M/S. GCL EQUIPMENT & MACHINES PVT. LTD, MUMBAI V. TDS CPC, GHAZIABAD

ITA 132/MUM/2022

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1304 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: G
• Assessment Year: misc
• Appeal Filed On: 24-01-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HOSHANG B IRANI
• Keywords: TDS
• Section: 234E; 200A; 73

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM AND SHRI KAVITHA RAJAGOPAL, JM ITA No. 126 to 129/Mum/2022 (Assessment Year 2015-16) ITA No. 130 to 133/Mum/2022 (Assessment Year 2014-15) ITA No. 134 to 136/Mum/2022 (Assessment Year 2013-14) M/s G CL E qu ip m e n t a n d Ma ch in e s P vt. L td . 3 5 -3 6 /C.L .K , A r ca d e , Ma ro l Na ka , S i r M. V .Ro a d , A n d h e ri (E a st ) Mu m b a i-4 0 0 0 5 9 Vs. The TDS CPC Uttar Pradesh, Aayakar Bhavan, Sector 3, Vaishali, Ghazizabad, Ghaziabad, Uttar Pradesh- 201010 (Appellant) (Respondent) PAN No. AAACG5360J Assessee by : Shri Bharat Kumar, AR Revenue by : Shri Hoshang B Irani, DR Date of hearing: 25.05.2022 Date of pronouncement : 25.05.2022 O R D E R PER BENCH 01. This is the bunch of 11 (eleven) appeals concerning one assessee involving only issue of levy of fee under Section 234E of the Income Tax Act, 1961 (the Act). i. ITA No. 135/Mum/2022 is filed by the assessee against the order of National Faceless appeal Center (NFAC), [the learned CIT (A)] for A.Y. 2013-14, Page | 2 ITA Nos. 126-136/Mum/2022 GCL Equipment and Machines Pvt. Ltd.; A.Y. 13-14 to 15-16 wherein the learned CIT (A) has upheld the order passed under Section 200A of the Act by the ACIT, TDS CPC, Bangalore [ The ld AO ] for Quarter 3 of F.Y. 2012-13 relevant to A.Y. 2013-14, wherein late fee of ₹5,258/- u/s 234E of the Act was upheld. This appeal is delayed by 7 days. ii. ITA No. 134/Mum/2022, is filed by assessee against the order passed by learned CIT (A) dated 17.11.2021, wherein the late fee levied under Section 234E of the Act for 2 nd Quarter of F.Y. 2012- 13 of ₹9,266/- is upheld. This appeal is delayed by 7 days. iii. ITA No. 136/Mum/2022, is filed by against the order of the learned CIT (A) wherein the order passed under Section 200A of the Act by The ld AO , for Quarter 4, F.Y. 2012-13 charging late fee under Section 234E of the Act of ₹21,297/- is upheld. This appeal is also filed late by 7 days. iv. ITA No. 130/Mum/2022 is filed by the assessee against the order of the learned CIT (A) dated 17 th November, 2021, wherein the order passed under Section 200A of the Act for levy of late fee under Section 234E of the Act of ₹8,863/- for the first quarter of F.Y. 2013-14 is upheld. This appeal is filed late by 7 days. v. ITA No. 131/Mum/2022 is filed by the assessee against the order of the learned CIT (A), wherein the Page | 3 ITA Nos. 126-136/Mum/2022 GCL Equipment and Machines Pvt. Ltd.; A.Y. 13-14 to 15-16 order passed under Section 200A of the Act by the learned Assessing Officer for second quarter of F.Y. 2013-14 charging late fee under Section 234D of the Act of ₹ 7,030/- is upheld. This appeal is also filed late by 7 days. vi. ITA No. 132/Mum/2022 is filed by the assessee against the order of learned CIT (A) dated 16 th November, 2021, wherein the order passed under Section 200A of the Act levying late fee under Section 234E of the Act of ₹7,758/- for third quarter of F.Y. 2013-14 is upheld. The appeal is filed late by 7 days. vii. ITA No. 133/Mum/2022 is filed against the order of learned CIT (A) confirming the order passed under Section 200A by the learned Assessing Officer levied late fee under Section 234E of the Act of ₹ 12,149/- for 4 th Quarter of F.Y. 2013-14 amounting to ₹ 12,149/- is upheld. viii. ITA No. 126/Mum/2022 is filed by the assessee against the order passed by the learned CIT (A) confirming the levy of late fee under Section 234E of the Act of ₹ 7,942/- levied by the learned Assessing Officer for First Quarter of F.Y. 2014-15 is confirmed. The appeal is filed late by 7 days. ix. ITA No. 127/Mum/2022 is filed by the assessee against the order of the learned CIT (A) confirming the order under Section 200A of the Act passed by Page | 4 ITA Nos. 126-136/Mum/2022 GCL Equipment and Machines Pvt. Ltd.; A.Y. 13-14 to 15-16 the learned Assessing Officer for the second quarter of F.Y. 2014-15 levied late fee under Section 234E of the Act of ₹8,901/- was confirmed. x. ITA No. 128/Mum/2022 is filed by the assessee against the order by the learned CIT (A) wherein the order passed under Section 200A of the Act by the learned Assessing Officer for the third quarter of F.Y. 2014-15 levying late fee of ₹ 3,017/- under Section 234E of the Act. xi. ITA No. 129/Mum/2022 is filed by the assessee against the order of the learned CIT (A) confirmed the order under Section 200A of the Act passed by the learned Assessing Officer for Quarter no. 4 of F.Y. 2014-15, wherein late fee levied of 8,400/- under Section 234E of the Act was confirmed. 02. The learned Authorized Representative submitted that these appeal are filed late in some of the cases by 7 days. The delay has occurred within the period of January, 2022 by just 7 days wherein Corona wave is there and therefore, appeal could not be filed in time. Subsequently, on 25 th January, 2022 all the appeals were filed together and the delay is of very small number of days because of pandemic, hence, same should be condoned and matter should be decided on the merits of the case. Page | 5 ITA Nos. 126-136/Mum/2022 GCL Equipment and Machines Pvt. Ltd.; A.Y. 13-14 to 15-16 03. The learned Departmental Representative vehemently opposed the arguments of the learned Authorized Representative for condonation of appeal. 04. We have carefully considered the rival contentions and find that the orders of the ld CIT (A) in these cases were served on assessee on 19 th November, 2021. The due date of filing of the appeal was 60 days there from i.e. 18.01.2022. All these appeals have been filed on 25 th January, 2022 causing a delay of 7 days. It is matter of common knowledge that in the month of December 2021 and January 2022, the pandemic was not over. The movement of the people and business activities were carried out in a very restrictive manner. The delay in filing of appeal has arisen in that period. Therefore, we find that there is a sufficient cause in filing appeals late. Hence, we condone the delay in filing of the impugned appeals. 05. Issue involved in all these appeals is levy of late fee u/s 234E of the Act by the ACIT, TDS CPC Bangalore for F.Y. 2012-13 to F.Y. 2014-15 for various quarters. The respective orders under Section 200A of the Act were passed and then late fee under Section 234E of the Act was levied for filing of form no. 26Q for respective quarters late. 06. Assessee preferred appeal against such orders before the learned CIT (A) submitting that amendment with effect from 1 st June, 2015 is Page | 6 ITA Nos. 126-136/Mum/2022 GCL Equipment and Machines Pvt. Ltd.; A.Y. 13-14 to 15-16 prospective for computation of fee and therefore, with effect from 1 st June 2015 only there could be a default and late fee could be levied. The assessee also relied on the decision of co-ordinate Bench before learned CIT (A). The learned CIT (A) found that all these appeals are filed late before him and therefore, he dismissed those appeals being filed much beyond time prescribed and without any compelling reasons. Even on the merits of the case, he confirmed the fee levied by following the decision of Hon'ble Gujarat High Court in case of Rajesh Kourani Vs. Union of India (2017) 83 taxmann.com 137 (Gujarat). Accordingly, the levy of late fee under Section 234E of the Act by all these orders were confirmed. Accordingly, the assessee is aggrieved against those orders. 07. The learned Authorized Representative submitted that on the merits, the issue is covered in favour of assessee by decision of Honourable Kerala High court , wherein it has been held that levy of late fee under Section 234E of the Act would be in order, only if the default in filing of Form no. 26Q occurs on or after 1 st June, 2015. He further submitted that the reliance on the decision of the Hon'ble Gujarat High Court by the learned CIT (A) is not correct when the decision of Hon'ble kerala High Court relied upon by the assessee is placed before him. Assessee further stated that in absence of any decision of Hon'ble jurisdictional High Court, a view in favour of the Page | 7 ITA Nos. 126-136/Mum/2022 GCL Equipment and Machines Pvt. Ltd.; A.Y. 13-14 to 15-16 assessee should have been followed in case of payment of late fee. He also stated that in several decisions of the co-ordinate Benches, the view has been taken accordingly. 08. The learned Departmental Representative vehemently supported the order of learned CIT (A). 09. We have carefully considered the rival contentions and perused the orders of lower authorities. In the present case, the issue involved is whether late fee can be charged u/s 234 E of the Act in case of period prior to 1/6/2015. We find that this issue has been decided by the coordinate bench in one of the latest decision considering the decision of Honourable Gujarat High court , which was followed by the ld CIT [A] . the coordinate bench in SHRI SANJAY GOPAL PANDIT VERSUS NATIONAL FACELESS APPEAL CENTRE, DELHI in ITA No.1902/Mum./2021, ITA No.1903/Mum./2021, ITA No.1904/Mum./2021 dtaed April 26, 2022 has decided this issue as under :- “4. In these appeals, assessee is aggrieved with (i) levy of fee under section 234E of the Act vide intimation issued under section 200A(1) of the Act for the period prior to 01.06.2015; and (ii) dismissal of its appeals by the learned CIT(A) on the ground of delay. 5. The assessee filed separate appeals before the learned CIT(A) for assessment years under consideration against the purported order/intimation dated 09.01.2020 under section 200A of the Act passed by the ITO, TDS Ward 2, Thane, levying fee under section 234E of the Act for late filing of TDS return for relevant financial years. As per the facts available on record, the said order dated 09.01.2020 was claimed to have been served on the assessee on Page | 8 ITA Nos. 126-136/Mum/2022 GCL Equipment and Machines Pvt. Ltd.; A.Y. 13-14 to 15-16 15.01.2020. However, in the appeals before the learned CIT(A), assessee did not file the copy of said purported order/intimation under section 200A(1) levying fee under section 234E of the Act and instead filed copy of default summary of TDS statements along with Form No. 35. The learned CIT(A), vide separate impugned orders, noted that the default summary statements are issued by the TDS CPC along with the intimation/order under section 200A of the Act and copy of such orders under section 200A along with default summary are sent directly to the registered email id of the deductor and the details are also accessible on the departmental portal, which can also be accessed by the deductor. The learned CIT(A) further noted that the assessee has wrongly treated the default summary issued by the TDS CPC as an order under section 200A and has filed appeals enclosing same. Treating such appeals as defective, deficiency letters were issued to the assessee for rectification of such defects. However, as noted by the learned CIT(A), the assessee neither rectified the defects nor sought any further time for same. The learned CIT(A) further noted that the assessee has counted the number of days of delay from the date on which the default summary was downloaded by the assessee and not from the date of intimation/order under section 200A whereby the fee under section 234E of the Act was levied. The learned CIT(A) rejected the contention of the assessee that the assessee has not received any intimation of such outstanding dues and only upon initiation of recovery proceedings, assessee came to know about the outstanding demand. The learned CIT(A) vide separate impugned orders held that the assessee did not adduce any reasonable cause which prevented it from filing a valid appeal within the 30 days’ time limit under section 249(2) of the Act against the intimation issued under section 200A(1) of the Act. Accordingly, the learned CIT(A) dismissed the appeals, vide separate orders, treating the same to be not admissible in law and facts and to have been instituted belatedly on the basis of default summary without intimation under 200A of the Act. 6. During the course of hearing, learned departmental representative vehemently relied upon the impugned orders passed by the learned CIT(A) and submitted that the appeals were filed belatedly by the assessee. 7. We have considered the submissions and perused the material available on record. In the impugned orders, it is evident that the learned CIT(A) has not denied that fee under section 234E of the Act has been levied on the assessee for the financial years under consideration. The Page | 9 ITA Nos. 126-136/Mum/2022 GCL Equipment and Machines Pvt. Ltd.; A.Y. 13-14 to 15-16 learned CIT(A) dismissed the appeals on the basis that same have been filed belatedly and no sufficient cause for condoning the delay has been put forth by the assessee. Further, the assessee has also not filed the copy of intimation/order issued under section 200A of the Act whereby the fee under section 234E of the Act was levied. Thus, only on the basis of above technicalities the learned CIT(A) dismissed the appeals filed by the assessee. 8. From the Form 35, forming part of the appeal set before us, it is evident that the assessee has raised following ground of appeal before the learned CIT(A): “Income Tax Department (TRACES) erred in levy fees u/s 234E in its intimation (Default Summary) without verifying the fact that Power to levy fees u/s 234E in default summary statement u/s 200A was made applicable w.e.f. 01.06.2015 (Finance Act, 2015).” However, the learned CIT(A) did not deal with merits of the case and proceeded to dismissed the appeals on the ground of delay and also defects in filing the appeals by the assessee. The learned CIT(A) also rejected the submission of the assessee seeking condonation of delay that the assessee has not received any intimation of such outstanding dues and only upon initiation of recovery proceedings, assessee came to know about the outstanding demand. 9. Further, on merits, we find that the issue whether clause (c) of section 200A(1), as substituted by Finance Act, 2015, w.e.f. 01.06.2015, whereby the A.O. was enabled to compute the fee under section 234E of the Act while processing of statement of tax deducted at source, is prospective in nature has came up for adjudication before the Hon’ble High Courts of various States. The first decision was rendered by the Hon’ble Karnataka High Court in Fatheraj Singhvi v/s Union of India, [2016] 73 taxmann.com 252 (Kar.), whereby the Hon’ble High Court held that such an amendment is prospective in nature and thus intimation issued under section 200A of the Act for computation and intimation of payment of fee under section 234E of the Act relating to the period of tax deduction prior to 01.06.2015 was not maintainable. 10. However, the Hon’ble Gujarat High Court in Rajesh Kourani v/s Union of India, [2017] 83 taxmann.com 137 (Guj.), did not concur with the views expressed by the Hon’ble Karnataka High Court in Fatheraj Singhvi (supra), Page | 10 ITA Nos. 126-136/Mum/2022 GCL Equipment and Machines Pvt. Ltd.; A.Y. 13-14 to 15-16 and held that the aforesaid amendment by Finance Act, 2015, w.e.f. 01.06.2015, is retrospective in nature. 11. Recently, the Hon’ble Kerala High Court had an occasion to deal with this issue in Olari Little Flower Kuries Pvt. Ltd. v/s Union of India, [2022] 134 taxmann.com 111 (Ker.), wherein the Hon’ble High Court had taken into consideration both the aforesaid decisions passed by the Hon’ble Karnataka High Court as well as Hon’ble Gujarat High Court. The Hon’ble Kerala High Court concurring with the decision passed by the Hon’ble Karnataka High Court in Fatheraj Sanghvi (supra) held that the provisions of section 200A of the Act as amended by Finance Act, 2015, enable computation of fee payable under section 234E of the Act at the time of processing of statement of TDS, is prospective in nature from 01.06.2015 and thus intimation issued under section 200A of the Act dealing with the fee under section 234E for belated filing of TDS return for the period prior to 01.06.2015, are invalid. 12. Further, we also find that the Co–ordinate Bench of the Tribunal in Permanent Magnets Ltd. v/s DCIT, ITA no.6436 to 6442/Mum./2018, order dated 07.08.2019, following the aforesaid decision of the Hon’ble Karnataka High Court in Fatheraj Sanghvi (supra) directed deletion of fee under section 234E of the Act levied vide intimation under section 200A of the Act for the period prior to 01.06.2015. 13. It is well established that rules of procedure are handmaid of justice. Further, when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred. Thus, in view of the above, as the learned CIT(A) has dismissed the appeals filed by the assessee, on delay and on defects in filing the appeal, without dealing with merits of the case, we in the substantial interest of justice deem it appropriate to restore the appeals before the learned CIT(A) for adjudication on merits after condoning the delay in filing the appeals. The assessee is also directed to obtain the copy of intimation issued under section 200A(1) for financial years under consideration from the AO(TDS) and provide the same to the learned CIT(A) for adjudication of its appeals. Needless to mention that adequate opportunity of hearing shall be granted to the assessee before passing the order and the CIT(A) shall have the liberty to call for remand report, if any, from the concerned Assessing Officer while deciding this issue.” Page | 11 ITA Nos. 126-136/Mum/2022 GCL Equipment and Machines Pvt. Ltd.; A.Y. 13-14 to 15-16 010. In the present appeals before us the ld CIT [A] has also decided the issue on merits of the case against the assesee, therefore instead of setting aside these matter back to his file, which will not serve any fruitful purpose, we direct the ld AO to delete late fee u/s 234 E of the act pertaining period prior to 1/6/2015. Ld AR also agreed before us that Late Fee Pertaining period after that I.e. after 1/6/2015 is sustainable. 011. Therefore respectfully following the decision of the coordinate bench, ITA NO 127/M/2022, 128/M/2022 and ITA no 129/M/2022 pertaining to quarter 2,3 and 4 of F Y 2015-16 are dismissed and all other appeals are allowed. 012. Accordingly, Above three appeals are dismissed and other 8 appeals are allowed. Order pronounced in the open court on 25.05.2022. Sd/- Sd/- (KAVITHA RAJAGOPAL) (PRASHANT MAHARISHI) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Mumbai, Dated: 25.05.2022 Sudip Sarkar, Sr.PS Page | 12 ITA Nos. 126-136/Mum/2022 GCL Equipment and Machines Pvt. Ltd.; A.Y. 13-14 to 15-16 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A) 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai