Nirma Education & Research Foundation, Ahmedabad V. The Dy.CIT, Centralized Processing Cell- TDS, Gaziabad

ITA 1375/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6148 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 15-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: REKHA BELSARE
• Keywords: Capital asset
• Section: 154

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .. , , BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ! ' ./ I.T.A. NO.1375,1376 & 1377/AHD/2015 ( / ASSESSMENT YEAR : 2013-14) NIRMA EDUCATION & RESEARCH FOUNDATION, NIRMA HOUSE, ASHRAM ROAD, AHMEDABAD / VS. THE CIT, CENTRALIZED PROCESSING CELL-TDS, GHAZIABAD $ ./ %!&! ./ PAN/GIR NO. : AAATN1441L ( ' $' / APPELLANT ) .. ( ($' / RESPONDENT ) ' $' ) / APPELLANT BY : SHRI REKHA BELSARE, A.R ($' * ) / RESPONDENT BY : DINESH SINGH, SR. D.R + , * - / DATE OF HEARING 29/01/2018 ./0 * - / DATE OF PRONOUNCEMENT 01/ 02 /2018 ! 1 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAVE BEEN FILED AT THE INSTA NCE OF THE ASSESSEE AGAINST THE RESPECTIVE ORDERS OF THE COMMI SSIONER OF INCOME TAX(APPEALS)-8, AHMEDABAD [CIT(A) IN SHORT] ARISIN G WITH REFERENCE TO INTIMATION PASSED UNDER SECTION 200A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR CERTAIN QUARTERS OF FINANCIAL YEAR 2012-13, WHEREBY LATE FILING FEE WAS CHARGED UNDER SECTION 234E FOR DELAY IN FILING TDS STATEMENTS. ITA NO.1375,137 6 & 1377AHD/2015 NIRMA EDUCATION & RESEARCH FOUNDATION. VS. CIT CPC- TDS ASST.YEAR 2013-14 - 2 - 2. THE ONLY GROUND RAISED IN THE CAPTAIN APPEAL REL ATES TO LATE FEE CHARGED UNDER SECTION 234E FOR BELATED FILING OF TD S RETURNS FOR SOME QUARTERS IN APPEAL. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED WITH REFE RENCE TO ITA NO. 1375/AHD/2015 THAT THE REVENUE HAS IMPOSED LATE FIL ING FEES UNDER SECTION 234E OF THE ACT AMOUNTING TO RS. 25,000/- F OR BELATED FILING OF QUARTER-2 RETURN IN PRESCRIBED FORM NO. 26Q FOR FIN ANCIAL YEAR 2012-13 RELEVANT ASSESSMENT YEAR 2013-14. IT WAS SUBMITTED THAT SIMILAR LATE FILING FEES OF RS. 22,400/- AND RS. 10,000/- IN OTHER APPE ALS ARE SUBJECT MATTER OF CONTROVERSY. 4. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE INTIMATION UNDER SECTION 200A TO THE ASSESSEE NOTIFYING LATE F ILING FEE UNDER SECTION 234E SUGGESTS THAT THE ISSUE RELATES TO PERIOD PRIO R TO 01.06.2015 IN ALL THREE APPEALS. THE LD. AUTHORISED REPRESENTATIVE AC CORDINGLY SUBMITTED THAT THE DEFAULT IN FURNISHING TDS STATEMENT PRIOR TO 01.06.2015 DO NOT GIVE RISE TO LATE FILING FEE CONTEMPLATED UNDER SEC TION 234E IN VIEW OF THE LIMITED MANDATE OF SECTION 200A AT THE RELEVANT TIM E. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ISSUE IS NO LONGE R RES INTEGRA AND DECIDED IN FAVOUR OF ASSESSEES PLACED IN SIMILAR FACTS SITUATIONS BY PLETHORA OF TRIBUNAL DECISION IN RESPECT OF CASES P RIOR TO 01.06.2015. THE ITA NO.1375,137 6 & 1377AHD/2015 NIRMA EDUCATION & RESEARCH FOUNDATION. VS. CIT CPC- TDS ASST.YEAR 2013-14 - 3 - LD. AUTHORISED REPRESENTATIVE RELIED UPON THE DECIS ION OF THE TRIBUNAL IN THE CASE OF NAVIN GLOBAL PVT. LTD. VS. DCIT AND OTH ERS ITA NO. 3144/AHD/2014 & OTHERS, ORDER DATED 29.07.2016 AND WONDER WAVES ENTERTAINMENT PVT. LTD. VS. DCIT, ITA NO. 2143 TO 2146/AHD/2015 FOR A.Y. 2014-15, ORDER DATED 14.10.2015. 5. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE RESPECTIVE ORDERS OF THE CIT(A). 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. WE FIND THAT THE CORRECTNESS OF CHARGE OF LATE FEE UNDER S.234E PRIOR TO AMENDMENT OF SECTION 200A W.E.F. 01.06.2015 IS ESSENTIALLY IN QU ESTION. THE ASSESSEE SEEKS TO PLEAD TOWARDS NON- PERMISSIONABILITY OF LE VY OF FEE UNDER SECTION 234E OF THE ACT TILL SECTION 200A OF THE ACT WAS AM ENDED W.E.F. 01.06.2015. TO SUPPORT THE AFORESAID PROPOSITION, THE DECISIONS OF THE CO-ORDINATE BENCH OF TRIBUNAL WAS SOUGHT TO BE RELI ED UPON ON BEHALF OF THE ASSESSEE. AT THIS JUNCTURE, WE NOTICE THAT HON BLE GUJARAT HIGH COURT IN THE CASE OF RAJESH KOURANI VS. UNION OF INDIA 29 7 CTR 502 (GUJARAT) HAS TAKEN A VIEW ADVERSE TO THE PROPOSITION OF ASSE SSEE. THE HONBLE HIGH COURT OBSERVED THAT SECTION 200A OF THE INCOME TAX ACT, 1961 IS A MACHINERY PROVISION AND CANNOT GOVERN A CHARGING PR OVISION. IN TERMS OF THE AFORESAID DECISION, THE REVENUE COULD ALWAYS LE VY FEE IN TERMS OF SECTION 234E OF THE ACT EVEN PRIOR THE AMENDMENT IN SECTION 200A OF THE ITA NO.1375,137 6 & 1377AHD/2015 NIRMA EDUCATION & RESEARCH FOUNDATION. VS. CIT CPC- TDS ASST.YEAR 2013-14 - 4 - ACT. THE HONBLE HIGH COURT NOTED THAT SECTION 200A OF THE ACT IS A MACHINERY PROVISION THAT PROVIDES FOR A MECHANISM F OR PROCESSING AND COMPUTING AMONGST OTHERS, FEE PAYABLE UNDER SECTION 234E OF THE ACT. IT WILL BE APT TO EXTRACT THE OPERATIVE PARA OF THE JU DGMENT OF THE HONBLE GUJARAT HIGH COURT FOR READY REFERENCE:- 16. WE NOW COME TO THE PETITIONER'S CENTRAL CHALLENGE V IZ. OF NON PERMISSIBILITY TO LEVY FEE UNDER SECTION 234E OF TH E ACT TILL SECTION 200A OF THE ACT WAS AMENDED WITH EFFECT FROM 01.06.2015. WE HAV E NOTICED THE RELEVANT STATUTORY PROVISIONS. THE PICTURE THAT EMERGES IS T HAT PRIOR TO 01.07.2012, THE ACT CONTAINED A SINGLE PROVISION IN SECTION 272A PR OVIDING FOR PENALTY IN CASE OF DEFAULT IN FILING THE STATEMENTS IN TERMS OF SEC TION 200 OR PROVISO TO SECTION 206C. SUCH PENALTY WAS PRESCRIBED AT THE RATE OF RS .100 FOR EVERY DAY DURING WHICH THE FAILURE CONTINUED. WITH EFFECT FROM 01.06 .2012, THREE MAJOR CHANGES WERE INTRODUCED IN THE ACT. SECTION 234E AS INTRODU CED FOR THE FIRST TIME TO PROVIDE FOR CHARGING OF FEE FOR LATE FILING OF THE STATEMENTS. SUCH FEE WOULD BE LEVIED AT THE RATE OF RS.200/- FOR EVERY DAY OF FAI LURE SUBJECT TO THE MAXIMUM AMOUNT OF TAX DEDUCTIBLE OR COLLECTIBLE AS THE CASE MAY BE. SECTION 271H WAS ALSO INTRODUCED FOR THE FIRST TIME FOR LEVYING PENA LTY FOR FAILURE TO FURNISH THE STATEMENTS. SUCH PENALTY WOULD BE IN THE RANGE OF R S.10,000/- AND RS.L LAKH. NO PENALTY WOULD BE IMPOSED IF THE TAX IS DEPOSITED WITH FEE AND INTEREST AND THE STATEMENT IS FILED WITHIN ONE YEAR OF THE DUE D ATE. WITH ADDITION TO THESE TWO PROVISIONS PRESCRIBING FEE AND PENALTY RESPECTI VELY, CLAUSE (K) OF SUB- SECTION (2) OF SECTION 272A BECAME REDUNDANT AND BY ADDING A PROVISO TO THE SAID SECTION, THIS EFFECT WAS THEREFORE LIMITED UPT O 01.07.2012. 17. IN ESSENCE, SECTION 234E THUS PRESCRIBED FOR THE FI RST TIME CHARGING OF A FEE FOR EVERY DAY OF DEFAULT IN FILING OF STATEMENT UNDER SUB-SECTION (3) OF SECTION 200 OR ANY PROVISO TO SUB-SECTION (3) OF SE CTION 206C. THIS PROVISION WAS APPARENTLY ADDED FOR MAKING THE COMPLIANCE OF D EDUCTION AND COLLECTION OF TAX AT SOURCE, DEPOSITING IT WITH GOVERNMENT REV ENUE AND FILING OF THE STATEMENTS MORE STRINGENT. ITA NO.1375,137 6 & 1377AHD/2015 NIRMA EDUCATION & RESEARCH FOUNDATION. VS. CIT CPC- TDS ASST.YEAR 2013-14 - 5 - 18. IN THIS CONTEXT, WE MAY NOTICE THAT SECTION 200A WH ICH PERTAINS TO PROCESSING OF STATEMENTS OF TAX DEDUCTED AT SOURCE PROVIDES FOR THE PROCEDURE ONCE A STATEMENT OF DEDUCTION OF TAX AT SOURCE IS F ILED BY THE PERSON RESPONSIBLE TO DO SO AND AUTHORIZES THE ASSESSING O FFICER TO MAKE CERTAIN ADJUSTMENTS WHICH ARE PRIMA-FACIE OR ARITHMETICAL I N NATURE. THE OFFICER WOULD THEN SEND AN INTIMATION OF A STATEMENT TO THE ASSESSEE. PRIOR TO 01.06.2015, THIS PROVISION DID NOT INCLUDE ANY REFE RENCE TO THE FEE PAYABLE UNDER SECTION 234E OF THE ACT. BY RECASTING SUB-SEC TION (1), THE NEW CLAUSE-C PERMITS THE AUTHORITY TO COMPUTE THE FEE, IF ANY, P AYABLE BY THE ASSESSEE UNDER SECTION 234E OF THE ACT AND BY VIRTUE OF CLAUSE-D, ADJUST THE SAID SUM AGAINST THE AMOUNT PAID UNDER THE VARIOUS PROVISIONS OF THE ACT. 19. IN PLAIN TERMS, SECTION 200A OF THE ACT IS A MACHIN ERY PROVISION PROVIDING MECHANISM FOR PROCESSING A STATEMENT OF DEDUCTION O F TAX AT SOURCE AND FOR MAKING ADJUSTMENTS, WHICH ARE, AS NOTED EARLIER, AR ITHMETICAL OR PRIMA-FACIE IN NATURE. WITH EFFECT FROM 01.06.2015, THIS PROVIS ION SPECIFICALLY PROVIDES FOR COMPUTING THE FEE PAYABLE UNDER SECTION 234E OF THE ACT. ON THE OTHER HAND, SECTION 234E IS A CHARGING PROVISION CREATING A CHA RGE FOR LEVYING FEE FOR CERTAIN DEFAULTS IN FILING THE STATEMENTS. UNDER NO CIRCUMSTANCES A MACHINERY PROVISION CAN OVERRIDE OR OVERRULE A CHARGING PROVI SION. WE ARE UNABLE TO SEE THAT SECTION 200A OF THE ACT CREATES ANY CHARGE IN ANY MANNER. IT ONLY PROVIDES A MECHANISM FOR PROCESSING A STATEMENT FOR TAX DEDUCTION AND THE METHOD IN WHICH THE SAME WOULD BE DONE. WHEN SECTIO N 234E HAS ALREADY CREATED A CHARGE FOR LEVYING FEE THAT WOULD THEREAF TER NOT BEEN NECESSARY TO HAVE YET ANOTHER PROVISION CREATING THE SAME CHARGE . VIEWING SECTION 200A AS CREATING A NEW CHARGE WOULD BRING ABOUT A DICHOTOMY . IN PLAIN TERMS, THE PROVISION IN OUR UNDERSTANDING IS A MACHINERY PROVI SION AND AT BEST PROVIDES FOR A MECHANISM FOR PROCESSING AND COMPUTING BESIDE S OTHER, FEE PAYABLE UNDER SECTION 234E FOR LATE FILING OF THE STATEMENT S. 20. EVEN IN ABSENCE OF SECTION 200A OF THE ACT WITH INT RODUCTION OF SECTION 234E, IT WAS ALWAYS OPEN FOR THE REVENUE TO DEMAND AND COLLECT THE FEE FOR LATE FILING OF THE STATEMENTS. SECTION 200A WOULD M ERELY REGULATE THE MANNER IN WHICH THE COMPUTATION OF SUCH FEE WOULD BE MADE AND DEMAND RAISED. IN ITA NO.1375,137 6 & 1377AHD/2015 NIRMA EDUCATION & RESEARCH FOUNDATION. VS. CIT CPC- TDS ASST.YEAR 2013-14 - 6 - OTHER WORDS, WE CANNOT SUBSCRIBE TO THE VIEW THAT W ITHOUT A REGULATORY PROVISION BEING FOUND FOR SECTION 200A FOR COMPUTAT ION OF FEE, THE FEE PRESCRIBED UNDER SECTION 234E CANNOT BE LEVIED. ANY SUCH VIEW WOULD AMOUNT TO A CHARGING SECTION YIELDING TO THE MACHINERY PRO VISION. IF AT ALL, THE RECASTED CLAUSE (C) OF SUBSECTION (1) OF SECTION 20 0A WOULD BE IN NATURE OF CLARIFICATORY AMENDMENT. EVEN IN ABSENCE OF SUCH PR OVISION, AS NOTED, IT WAS ALWAYS OPEN FOR THE REVENUE TO CHARGE THE FEE IN TE RMS OF SECTION 234E OF THE ACT. BY AMENDMENT, THIS ADJUSTMENT WAS BROUGHT WITH IN THE FOLD OF SECTION 200A OF THE ACT. THIS WOULD HAVE ONE DIRECT EFFECT. AN ORDER PASSED UNDER SECTION 200A OF THE ACT IS RECTIFIABLE UNDER SECTIO N 154 OF THE ACT AND IS ALSO APPEALABLE UNDER SECTION 246A. IN ABSENCE OF THE PO WER OF AUTHORITY TO MAKE SUCH ADJUSTMENT UNDER SECTION 200A OF THE ACT, ANY CALCULATION OF THE FEE WOULD NOT PARTAKE THE CHARACTER OF THE INTIMATION U NDER SAID PROVISION AND IT COULD BE ARGUED THAT SUCH AN ORDER WOULD NOT BE OPE N TO ANY RECTIFICATION OR APPEAL. UPON INTRODUCTION OF THE RECASTED CLAUSE (C ), THIS SITUATION ALSO WOULD BE OBVIATED. EVEN PRIOR TO 01.06.2015, IT WAS ALWAY S OPEN FOR THE REVENUE TO CALCULATE FEE IN TERMS OF SECTION 234E OF THE ACT. THE KARNATAKA HIGH COURT IN CASE OF FATHERAJ SINGHVI (SUPRA) HELD THAT SECTI ON 200A WAS NOT MERELY A REGULATORY PROVISION, BUT WAS CONFERRING SUBSTANTIV E POWER ON THE AUTHORITY. THE COURT WAS ALSO OF THE OPINION THAT SECTION 234E OF THE ACT WAS IN THE NATURE OF PRIVILEGE TO THE DEFAULTER IF HE FAILS TO PAY FEES THEN HE WOULD BE RID OF RIGOR OF THE PENAL PROVISION OF SECTION 271H OF THE ACT. WITH BOTH THESE PROPOSITIONS, WITH RESPECT, WE ARE UNABLE TO CONCUR . SECTION 200A IS NOT A SOURCE OF SUBSTANTIVE POWER. SUBSTANTIVE POWER TO L EVY FEE CAN BE TRACED TO SECTION 234E OF THE ACT. FURTHER THE FEE UNDER SECT ION 234E OF THE ACT IS NOT IN LIEU OF THE PENALTY OF SECTION 271H OF THE ACT. BOT H ARE INDEPENDENT LEVIES. SECTION 271H ONLY PROVIDES THAT SUCH PENALTY WOULD NOT BE LEVY IF CERTAIN CONDITIONS ARE FULFILLED. ONE OF THE CONDITIONS IS THAT THE TAX WITH FEE AND INTEREST IS PAID. THE ADDITIONAL CONDITION BEING TH AT THE STATEMENT IS FILED LATEST WITHIN ONE YEAR FROM THE DUE DATE. 21. COUNSEL FOR THE PETITIONER HOWEVER, REFERRED TO THE DECISION OF SUPREME COURT IN CASE OF CITV. B.C. SRINIVASA SETTY [1981] 128 1TR 294/5 TAXMAN 1 (SO. TO CONTEND THAT WHEN A MACHINERY PROVISION IS NOT PROVIDED, THE LEVY ITA NO.1375,137 6 & 1377AHD/2015 NIRMA EDUCATION & RESEARCH FOUNDATION. VS. CIT CPC- TDS ASST.YEAR 2013-14 - 7 - ITSELF WOULD FAIL. THE DECISION OF SUPREME COURT IN CASE OF B C SRINIVASA SETTY (SUPRA) WAS RENDERED IN ENTIRELY DIFFERENT BACKGROU ND. ISSUE INVOLVED WAS OF CHARGING CAPITAL GAIN ON TRANSFER OF A CAPITAL ASSET. IN CASE ON HAND, THE ASSET WAS IN THE NATURE OF GOODWILL. THE SUPREME COURT RE FERRING TO VARIOUS PROVISIONS CONCERNING CHARGING AND COMPUTING CAPITA L GAIN OBSERVED THAT NONE OF THESE PROVISIONS SUGGEST THAT THEY INCLUDE AN ASSET IN THE ACQUISITION OF WHICH NO COST CAN BE CONCEIVED. IN SUCH A CASE, THE ASSET IS SOLD AND THE CONSIDERATION IS BROUGHT TO TAX, WHAT IS CHARGED IS A CAPITAL VALUE OF THE ASSET AND NOT ANY PROFIT OR GAIN. THIS DECISION THEREFORE WOULD NOT APPLY IN THE PRESENT CASE. 22. IN THE RESULT, PETITION FAILS AND IS DISMISSED. 7. IT IS THUS APPARENT FROM THE DECISION OF THE HO NBLE GUJARAT HIGH COURT THAT FEE UNDER SECTION 234E COULD BE LEVIED I N THE RELEVANT FINANCIAL YEAR IN QUESTION EVEN IN THE ABSENCE OF A REGULATORY PROVISION I.E. SECTION 200A OF THE ACT. IT WAS THUS OPEN TO T HE REVENUE TO CHARGE THE FEE STIPULATED IN SECTION 234E OF THE ACT EVEN PRIOR TO THE AMENDMENT BROUGHT UNDER SECTION 200A OF THE ACT W.E.F. 01.06. 2015. WITH THE AMENDMENT, THE ADJUSTMENT HAS BEEN BROUGHT WITHIN T HE FOLD OF SECTION 200A OF THE ACT. HENCE, AS HELD, THE AMENDMENT IS C LARIFICATORY IN NATURE. WE NOTE FROM THE DECISION OF THE HONBLE GU JARAT HIGH COURT THAT SECTION 200A IS NOT A SOURCE OF SUBSTANTIVE POWER. SUBSTANTIVE POWER TO LEVY FEE COULD BE TRACED TO SECTION 234E OF THE ACT . 8. RESPECTFULLY FOLLOWING BINDING DECISION OF THE H ONBLE GUJARAT HIGH COURT, WE DECLINE TO INTERFERE WITH THE ACTION OF THE REVENUE ITA NO.1375,137 6 & 1377AHD/2015 NIRMA EDUCATION & RESEARCH FOUNDATION. VS. CIT CPC- TDS ASST.YEAR 2013-14 - 8 - TOWARDS INVOKING SECTION 234E OF THE ACT FOR LEVY O F LATE FILING FEE APPEALED AGAINST. 9. IN THE RESULT, ALL THE THREE APPEALS OF THE ASSE SSEE ARE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 01/ 02/2018 SD/- SD/- (.. ) ( ) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 01/02/2018 !' #' / COPY OF THE ORDER FORWARDED TO : 1. ' $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 456- ! ! 7- / CONCERNED CIT 4. ! ! 7- ( ' ) / THE CIT(A)-5, AHMEDABAD 5. 89 -+56 , ! ' '56 0 , ': 4 / DR, ITAT, AHMEDABAD 6. ; , / GUARD FILE. $ % / BY ORDER, &/% '( ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 17.1.18 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 17.1.18 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR