Sabir Ali, Kannur V. The Assistant Commissioner of Income Tax, Ghaziabad

ITA 203/COCH/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1701 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 08-11-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R KRISHNAN
• Keywords: Condonation of delay; TDS
• Section: 234E; 200A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri George George K, JM & Shri Laxmi Prasad Sahu, AM ITA No.200/Coch/2021 : Asst.Year 2013-2014 ITA No.201/Coch/2021 : Asst.Year 2013-2014 ITA No.202/Coch/2021 : Asst.Year 2013-2014 ITA No.203/Coch/2021 : Asst.Year 2014-2015 Sri.Sabir Ali TTN 344 A-8 G-Tech Computer Education, Kaoser Complex Caltex Junction Kannur – 670 002. PAN : BNAPS6392F. v. The Assistant Commissioner of Income-tax, Ghaziabad. (Appellant) (Respondent) Appellant by : Sri.R Krishnan, CA Respondent by : Smt.J.M.Jamunna Devi, Sr.DR Date of Hearing : 18.05.2022 Date of Pronouncement : 20.05.2022 O R D E R Per George George K, JM : These appeals at the instance of the assessee are directed against four orders of the CIT(A), all dated 27.08.2021. The relevant assessment years are 2013-2014 and 2014-2015. Common issues are raised in these appeals, hence, these appeals were heard together and are being disposed of by this consolidated order. 2. The grounds raised for all the appeals are identical and they read as follows:- “1. The order of the Officer is against law facts and circumstances of the case. ITA Nos.200 to 203/Coch/2021. Sri.Sabir Ali. 2 2. The CIT(Appeals) is not justified in not condoning the delay as in similar cases, the department has condoned such delay in the matter of 234E. 3. The CIT(Appeals) has erred in sustaining the late fees under 234E on the basis of non jurisdictional High Court decisions ignoring the decisions of other High Courts. 4. The CIT(Appeals) has overlooked many decisions in which the levy of late fees has been deleted by appellate authorities. 5. For these and other grounds that may be raised at the time of hearing the late fees together with interest charged may kindly be deleted.” 3. The brief facts of the case are as follows: The assessee had filed belatedly TDS statements in Form No.24Q and 26Q for various quarters for assessment years 2013-2014 and 2014-2015. The statements were processed by the Assessing Officer vide orders passed u/s 200A of the I.T.Act, wherein fees was levied u/s 234E of the I.T.Act, for late filing of TDS statements. The details of levy u/s 234E of the I.T.Act, the period for which the fee is levied are detailed below:- Assessment Year Net payable u/s 234E of the I.T.Act. (In Rs.) 2013-2014 Q2 57,600 2013-2014 Q4 31,240 2013-2014 Q3 34,640 2014-2015 Q1 21,250 4. Aggrieved by the orders passed u/s 200A of the I.T.Act, for various quarters levying fees u/s 234E of the I.T.Act, the assessee preferred appeals before the first appellate authority. All the appeals filed before the first appellate authority were ITA Nos.200 to 203/Coch/2021. Sri.Sabir Ali. 3 barred by limitation. The assessee had filed petitions for condonation of delay. The CIT(A) rejected the appeals holding that delay cannot be condoned and also on merits that the ACIT (CPC) TDS was justified in levying fees u/s 234E of the I.T.Act. The CIT(A) primarily relied on the judgment of the Hon’ble Gujarat High Court in the case of Shri Rajesh Kourani v. Union of India reported in (2017) 83 taxmann.com 137 (Gujarat), for deciding the issue on merits, against the assessee. 5. Aggrieved by the orders of the CIT(A), the assessee has filed these appeals before the Tribunal. The learned AR, as regards the condonation of delay, relied on the submissions made before the CIT(A). As regards the issue on merits, the learned AR submitted that the same is squarely covered in favour of the assessee by the judgment of the Hon’ble jurisdictional High Court in the case of Olari Little Flower Kuries (P.) Ltd. v. Union of India reported in 440 ITR 26 (Ker.). 6. The learned Departmental Representative strongly supported the orders of the CIT(A). 7. We have heard rival submissions and perused the material on record. The Assessing Officer cannot make any adjustment other than one prescribed in section 200A of the Act. Prior to 01.06.2015, there was no enabling provision in section 200A of the Act for making adjustment in respect of statement filed by the assessee with regard to tax deducted at source by levying fees u/s 234E of the Act. The Parliament for ITA Nos.200 to 203/Coch/2021. Sri.Sabir Ali. 4 the first time enabled the Assessing Officer to make adjustment by levying fees u/s 234E of the Act with effect from 01.06.2015. The Hon’ble jurisdictional High Court in the case of Olari Little Flower Kuries (P.) Ltd. v. Union of India reported in (2022) 440 ITR 26 (Ker.), has held that since provision of section 200A of the I.T.Act was amended to enable computation of fee payable u/s 234E of the I.T.Act at the time of processing of return and said amendment came into effect from 01.06.2015 (in view of CBDT Circular No.19 of 2015 dated 17.11.2015) intimations issued u/s 200A of the I.T.Act dealing with fee for belated filing of TDS returns for the period prior to 01.06.2015 were invalid and were to be set aside. Therefore, going by the dictum laid down by the Hon’ble jurisdictional High Court judgment in the case of Olari Little Flower Kuries (P.) Ltd. v. Union of India (supra), the levy of late fee for the various quarters for financial years 2012-2013 and 2013-2014 cannot be sustained in order passed u/s 200A of the I.T.Act, prior to 01.06.2015. It is to be mentioned that the CIT(A) had relied on the judgment of the Hon’ble Gujarat High Court in the case of Shri Rajesh Kourani v. Union of India (supra). The Hon’ble Kerala High Court in the case of M/s.Sarala Memorial Hospital v. Union of India & The Income Tax Officer (TDS) [WP(C) No.37775 of 2018 of 18 th December, 2018], has considered the judgment of the Hon’ble Gujarat High Court in the case of Shri Rajesh Kourani v. Union of India (supra) and distinguished the same. The Hon’ble Kerala High Court had disposed of the Writ Petition in favour of the assessee, stating that there is ITA Nos.200 to 203/Coch/2021. Sri.Sabir Ali. 5 cleavage in judicial opinion and the judgment in the case of Shri Rajesh Kourani v. Union of India (supra) has not considered CBDT Circular No.19 of 2015, which has clearly emphasized that the amendment would take effect only from 01.06.2016. Therefore, it was concluded by the Hon’ble Kerala High Court that the amendment relating to section 200A of the I.T.Act is prospective with effect from 01.06.2016. 7.1 As regards the condonation of delay is concerned, it is admitted that there is a delay of approximately five years in filing the appeals before the first appellate authority. The reasons stated for the delay is that – (a) The assessee was advised that there was no appeal remedy for late fee u/s 234E. (b) The decision of the Karnataka High Court declaring that late fee u/s 234E was bad in law came to the notice of the assessee only in end of September 2018. (c) The assessee had no infrastructural facility to be abreast with legal information and tax law cases. 7.2 It is settled principle that expression “sufficient cause” ought to be interpreted in a manner which subserve and advances the cause of substantial justice. The Hon’ble Apex Court in the case of State of West Bengal v. The Administrator, Howrah Municipality reported in AIR 1972 page 749 (SC) had held that the scope of expression “sufficient cause” for the condonation of delay should receive a liberal construction so as to advance the substantial justice. The Hon’ble Apex Court in the case of N.Balakrishnan v. M.Krishmnamurthy reported in (1998) 7 SCC 123 (SC) had condoned the delay of 883 days in filing the application for ITA Nos.200 to 203/Coch/2021. Sri.Sabir Ali. 6 setting aside the ex parte decree for which application for condonation of delay was filed. In the said case, the Trial Court had found that there was sufficient cause made out for condonation of delay and had condoned the delay. However, the Hon’ble High Court reversed the order of the Trial Court. The Hon’ble Apex Court while restoring the order of the Trial Court had observed in para 8, 9 and 10 as under:- “The primary function of a Court is to adjudicate the dispute between the parties and to advance substantial justice. The time limit fixed for approaching the Court in different situations is not because on the expiry of such time a bad cause would transform into a good cause.” 7.3 The Hon’ble Apex Court further observed that rules of limitation are not meant to destroy the rights of the parties. They are meant to see that parties do not resort to dilatory tactics, but seek the remedy promptly. The Hon’ble Court further observed that refusal to condone the delay would result in foreclosing a suitor for putting forth his cause. There is no presumption that delay in approaching the Court is always deliberate. 7.4 The Hon’ble Apex Court in the case of Collector, Land Acquisition v. MST.Katiji and Others (1987) 167 ITR 471 (SC) had held that when substantial justice and technicality are pitted against each other, the cause of substantial justice deserves to be preferred. The relevant finding of the Hon’ble Apex Court reads as follows:- “ “Every day’s delay must be explained” does not imply a pedantic approach. The doctrine must be applied in a rational, common sense and pragmatic manner. ITA Nos.200 to 203/Coch/2021. Sri.Sabir Ali. 7 The doctrine of equality before law demands that all litigants, including the State as litigant, are accorded the same treatment and the law is administrated in an evenhanded manner. There is no warrant for according a step-motherly treatment when the State is the applicant praying for condonation of delay. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non- deliberate delay.” 7.5 The Hon’ble Apex Court in the case of Improvement Trust v. Ujagar Singh & Ors. in Civil Appeal No.2395 of 2008 (judgment dated 9 th June, 2010) had held that ordinarily the matter should be disposed of on merits and not on technicality. It was held by the Hon’ble Apex Court that justice can be done only when the matter is fought on merits and in accordance with law rather than to dispose it on technicalities and that too at the threshold. It was further held by the Hon’ble Apex Court that unless the malafides are writ large on the conduct of the party, generally as a normal rule, delay should be condoned. 7.6 In the instant case, the assessee submits that he was advised that there is no appeal remedy for late fee u/s 234E of the I.T.Act. It is further stated that the decision of the Hon’ble Karnataka High Court in the case of Sri Fateharaj Singhvi v. Union of India & Ors. reported in 289 CTR 602 (Kar.), declaring that late fee u/s 234E was bad in law came to the notice of the assessee only in September 2018. The pleae of the assessee that downloading of the intimation and filing an ITA Nos.200 to 203/Coch/2021. Sri.Sabir Ali. 8 appeal for which he has received legal advise that it is not appealable order cannot be totally brushed aside. The assessee came to know of the judgment of the Hon’ble Karnataka High Court in the case of Sri Fateharaj Singhvi v. Union of India & Ors. (supra) only in September 2018, and thereafter, he filed appeal before the first appellate authority immediately. Since on merits, the issue is covered in favour of the assessee by the judgments of the Hon’ble jurisdictional High Court, cited supra, and taking note of the judicial pronouncements, where the expression “sufficient cause” has received a liberal construction, we condone the delay of filing these appeals before the CIT(A). It is ordered accordingly. 8. In the result, the appeals filed by the assessee are allowed. Order pronounced on this 20 th day of May, 2022. Sd/- (Laxmi Prasad Sahu) Sd/- (George George K) ACCOUNTANT MEMBER JUDICIAL MEMBER Bangalore; Dated : 20 th May, 2022. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT(A), NFAC, Delhi. 4. The CIT Cochin. 5. The DR, ITAT, Cochin. 6. Guard File. Asst.Registrar/ITAT, Cochin