V-Secure Financial Services Private Limited, Hyderabad V. Income Tax Officer, Ward-17(4), Hyderabad

ITA 1906/Hyd/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2994 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-05-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 22-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Assessee Lawyers: T RAJENDRA PRASAD
• Keywords: Opportunity of being heard; Retrospective amendment

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. 1906/HYD/2017 ASSESSMENT YEAR: 2013-14 V- SECURE FINANCIAL SERVICES PVT. LTD., HYDERABAD. PAN AADCV 2054R VS. INCOME-TAX OFFICER, WARD 17(4), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI T. RAJENDRA PRASAD REVENUE BY : SMT. N. SWAPNA DATE OF HEARING 08/05/2018 DATE OF PRONOUNCEMENT 23/05/2018 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 31/08/2017 OF CIT(A) 8, HYDERABAD FOR AY 20 13-14. 2. IN THIS CASE, THE ORDER U/S 200A WAS PASSED ON 0 9/12/2013 AND THE APPEAL WAS FILED BY THE ASSESSEE ON 08/01/2014 WITH A DELAY OF 1142 DAYS BEFORE THE CIT(A). 3. BEFORE THE CIT(A), ASSESSEE SUBMITTED THAT IT WA S UNDER THE IMPRESSION THAT THERE IS NO LEGAL REMEDY OF APPEAL U/S 246A AGAINST THE IMPUGNED ORDER PASSED U/S 200A. IT WAS ALSO SUB MITTED THAT ASSESSEE WAS PREVENTED FROM FILING THE APPEAL WITHI N THE TIME AS THERE WAS NO PROVISION IN SECTION 246A OF THE ACT. HOWEVER, IT WAS SUBMITTED THAT THE ASSESSEE CAME TO KNOW FROM A NUM BER OF SIMILAR CASES THAT A PROVISION WAS ADDED IN SECTION 246A WI TH EFFECT FROM 2 ITA NO. 1906/HYD/17 V-SECURE FINANCIAL SERVICES PVT. LTD. 01/06/2015 AND THE APPEAL IS MAINTAINABLE FROM THEN ONWARDS AND AGAINST THE ORDER PASSED U/S 200A. 4. AFTER CONSIDERING THE ABOVE SUBMISSIONS, LD. CIT (A) BROUGHT ON RECORD THAT ORDER U/S 200A(1) WAS ALWAYS APPEALABLE ORDER AS PER THE PROVISIONS OF SECTION 246(1)(A) AND OBSERVED THAT R ELEVANT PORTION OF THIS CLAUSE WAS SUBSTITUTED BY SOME OTHER CLAUSES B Y THE FINANCE ACT, 2015 WITH EFFECT FROM 01/06/2015. IT DID NOT HAVE A NY BEARING ON THE APPEALABILITY OF THE ORDER U/S 200A(1)(C) WHEREIN L EVY OF LATE FEE U/S 234E WAS MADE. BY REJECTING THE ARGUMENT OF THE ASS ESSEE, LD. CIT(A) DISMISSED APPEAL FILED BY THE ASSESSEE WITH A HUGE DELAY OF 1142 DAYS. 5. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERR ED APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS OF APPEA L: 1. THE CIT APPEALS HAS ERRED IN LAW AND FACTS OF TH E CASE IN DISMISSING THE CASE MERELY ON THE GROUNDS OF LIMITA TION RATHER THAN ON THE BASIS OF MERITS 2. CIT APPEALS ERRED IN CONFIRMING THE ORDER OF THE DCLT CPS TDS GHAZIABAD WHEREBY FEE UNDER SECTION 234E WAS LE VIED FOR THE PERIODS PRIOR TO 1 ST JUNE 2015 THROUGH AN INTIMATION UNDER SECTION 200A J EVEN THOUGH SECTION 200A WAS A MENDED WITH EFFECTIVE FROM 1 ST JUNE 2015 CONTAINING A REFERENCE TO SECTION 234E 6. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT NO DOUBT THERE IS A DELAY ON T HE PART OF THE ASSESSEE IN FURNISHING THE REQUIRED STATEMENTS/INFO RMATION AS PER THE TDS PROVISIONS, AND ACCORDINGLY, THE LATE FILING FE E U/S 234E WAS LEVIED ON THE ASSESSEE. THE INTIMATION U/S 200A OF THE ACT, DATED 09/12/2013 WAS ACCORDINGLY PASSED AND SERVED ON THE ASSESSEE. THE ASSESSEE FILED AN APPEAL AGAINST THIS INTIMATION ON 23/02/2017 RESULTING IN DELAY OF 1142 DAYS IN FILING APPEAL BE FORE THE FIRST APPELLATE AUTHORITY AND THE REASONS FOR SUCH DELAY THAT SUCH AN ORDER WAS NOT APPEALABLE AT THAT POINT OF TIME AS SUBMITT ED BY THE ASSESSEE 3 ITA NO. 1906/HYD/17 V-SECURE FINANCIAL SERVICES PVT. LTD. ARE NOT SUSTAINABLE AS THE ORDERS PASSED U/S 200A W ERE APPEALABLE ORDERS AS PER THE PROVISIONS OF SECTION 246A. HOWEV ER, THE ASSESSEE HAS NOW BROUGHT TO OUR NOTICE THE DECISION OF HONB LE KARNATAKA HIGH COURT IN THE CASE OF SRI FATHERAJ SINGHVI AND OTHER S IN W.P. NOS. 2663-2674/2015(T-IT) & OTHERS, DATED 26/08/2016 IN WHICH, THE HONBLE COURT CONSIDERED THE QUESTION AS TO WHETHE R THERE WAS MECHANISM PROVIDED U/S 200A PRIOR TO 01/06/2015 TO DEMAND THE FEE U/S 234E OF THE ACT AND AFTER CONSIDERING THE VARIO US ASPECTS OF THE ISSUE HAS HELD THAT THE SUBSTITUTION OF CLAUSES (C) TO (F) OF SUB-SECTION (1) OF SECTION 200A CAN BE READ AS HAVING PROSPECTI VE EFFECT AND NOT RETROSPECTIVE EFFECT. THE RELEVANT OBSERVATIONS ARE REPRODUCED HEREUNDER FOR READY REFERENCE: 21. HOWEVER, IF SECTION 234E PROVIDING FOR FEE WAS BROUGHT ON THE STATE BOOK, KEEPING IN VIEW THE AFORESAID PURPOSE AND THE INTENTION THE N, THE OTHER MECHANISM PROVIDED FOR COMPUTATION OF FEE AND FAILURE FOR PAYMENT OF F EE UNDER SECTION 200A WHICH HAS BEEN BROUGHT ABOUT WITH EFFECT FROM 1.6.2015 CANNOT BE SAID AS ONLY BY WAY OF A REGULATORY MODE OR A REGULATORY MECHANISM BUT IT CA N RATHER BE TERMED AS CONFERRING SUBSTANTIVE POWER UPON THE AUTHORITY. IT IS TRUE TH AT, A REGULATORY MECHANISM BY INSERTION OF ANY PROVISION MADE IN THE STATUTE BOOK , MAY HAVE A RETROACTIVE CHARACTER BUT, WHETHER SUCH PROVISION PROVIDES FOR A MERE REG ULATORY HTTP://WWW.ITATONLINE.ORG 26 MECHANISM OR CONFERS SUBSTANTIVE POWER UPON THE AUTHORITY WOULD ALSO BE A ASPECT WHICH MAY BE REQUIRED TO BE CONSIDERED BEFORE SUCH PROVISIONS IS HELD TO BE RETROACTIVE IN NATURE. FURTHER, WHEN ANY PROVISION IS INSERTED FOR LIABILITY TO PAY ANY TAX OR THE FEE BY WAY OF COMPENSATORY IN NATURE OR FEE INDEPENDENT LY SIMULTANEOUSLY MODE AND THE MANNER OF ITS ENFORCEABILITY IS ALSO REQUIRED TO BE CONSIDERED AND EXAMINED. NOT ONLY THAT, BUT, IF THE MODE AND THE MANNER IS NOT EXPRES SLY PRESCRIBED, THE PROVISIONS MAY ALSO BE VULNERABLE. ALL SUCH ASPECTS WILL BE REQUIR ED TO BE CONSIDERED BEFORE ONE CONSIDERS REGULATORY MECHANISM OR PROVISION FOR REG ULATING THE MODE AND THE MANNER OF RECOVERY AND ITS ENFORCEABILITY AS RETROACTIVE. IF AT THE TIME WHEN THE FEE WAS PROVIDED UNDER SECTION 234E, THE PARLIAMENT ALSO PR OVIDED FOR ITS UTILITY FOR GIVING PRIVILEGE UNDER SECTION 271H(3) THAT TOO BY EXPRESS LY PUT BAR FOR PENALTY UNDER SECTION 272A BY INSERTION OF PROVISO TO SECTION 272A(2), IT CAN BE SAID THAT A PARTICULAR SET UP FOR IMPOSITION AND THE PAYMENT OF FEE UNDER SECTION 234E WAS PROVIDED BUT, IT DID NOT PROVIDE FOR MAKING OF DEMAND OF SUCH FEE UNDER SECT ION 200A PAYABLE UNDER SECTION 234E. HENCE, CONSIDERING THE AFORESAID PECULIAR FAC TS AND CIRCUMSTANCES, WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE LEARNED COUN SEL FOR RESPONDENT-REVENUE THAT INSERTION OF CLAUSE (C) TO (F) UNDER SECTION 200A(1 ) SHOULD BE TREATED AS RETROACTIVE IN CHARACTER AND NOT PROSPECTIVE. 6.1 CONSIDERING THE ABOVE DECISION, IN OUR VIEW, AS SESSEE HAS A FAVOURABLE CASE IN ITS FAVOUR. IN THIS APPEAL, WE H AVE TO ADJUDICATE WHETHER THE CIT(A) WAS RIGHT IN REFUSING TO CONDONE THE DELAY OF 1142 DAYS IN FILING OF THE APPEAL BEFORE HIM. FOR CONDON ATION OF DELAY, THE 4 ITA NO. 1906/HYD/17 V-SECURE FINANCIAL SERVICES PVT. LTD. ASSESSEE HAS EXPLAINED SUFFICIENT CAUSE AND VARIO US COURTS HAVE HELD THAT THE EXPRESSION SUFFICIENT CAUSE OUGHT T O BE INTERPRETED IN A MANNER WHICH SUBSERVES A CAUSE OF JUSTICE FOR WHICH THE INSTITUTIONS OF JUSTICE STAND FOR. WHEN A CASE WITH ARGUABLE POI NTS IS SHUT ON PRESUMPTIONS OF LIMITATION, IT RESULTS IN THROWING OUT A GOOD CASE AT THE THRESHOLD WITH ONLY A NECESSARY IMPLICATION OF JUSTICE BEING PROPAGATED AND JUSTICE BEING DENIED. IN THE CASE OF COLLECTOR LAND ACQUISITION, ANANTNAG VS. MST. KATIJI [1987] SCC 10 7, THE HONBLE SUPREME COURT OBSERVED THAT THE LEGISLATURE HAS CON FERRED THE POWERS TO CONDONE DELAY BY ENACTING SECTION 5 OF TH E INDIAN LIMITATION ACT OF 1963, IN ORDER TO ENABLE COURTS T O DO SUBSTANTIAL JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON MERI TS AND THAT THE EXPRESSION SUFFICIENT CAUSE EMPLOYED BY THE LEGIS LATURE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY TH E LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTI CE THAT BEING THE LIFE PURPOSE FOR THE EXISTENCE OF THE INSTITUTION O F COURTS. RESPECTFULLY FOLLOWING THE ABOVE JUDGMENT, WE ARE OF THE OPINION THAT THE DELAY IN FILING OF APPEAL BEFORE LD. CIT(A) IS BE CONDONED I N THE INTEREST OF JUSTICE. ACCORDINGLY, WE REMIT THIS FILE BACK TO TH E FILE OF CIT(A) WITH A DIRECTION TO CONDONE THE DELAY AND CONSIDER THE ISS UE ON MERITS IN ACCORDANCE WITH LAW AND AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 23 RD MAY, 2018. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAH MAN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 23 RD MAY, 2018 KV 5 ITA NO. 1906/HYD/17 V-SECURE FINANCIAL SERVICES PVT. LTD. COPY TO:- 1) V-SECURE FINANCIAL SERVICES PVT. LTD., III FLOO R, 10-5-2/7/G/3C, OPP. BANJARA FUNCTION HALL, HYDERABAD 28 2) ITO, WARD 17(4), SIGNATURE TOWERS, OPP. BOTAN ICAL GARDENS, KONDAPUR, HYDERABAD 84. 3) CIT(A) 8, HYDERABAD. 4) CIT (TDS), HYD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE