Shri Kishore Bhagwandas Sadhwani, Ahmedabad V. The Dy.CIT, CPC Cell-TDS, Gaziabad

ITA 1904/AHD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94688 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-11-2015
• Assessment Year: misc
• Appeal Filed On: 26-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LALA PHILIPSSR
• Assessee Lawyers: S K SADHWANI
• Keywords: Charitable institution

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.1904/AHD/2015 /BLOCK ASSTT. YEAR: 2014-2015 KISHORE BHAGWANDAS SADHWANI S-5, SINDHI MARKET REVDI BAZAR AHMEDABAD 380 002. PAN: ALSPS 5788 C VS DCIT, CENTRALISED PROCESSING CELL-TDS GHAZIABAD. %& / (APPELLANT) '( %& / (RESPONDENT) ASSESSEE BY : SHRI S.K. SADHWANI REVENUE BY : SHRI LALA PHILIPS,SR.DR / DATE OF HEARING : 16/11/2015 / DATE OF PRONOUNCEMENT: 17/11/2015 )*/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF THE CIT(A)-4, AHMEDABAD DATED 27.5.2015 FOR THE ASSTT.Y EAR 2014-15. 2. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE NOT IN CONSONANCE OF WITH RULE 8 OF THE INCOME TAX (APPELL ATE TRIBUNAL) RULE THEY ARE DESCRIPTIVE AND ARGUMENTATIVE IN NATURE. IN BRIEF, ITS GRIEVANCE IS THAT THE LD.CIT(A) HAS ERRED IN UPHOLD ING THE LEVY OF FEES UNDER SECTION 234E OF THE INCOME TAX ACT, 1961 AMOU NTING TO ITA NO.1904/AHD/2015 2 RS.1,16,180/- ON THE ASSESSEE REPRESENTING FOUR QUA RTERS OF F.Y.2013- 14. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE DI D NOT SUBMIT TDS STATEMENT UNDER SECTION 200(3) OF THE ACT WITHIN TH E PRESCRIBED DUE DATE. HE HAS FILED THE STATEMENT AFTER EXPIRY OF D UE DATE. THE LD.CIT (CPC-TDS) HAS INTIMATED THE LEVY OF FEES BY EMAIL A S WELL AS BY NOTICE AS UNDER: QUARTER AMOUNT OF FEE U/S.234E Q1 47,820/- Q2 13,040/- Q3 23,520/- Q4 31,800/- TOTAL 1,16,180/- 4. AGGRIEVED WITH THE INTIMATION, THE ASSESSEE FILE D FOUR APPEALS BEFORE THE CIT(A) BEARING NOS. CIT(A)-4/338/CPC/14- 15, CIT(A)- 4/339/CPC/14-15, CIT(A)-4/340/CPC/14-15 AND CIT(A)- 4/341/CPC/14- 15. ALL THESE APPEALS ARE BEING DISPOSED OF BY A C OMMON ORDER. BEFORE US, THE ASSESSEE HAS FILED ONLY ONE APPEAL. THE LD .COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ISSUE IS SQUARELY COVER ED BY THE ORDER OF THE TRIBUNAL PASSED IN ITA NO.3274, 3275 & 3276/AHD /2014 IN THE CASE OF LIONS CLUB OF NORTH SURAT CHARITABLE TRUST VS. I TO. HE PLACED ON RECORD COPY OF THE TRIBUNALS ORDER. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORDER OF THE CIT(A). 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. ONCE THE ASSESSEE HAS FILED FOUR APPEALS BEFORE THE CIT(A), THEN HE OUGHT TO HAVE FILED FOUR APPEAL BEF ORE THE TRIBUNAL ALSO. THE LD.FIRST APPELLATE AUTHORITY HAS DECIDED FOUR A PPEALS BY A CONSOLIDATED ORDER FOR THE SAKE OF DISPOSAL. EVERY DEMAND INTIMATED TO THE ASSESSEE BY WAY OF INTIMATION BY THE DCIT-TDS I S AN INDEPENDENT ITA NO.1904/AHD/2015 3 EXECUTABLE ORDER. THE ASSESSEE OUGHT TO HAVE FILED FOUR APPEALS CHALLENGING EACH DEMAND ORDER, WHICH HAS INTIMATED SEPARATELY TO IT. IN OTHER WORDS, THERE ARE FOUR CAUSE OF ACTION TO T HE ASSESSEE AND HE HAS TO FILE FOUR APPEALS. CONSIDERING THIS ASPECT, WE TREAT THIS APPEAL VALID QUA THE LEVY OF LATE FEES FOR QUARTER NO.1, WHEREIN HI GHEST DEMAND OF RS.47,820/- HAS BEEN RAISED. THE ISSUE IN DISPU TE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF T HE ITAT, AHMEDABAD PASSED IN LIONS CLUB OF NORTH SURAT CHARITABLE TRUS T (SUPRA). THE ITAT HAS FOLLOWED THE DECISION RENDERED BY ITAT, AMRISTA R BENCH IN THE CASE OF SIBIA HEALTHCARE PVT. LTD. VS. DCIT, ITA NO.90/A SR/2015 ORDER DATED 9.6.2015. THE ORDER OF THE DIVISION BENCH HAS BEEN REPRODUCED IN THE CASE OF LIONS CLUB OF NORTH SURAT CHARITABLE TRUST (SUPRA) AND IT READ AS UNDER: 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. IN ADDITION TO HIS ARGUM ENT ON THE MERITS, LEARNED COUNSEL HAS ALSO INVITED OUR ATTENTION TO T HE REPORTS ABOUT THE DECISIONS OF VARIOUS HONBLE HIGH COURTS, INCLU DING HONBLE KERALA HIGH COURT, IN THE CASE OF NARATH MAPILA LP SCHOOL VS UNION OF INDIA [WP (C) 31498/2013(J)], HONBLE KARANATAKA HIGH COURT IN THE CASE OF ADITHYA BIZOR P SOLUTIONS VS UNION OF I NDIA [WP NO. 6918- 6938/2014(T-IT), HONBLE RAJASTHAN HIGH COURT IN TH E CASE OF OM PRAKASH DHOOT VS UNION OF INDIA [WP NO. 1981 OF 201 4] AND OF HONBLE BOMBAY HIGH COURT IN THE CASE OF RASHMIKANT KUNDALIA VS UNION OF INDIA [WP NO. 771 OF 2014], GRANTING STAY ON THE DEMANDS RAISED IN RESPECT OF FEES UNDER SECTION 234E. THE F ULL TEXT OF THESE DECISIONS WERE NOT PRODUCED BEFORE US. HOWEVER, AS ADMITTEDLY THERE ARE NO ORDERS FROM THE HONBLE COURTS ABOVE RETRAIN ING US FROM OUR ADJUDICATION ON MERITS IN RESPECT OF THE ISSUES IN THIS APPEAL, AND AS, IN OUR HUMBLE UNDERSTANDING, THIS APPEAL REQUIRES A DJUDICATION ON A VERY SHORT LEGAL ISSUE, WITHIN A NARROW COMPASS OF MATERIAL FACTS, WE ARE PROCEEDING TO DISPOSE OF THIS APPEAL ON MERITS. 5. WE MAY PRODUCE, FOR READY REFERENCE, SECTION 23 4E OF THE ACT, WHICH WAS INSERTED BY THE FINANCE ACT 2012 AND WAS BROUGHT INTO EFFECT FROM 1ST JULY 2012. THIS STATUTORY PROVISIO N IS AS FOLLOWS: ITA NO.1904/AHD/2015 4 234E. FEE FOR DEFAULTS IN FURNISHING STATEMENTS (1) WITHOUT PREJUDICE TO THE PROVISIONS OF THE ACT, WHERE A PERSON FAILS TO DELIVER OR CAUSE TO BE DELIVERED A STATEMENT WITHIN THE TIME PRESCRIBED IN SUB-SECTION (3) OF SE CTION 200 OR THE PROVISO TO SUBSECTION (3) OF SECTION 206 C, HE SHALL BE LIABLE TO PAY, BY WAY OF FEE, A SUM OF TWO HUNDRED RUPEES FOR EVERY DAY DURING WHICH THE FAILURE CONTI NUES. (2) THE AMOUNT OF FEE REFERRED TO IN SUB-SECTION (1 ) SHALL NOT EXCEED THE AMOUNT OF TAX DEDUCTIBLE OR COLLECTI BLE, AS THE CASE MAY BE. (3) THE AMOUNT OF FEE REFERRED TO IN SUB-SECTION (1 ) SHALL BE PAID BEFORE DELIVERING OR CAUSING TO BE DELIVERE D A STATEMENT IN ACCORDANCE WITH SUB-SECTION (3) OF SEC TION 200 OR THE PROVISO TO SUB-SECTION (3) OF SECTION 20 6C. (4) THE PROVISIONS OF THIS SECTION SHALL APPLY TO A STATEMENT REFERRED TO IN SUB-SECTION (3) OF SECTION 200 OR THE PROVISO TO SUB-SECTION (3) OF SECTION 206C WHIC H IS TO BE DELIVERED OR CAUSED TO BE DELIVERED FOR TAX DEDU CTED AT SOURCE OR TAX COLLECTED AT SOURCE, AS THE CASE MAY BE, ON OR AFTER THE 1ST DAY OF JULY, 2012. 6. WE MAY ALSO REPRODUCE THE SECTION 200A WHICH WA S INSERTED BY THE FINANCE ACT 2009 WITH EFFECT FROM 1ST APRIL 2010. THIS STATUTORY PROVISION, AS IT STOOD AT THE RELEVANT PO INT OF TIME, WAS AS FOLLOWS: 200A: PROCESSING OF STATEMENTS OF TAX DEDUCTED AT S OURCE (1) WHERE A STATEMENT OF TAX DEDUCTION AT SOURCE, O R A CORRECTION STATEMENT, HAS BEEN MADE BY A PERSON DED UCTING ANY SUM (HEREAFTER REFERRED TO IN THIS SECTION AS DEDUC TOR) UNDER SECTION 200, SUCH STATEMENT SHALL BE PROCESSED IN T HE FOLLOWING MANNER, NAMELY: (A) THE SUMS DEDUCTIBLE UNDER THIS CHAPTER SHALL BE COMPUTED AFTER MAKING THE FOLLOWING ADJUSTMENTS, NAMELY: ITA NO.1904/AHD/2015 5 (I) ANY ARITHMETICAL ERROR IN THE STATEMENT; OR (II) AN INCORRECT CLAIM, APPARENT FROM ANY INFORMAT ION 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 SUM PAYABLE BY, OR THE AMOUNT OF REFUND DUE TO, THE DEDUCTOR SHALL BE DETERMINED AFTER ADJUSTMENT OF AM OUNT COMPUTED UNDER CLAUSE (B) AGAINST ANY AMOUNT PAID U NDER SECTION 200 AND SECTION 201, AND ANY AMOUNT PAID OT HERWISE BY WAY OF TAX OR INTEREST; (D) AN INTIMATION SHALL BE PREPARED OR GENERATED AN D SENT TO THE DEDUCTOR SPECIFYING THE SUM DETERMINED TO BE PAYABL E BY, OR THE AMOUNT OF REFUND DUE TO, HIM UNDER CLAUSE (C); AND (E) THE AMOUNT OF REFUND DUE TO THE DEDUCTOR IN PUR SUANCE OF THE DETERMINATION UNDER CLAUSE (C) 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 FI NANCIAL YEAR IN WHICH THE STATEMENT IS FILED. EXPLANATION : FOR THE PURPOSES OF THIS SUB-SECTION, 'AN INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN THE STATEMEN T' SHALL MEAN A CLAIM, ON THE BASIS OF AN ENTRY, IN THE STAT EMENT (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 SOUR CE, WHERE SUCH RATE IS NOT IN ACCORDANCE WITH THE PROVISIONS OF TH IS ACT; (2) FOR THE PURPOSES OF PROCESSING OF STATEMENTS UN DER SUB- SECTION (1), THE BOARD MAY MAKE A SCHEME FOR CENTRA LISED 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 NO.1904/AHD/2015 6 7. BY WAY OF FINANCE ACT 2015, AND WITH EFFECT FROM 1ST JUNE 2015, THERE IS AN AMENDMENT IN SECTION 200A AND THIS AMEN DMENT, AS STATED IN THE FINANCE ACT 2015, IS AS FOLLOWS: IN SECTION 200A OF THE INCOME-TAX ACT, IN SUB-SECTI ON (1), FOR CLAUSES (C) TO (E), THE FOLLOWING CLAUSES SHALL BE SUBSTITUTED WITH EFFECT FROM THE 1 ST DAY OF JUNE, 2015, NAMELY: (C) THE FEE, IF ANY, SHALL BE COMPUTED IN ACCORDAN CE 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 TH E AMOUNT COMPUTED UNDER CLAUSE (B) AND CLAUSE (C) AGAINST AN Y AMOUNT PAID UNDER SECTION 200 OR SECTION 201 OR SECTION 23 4E AND ANY AMOUNT PAID OTHERWISE BY WAY OF TAX OR INTEREST OR FEE; (E) AN INTIMATION SHALL BE PREPARED OR GENERATED AN D SENT TO THE DEDUCTOR SPECIFYING THE SUM DETERMINED TO BE PAYABL E BY, OR THE AMOUNT OF REFUND DUE TO, HIM UNDER CLAUSE (D); AND (F) THE AMOUNT OF REFUND DUE TO THE DEDUCTOR IN PUR SUANCE OF THE DETERMINATION UNDER CLAUSE (D) SHALL BE GRANTED TO THE DEDUCTOR. 8. IN EFFECT THUS, POST 1ST JUNE 2015, IN THE COUR SE OF PROCESSING OF A TDS STATEMENT AND ISSUANCE OF INTIMATION UNDER SE CTION 200A IN RESPECT THEREOF, AN ADJUSTMENT COULD ALSO BE MADE I N RESPECT OF THE FEE, IF ANY, SHALL BE COMPUTED IN ACCORDANCE WITH T HE PROVISIONS OF SECTION 234E . THERE IS NO DISPUTE THAT WHAT IS IMPUGNED IN APPEAL BEFORE US IS THE INTIMATION UNDER SECTION 20 0A OF THE ACT, AS STATED IN SO MANY WORDS IN THE IMPUGNED INTIMATION ITSELF, AND, AS THE LAW STOOD, PRIOR TO 1ST JUNE 2015, THERE WAS NO ENA BLING PROVISION THEREIN FOR RAISING A DEMAND IN RESPECT OF LEVY OF FEES UNDER SECTION 234E. WHILE EXAMINING THE CORRECTNESS OF THE INTIMA TION UNDER SECTION 200A, WE HAVE TO BE GUIDED BY THE LIMITED M ANDATE OF SECTION 200A, WHICH, AT THE RELEVANT POINT OF TIME, PERMITT ED COMPUTATION OF AMOUNT RECOVERABLE FROM, OR PAYABLE TO, THE TAX DED UCTOR AFTER MAKING THE FOLLOWING ADJUSTMENTS: ITA NO.1904/AHD/2015 7 (A). AFTER MAKING ADJUSTMENT ON ACCOUNT OF ARITHME TICAL ERRORS AND INCORRECT CLAIMS APPARENT FROM ANY INFORMATION IN THE STATEMENT - SECTION 200A(1)(A) (B). AFTER MAKING ADJUSTMENT FOR INTEREST, IF ANY, COMPUTED ON THE BASIS OF SUMS DEDUCTIBLE AS COMPUTED IN THE STATEME NT. - SECTION 200A(1)(B) 9. NO OTHER ADJUSTMENTS IN THE AMOUNT REFUNDABLE T O, OR RECOVERABLE FROM, THE TAX DEDUCTOR, WERE PERMISSIBL E IN ACCORDANCE WITH THE LAW AS IT EXISTED AT THAT POINT OF TIME. 10. IN VIEW OF THE ABOVE DISCUSSIONS, IN OUR CONSI DERED VIEW, THE ADJUSTMENT IN RESPECT OF LEVY OF FEES UNDER SECTION 234E WAS INDEED BEYOND THE SCOPE OF PERMISSIBLE ADJUSTMENTS CONTEMP LATED UNDER SECTION 200A. THIS INTIMATION IS AN APPEALABLE ORDE R UNDER SECTION 246A(A), AND, THEREFORE, THE CIT(A) OUGHT TO HAVE E XAMINED LEGALITY OF THE ADJUSTMENT MADE UNDER THIS INTIMATION IN THE LIGHT OF THE SCOPE OF THE SECTION 200A. LEARNED CIT(A) HAS NOT DONE SO . HE HAS JUSTIFIED THE LEVY OF FEES ON THE BASIS OF THE PROVISIONS OF SECTION 234E. THAT IS NOT THE ISSUE HERE. THE ISSUE IS WHETHER SUCH A LEV Y COULD BE EFFECTED IN THE COURSE OF INTIMATION UNDER SECTION 200A. THE ANSWER IS CLEARLY IN NEGATIVE. NO OTHER PROVISION ENABLING A DEMAND I N RESPECT OF THIS LEVY HAS BEEN POINTED OUT TO US AND IT IS THUS AN A DMITTED POSITION THAT IN THE ABSENCE OF THE ENABLING PROVISION UNDER SECTION 200A, NO SUCH LEVY COULD BE EFFECTED. AS INTIMATION UNDER SE CTION 200A, RAISING A DEMAND OR DIRECTING A REFUND TO THE TAX DEDUCTOR, CAN ONLY BE PASSED WITHIN ONE YEAR FROM THE END OF THE FINANCIA L YEAR WITHIN WHICH THE RELATED TDS STATEMENT IS FILED, AND AS TH E RELATED TDS STATEMENT WAS FILED ON 19TH FEBRUARY 2014, SUCH A L EVY COULD ONLY HAVE BEEN MADE AT BEST WITHIN 31ST MARCH 2015. THAT TIME HAS ALREADY ELAPSED AND THE DEFECT IS THUS NOT CURABLE EVEN AT THIS STAGE. IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING IN MI ND ENTIRETY OF THE CASE, THE IMPUGNED LEVY OF FEES UNDER SECTION 234 E IS UNSUSTAINABLE IN LAW. WE, THEREFORE, UPHOLD THE GRIEVANCE OF THE ASSESSEE AND DELETE THE IMPUGNED LEVY OF FEE UNDER SECTION 234E OF THE ACT. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. ITA NO.1904/AHD/2015 8 6. A PERUSAL OF THE ABOVE WOULD INDICATE THAT SECTI ON 200A NOWHERE AUTHORIZES THE AO TO LEVY FEE UNDER SECTION 234E WH ILE PROCESSING THE RETURN UNDER THIS SECTION. RESPECTFULLY FOLLOWING THE ORDER OF THE CO- ORDINATE BENCH, WE ALLOW THE APPEAL OF THE ASSESSEE AND DELETE THE DEMAND UPTO RS.47,820/- RELATING TO QUARTER-1. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 17 TH NOVEMBER, 2015 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 17/11/2015