOME TAX (CENTRALIZED PROCESSING CELL- TDS) ON ACCOUNT O F LATE FILING FEE HAD MISCONCEIVED THE FACTS OF THE CASE IN LIGHT OF THE SETTLED POSITION OF LAW. 5. ANY OTHER GROUND OF APPEAL AS MAY BE ALLOWED TO BE RAISED AT THE TIME OF HEARING OF THE APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE IS A CHARITABLE SOCIETY DULY REGISTERED WI TH THE REGISTRATION OF SOCIETIES ACT & ALSO U/S 12A OF THE INCO ME TAX ACT. THE ASSESSEE DEDUCTED TDS ON CERTAIN PAYMENTS & DULY DEPOSI TED ALONG WITH INTEREST ON WHICH THERE IS NO DISPUTE. THE A SSESSEE FILED TDS RETURN FOR THE ASST. YEAR:2014-15 WHICH WAS DELAYED & WHILE PROCESSING THE TDS RETURN U/S 200A BY THE CENTRALIZED PROCESSING CELL -TDS GHAZIABAD, LEVIED THE LATE FILING FEE OF RS.1,7 1,000/- U/S 234E OF THE INCOME TAX ACT 1961 VIDE INTIMATION DATED 20/11/2 015 & AGAINST WHICH THE 1 ST APPEAL WAS PREFERRED BEFORE THE LD. CIT(A), WHO WAS PLEASED TO JUSTIFY, IMPOSING THE LATE FILING FEE OF R S.1,71,000/- U/S 234(E) OF THE I.T. ACT BY HOLDING AS UNDER: 4.2 I HAVE GONE THROUGH THE SUBMISSIONS MADE IN THIS REGARD AND MATERIAL BROUGHT ON RECORD AND FIND THAT A LATE FILING FEE RS.1,71,000/- HAS BEEN IMPOSED BY THE ACIT (CPC) ON ACCOUNT OF DELAY IN FILING OF TDS RETURN FOR Q1 OF F.Y. 2013- 2014. THE APPELLANT HAS MERELY REPRODUCED THE PROVI SIONS OF SECTION 200A OF THE IT ACT ALONG WITH THE PROVISION S OF SECTION 234E OF THE I.T. ACT. THE APPELLANT HAS FUR THER RELIED UPON THE DECISION OF HONBLE ITAT, AMRITSAR BENCH I N THE CASE OF SIBIA HEALTHCARE (PVT.) LTD. IN ITA NO.90(ASR)/2015 ALONG WITH OTHER DECISIONS OF HONB LE ITAT CHENNAI BENCH ON THIS ISSUE. ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 3 4.3 HAVING CONSIDERED THE SUBMISSIONS MADE IN THIS REGARD, I FIND THAT HONBLE ITAT, AMRITSAR BENCH HAS DECIDED IN THE CASE SIBIA HEALTHCARE (P) LTD. IN ITA NO.90(ASR)/2 015 THAT ADDITIONAL FEE CANNOT BE CHARGED IN RESPECT OF ORDER PASSED BEFORE 01.06.2015. HOWEVER, IN THIS CASE I F IND THAT TDS RETURN HAS BEEN FILED ON 17.11.2015 AND PROCESS ING OF TDS RETURN HAS BEEN DONE ON 20.11.2015, WHICH IS MU CH AFTER THE DATE OF 01.06.2015. THEREFORE, THE DECISI ON OF HONBLE ITAT WOULD NOT BE APPLICABLE IN THE PRESENT FACTUAL CIRCUMSTANCES OF THE CASE. 4.4 ACCORDINGLY, I HOLD THAT IN THE PRESENT FACTS O F THE CASE, ACIT (CPC) WAS JUSTIFIED IN IMPOSING THE LATE FILING FEE OF RS.1,71,000/- 234E OF THE I.T. ACT AND CONFIRMED TH E SAME. 4. FEELING AGGRIEVED AGAINST THE ORDER PASSED BY THE LD. CIT(A), THE ASSESSEE PREFERRED THE INSTANT APPEAL WHICH IS UNDER CONSIDERATION. 5. IT WAS ARGUED BY THE LD. COUNSEL OF THE ASSESSEE THAT THE LD. ASSESSING OFFICER (CPC-TDS) HAS GROSSLY ERRED IN LAW IN LE VYING LATE FILING FEE OF RS.1,71,000/- AND RAISING THE DEMAND U/ S 200A OF THE ACT. IT WAS FURTHER SUBMITTED BY THE LD. AR THAT UP TO 31 ST MAY, 2015 THERE WAS NO ENABLING PROVISION IN THE ACT FOR RAISING A DEM AND IN RESPECT OF LEVY OF FEES U/S 234E OF THE ACT, HOWEVER, AFTER 31 ST MAY, 2015 LEVY OF LATE FILING FEE U/S 234E WAS INTRODUCED BY FINANCE BILL , 2015. IN THE INSTANT CASE, THE TDS RETURN FOR QUARTER ENDING 30 TH JUNE, 2013 WAS DUE TO BE FILED ON OR BEFORE 15.07.2013, BU T ADMITTEDLY THE RETURN WAS FILED ON 17.11.2015 I.E., DELAYED BY 855 DAYS ON WHICH THE DUE INTEREST WAS PAID BEFORE THE FILING OF TDS RETURN AND THE TDS RETURN WAS PROCESSED BY CPC (TDS) ON 19.11.2015 U/S 200A OF THE ACT ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 4 AND WHILE PROCESSING AND ISSUING THE INTIMATION OF TDS R ETURN U/S 200A OF THE IT ACT, THE CPC-(TDS) LEVIED LATE FILING FEE U/S 234E @ RS.200/- FOR 855 DAYS I.E. RS.1,71,000/- I.E.,(RS.200 X 855 DAYS) FROM THE PERIOD 15.07.2013 TO 17.11.2015 I.E. PERIOD OF DELAY IN FILING THE TDS RETURN. IT WAS FURTHER ARGUED THAT AMENDMENT IN SEC. 200A WAS BROUGHT BY THE FINANCE ACT, 2015 ONLY AND PRIOR TO TH AT THERE WAS NO ENABLING PROVISION IN THE ACT FOR RAISING A DEMAND IN RESPECT OF LEVY OF FEES UNDER SEC.234E. THE LD. AR ALSO RELIED UPON THE JUDGMENT PASSED BY TH E CO- ORDINATION BENCH OF ITA, AMRITSAR IN THE CASE OF SIBIA HEALTHCARE PVT. LIMITED VS. DCIT(TDS) ITA NO.90(ASR)/2015 DATED 09.06 .2015 AND ARGUED THAT THE AFORESAID JUDGMENT SQUARELY COVERED THE CASE OF THE INSTANT ASSESSEE AS WELL AS. THE HONBLE ITAT AMRITSAR BENCH IN THE SAID CASE, IN THE ABSENCE OF ENABLING PROVISION U/S 200A D ELETED THE FEE LEVIED U/S 234E. IT WAS ALSO SUBMITTED BY THE LD. AR THAT AMENDMENT IN THE FINANCE ACT,2015 WHICH CAME TO BE EFFECTIVE W.E.F., 1 ST JUNE, 2015 CANNOT BE TREATED AS RETROSPECTIVE IN NATURE BECAUSE IT I S WELL SETTLED LAW AS WELL AS FUNDAMENTAL RIGHT OF THE CITIZEN WHICH I S PRESCRIBED UNDER ARTICLE20(1) OF THE INDIAN CONSTITUTION, 1949 , WHICH PROVIDES THAT THE PERSON CANNOT BE SUBJECTED TO PENALTY GREATER THAN THAT WHICH MIGHT HAVE BEEN INFLICTED UNDER THE LAW IN FORCE AT THE TIME OF THE COMMENCEMENT OF THE OFFENCE. THE ASSESSEE HAS ALSO PREPARED THE CHART AND FINALLY SUBMITTED THAT THE ASSESSEE IS NOT DISPUT ING THE LIABILITY OF DEFAULT FROM 1 ST JUNE, 2015 TO 17 TH NOV., 2015, HOWEVER, THE LATE FEE FOR THE PERIOD FROM 15 TH JULY, 2013 TO 31 ST MAY, 2015 CANNOT BE LEVIED. HENCE, THE SAME IS LIABLE TO BE DELETED. ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 5 6. ON THE CONTRARY, IT WAS ARGUED BY LD. DR THAT ADMITTE DLY IN THE INSTANT CASE, DUE DATE OF RETURN WAS 15 TH JULY, 2013, HOWEVER, THE SAME WAS FILED ONLY ON 17 TH NOV. 2015 AND THEREAFTER, ORDER U/S 234E WAS INTIMATION U/S 200A OF THE I.T. ACT WAS GIVEN ON 2 0 TH NOV.2015, THEREFORE, THE LATE FEE HAS TO BE LEVIED FROM THE DU E DATE OF RETURN AND UP TO THE DATE OF FILING OF REGULAR STATEMENT. HENCE, THE ORDER PASSED BY THE LD. CIT(A) CANNOT BE FAULTED BECAUSE THE MATTE R PERTAINS TO THE PERIOD AFTER 1 ST JULY, 2015 WHEN THE PROVISION OF LATE FEE ENABLED. 7. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCES OF THE CASE, FOR THE SAKE OF CONVENIENCE AND BREVITY, WE FEEL I T APPROPRIATE TO REPRODUCE THE STATUTORY PROVISION PRIOR TO 1 ST JUNE, 2015. STATUTORY PROVISIONS PRIOR TO AMENDMENT (BEFORE 01.06.2015 ) THE PROVISIONS OF SEC 234E OF THE ACT, WHICH WAS IN SERTED BY THE FINANCE ACT 2012 AND WAS BROUGHT INTO EFFECT FROM 1 .07.2012, ARE AS FOLLOWS:- 234 F. FEE FOR DEFAULTS IN FURNISHING STATEMENTS II) WITHOUT PREJUDICE TO THE PROVISIONS OF THE ACT , WHERE A PERSON FAILS TO DELIVER OR CAUSE TO HE DELIVERED A STATEME NT WITHIN THE PRESCRIBED IN SUB -SECTION (3) OF SECTION 200 OR TH E PROVISO TO SUBSECTION (3) OF SEC. 206C, HE SHALL BE LIABLE TO PAY, BY WAY OF FEE, A SUM OF TWO HUNDRED RUPEES FOR EVERY DAY D URING WHICH THE FAILURE CONTINUES. ( 2) THE AMOUNT OF FEE REFERRED 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 STAT EMENT IN ACCORDANCE WITH SUB-SECTION (3) OF SECTION 200 OR T HE PROVISO TO SUB-SECTION(3) OF SECTION 206C. ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 6 (4) THE PROVISIONS OF THIS SECTION SHALL APPLY TO A STA TEMENT REFERRED TO IN SUB-SECTION (3) OF SECTION 200 OR TH E PROVISO TO SUB-SECTION(3) OF SECTION 206C WHICH IS TO BE DELIV ERED OR CAUSED TO BE DELIVERED FOR TAX DEDUCTED AT SOURCE O R TAX COLLECTED AT SOURCE, AS THE CASE MAY ON OR AFTER T HE I S ' DAY OF JULY,2012 THE STATUTORY PROVISIONS OF SECTION 200A WHICH WAS INSERTED BY THE FINANCE ACT 2009 WITH EFFECT FROM 1 ST APRIL 2010 ARE AS FOLLOWS: 200A(1)) WHERE A STATEMENT OF LAX DEDUCTION AT SOUR CE OR A CORRECTION STATEMENT HAS BEEN MADE BY A PERSO N DEDUCTING ANY SUM (HEREINAFTER REFERRED TO IN THIS SECTION A S DEDUCTION) A PERSON DEDUCTING UNDER SECTION 20, SUCH STATEMENT SHALL BE PROCESSED IN THE FOLLOWING MANNER , NAMELY:- (A)) THE SUMS DEDUCTIBLE UNDER THIS CHAPTER SHALL BE COMPUTED AFTER MAKING THE FOLLOWING ADJUSTMENT 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 SUM PAYABLE BY ,OR THE AMOUNT OF REFUND DU E TO, THE DEDUCTOR SHALL BE DETERMINED AFTER ADJUSTMENT OF AM OUNT COMPUTED UNDER CLAUSE (B) AGAINST ANY AMOUNT PAID U NDER SECTION 200 AND SECTION 201 AND ANY AMOUNT PAID OTH ERWISE BY WAY OF TAX OR INTEREST; (D) AN INTIMATION SHALL HE PREPARED OR GENERATED A ND SENT TO THE DEDUCT OR SPECIFYING THE SUM DETERMINED TO BE PAYAB LE BY, OR THE AMOUNT OF REFUND DUE TO ,HIM UNDER CLAUSE (C) A ND (E) THE AMOUNT OF REFUND DUE TO THE DEDUCTOR IN PUR SUANCE OF THE DETERMINATION UNDER (E) SHALL BE GRANTED TO THE DED UCTOR. PROVIDED THAT NO INTIMATION UNDER THIS SUB -SECTION SHALL BE SENT AFTER THE EXPIRY OF ON. FROM THE END OF THE FINANCIAL YEAR IN WHICH THE STATEMENT IS FILED. ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 7 EXPLANATION - FOR THE PURPOSES OF THIS SUB-SECTION, 'AN INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN TH E STATEMENT SHALL MEAN A CLAIM, ON THE BASIS OF AN ENTRY IN TH E STATEMENT. (I) OF AN ITEM ,WHICH IS INCONSISTENT WITH ANOT HER ENTRY OJ THE SAME OR SOME OTHER ITEM SUCH STATEMENT; (II) IN RESPECT OF RATE OF DEDUCTION OF TAX AT SOURCE , WHERE SUCH RATE IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT; (2 FOR THE PURPOSES OF PROCESSING OF STATEMENTS UN DER SUB SECTION (1) THE BOARD MAY MAKE A SCHEME FOR CENTRALIZED PROCESSING OF STATEMENTS OF TAX DEDUCTED AS SOURCE TO EXPEDITIOUSLY DETERMINE THE TAX PAYABLE BY , OR THE REFUND DUE TO , THE DEDUCTOR AS REQUIRED UNDER THE SAID SUB-SECTION. THE ASSESSING OFFICER CANNOT MAKE ANY ADJUSTMENT OTHER THAN THE ONE PRESCRIBED ABOVE IN SECTION 200A OF THE ACT. BY FINANCE ACT, 2015, WITH EFFECT FROM 01.06.2015, THE PARLIAMENT AMENDED SECTION 200A BY SUBSTITUTING SUB-SECTION (1) OF CLAUSES (C) TO (E). STATUTORY PROVISIONS AFTER 01.06.2015:- THE AMENDMENTS MADE IN SECTION 200A BY THE FINANCE ACT, 2015 ARE AS UNDER: IN SECTION 200A OF THE INCOME TAX ACT, IN SUB-SECT ION (1), FOR CLAUSES (C) THE FOLLOWING CLAUSES SHALL BE SUBS TITUTED WITH EFFECT FROM THE 1 ST DAY OF JUNE ,2015 NAMELY (C) THE FEE, IF ANY, SHALL BE COMPUTED WITH THE P ROVISIONS OF SECTION 234E; (D) THE SUM PAYABLE BY, OR THE AMOUNT OF REFUND DU E TO, THE DEDUCTOR SHALL BE DETERMINED AFTER ADJUSTMENT OF THE AMOUNT COMPUTED UNDER CLAUSE (B) AND CLAUSE (C) AGAINST ANY AMOUNT PAID U NDER SECTION 200 OR SECTION 201 OR SECTION 234E AND ANY AMOUNT PAID OTHERWISE BY WAY OF TAX OR INTEREST OR FEE; (F) AN INTIMATION SHALL BE PREPARED OR GENERATED A ND SENT TO THE DEDUCTOR SPECIFYING THE SUM DETERMINED TO BE PAYABL E BY, OR THE AMOUNT OF REFUND DUE TO, HIM UNDER CLAUSE (D): ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 8 (G) THE AMOUNT OF REFUND DUE TO THE DEDUCTOR IN PU RSUANCE OF THE DETERMINATION UNDER CLAUSE (D) SHALL BE GRANTED TO THE DEDUCTOR. FROM THE CONJOINT READING OF THE PROVISIONS PRIOR A ND POST TO 01 ST JUNE 2015, IT IS OBVIOUS THAT PRIOR TO 01.06.2015, THERE WAS NO ENABLING PROVISION IN SECT ION 200A OF THE ACT FOR MAKING ADJUSTMENT IN RESPECT OF THE STATEMENT FILED BY THE ASSESSES WITH REGARD TO TAX DEDUCTED AT SOURCE BY LEVYING FEE UNDER SECTION 234 E OF THE ACT. THE PARLIAMENT FOR THE FIRST TIME ENABLED THE ASSESSING OFFICER TO MAKE ADJUSTMENT BY LEVYING FEE UNDER SEC TION 234E OF THE ACT WITH EFFECT FROM 01.06.2015. THE SIMILAR CONTROVERSY WAS ALSO DEALT WITH, BY THE CO-O RDINATION BENCH IN THE CASE OF SIBIA HEALTHCARE PVT. LIMITED VS. D CIT(TDS) (SUPRA) , BY HOLDING AS UNDER: 10. IN VIEW OF THE ABOVE DISCUSSIONS, IN OUR CON SIDERED VIEW, THE ADJUSTMENT IN RESPECT OF LEVY OF FEES UNDER S. 234E WAS INDEED BEYOND THE SCOPE OF PERMISSIBLE ADJUSTMENTS CONTEMPLATED UNDER S. 200A. THIS INTIMATION IS AN A PPEALABLE ORDER UNDER S. 246A(A), AND, THEREFORE, THE CIT (A) OUGHT TO HAVE EXAMINED LEGALITY OF THE ADJUSTMENT MADE UNDER THIS INTIMATION IN THE LIGHT OF THE SCOPE OF THE S. 200A . LEARNED CIT(A) HAS NOT DONE SO. HE HAS JUSTIFIED THE LEVY O F FEES ON THE BASIS OF THE PROVISIONS OF S. 234E. THAT IS NOT THE ISSUE HERE. THE ISSUE IS WHETHER SUCH A LEVY COULD BE EFFECTED IN THE COURSE OF INTIMATION UNDER S. 200A. THE ANSWER IS C LEARLY IN NEGATIVE. NO OTHER PROVISION ENABLING A DEMAND IN R ESPECT OF THIS LEVY HAS BEEN POINTED OUT TO US AND IT IS THUS AN ADMITTED POSITION THAT IN THE ABSENCE OF THE ENABLING PROVIS ION UNDER S. 200A, NO SUCH LEVY COULD BE EFFECTED. AS INTIMATION UNDER S. 200A, RAISING A DEMAND OR DIRECTING A REFUND TO THE TAX DEDUCTOR, CAN ONLY BE PASSED WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR WITHIN WHICH ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 9 THE RELATED TDS STATEMENT IS FILED, AND AS THE RELA TED TDS STATEMENT WAS FILED ON 19TH FEB., 2014, SUCH A LEVY COULD ONLY HAVE BEEN MADE AT BEST WITHIN 31ST MARCH, 2015. THA T TIME HAS ALREADY ELAPSED AND THE DEFECT IS THUS NOT CURA BLE EVEN AT THIS STAGE. IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING IN MI ND ENTIRETY OF THE CASE, THE IMPUGNED LEVY OF FEES UND ER S. 234E IS UNSUSTAINABLE IN LAW. WE, THEREFORE, UPHOLD THE GRI EVANCE OF THE ASSESSEE AND DELETE THE IMPUGNED LEVY OF FEE UN DER S. 234E OF THE ACT. THE ASSESSEE GETS THE RELIEF ACCOR DINGLY. LET US TO CONSIDER MANDATE OF THE CONSTITUTION OF IN DIA AS ENSHRINED IN ARTICLE20 (1) NO PERSON SHALL BE CONVICTED OF ANY OFFENCE EXCEP T FOR VIOLATION OF LAW IN FORCE AT THE TIME OF COMMENCING OF THE ACT CHARGED AS AN OFFENCE, NOT BE SUBJECTED TO PENALTY GREATER THAN WHICH MIGHT HAVE BEEN INFLICTED UNDER THE LAW IN FORCE AT THE TIME OF THE COMMENCEMENT OF THE OFFENCE ORDINARILY, A LEGISLATURE HAS POWER TO MAKE PROSPECT IVE LAWS, BUT ART.20 OF THE INDIAN CONSTITUTION, 1950 PROVIDE S CERTAIN SAFEGUARDS TO THE PERSONS ACCUSED OF CRIME AND SO ART. 20(1) OF THE I NDIAN CONSTITUTION IMPOSES A LIMITATION ON THE LAW MAKING POW ER OF THE CONSTITUTION. IT PROHIBITS THE LEGISLATURE TO MAKE RET ROSPECTIVE CRIMINAL LAWS HOWEVER IT DOES NOT PROHIBIT A CIVIL LIABILITY RE TROSPECTIVELY I.E. WITH EFFECT FROM A PAST DATE. SO A TAX CAN BE IMPOSED RETROSPECTIVELY. CLAUSE (1) OF THE ARTICLE 20 OF THE INDIAN CONSTITUT ION GUARANTEES RIGHTS AGAINST EX-POST FACTO LAWS. IT PROVIDES THAT N O PERSON SHALL BE CONVICTED OF ANY OFFENCE EXCEPT FOR VIOLATION OF A LAW IN FORCE AT THE TIME OF THE COMMISSION OF THE ACT CHARGED AS AN OFFENCE, NOR BE SUBJECTED TO A PENALTY GREATER THAN THAT WHICH MIGHT H AVE BEEN INFLICTED UNDER THE LAW IN FORCE AT THE TIME OF THE CO MMISSION OF THE OFFENCE. THE AMERICAN CONSTITUTION ALSO CONSTITUTES A SIM ILAR PROVISION ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 10 PROHIBITING EX-POST FACTO LAWS BOTH BY THE CENTRAL AND STATE LEGISLATURES. LET US TO CONSIDER THE MEANING OF PROSPECTIVE AND RETROSPECTIVE :- THE DICTIONARY MEANING OF THE WORD PROSPECTIVE WITH REFERENCE TO STATUTES SHOWS THAT IT IS CONCERNED WITH OR A PPLYING THE LAWS IN FUTURE OR AT LEAST FROM THE DATE OF COMMENCEMEN T OF THE STATUTE. WHEREAS THE WORD RETROSPECTIVE WHEN USED WITH R EFERENCE TO AN ENACTMENT MAY MEAN: 1. EFFECTING AN EXISTING CONTRACT OR 2. REOPENING OF THE PAST, CLOSED AND COMPLETED TRANSAC TIONS, OR 3. AFFECTING ACCRUED RIGHTS AND REMEDIES, OR 4. AFFECTING PROCEDURE. THE RETROSPECTIVE OPERATION OF AN ENACTMENT M AY MEAN ONE THING AND ITS AFFECTING THE RIGHTS OF PARTIES ANOTHER. NORMALLY, AN ENACTMENT IS PROSPECTIVE IN NATURE. IT DOES NOT AFFECT TH AT WHICH HAS GONE, OR COMPLETED AND CLOSED UP ALREADY. ORDINARILY, THE PRESUMPTION WITH RESPECT TO AN ENACTMENT IS THAT, UNLESS THERE IS SOME THING IN IT TO SHOW THAT IT MEANS OTHERWISE, IT DEALS WITH FUTURE CON TINGENCIES, AND DOES NOT ANNUL OR AFFECT EXISTING RIGHTS AND LIABILITI ES OR VESTED RIGHTS, OR OBLIGATIONS ALREADY ACQUIRED UNDER SOME PROVISIONS O F LAW ALTHOUGH ITS EFFECT IS THAT IT DOES NOT AFFECT AN EXISTING RIGHT A S WELL. IF AN ENACTMENT EXPRESSLY PROVIDES THAT IT SHOULD BE DEEMED T O HAVE COME INTO EFFECT FROM A PAST DATE, IT IS RETROSPECTIVE IN NAT URE. IT THEN OPERATES TO AFFECT EXISTING RIGHTS AND OBLIGATIONS, AND IS CONSTRUED TO TAKE AWAY, IMPAIR OR CURTAIL, A VESTED RIGHT WHICH HAD BEEN ACQUIRED UNDER SOME EXISTING LAW. IF AN ENACTMENT IS INTENDED TO BE ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 11 RETROSPECTIVE IN OPERATION, AND ALSO IN EFFECT, THE LEG ISLATURE MUST EXPRESSLY, AND IN CLEAR AND UNEQUIVOCAL LANGUAGE, SAY SO, IN THE ENACTMENT ITSELF. A RETROSPECTIVE OPERATION IS NOT GIVE N TO A STATUTE, SO AS TO IMPAIR AN EXISTING RIGHT OR OBLIGATION, OTHERWI SE THAN AS REGARDS MATTERS OF PROCEDURE UNLESS THAT EFFECT CANNOT BE AVOIDED WITHOUT DOING VIOLENCE TO THE LANGUAGE OF THE ENACTMENT. IF T HE ENACTMENT IS EXPRESSED IN A LANGUAGE WHICH IS CAPABLE OF EITHER INT ERPRETATION, IT OUGHT TO BE CONSTRUED PROSPECTIVELY. THE SPECIAL BENCH OF THE DELHI TRIBUNAL, IN THE ITO NEW DELHI VS EKTA PROMOTERS PRIVATE LTD CASE , [(2008) 117 TTJ DELHI 289] WHILE CONSIDERING , WHETHER THE LEVY OF INTEREST UNDER SECTION 234D OF THE ACT FROM JUNE 1, 2003, WILL HAVE RETROSPECTIVE APP LICATION TO CASE, OBSERVED THAT ' THE I-T DEPARTMENT SOUGHT TO LEVY INTEREST UNDER SECTION 234D FOR ASSESSMENT YEARS (AYS) 1998-99 TO 2000-200 1 BY ISSUING NOTICES UNDER SECTION 148 OF THE ACT. THE COMPANY C ONTESTED THE LEVY AND THE CIT (APPEALS) HELD THAT INTEREST UNDER SECTION 234D COULD NOT BE CHARGED FOR AYS BEFORE JUNE 1, 2003. T HE DEPARTMENT TOOK THE MATTER TO THE TRIBUNAL. THE SPECIAL BENCH OF THE TRIBUNAL HELD THAT LEVY OF INTEREST UNDER SECTION 234 CAN BE APPLIED ONLY FROM AYS 2004-2005 ONWARDS AND NOT FOR THE EARLIER YEARS . THE BENCH REASONED THAT THERE IS NO DISPUTE TO THE PROPOSITION THAT A COUR T CANNOT READ ANYTHING INTO A STATUTORY PROVISION WHICH IS PLAIN AND UNAMBIGUOUS. A STATUTE IS THE EDICT OF THE LEGISLATURE. THE LANG UAGE EMPLOYED IN A STATUTE IS DETERMINATIVE OF THE LEGISLATIVE INTENT AND ACCORDING TO THE FIRST AND PRIMARY RULE OF CONSTRUCTION, THE INTENTI ON OF THE LEGISLATION MUST BE FOUND IN THE WORDS USED BY THE LEGISLATURE ITSELF AND THE FUNCTION OF THE COURT IS ONLY TO INTERPRET THE LAW AND THE COURT CANNOT LEGISLATE. IF A PROVISION OF LAW IS MISUSED AND SUB JECTED TO THE ABUSE OF THE PROCESS OF LAW, IT IS FOR THE LEGISLATURE TO AMEND, MODIFY OR REPEAL IT, IF DEEMED NECESSARY. LEGISLATIVE CAUSUS OMISSUS CANNOT BE SUPPLIED BY JUDICIAL INTERPRETATIVE COURSE. THUS, ON THE BASIS OF ARGUME NT THAT LEGISLATURE ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 12 HAS BROUGHT THIS PROVISION JUST TO FILL THE LACUNA IN THE LAW AND THEREFORE THESE PROVISIONS SHOULD BE CONSTRUED RETR OSPECTIVE CANNOT BE ACCEPTED MORE PARTICULARLY WHEN THESE PROVISIONS HAVE BEEN INSERTED ON THE STATUTE WITH EFFECT FROM JUNE 1, 20 03, AND NOT WITH RETROSPECTIVE EFFECT. THE LEGISLATURE HAS SPECIFICA LLY MENTIONED THE DATE OF APPLICABILITY, THAT IS, JUNE 1, 2003, AND T HE LEGISLATOR WAS NOT INCOMPETENT TO MAKE RETROSPECTIVE PROVISION, IF IT WAS SO INTENDED. THEREFORE, MERELY ON THE BASIS OF INTERPR ETATION, RETROSPECTIVE EFFECT CANNOT BE GIVEN TO THE PROVISI ONS OF SECTION 234D. ACCORDINGLY, LEVY ON INTEREST UNDER SEC TION 234D OF THE ACT WOULD APPLY PROSPECTIVELY FROM AY 2004-05 ONWARDS. IN THE INSTANT CASE, THE FINANCE ACT OF 2015 MADE IT ABUNDANTLY CLEAR THAT IT SHALL BE EFFECTIVE FROM JUNE 1, 2015. IT IS ALSO SETTLED LAW THAT PENAL LAWS CANNOT GENERALLY HAVE RETR OSPECTIVE OPERATION. IN THE MAXWELLS INTERPRETATION OF STATUTES, 12TH EDN . THE STATEMENT OF LAW RELATING TO ITS OPERATION IS STATED A S: 'PERHAPS NO RULE OF CONSTRUCTION IS MORE FIRMLY ESTABLISHED THAN THUS - THAT A RETROSPECTIVE OPERAT ION IS NOT TO BE GIVEN TO A STATUTE SO AS TO IMPAIR AN EXISTING R IGHT OR OBLIGATION, OTHERWISE THAN AS REGARDS MATTERS OF PR OCEDURE, UNLESS THAT EFFECT CANNOT BE AVOIDED WITHOUT DOING VIOLENCE TO THE LANGUAGE OF THE ENACTMENT. IF THE ENACTMENT IS EXPRESSED IN LANGUAGE WHICH IS FAIRLY CAPABLE OF EITHER INTER PRETATION, IT OUGHT TO BE CONSTRUED AS PROSPECTIVE ONLY. THE RULE HAS, IN FACT, TWO ASPECTS, FOR IT, 'INVOLVES ANOTHER AND SU BORDINATE RULE, TO THE EFFECT THAT A STATUTE IS NOT TO BE CON STRUED SO AS TO HAVE A GREATER RETROSPECTIVE OPERATION THAN ITS LAN GUAGE RENDERS NECESSARY. THE RULE OF BENEFICIAL CONSTRUCTION REQU IRES THAT EX-POST FACTO LAW SHOULD BE APPLIED TO REDUCE THE RIGOROUS SENTENCE OF THE PREVIOUS LAW ON THE SAME SUBJECT. SUCH A LAW IS NOT AFFECTED BY ARTICLE 20(1). THE PRINCIPLE IS BASED U PON THE LEGAL MAXIM SALUS POPULI EST SUPREMA LEX WHICH MEANS TH E WELFARE OF THE PEOPLE IS THE SUPREME FOR THE LAW. I T IS INSPIRED BY PRINCIPLES OF JUSTICE, EQUITY AND GOOD CONSCIENC E. ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 13 IN GARIKAPATI VEERAYA V. N. SUBBIAH CHOUDHRY , [1957 AIR 540], THE APEX COURT LAID DOWN AS UNDER: 'THE GOLDEN RULE OF CONSTRUCTION IS THAT, IN THE AB SENCE OF ANYTHING IN THE ENACTMENT TO SHOW THAT IT IS TO HAV E RETROSPECTIVE OPERATION, IT CANNOT BE SO CONSTRUED AS TO HAVE THE EFFECT OF ALTERING THE LAW APPLICABLE TO A CLAI M IN LITIGATION AT THE TIME WHEN THE ACT WAS PASSED.' IN RATAN LAL VS. STATE OF PUNJAB , { AIR 1965 SC 444} ' A BOY OF 16 YEARS WAS CONVICTED FOR COMMITTING AN OFFENCE OF HOUSE-TRESPASS AND OUTRAGING THE MODESTY OF A GIRL AGED 7 YEARS. THE MAGISTRATE SENTENCED HIM FOR SIX MONTHS RIGOROUS IMPRISONMENT AND ALSO IMPOSED FINE. AFTER THE JUDGMENT OF MAGISTRATE, THE PROBATION OF OFFENDERS ACT, 1958 CAME INTO FORCE. IT PROVIDED THAT A PERSON BELOW 21 YEARS OF AGE SHOULD NOT ORDINARILY BE SENTENCED TO IMPRISONM ENT. THE SUPREME COURT BY A MAJORITY OF 2 TO 1 HELD THAT THE RULE OF BENEFICIAL INTERPRETATION REQUIRED THAT EX-POST FAC TO COULD BE APPLIED TO REDUCE THE PUNISHMENT. SO AN EX-POST FAC TO LAW WHICH BENEFICIAL TO THE ACCUSED IS NOT PROHIBITED B Y CLAUSE (1) OF ARTICLE 20. IN K. S. PARIPOORNAN V. STATE OF KERALA , (1992) 1 SCC 684. THE APEX COURT WHILE CONSIDERING THE EFFECT OF AMENDME NT IN THE LAND ACQUISITION ACT IN PENDING PROCEEDINGS HELD IN PAR A 47 THEREOF AS: 'IN THE INSTANT CASE WE ARE CONCERNED WITH THE APPLICATION OF THE PROVISIONS OF SUB-SEC. (1-A) OF S.23 AS INTRODUCED BY THE AMENDING ACT TO ACQUISITION PROCE EDINGS WHICH WERE PENDING ON THE DATE OF COMMENCEMENT OF T HE AMENDING ACT. IN RELATION PENDING PROCEEDINGS, THE APPROACH OF THE COURTS IN ENGLAND IS THAT THE SAME ARE UNAFF ECTED BY THE CHANGES IN THE LAW SO FAR AS THEY RELATE TO THE DETERMINATION OF THE SUBSTANTIVE RIGHTS AND IN THE ABSENCE OF A CLEAR INDICATION OF A CONTRARY INTENTION IN AN AM ENDING ENACTMENT, THE SUBSTANTIVE RIGHTS OF THE PARTIES TO AN ACTION ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 14 FALL TO BE DETERMINED BY THE LAW AS IT EXISTED WHEN THE FICTION WAS COMMENCED AND THIS IS SO WHETHER THE LAW IS CHA NGE BEFORE THE HEARING OF THE CASE AT THE FIRST INSTANC E OR WHILE AN APPEAL IS PENDING'. IN STATE OF M.P. AND ANOTHER, VERUS G.S. DALL & FLOUR MILLS , (AIR 1991 SC 772), THE APEX COURT IN PARA 21 OF THE JUDGMENT THE APEX COURT HAS OBSERVED THAT: 'THE NOTIFICATION OF 3/71187 AMENDING THE 1981 NOTIFICATION WITH RETROSPECTIVE EFFECT SO AS TO EXC LUDE WHAT MAY BE DESCRIBED IN BRIEF AS 'TRADITIONAL INDUSTRIE S' THOUGH, LIKE RULE 14 OF THE DEFERMENT RULES, THE EXCLUSION EXTENDS' EVEN TO CERTAIN OTHER NON-TRADITIONAL UNITS OPERATI NG IN CERTAIN SITUATIONS. THOUGH THIS NOTIFICATION PURPORTS TO BE RETROSPECTIVE, IT CANNOT BE GIVEN SUCH EFFECT FOR A SIMPLE REASON. WE HAVE HELD THAT THE 1981 NOTIFICATION CLE ARLY ENVISAGES NO EXCLUSION OF ANY INDUSTRY WHICH FULFIL S THE TERMS OF THE NOTIFICATION FROM AVAILING OF THE EXEMPTION GRANTED UNDER IT. IN VIEW OF THIS INTERPRETATION, THE 1987 AMENDMENT HAS THE EFFECT OF RESCINDING THE EXEMPTION GRANTED BY THE 1981 NOTIFICATION IN RESPECT OF THE INDUSTRIES MENTIONED BY IT. S. 12 IS CLEAR THAT, WHILE A NOTIFICATION UNDER IT. IN HITENDRA VISHNU THAKUR VERSUS STATE OF MAHARASHTRA , 1994 SCC (4) 602 , A MBIT AND SCOPE OF AN AMENDING ACT AND ITS RETROSPECTIVE OPERATION CONSIDERED AS: '(I) A STATUTE WHICH AFFECTS SUBSTANTIVE RIGHTS I S PRESUMED TO BE PROSPECTIVE IN OPERATION UNLESS MADE RETROSPECTIVE, EITHER EXPRESSLY OR BY NECESSARY INTENDMENT, WHEREAS A STATUTE WHICH MERELY AFFECTS PROCEDURE, UNLESS SUCH A CONSTRUCTION IS TEXTUALLY IMPOSSIBLE, IS PRESUMED TO BE RETROSPECTIVE IN ITS APPLICATION, SHOULD NOT BE GIVEN AN EXTENDED MEANIN G AND SHOULD BE STRICTLY CONFINED TO ITS CLEARLY DEFI NED LIMITS. (II) LAW RELATING TO FORUM AND LIMITATION IS PROCE DURAL IN NATURE, WHEREAS LAW RELATING TO RIGHT OF ACTION AND RIGHT OF APPEAL EVEN THOUGH REMEDIAL IS SUBSTANTIVE IN NA TURE. (III) EVERY LITIGANT HAS A VESTED RIGHT IN SUBSTAN TIVE LAW BUT NO SUCH RIGHT EXISTS IN PROCEDURAL LAW. ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 15 (IV) A PROCEDURAL STATUTE SHOULD NOT GENERALLY SPEAKING BE APPLIED RETROSPECTIVELY WHERE THE RESULT WOULD BE T O CREATE NEW DISABILITIES OR OBLIGATIONS OR TO IMPOSE NEW DUTIES IN RESPECT OF TRANSACTIONS ALREADY ACCOMPLIS HED. (V) A STATUTE WHICH NOT ONLY CHANGES THE PROCEDURE BUT ALSO CREATES NEW RIGHTS AND LIABILITIES SHALL BE CONSTRU ED TO BE PROSPECTIVE IN OPERATION UNLESS OTHERWISE PROVID ED, EITHER EXPRESSLY OR BY NECESSARY IMPLICATION.' FROM THE PERUSAL OF THE ARTICLE 20(1) OF THE CONSTITUT ION OF INDIA, JUDGMENTS (SUPRA) AND ON THE AFORESAID CONSIDERAT ION AND OBSERVATION, WE ARE INCLINED TO HELD THAT THE CARDINAL PRINCIPLE OF CONSTRUCTION OF A STATUTE IS THAT EVERY STATUTE IS PRIMA-F ACIE A PROSPECTIVE UNLESS IT IS EXPRESSLY OR BY NECESSARY IMPLICATI ON MADE TO HAVE RETROSPECTIVE OPERATION. WHEN A PROCEDURAL LAW I S CONSIDERED IT IS ALWAYS RETROACTIVE I.E. CAME INTO EFFECT FROM PAST DAT E SO THE QUESTION OF RETROSPECTIVE OPERATION SHALL ARISE IN SUBSTAN TIVE LAWS ONLY. CONSIDERING THE MEANING OF RETROSPECTIVE AND RETROACTIV E LAWS, ONLY SUBSTANTIVE CIVIL LAWS CAN BE OPERATED RETROSPECTIVELY IF THE STATUTE SPECIFICALLY PRESCRIBES IT OR THERE EXISTS LARGE INTEREST OF THE PUBLIC AS WHOLE OTHERWISE ALL STATUTES SHALL BE OPERATED RETROACTI VELY, IN THE INSTANT CASE AS THE FINANCE ACT 2015 INTRODUCED THE ENABLI NG PROVISION FOR IMPOSING OF LATE FILING FEES U/S 234E WHICH WAS BROU GHT BY THE AMENDMENT FOR THE CHARGES TO SEC. 200A W.E.F 1 ST JUNE, 2015 THEREFORE THE SAME ARE TO BE PROSPECTIVE ONLY AND CANNOT BE MADE EFFECTIVE AS RETROSPECTIVE . AS THE LD. AR HAS DRAWN OUR ATTENTION TO CHART FILED IN THE PAPER BOOK PAGE -9 WHICH IS REPRODUCED HEREIN BELOW. ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 16 CONTINUING DEFAULT (85 5 DAYS) [FROM DUE DATE OF RETURN I.E. 15.07.2013 TO 17.11.2 015, TOTAL PERIOD OF DEFAULT (DELAY) IS 855 DAYS.] DUE DATE OF RETURN 15.07.2013 PROVISION OF SECTION 200A AMENDED FROM 01.06.2015. [PERIOD ] 15.07.2013 TO 31.05.2015 NO DEFAULT PERIOD ------PRE AMENDMENT PERIOD------ (685 DAYS) [PERIOD] 01.06.2015 TO 17.11.2015] DEFAULT PERIOD -----POST AMENDMENT PERIOD----- ( 200 DAYS) DEFAULT ADMITTED BY THE APPELLANT ON THE AFORESAID ANALYZATION, CONSIDERATION AND OBSERVA TION WE ARE OF THE CONSIDERED OPINION THAT THE LATE FEE U/S 23 4E CANNOT BE CHARGED OF PERIOD FROM 15 JULY, 2013 TO 31 ST MAY, 2015 WHICH COMES TO 685 DAYS IN THE INSTANT CASE RELATES TO PRIOR OF AMEN DMENT , THEREFORE, THE LATE FEE AS LEVIED BY THE REVENUE AUT HORITY IS LIABLE TO BE DELETED AND FURTHER AS THE ASSESSEE HAS BONAFIDELY ACCE DED TO PAY THE LATE FEE FOR THE DEFAULT PERIOD I.E. OF THE POST AMENDMENT PERIOD FROM 1 ST JUNE, 2015 TO 17 TH NOV. 2015 WHICH COMES TO 200 DAYS, HENCE, WE DIRECT THE REVENUE AUTHORITY TO REDUCE THE L ATE FEE FOR THE PERIOD QUA PRE AMENDMENT PERIOD I.E. UP TO 31 ST MAY, 2015. 8. IN VIEW OF THE AFORESAID DIRECTION THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31.08.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:31.08.2017. /PK/ PS. ITA NO.110 (ASR)/2017 ASST. YEA R: 2014-15 17 COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER