M/s. Sri. Family Biznet Private Limited, Bangalore V. Commissioner of Income Tax-A-9, Bangalore

ITA 2028/BANG/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5796 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-09-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 20-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNDAR R AJAN CIT BENGALURU
• Keywords: TDS; Set aside
• Section: 234E; 200A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI , JUDICIAL MEMBER ITA NO S . 2027, 2028 AND 2029 /BANG/20 1 9 ASSESSMENT YEARS : 2013-14, 2014-15 AND 2015-16 M/S. SRI FAMILY BIZNET PVT. LTD., #1731(31), 1 ST FLOOR, 17 TH CROSS, MAGADI CHORD LAYOUT, VIJAYANAGAR, BENGALURU 560 040. PAN : A AQ C S 1322 N VS. THE COMMISSIONER OF INCOME-TAX (APPEALS)-9, BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI. SANKETH S. NAYAK , CA REVENUE BY : SHRI. SUNDAR RAJAN , ADDL. CIT (DR)(ITAT), BENGALURU DATE OF HEARING : 03 .0 9 .2020 DATE OF PRONOUNCEMENT : 04.09 .2020 O R D E R PER A. K. GARODIA, ACCOUNTANT MEMBER: THESE THREE APPEALS ARE FILED BY THE ASSESSEE AND THE SAME ARE DIRECTED AGAINST A COMBINED ORDER OF LEARNED CIT(A)-9, BENGALURU, DATED 31.07.2019 FOR ASSESSMENT YEARS 2013-14, 2014-15, 2015-16. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE IDENTICAL GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-9, BENGALURU ('LEARNED CIT(A)') HAS NOT CONSIDERED THE CORRECT LEGAL POSITION WHICH EMANATE THE VARIOUS JUDGEMENTS. 2. THE HONOURABLE KARNATAKA HIGH COURT IN THE CASE OF FATHERAJ SINGHAVI V/S U01 (2650/2015, WA 34/2016, WA2648/2015, WA2652/2015) HAS HELD THAT THERE WAS NO POWER UNDER SECTION 200A TO LEVY ANY LATE FEE U/S 234E PRIOR TO AMENDMENT OF THE LAW ITA NO. 2027, 2028 AND 2029/BANG/2019 PAGE 2 OF 4 ON 1-6-2015. THEREFORE, THE DEMAND OF LATE FEE WOULD BE AUTOMATICALLY CANCELLED AS THE LAW PREVAILING AT THAT TIME U/S 200A DID NOT ALLOW SUCH LEVY WHILE PROCESSING THE TDS RETURNS. 3. THE LEARNED CIT(A) HAS ERRED BY HOLDING THAT THE DECISION OF THE HONOURABLE KARNATAKA HIGH COURT IN FATHERAJ SINGHVI CASE IS NOT APPLICABLE WHILE PROCESSING THE REVISED STATEMENT WHICH IS FILED AFTER 01.06.2015. 4. THE DECISION OF THE HONOURABLE SUPREME COURT OF INDIA IN THE CASE OF PRASHANTI MEDICAL SERVICES & RESEARCH FOUNDATION IN RELATION TO SECTION 35AC IS NOT APPLICABLE IN OUR CASE. 5. SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING. 3. IN THE COURSE OF HEARING, IT WAS SUBMITTED BY LEARNED AR OF THE ASSESSEE THAT THE ISSUE INVOLVED IN THESE THREE APPEALS IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF FATHERAJ SINGHVI VS. UOI REPORTED IN 289 CTR 602 (KAR). HE SUBMITTED THAT AS PER THIS JUDGMENT, IT WAS HELD BY HONBLE KARNATAKA HIGH COURT THAT UNDER SECTION 234E, FEES CANNOT BE LEVIED BY THE AO UNDER SECTION 200A FOR ANY PERIOD PRIOR TO 01.06.2015. HE SUBMITTED THAT BEFORE LEARNED CIT(A) ALSO, RELIANCE WAS PLACED ON THESE JUDGMENTS BUT IT IS HELD BY LEARNED CIT(A) IN PARA 17 OF THE IMPUGNED ORDER THAT SINCE THE ASSESSEE HAS FILED REVISED STATEMENT AFTER 01.06.2015 I.E., THE DATE ON WHICH SECTION 200A IS AMENDED, THIS JUDGMENT IS NOT APPLICABLE BUT AS PER THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT, DATE OF FILING OF JUDGMENT IS NOT RELEVANT AND IF THE PERIOD INVOLVED IS PRIOR TO 01.06.2015, THEN THIS DEMAND CANNOT BE RAISED. AS AGAINST THIS, LEARNED DR OF THE REVENUE SUPPORTED THE ORDER OF CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND WE FIND THAT PARA 27 OF THIS JUDGMENT OF HONBLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF FATHERAJ SINGHVI VS. UOI (SUPRA) IS RELEVANT AND THE SAME IS AVAILABLE ON PAGE 63 OF THE PAPER BOOK. FOR READY REFERENCE, WE REPRODUCE THIS PARA AS UNDER: ITA NO. 2027, 2028 AND 2029/BANG/2019 PAGE 3 OF 4 23. IN VIEW OF THE AFORESAID OBSERVATIONS AND DISCUSSION, THE IMPUGNED NOTICES UNDER SECTION 200A OF THE ACT FOR COMPUTATION AND INTIMATION FOR PAYMENT OF FEE UNDER SECTION 234E AS THEY RELATE TO FOR THE PERIOD OF THE TAX DEDUCTED PRIOR TO 1.6.2015 ARE SET ASIDE. IT IS CLARIFIED THAT THE PRESENT JUDGMENT WOULD NOT BE INTERPRETED TO MEAN THAT EVEN IF THE PAYMENT OF THE FEES UNDER SECTION 234E ALREADY MADE AS PER DEMAND/INTIMATION UNDER SECTION 200A OF THE ACT FOR THE TDS FOR THE PERIOD PRIOR TO 01.04.2015 IS PERMITTED TO BE REOPENED FOR CLAIMING REFUND. THE JUDGMENT WILL HAVE PROSPECTIVE EFFECT ACCORDINGLY. IT IS FURTHER OBSERVED THAT THE QUESTION OF CONSTITUTIONAL VALIDITY OF SECTION 234E SHALL REMAIN OPEN TO HE CONSIDERED BY THE DIVISION BENCH AND SHALL NOT GET CONCLUDED BY THE ORDER OF THE LEARNED SINGLE JUDGE. 5. AS PER THIS PARA OF THIS JUDGMENT AS REPRODUCED ABOVE, IT IS CLEAR THAT THE LEVY OF FEES UNDER SECTION 234E CANNOT BE MADE FOR ANY PERIOD PRIOR TO 01.06.2015 EXCEPT IN A CASE WHERE THE ASSESSEE HAS ALREADY MADE PAYMENT OF SUCH FEES AS DEMANDED BY THE AO AND SEEKS ITS REFUND IN THE LIGHT OF THIS JUDGMENT BY WAY OF REOPENING OF THE CONCLUDED ASSESSMENT. IN THE PRESENT CASE, NEITHER THE ASSESSEE HAS PAID THE FEES NOR THE ASSESSMENT HAS ATTAINED FINALITY AND THEREFORE, RESPECTFULLY FOLLOWING THIS JUDGMENT, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE FOR ALL THE THREE YEARS BECAUSE IN ALL THESE THREE YEARS, THE PERIOD INVOLVED IS PRIOR TO 01.06.2015. 6. IN THE RESULT, ALL THE THREE APPEALS OF THE ASSESSEES ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (BEENA PILLAI) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED: 04 TH SEPTEMBER, 2020. /NS/* ITA NO. 2027, 2028 AND 2029/BANG/2019 PAGE 4 OF 4 COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.