MSV IT Solutions Private Limited, Hyderabad V. Income Tax Officer, Ward-16(4), Hyderabad

ITA 177/Hyd/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4703 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-10-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 29-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: T RAJENDRA PRASAD
• Keywords: Opportunity of being heard; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO S . 177 & 178 / HYD/201 8 ASSESSMENT YEAR S : 20 13 - 14 & 2014 - 15 MSV IT SOLUTIONS PVT. LTD., HYDERABAD . PAN AAHCM6063B VS. INCOME - TAX OFFICER, WARD 16(4), HYDERABAD. APPELLANT RESPONDENT A SSESSEE BY: S HRI T. RAJENDRA PRASAD RE VENUE BY: SHRI NILANJAN DEY DATE OF HEARING: 0 8 / 10 / 201 8 DATE OF PRONOUNCEMENT: 26 / 1 0 /201 8 O R D E R PER S. RIFAUR RAHMAN , AM: BOTH THESE APPEALS FILED BY SAME ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF CIT(A) 8, HYDERABAD, BOTH DATED, 11 TH OCTOBER, 2017 FOR AY 20 1 3 - 14 AND 2014 - 15 . SINCE IDENTICAL ISSUES ARE INVOLVED IN BOTH THESE APPEALS THEY WERE CLUBBED AND HEARD TOGETHER AND, THEREFORE, A COMMON ORDER IS PASSED FOR THE SAKE OF CONVENIENCE. ITA NO. 177/HYD/2018 2. BRIEF FACTS OF THE CASE ARE THAT THE AO LEVIED LATE FEE U/S 234E OF RS. 36,600/ - . AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WITH A DELAY OF 1531 DAYS AND REQUESTED FOR CONDONATION OF DELAY ON THE GROUND THAT THERE WAS NO LEGAL REMEDY OF APPEAL U/S 246A AGAINST THE IMPUGNED ORDER AT THE RELEVANT POINT OF TIME. THE CIT(A) DID NOT CONDONE I.T.A. NO. 177 & 178/HYD/18 MSV IT SOLUTIONS PVT. LTD., HYD. 2 THE DELAY AND NOT ADMITTED THE APPEAL OF THE ASSESSEE BY OBSERVING AS UNDER: 4. I HAVE CONSIDERED THE SUBMISSION MADE BY THE AR. FROM THE SUBMISSIONS OF THE A R. I AM CONSTRAINED TO NOTE THAT THE AR COMPLETELY MISCONSTRUED AND MISUNDERSTOOD THE ISSUE WITH REGARD TO MAINTAINABILITY OF APPEALS ON ORDER U / S.200A(1). THE ORDER U/S.200A(1) WAS ALWAYS AN APPEALABLE ORDER AS PER THE PROVISIONS OF SECTION 246A(1)(A). THE RELEVANT PORTION OF THIS CLAUSE WAS SUBSTITUTED BY SOME OTHER CLAUSES BY THE FINANCE ACT, 2015 W.E.F. 01.06.2015. IT DID NOT HAVE ANY BEARING ON THE A PPEALABILITY OF THE ORDER UJS.200A(1)(C) WHEREIN LEVY OF LATE FEE UJS.234E HAS BEEN MADE AS ONE OF THE ITE MS OF ADJUSTMENT. THE REASONS ADDUCED BY THE APPELLANT FOR THE HUGE DELAY OF MORE THAN 4 YEARS IN FILING OF APPEAL HAS NO SUBSTANCE. I AM, THEREFORE, N LOT SATISFIED WITH THE APPELLANT'S EXPLANATION FOR NOT PRESENTING THE APPEAL WITHIN THE PERIOD OF LIMITAT ION IN TERMS OF PROVISIONS OF SECTION 249(3) OF THE ACT AND AFTER A LAPSE OF MORE THAN 4 YEARS. HENCE, THE DELAY IN FILING OF APPEAL IS NOT CONDONED. ACCORDINGLY, THE APPEAL IS NOT ADMITTED AT THE THRESHOLD STAGE ITSELF. 3. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US AND RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE APPELLANT 'MSVIT SOLUTIONS PRIVATE LIMITED' FILED ITS TDS RETURN OF QUARTER 4 FOR THE FINANCIAL YEAR 2012 - 13 ON DT.14.11.2013. THE SA ME IS PROCESSED AND INTIMATION ORDER U /S.200A OF THE INCOME TAX ACT PASSED ON DT.08.12.2013. AS PER THE INTIMATION ORDER, LATE FILING FEE OF RS.36, 600/LEVIED U /S.234E OF THE INCOME TAX ACT. 2. THE PRESENT APPEAL IS FILED AGAINST THE ORDER PASSED UNDER S ECTION 200A FOR LEVYING LATE FEE OF RS.36,600/ - U /S.234E OF THE INCOME TAX ACT. 3. AS PER THE PROVISIONS OF SECTION 200A OF THE ACT, THE TDS, CPC SHALL MAKE ADJUSTMENTS FOR ANY ARITHMETICAL ERROR IN THE STATEMENTS OR AN INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN THE STATE MENT AND ALSO THE INTEREST, IF ANY SHALL BE COMPUTED ON THE BASIS OF THE SUMS DEDUCTIBLE AS COMPUTED IN THE STATEMENT. HOWEVER, THERE IS NO PROVISION U/S 200A OF THE ACT, FOR COMPUTATION OF THE FEE, IF ANY IN ACCORDANCE WITH THE PRO VISIONS OF SECTION 234E OF THE ACT, BEFORE INSERTION OF I.T.A. NO. 177 & 178/HYD/18 MSV IT SOLUTIONS PVT. LTD., HYD. 3 SUB - CLAUSE (C) TO THE STATUTE BY THE FINANCE ACT, 2015 W.E. F 1.6.2015. 4. ALSO THE MEMORANDUM EXPLAINING THE FINANCE BILL CATEGORICALLY STATED THAT THERE IS NO ENABLING PROVISION IN SECTION 200A OF THE ACT, FOR COMPUTATION OF FEE U/S 234E OF THE ACT, HENCE THE FINANCE BILL, 2015 PROPOSES TO INSERT ENABLING PROVISION IN SECTION 200A OF THE ACT. IN THE ABSENCE OF ENABLING PROVISION IN SECTION 200A OF THE ACT, FOR LEVY OF LATE FEE U/S 234E OF THE ACT BE FORE INSERTION OF SUB CLAUSE (C) TO SECTION 200A OF THE ACT, NO ADJUSTMENTS CAN BE MADE IN THE INTIMATIONS ISSUED U/S 200A OF THE ACT BY THE A. O . 5. INCOME TAX APPELLATE TRIBUNAL VISHAKHAPATNAM BENCH ORDER PRODUCED FOR READY PERUSAL IN SUPPORT OF THE PRE SENT ISSUE IN APPEAL. THE APPELLANT UNDER APPEAL RELIED UPON THE DECISIONS OF ITAT, PUNE IN THE CASE OF GAJANANA CONSTRUCTIONS VS. CIT, CPC (TDS), GHAZIABAD (2016) 161 ITO 313 ( PUNE TRIBUNAL) AND ALSO VARIOUS TRIBUNAL/HIGH COURT DECISIONS. THE COORDINATE BENCH OF THIS TRIBUNAL, UNDER SIMILAR CIRCUMSTANCES HELD THAT POWER TO CHARGE/COLLECT FEES U/S 234E OF THE ACT WAS VESTED WITH REVENUE ONLY ON SUBSTITUTION OF CLAUSE (C) TO SECTION 200A OF THE ACT VIDE FINANCE ACT, 2015 W.E. F. 1.6.2015. HENCE, PRIOR TO 1. 6.2015, NO FEE COULD HAVE BEEN LEVIED U/S.234E OF THE ACT WHILE ISSUING INTIMATION U/S 200A OF THE ACT. 6. THERE IS NO ENABLING PROVISION IN SECTION 200A OF THE ACT, BEFORE INSERTION OF SUB C1AUSE(C) INTO SECTION 200A OF THE ACT BY THE FINANCE ACT, 2015 W.E. F. 1.6.2015 AND HENCE, NO ADJUSTMENTS CAN BE MADE TOWARDS LATE FEE PAYABLE U/S 234E OF THE ACT, FOR BELATED FILING OF TD S STATEMENTS U/S.200 (3) OF THE ACT, WHILE ISSUING INTIMATION U/S 200A OF THE ACT, FOR PROCESSING TD5 STATEMENTS FILED AND PROCESSED FOR THE ASSESSMENT YEARS PRIOR TO 1.6.2015. 7. IN THE PRESENT CASE, THE TD5 RETURNS HAS BEEN FILED AND PROCESSED BY THE TD5, CPC BEFORE 01.06.2015. THEREFORE, FEE PAYABLE U/S.234E OF THE ACT, CANNOT BE LEVIED WHILE PROCESSING TD S STATEMENTS U/S 200A OF THE ACT IN THE PRESENT CASE ALSO. APPELLANT REQUEST FOR DELETION OF LATE FEE OF RS.36,600 LEVIED U/S.234E OF THE ACT. 4. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BEFORE THE CIT(A), THE AR OF THE ASSESSEE I.T.A. NO. 177 & 178/HYD/18 MSV IT SOLUTIONS PVT. LTD., HYD. 4 REQUESTED FOR CONDONA TION OF DELAY ON THE GROUND THAT THERE WAS NO LEGAL REMEDY OF APPEAL U/S 246A AGAINST THE IMPUGNED ORDER AT THE RELEVANT POINT OF TIME. HOWEVER, THE CIT(A) REJECTED THE SUBMISSION OF THE ASSESSEE AND DID NOT CONDONE THE DELAY AND DID NOT ADMIT THE APPEAL F OR ADJUDICATION. WE ARE OF THE VIEW THAT, TO MEET THE ENDS OF JUSTICE, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE CASE BACK TO HIS FILE WITH A DIRECTION TO CONDONE THE DELAY AND ADJUDICATE THE APPEAL ON MERITS IN ACCORDANCE WITH LAW AFTER PROVIDI NG REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 178/HYD/2018 6. BRIEF FACTS OF THE CASE ARE THAT THE AO LEVIED LATE FEE OF RS. 24,400/ - U/S 234E. THE ASSESSEE APPEALED AGAINST THE ACTION OF THE AO TO CIT(A) AND CONTENDED BEFORE HIM THAT THE PROVISIONS TO INCLUDE LATE FEE U/S 234E IN THE INTIMATION U/S 200A OF THE ACT C AME INTO EFFECT ONLY THROUGH THE FINANCE ACT, 2015 W.E.F. 01/06/2015 AND, THEREFORE, PRIOR TO 01/06/2015 SUCH INCLUSION OF LATE FEE U/S 234E IN THE INTIMATION U/S 200A IS NOT PERMISSIBLE UNDER THE LAW AND CONSEQUENTLY ANY SUCH LEVY IS UNSUSTAINABLE AND HEN CE THE LEVY IS LIABLE TO BE DELETED. IN SUPPORT OF THESE CONTENTIONS, THE AR OF THE ASSESSEE RELIED UPON THE DECISION OF THE PUNE BENCH OF ITAT IN THE CASE OF GAJANAN CONSTRUCTIONS AND OTHERS IN ITA NO. 1292 & 1293/PN/2015, DATED 29/08/2016. 7. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CONFIRMED THE ACTION OF THE AO FOLLOWING THE I.T.A. NO. 177 & 178/HYD/18 MSV IT SOLUTIONS PVT. LTD., HYD. 5 JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF RAJESH KOURANI VS. UNION OF INDIA . 8. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APP EAL BEFORE US RAISING THREE GROUNDS OF APPEAL, WHICH ARE AGAINST THE LEVY OF LATE FEE U/S 234E OF THE ACT. 9. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE THE COORDINATE BENCH OF THIS TRIBUNAL (WHERE BOTH THE MEMBERS ARE PARTY) IN THE CASE OF M / S TERRA INFRA DEVELOPMENT LTD., IN ITA NOS. 1876 & 1875/HYD/2017 VIDE ORDER DATED 03/10/2018. IN THE SAID CASE, THE COORDINATE BENCH HAS OBSERVED AS UNDER: '4. WE FIND THAT THOUGH THE PROVISIONS FOR LEVY OF FEE IN CERTAIN CASES HAS BEEN BROUGHT INTO THE STATUTE BOOK W.E.F. 1.7.2012, IT HAS BEEN BROUGHT UNDER THE PURVIEW OF SECTION 200A ONLY W.E.F. 1.6.2015. THEREFORE, AS RIGHTLY HELD BY THE COORDINATE BENCH IN THE CASE OF M/S. SONA LAC PAINTINGS & COATINGS LTD (167 D TR (CHD. TRIB) 183) WE HOLD THAT THE INTEREST U/S 234E CANNOT BE LEVIED IN RESPECT OF TOS RETURNS FILED PRIOR TO 1.6.2015. FOR THE SAKE OF READY REFERENCE, THE RELEVANT PARA IS REPRODUCED, HEREUNDER: '10. NOW COMING T O THE MERITS OF THE CASE, WE FIND FORCE IN THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT PRIOR TO 01.06.2015, THERE WAS NO MANDATE, AS PER THE STATUTE, TO MAKE ANY ADJUSTMENT ON ACCOUNT OF LEVY OF FEES ULS 234E WHILE PROCESSING TOS RETURNS ULS 200A. WE HAVE TAKEN NOTE OF THE ORDER OF THE HON'BLE GUJARAT HIGH COURT HOLDING THE AMENDMENT MADE TO SECTION 200A W.E.F. 01.06.2015, GIVING POWER TO MAKE ADJUSTMENT ON ACCOUNT OF FEES U / S 234E WHILE PROCESSING RETURNS U / S 200A TO BE RETROSPECTIVE IN NATUR E, STATING THAT THIS POWER GIVEN TO THE AO IS A MACHINERY PROVISION WHILE THE SUBSTANTIVE PROVISION OF THE POWER TO LEVY FEES ULS 234E WAS ALWAYS THERE ON THE STATUTE FROM 01.06.2012. BUT AT THE SAME TIME, WE NOTE THAT THE HON'BLE I.T.A. NO. 177 & 178/HYD/18 MSV IT SOLUTIONS PVT. LTD., HYD. 6 KARNATAKA HIGH COURT HELD THAT LEVY OF FEES ULS 234E WHILE PROCESSING RETURNS, T D S U/S 200A PRIOR TO 01.06.2015 WAS WITHOUT ANY AUTHORITY OF LAW. WITH TWO DIVERGENT VIEW OF THE HON'BLE HIGH COURTS ON THE ISSUE AND IN THE ABSENCE OF ANY DECISION BY THE JURISDICTIONAL HIGH COURT, WE CONCUR WITH THE LEARNED COUNSEL FOR THE ASSESSEE THAT AS PER THE WELL ACCEPTED RULE OF CONSTRUCTION, IF TWO REASONABLE CONSTRUCTIONS OF A STATUTE ARE POSSIBLE THE CONSTRUCTION WHICH FAVOURS THE ASSESSEE MUST BE ADOPTED. IN VIEW OF THE SAME, RESPECTFULLY F OLLOWING THE DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF FATHERAJ SINGHVI (289 CTR 602), WE HOLD THAT THE FEES LEVIED IN ALL THE PRESENT CASES U / S 234E PRIOR TO 01.06.2015 IN THE INTIMATIONS MADE ULS 200A WAS WITHOUT AUTHORITY OF LAW AND THE SAME I S THEREFORE, DIRECTED TO BE DELETED. IN VIEW OF THE ABOVE, ALL THE APPEALS OF THE ASSESSEE STAND ALLOWED'. 9 .1 AS THE ISSUE UNDER CONSIDERATION IS MATERIALLY IDENTICAL TO THAT OF THE ABOVE DECISION, RESPECTFULLY FOLLOWING THE SAME, WE SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE AO TO DELETE LEVY OF LATE FEE IMPOSED U/S 234E. ACCORDINGLY, GROUNDS RAISED ARE ALLOWED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. 11. TO SUM UP, APPEAL IN ITA NO. 177/HYD/18 IS ALLOWED FOR STATISTICAL PURPOSES AND APPEAL IN ITA NO. 178/HYD/18 IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 26 TH OCTOBER , 2018. SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 26 TH OCTOBER , 2018 KV I.T.A. NO. 177 & 178/HYD/18 MSV IT SOLUTIONS PVT. LTD., HYD. 7 COPY FORWARDED TO: 1. MSV IT SOLUTIONS PVT. LTD., PLOT NO. 37, SILPA BRINDAVAN, YELLAMMA BANDA, KUKATPALLY, HYDERABAD 500 072 2 . ITO, WAD 16(4), IT TOWERS, AC GUARDS, MASAB TANK, HYD. 500 004 3 . CIT (A) - 8 , HYDERABAD 4. CIT (TDS) , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE