Yeshwanthraj Ranka, Bangalore V. The Commissioner Of Income Tax (Appeals)- 7, Bangalore

ITA 1842/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0472 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 26-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K N DHANDA
• Assessee Lawyers: S VIMAL CHAND DHARIWA LL
• Keywords: TDS; Capital Gains
• Section: 234E; 200A; 246A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER ITA NO S . 1 842 TO 1844 /BANG/20 19 ASSESSMENT YEARS : 2013-14 TO 2015-16 SHRI. YESHWANTRAJ RANKA, S/O. CHITARMAL RANKA, PRO;: M/S. RANKAS NO.29, R. V. ROAD, BASAVANGUDI, OPP. VIJAYA COLLEGE, BENGALURU 560 004. PAN : A GQPR 0628 F VS. THE INCOME-TAX OFFICER (TDS), WARD 3(4), 4 TH FLOOR, HMT BHAVAN, BELLARY ROAD, BENGALURU 560 032. APPELLANT RESPONDENT ASSESSEE BY : SHRI. S. VIMAL CHAND DHARIWA LL , CA REVENUE BY : SHRI. K. N. DHANDAPANI , ADDL. CIT (DR)(ITAT), BENGALURU DATE OF HEARING : 16 . 0 6 .20 20 DATE OF PRONOUNCEMENT : . 0 6 .20 20 O R D E R PER A.K. GARODIA, ACCOUNTANT MEMBER THESE THREE APPEALS ARE FILED BY THE ASSESSEE WHICH ARE DIRECTED AGAINST A COMBINED ORDER OF LEARNED CIT(A)-7, BENGALURU, DATED 04.07.2019 FOR ASSESSMENT YEARS 2013-14 TO 2015-16. THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FOLLOWING 3 COMMON GROUNDS ARE RAISED BY THE ASSESSEE IN EACH OF THESE THREE APPEALS: ITA NOS. 1842 TO 1844/BANG/2019 PAGE 2 OF 6 1. THE HIGH COURT OF KARNATAKA ON 26-08-2016, IN THE CASE OF FATHERAJ SINGHVI VS THE COMMISSIONER OF INCOME-TAX (TDS) HELD UP THAT NO PENALTY / FEE CAN BE LEVIED U/S.234-E, UP TO THE PERIOD OF 01-06-2015, WHEREIN NEW CLAUSE (C) INSERTED AND IS EFFECTIVE FROM 1ST JUNE, 2015. 2. ITAT, AMRITSAR IN THE CASE OF ' SIBIA HEALTHCARE P.LTD., VS THE COMMISSIONER OF INCOME-TAX (TDS) / DT.09-06-2018 ', HAS ALSO HELD THAT NO PENALTY / FEE CAN BE LEVIED U/S.234-E, UP TO THE PERIOD OF 01-06-2015, WHEREIN NEW CLAUSE (C) INSERTED AND IS EFFECTIVE FROM 1ST JUNE, 2015. 3. IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE ADDUCED AT THE TIME OF HEARING IT IS REQUESTED THAT THE IMPUGNED ORDER BE QUASHED AND THE RETURNED INCOME FROM LONG-TERM CAPITAL GAINS BE ACCEPTED. THE ASSESSMENT OF THE AMOUNT U/S.68 BE DELETED AND THE INTEREST ALSO TO BE DELETED, 3. IN THE COURSE OF HEARING, IT WAS SUBMITTED BY LEARNED AR OF THE ASSESSEE THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL ORDER RENDERED IN THE CASE OF SIBIA HEALTHCARE PVT. LTD., VS. DCIT IN ITA NO.90/ASR/2015 DATED 09.06.2015. HE SUBMITTED A COPY OF THIS TRIBUNAL ITA NOS. 1842 TO 1844/BANG/2019 PAGE 3 OF 6 ORDER. HE POINTED OUT THAT THIS IS THE FINDING OF THE TRIBUNAL IN THIS CASE THAT AMENDMENT IN SECTION 200A HAS BEEN MADE BY FINANCE ACT, 2015 W.E.F. 01.06.2015 AS PER WHICH A NEW CLAUSE (C) WAS INSERTED WHICH PRESCRIBED THAT THE FEE, IF ANY, SHALL BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 234E OF THE INCOME TAX ACT, 1961. HE SUBMITTED THAT THEREFORE, SUCH A DEMAND CAN BE RAISED ONLY FOR THE PERIOD AFTER 01.06.2015 AND NOT FOR ANY EARLIER PERIOD AND SINCE THE ASSESSMENT YEARS INVOLVED IN THE PRESENT CASE ARE ASSESSMENT YEARS 2013-14 TO 2015-16, SUCH DEMAND RAISED IN THESE 3 YEARS IS NOT SUSTAINABLE IN LAW. 4. AS AGAINST THIS, LEARNED DR OF THE REVENUE SUPPORTED THE ORDER OF CIT(A). HE ALSO SUBMITTED THAT AS PER PARA 6 OF THE ORDER OF CIT(A), THIS IS THE FINDING OF CIT(A) THAT THE ASSESSEE HAS SUBMITTED THAT HE HAS CHALLENGED THE ORDER DATED 26.11.2018 UNDER SECTION 200A OF THE INCOME TAX ACT, 1961 BUT NO SUCH ORDER IS UPLOADED BY THE ASSESSEE ALONG WITH FORM 35 NOR FILED DURING THE COURSE OF HEARING. HE SUBMITTED THAT IT IS ALSO NOTED BY THE CIT(A) IN THE SAME PARA OF HIS ORDER THAT THE ASSESSEE HAS NOT PRODUCED ANY COPY OF THE ORDER UNDER SECTION 200A OF THE INCOME TAX ACT, 1961 AGAINST WHICH THESE APPEALS HAVE BEEN FILED AND IT IS ALSO NOTED THAT THE AO HAS INFORMED TO THE ASSESSEE THE DETAILS OF THE OUTSTANDING DEMAND BY THE LETTER DATED 26.11.2018 REQUESTING THE ASSESSEE TO MAKE PAYMENT OF THE SAME AND ON THIS BASIS ONLY, THESE APPEALS ARE FILED BY THE ASSESSEE AND THIS IS THE FINDING OF THE LEARNED ITA NOS. 1842 TO 1844/BANG/2019 PAGE 4 OF 6 CIT(A) THAT THE LETTER OF THE AO INFORMING THE OUTSTANDING DEMAND AND REQUESTING PAYMENT OF THE SAME IS NOT AN APPEALABLE ORDER BEFORE CIT(A) UNDER SECTION 246A OF THE INCOME TAX ACT, 1961 AND THE CIT(A) DISMISSED THE APPEALS OF THE ASSESSEE AS NOT MAINTAINABLE BECAUSE OF THIS REASON. HE SUBMITTED THAT EVEN BEFORE THE TRIBUNAL, NO SUCH ORDER OF AO UNDER SECTION 200A HAS BEEN FILED AND THEREFORE, THE ORDER OF CIT(A) SHOULD BE CONFIRMED. 5. IN THE REJOINDER, IT WAS SUBMITTED BY LEARNED AR OF THE ASSESSEE THAT NO ORDER UNDER SECTION 200A HAS BEEN SERVED ON THE ASSESSEE BY THE AO AND THEREFORE, THERE IS NO QUESTION OF FILING THE APPEAL AGAINST SUCH ORDER AND SINCE FOR THE FIRST TIME, THE FACT ABOUT OUTSTANDING DEMAND WAS INTIMATED BY THE AO AS PER THIS LETTER DATED 26.11.2018 AND THE ASSESSEE HAS FILED THESE APPEALS BEFORE CIT(A) AND THEREFORE, THE SAME SHOULD BE CONSIDERED AS THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE AO UNDER SECTION 200A OF THE INCOME TAX ACT, 1961. AT THIS JUNCTURE, THE BENCH WANTED TO KNOW FROM LEARNED DR OF THE REVENUE AS TO WHETHER HE CAN PRODUCE ANY EVIDENCE THAT THE ORDERS PASSED BY THE AO UNDER SECTION 200A WERE SERVED ON THE ASSESSEE. IN REPLY, IT WAS SUBMITTED BY LEARNED DR OF THE REVENUE THAT THE ORDER WAS UPLOADED ON THE WEB PORTAL OF THE DEPARTMENT WHICH SHOULD BE ACCEPTED AS PROPER SERVICE ON THE ASSESSEE. ITA NOS. 1842 TO 1844/BANG/2019 PAGE 5 OF 6 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE FIND THAT THE LEARNED CIT(A) HAS REPRODUCED THE CONTENTS OF LETTER DATED 26.11.2018 ISSUED BY THE AO TO THE ASSESSEE ASKING THE ASSESSEE TO MAKE PAYMENT OF THE OUTSTANDING DEMAND UNDER SECTION 234E OF THE INCOME TAX ACT, 1961 AND IT HAS BEEN STATED IN THE SAID LETTER THAT THIS IS THE FINAL OPPORTUNITY TO THE ASSESSEE TO CLEAR THE OUTSTANDING DEMAND FAILING WHICH COERCIVE MEASURE FOR RECOVERY WILL BE UNDERTAKEN. IN THIS LETTER ALSO, THERE IS NO REFERENCE REGARDING THE DATE OF THE ORDER PASSED BY THE AO AND WHETHER THE SAME WAS SERVED ON THE ASSESSEE. THE AR OF THE ASSESSEE HAS ALSO STRONGLY SUBMITTED BEFORE US THAT NO SUCH ORDER HAS BEEN SERVED ON THE ASSESSEE EITHER IN THE PHYSICAL FORMAT OR THROUGH EMAIL AND LEARNED DR OF THE REVENUE ALSO COULD NOT PROVIDE ANY EVIDENCE REGARDING SERVICE OF THE ORDER ON THE ASSESSEE. WE THEREFORE, FEEL IT PROPER THAT THE APPEALS FILED BY THE ASSESSEE BEFORE CIT(A) REGARDING THESE OUTSTANDING DEMANDS INTIMATED TO THE ASSESSEE BY THE AO AS PER THIS LETTER DATED 26.11.2018 SHOULD BE CONSIDERED AS VALID APPEALS AND WE PROCEED TO DECIDE THESE APPEALS ON MERIT. THIS IS TRUE THAT BEFORE 01.06.2015, DEMAND IN RESPECT OF FEES UNDER SECTION 234E CANNOT BE RAISED UNDER SECTION 200A OF THE INCOME TAX ACT, 1961. THE ASSESSMENT YEAR INVOLVED IN THE PRESENT APPEALS ARE ASSESSMENT YEARS 2013-14 TO 2015-16. HENCE, THESE DEMANDS ARE FOR PERIODS PRIOR TO 01.06.2015 AND THEREFORE, NOT SUSTAINABLE AND HENCE, WE DELETE THESE DEMANDS. THIS VIEW OF US IS FORTIFIED BY THE JUDGMENT OF HONBLE ITA NOS. 1842 TO 1844/BANG/2019 PAGE 6 OF 6 KARNATAKA HIGH COURT RENDERED IN THE CASE OF SRI FATEHRAJ SINGHVI VS. CIT IN ITS JUDGMENT DATED 26.08.2016. IN PARA 23 OF THIS JUDGMENT, IT WAS HELD THAT INTIMATION GIVEN BY THE RESPONDENT DEPARTMENT U/S 200A FOR THE PERIOD PRIOR TO 01.06.2015 IS WITHOUT ANY AUTHORITY UNDER LAW AND HENCE ILLEGAL AND INVALID. 7. IN THE RESULT, THESE THREE APPEALS OF THE ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (PAVAN KUMAR GADALE) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED: 19 TH JUNE, 2020. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.