M/s. OSR Hotels Private Limited, Bengaluru V. Deputy Commissioner of Income-Tax, CPC, TDS, , Ghaziabad

ITA 146/BANG/2023

AI Insights

The case involves M/s. OSR Hotels Private Limited appealing against the orders of the National Faceless Appeal Centre (NFAC) which confirmed the levy of interest under section 234E of the Income Tax Act, 1961 for belated filing of TDS returns for various quarters from the assessment years 2013-14 to 2015-16. The primary legal contention was whether the fee under section 234E could be levied for TDS returns filed before the amendment to section 200A(1) by the Finance Act, 2015, which came into effect on June 1, 2015. The assessee argued, supported by a decision from the Karnataka High Court, that the provisions were not applicable retrospectively and thus, the levy of such fees for the periods prior to this date was invalid.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129689 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-04-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 02-03-2023
• Other Referred Cases: Fatehraj Singhvi v. UOI [2016] 73 taxmann.com 252
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 234E; 200A; 201; 73

Judgement Text

ITA Nos.138 to 149/Bang/2023 M/s. OSR Hotels Private Limited, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “A’’ BENCH: BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA Nos.138 to 149/Bang/2023 Assessment Years: 2013-14, 2013-14, 2014-15, 2014- 15, 2014-15, 2014-15, 2014-15, 2015-16, 2015-16, 2015-16, 2015-16 & 2015-16 repectively M/s. OSR Hotels Private Ltd. 987, 1 st Floor, 1 st Blok 3 rd Stage, 11 th Main Basaveshwaranagar Bengaluru 560 079 PAN NO : AABCO2927L Vs. Deputy Commissioner of Income-tax CPC (TDS) Bengaluru APPELLANT RESPONDENT Appellant by : Shri Ravi Shankar, A.R. Respondent by : Shri Sankar Ganesh K., D.R. Date of Hearing : 24.04.2023 Date of Pronouncement : 24.04.2023 O R D E R PER BENCH: These appeals by assessee is directed against different orders of NFAC for the assessment years 2013-14 to 2015-16 dated 28.1.2023. The issue relating to confirming the levy of interest u/s 234E of the Income Tax Act, 1961 (hereinafter called as ‘The Act” in short) for filing the TDS return belatedly. In these assessment years, the statement of tax deducted at sources for various quarters in Form No.26Q for different quarters from assessment year 2012-13 ITA Nos.138 to 149/Bang/2023 M/s. OSR Hotels Private Limited, Bangalore Page 2 of 6 to 2014-15 (relevant assessment years 2013-14 to 2015-16) filed belatedly as per table below:- SI. No. Date of filing Date of processing F.Y. Quarter Type Amount 1 21-10-2013 24.11.2016 2012-13 Q4 24Q 30,900 2 28-06-2013 28.09.2016 2012-13 Q4 26Q 8,800 3 07-11-2014 12.11.2014 2013-14 Q1 26Q 73,534 4 08-11-2014 12.11.2014 2013-14 .7 Q2 26Q 77,800 5 08-11-2014 12.11.2014 2013-14 Q3 26Q 59,400 6 08-11-2014 12.11.2014 2013-14 Q4 26Q 35,400 7 08-11-2014 29.12.2016 2013-14 Q4 24Q 35,200 8 30-10-2015 03.11.2015 2014-15 Q1 26Q 76,403 9 30-10-2015 03.11.2015 2014-15 Q2 26Q 76,000 1 0 30-10-2015 03.11.2015 2014-15 /- Q3 26Q 57,600 1 1 30-10-2015 03.11.2015 2014-15 Q4 26Q 33,600 1 2 30-10-2015 04.11.2015 2014-15 Q4 24Q 5,706 Total 5,70,343 2.2 The Ld. AO was of the view that, u/s.234E of the Act, if there is a delay in filing statement of TDS within the prescribed time then the person responsible for making payment and filing return of TDS is liable to pay by way of fee a sum of Rs.200/-per day during which the failure continues. 2.3 Aggrieved by the order of Ld.AO, the assessee preferred appeal before Ld. CIT(A). The assessee contended before Ld. CIT(A) that the provisions of section 234E of the Act was inserted by the Finance Act, 2012 w.e.f. 1.7.2012. Section 200A of the Act is a provision which deals with how a return of TDS filed u/s.200(3) of the Act has to be processed and it reads as follows:- “Processing of statements of tax deducted at source. 200A. (1) Where a statement of tax deduction at source or a correction statement has been made by a person deducting any sum (hereafter referred to in this section as deductor) under section 200, such statement shall be processed in the following manner, namely:— ITA Nos.138 to 149/Bang/2023 M/s. OSR Hotels Private Limited, Bangalore Page 3 of 6 (a) the sums deductible under this Chapter shall be computed after making the following adjustments, 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 fee, if any, shall be computed in accordance with the provisions of section 234E; (d) the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of the amount computed under clause (b) and clause (c) against any amount paid under section 200 or section 201 or section 234E and any amount paid otherwise by way of tax or interest or fee; (e) an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, him under clause (d); and (f) the amount of refund due to the deductor in pursuance of the determination under clause (d) shall be granted to the deductor: Provided that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the statement is filed. Explanation.— For the purposes of this sub-section, "an incorrect claim apparent from any information in the statement" shall mean a claim, on the basis of an entry, in the statement— (i) of an item, which is inconsistent with another entry of the same or some other item in 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 under sub-section (1), the Board may make a scheme for centralised processing of statements of tax deducted at source to expeditiously determine the tax payable by, or the refund due to, the deductor as required under the said subsection.” ITA Nos.138 to 149/Bang/2023 M/s. OSR Hotels Private Limited, Bangalore Page 4 of 6 4. Clause (c) to (f) of section 200A(1) was substituted by the Finance Act, 2015 w.e.f. 1.6.2015. The Assessee contended that AO could levy fee u/s.234E of the Act while processing a return of TDS filed u/s.200(3) of the Act only by virtue of the provisions of Sec.200A(1)(c), (d) & (f) of the Act and those provisions came into force only from 1.6.2015 and therefore the authority issuing intimation u/s. 200A of the Act while processing return of TDS filed u/s.200(3) of the Act, could not levy fee u/s. 234E of the Act in respect of statement of TDS filed prior to 1.6.2015. The Assessee, thus, challenged the validity of charging of fee u/s. 234E of the Act. The Assessee relied on the decision of the Hon’ble High Court of Karnataka in the case of Fatehraj Singhvi v. UOI [2016] 73 taxmann.com 252 wherein the Hon’ble Karnataka High Court held that amendment made u/s. 200A providing that fee u/s. 234E of the Act could be computed at the time of processing of return and issue of intimation has come into effect only from 1.6.2015 and had only prospective effect and therefore, no computation of fee u/s.234E of the Act for delayed filing of return of TDS while processing a return of TDS u/s.234E of the Act could have been made for tax deducted at source for the assessment years prior to 1.6.2015. 2.3 NFAC Confirmed it. Against this assessee is in appeal before us. 3. We have heard the rival submissions and perused the materials available on record. In this case, interest u/s 234E of the Act has been levied for belatedly filing the statement of tax deducted at source (TDS) for various quarters in Form No.26Q for different quarters in financial years 2012-13 to 2014-15 (AYs 2013-14 to 2015-16) as discussed in earlier para. 3.1 Clause (c) to (f) of section 200A(1) reproduced hereinabove was substituted by the Finance Act, 2015 w.e.f. 1.6.2015. The assessee contended that AO could levy fee u/s.234E of the Act while processing a return of TDS filed u/s.200(3) of the Act only by virtue of the provisions of Sec.200A(1)(c), (d) & (f) of the Act and those provisions came into force only from 1.6.2015 and therefore the authority issuing intimation u/s. 200A of the Act while processing ITA Nos.138 to 149/Bang/2023 M/s. OSR Hotels Private Limited, Bangalore Page 5 of 6 return of TDS filed u/s.200(3) of the Act, could not levy fee u/s. 234E of the Act in respect of statement of TDS filed prior to 1.6.2015. The assessee, thus, challenged the validity of charging of fee u/s. 234E of the Act. The assessee relied on the decision of the Hon’ble High Court of Karnataka in the case of Fatehraj Singhvi v. UOI [2016] 73 taxmann.com 252 wherein the Hon’ble Karnataka High Court held that amendment made u/s. 200A providing that fee u/s. 234E of the Act could be computed at the time of processing of return and issue of intimation has come into effect only from 1.6.2015 and had only prospective effect and therefore, no computation of fee u/s.234E of the Act for delayed filing of return of TDS while processing a return of TDS u/s.234E of the Act could have been made for tax deducted at source for the assessment years prior to 1.6.2015. 3.2 In view of the above, the assessee’s appeals are allowed. 4. In the result, the appeals filed by the assessee are allowed. Order pronounced in the open court on 24 th Apr, 2023 Sd/- (Beena Pillai) Judicial Member Sd/- (Chandra Poojari) Accountant Member Bangalore, Dated 24 th Apr, 2023. VG/SPS ITA Nos.138 to 149/Bang/2023 M/s. OSR Hotels Private Limited, Bangalore Page 6 of 6 Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(Judicial) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore.