Elmex Electric Pvt. Ltd., Vadodara V. ACIT, CPC, TDS, Banglore

ITA 1843/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8435 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 08-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KEYUR PATEL HEARING CONCLUDED
• Section: 154

Judgement Text

ITA NO.1843/AHD/2017 ASSESSMENT YEAR: 2015-16 (Q-1) PAGE 1 OF 2 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND MAHAVIR PRASAD JM] ITA NO.1843/AHD/2017 ASSESSMENT YEAR: 2015-16(Q-1) ELMEX ELECTRIC PVT. LTD., ..................APPELLANT 12, GIDC INDUSTRIAL ESTATE, MAKARPURA, VADODARA. [PAN : AAACE 4966 E] VS. A.C.I.T., C.P.C., TDS, BANGALORE . ............................RESPONDENT APPEARANCES BY SUNIL TALATI FOR THE APPELLANT KEYUR PATEL FOR THE RESPONDENT HEARING CONCLUDED ON: 12.04.2018 ORDER PRONOUNCED ON : 18.04.2018 O R D E R PER PRAMOD KUMAR, AM: 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HA S CHALLENGED CORRECTNESS OF THE ORDER DATED 18 TH MAY, 2017, PASSED BY THE LEARNED CIT(A)-5, VADODAR A, IN THE MATTER OF ASSESSMENT UNDER SECTION 154 R.W.S. 200A OF THE INC OME TAX ACT, 1961 (THE ACT HEREINAFTER), FOR THE ASSESSMENT YEAR 2015-16 (Q-1) . 2. GRIEVANCES RAISED BY THE APPELLANT ARE AS FOLLOW S :- 1. THE ORDER PASSED BY THE HONBLE COMMISSIONER OF INCOME TAX (APPEALS)-5, VADODARA, IS BAD IN LAW, CONTRARY TO L EGAL PRONOUNCEMENT SINCE THE PROVISIONS OF SECTION 200A R.W.S. 234E ARE NOT JUST APPLICABLE IN THE CASE OF APPELLANT PARTICULARLY WHEN THE PAYMENT MADE BY THE APPELLANT IS IN NATURE OF REIMBURSEMENT OF EXPENSE. HENCE IT IS SUBMITTED THAT WHEN THERE IS NO LIABILITY TO DEDUCT THE TAX AT SOURCE, THE LEVY OF LATE FILING FEES INVOKING THE PROVISIONS OF SECTION 234E OF THE ACT IS COMPLETELY ILLEGAL AND UNJUSTIFIABLE. THE SAME BE HELD SO AND INCORRECT LEVY OF PENALTY U /S.234E OF RS.99,800/- BE DELETED. 2. THE HONBLE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN BOTH ON FACTS AND AS WELL AS ON LAW IN CONFIRMING THE LE VY OF FEES U/S 234E OF THE ACT EVEN THOUGH APPRECIATING THE FACTS THAT INCOME HAS NEITHER ACCRUE NOR ARISEN IN INDIA AND THUS THE SAME HAS NOT BEEN LIAB LE TO BE TAXED IN INDIA. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PROVISIONS OF SECTION 234E ITA NO.1843/AHD/2017 ASSESSMENT YEAR: 2015-16 (Q-1) PAGE 2 OF 2 ARE NOT AT ALL APPLICABLE IN APPELLANTS CASE. THE SAME BE HELD NOW AND THE LATE FILING FEES LEVIED AND CONFIRMED BY THE LOWER AUTHORITIES U/S.234E OF RS.99,800/- BE DIRECTED TO BE DELETED. 3. TO ADJUDICATE ON THIS APPEAL ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. IT WAS A CASE IN WHICH ACIT, CPC-TDS HAS RAISED A DEMA ND OF RS.38,416/- ON ACCOUNT OF SHORT DEDUCTION OF TDS ON PAYMENT OF EXHIBITION CHA RGES AND IN TURN THE ASSESSING OFFICER HAS CHARGED INTEREST OF RS.7,680/- AND LATE FILING FEES OF RS.99,800/- AS WELL AS THE STAND OF THE ASSESSING OFFICER WAS THAT THERE I S NO TAX DEDUCTIBLE ON EXHIBITION CHARGES PAID HAVING NO BUSINESS CONNECTION IN INDIA . IT WAS ALSO CLAIMED BY THE ASSESSEE THAT SINCE THE ASSESSEE HAS NO OBLIGATION TO DEDUCT TAX AT SOURCE THERE WAS CLEARLY NO QUESTION OF NECESSITY TO FILE TDS RETURN AND ACCORDINGLY LATE FILING FEES UNDER SECTION 234E COULD NOT BE LEVIED. WHILE THE LEARNE D CIT(A) HAS AGREED THAT THE ASSESSEE DID NOT HAVE ANY LIABILITY TO DEDUCT TAX A T SOURCE AND CONSEQUENTLY DELETED THE TAX DEMAND FOR SHORT DEDUCTION OF TDS AND INTEREST LEVIED THEREON BUT HE UPHELD THE LEVY OF LATE FILING FEE UNDER SECTION 234E R.W.S. 2 00A OF THE ACT. THE ASSESSEE IS AGGRIEVED AND IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE AP PLICABLE LEGAL POSITION. 5. WE FIND THAT ONCE IT IS NOT IN DISPUTE THAT THE ASSESSEE DID NOT HAVE ANY OBLIGATION TO DEDUCT TAX FROM THE RELATED PAYMENT A ND THAT ONCE THE SAID TAX WITHHOLDING LIABILITY DID NOT SURVIVE FOR FILING OF RETURN, THE RE IS CLEARLY NO BASIS FOR UPHOLDING THE LATE FILING FEES UNDER SECTION 234E OF THE ACT FOR THE D ELAYED FILING OF TDS RETURN. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED VIEW, THE IMPUGNED LEVY OF LATE FILING FEES UNDER SECTION 234E AMOUNTING TO RS.99,800/- THUS INDEED D ESERVES TO BE DELETED. WE DELETE THE SAME. 6. IN THE RESULT, APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 18 TH APRIL, 2018. SD/- SD/- MAHAVIR PRASAD PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEM BER) DATED: 18 TH APRIL, 2018 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPOND ENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD