EPT Exim Services Pvt. Ltd., Ahmedabad V. The Dy. Commissioner of Income Tax, CPC, TDS, Gaziabad

ITA 2129/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5861 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 16-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: P M MEHTA; GM THAKOR
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER EPT EXIM SERVICES PVT. LTD. AHMEDABAD PAN: AHME01202F (APPELLANT) VS THE DCIT, CPC, TDS GHAIABAD (RESPONDENT) REVENUE BY : S H RI V.K. SINGH , SR. D . R. ASSESSEE BY: S H RI P.M. MEHTA & SHRI G.M. THAKOR , A.R. DATE OF HEARING : 19 - 03 - 2 018 DATE OF PRONOUNCEMENT : 23 - 03 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTA NT MEMBER : - THESE FIFTEEN APPEALS FILED BY ASSESSEE FOR A.Y. 2013 - 14 TO 2015 - 16 , AR ISE FROM ORDER OF THE CIT(A) - 8 , AHM EDABAD DATED 13 - 06 - 2016 , IN PROCEEDINGS UNDER SECTION 154 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - ITA NO. 2129/AHD/2016 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LD. CIT(A) ERRED IN NOT CONSIDERING THE 2ND GROUND OF APPEAL BEFORE HIM CHALLENGING THE VALIDITY OF THE IMPUGNED ORDER U/S. 154. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LD. CIT(A) ERRED IN NOT HOLDING THAT THE LD. ASSESSING OFFICER HAD POWER TO MAKE ADJUSTMENT I T A NO S . 2129 TO 2143 / A HD/20 16 A SSESSMENT YEAR S 2013 - 14 TO 2015 - 16 I.T.A NO S . 2129 TO 2143 /AHD/20 16 A.Y. 2013 - 1 4 TO 2015 - 16 PAGE NO EPT EXIM SERVICES PVT. LTD. VS. DCIT 2 U/S.234E, AS PER AMENDED PROVISIONS OF SECTION 200A OF THE INCOME TAX ACT, VIDE IMPUGNED INTIMAT ION U/S.154, AND ON THAT GROUND IN CONFIRMING THE LEVY OF FEES U/S.234E. 3. THERE ARE 15 APPEALS FILED BY THE ASSESSEE PERTAINING TO LEVY OF FEES U/S. 234E FOR DELAY IN FILING QUARTERLY STATEMENTS OF DEDUCTION OF TAXES U/S. 200(3) ON DIFFERENT QUARTER P ERIOD FROM ASSESSMENT YEAR S 2013 - 14 TO 2015 - 16 . AS THE IDENTICAL I SSUE INVOLVED IN ALL T HE APPEALS OF THE ASSESSE, THEREFORE , ITA 2129/AHD/2016 IS BEING TAKEN AS LEAD CASE AND ITS FINDING WILL BE APPLICABLE TO ALL THE REMAINING APPEAL S OF THE ASSESSEE. 4 . BRIEF FACTS OF THE CASE IS THAT ASSESSEE HAS FILED QUARTERLY STATEMENT OF TAX DEDUCTED AT SOURCE FOR THE PERIOD OF OCTOBER, 2012 TO DECEMBER 2 012 ( QUARTER 3 OF FINANCIAL YEAR 2012 - 13 ) IN FORM NO. 26Q ON 08 - 04 - 2013 U/S 200(3) OF THE ACT. THE ABOVE STAT EMENT WAS PROCESSED BY THE DY. COMMISSIONER OF INCOME T AX CENTRALIZED PROCESSING CELL TDS AND AFFIRMED U/S. 154 OF THE ACT WHEREIN TDS CPC HAS CHARGED LATE FILING FEE OF RS. 16,600/ - U/S. 234E OF THE ACT. 5. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD . CIT(A) STATING THAT ORDER PASSED U/S. 154 OF THE ACT BY THE CPC IS BAD IN LAW. HE HAS ALSO CONTENDED BEFORE THE LD. CIT(A) THAT AS THE LAW STOOD PRIOR TO FIRST JUNE, 2015 , THERE WAS NO ENABLING PROVISION THEREIN FOR RAISING A DEMAND IN RESPECT OF LEVY O F FEES U/S. 234EOF THE ACT. THE LD. CIT(A) VIDE HER ORDER DATED 13 TH JUNE, 2016 H AS DISMISSED THE APPEAL OF T HE ASSESSSEE STATING THAT ASSESSING OFFICER HAS RIGHTLY CHARGED FEES U/S. 234E OF THE ACT. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS SUBMITTED A COMPILATION CONTAINING COPY OF CHART SHOWING DETAIL OF FEES LEVIED BY THE CPC U/S. 234E OF THE ACT, COPIES OF INTIMATION OF ORDER PASSED U/S. 200A FOR 15 QUARTER S . HE HAS ALSO PROVIDED COPIES OF JUDICIAL PRONOUNCEMENTS RE L IED UPON BY HIM IN THE FOLLOWING CASES : - I) VIPUL FORMS & GRAPHICS PVT. LTD. DATED 13 - 12 - 2017 OF ITAT C BENCH. II) EPT GLOBAL LOGISTICS PVT. LTD. AHMEDABAD V. DCIT, CPC, TDS GAZIABAD DATED 24/07/2017 PASSED BY THE SMC BENCH OF ITAT, AHD. I.T.A NO S . 2129 TO 2143 /AHD/20 16 A.Y. 2013 - 1 4 TO 2015 - 16 PAGE NO EPT EXIM SERVICES PVT. LTD. VS. DCIT 3 III) WONDER W AVES ENTERTAINMENT PVT. LTD. AHMEDABAD DATED 14 - 10 - 2015 PASSED BY THE SMC B BENCH, ITAT, AHD . THE LD. COUNSEL HAS SUBMITTED THAT THE IMPUGNED DEMAND WAS RAISED U/S. 234E O F THE ACT VIDE INTIMATION DATED 3 RD SEP, 2014 WHER E AS THE PROVISION OF S ECTION 2 00A OF THE ACT DID NOT AUTHORIZE THE OFFICER TO LEVY FEES U/S. 234E OF THE ACT. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE LOWER AUTHORITIES . 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CARE FULLY. WE HAVE NOTICED THAT THE CPC HAD ISSUED INTIMATION U /S . 200A WHEREIN FEES U/S. 234E OF THE ACT WAS LEVIED AT RS.16600/ - . THE ASSESSEE HAS FILED RECTIFICATION APPLICATION U/S. 154 OF THE ACT. THE CPC HAS PASSED THE IMPUGNED ORDER U/S. 154 DATED 16 TH JUNE, 2015 WHEREIN THE INTEREST PART W AS DELETED BUT THE DEMAND U/S. 2 34E OF THE ACT WAS RETAINED. WE HAVE ALSO PERUSED THE ABOVE CITED JUDICIAL PRONOUNCEMENTS OF CO - ORDINATE BENCHES REFERRED BY THE LEARNED COUNSEL. DURING THE COU RSE OF APPELLATE PROC EEDINGS BEFORE US, WE FIND THAT THE CO - ORDINATE BENCHES OF ITAT IN THE ABOVE CITED DECISIONS H AS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE IT A T IN THE CASE OF WONDER WAVES ENTERTAINMENT PVT. LTD. VS. DCIT, CPC, TDS - GHAZIA BAD IN ITA NO. 2143 TO 2146/AHD/2015 FOR ASSESSMENT YEAR 2014 - 15 ORDER DATED 14/10/2015 WHERIN IT IS HELD THAT PRIOR TO JUNE, 2015 THERE WAS NO ENABLING PROVISION THEREIN FOR RAISING A DEMAND IN RESPECT OF LEVY OF FEES U/S. 234E OF THE ACT. HOWEVER , DURI NG THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, IT WAS BROUGHT TO THE NOTICE OF BOTH THE SIDES THAT JURISDICTIONAL HIGH C OURT OF GUJARAT IN THE CASE OF RAJESH KOURANI VS. UNION OF INDIA (2017) 83 TAXMANN.COM 137(GUJ) HELD THAT SECTION 234E OF THE ACT IS A CHARGING PROVISION CREATING A CHARGE FOR LEVY OF FESS FOR CERTAIN DEFAULT IN FILING STATEMENTS AND ALSO HELD THAT THE FEES PRESCRIBED U/S. 234E COULD BE LEVIED EVEN WITHOUT A REGULATORY PROVISION BEING FOUND IN SECTION 200A FOR COMPUTATION OF FEES. WE HAVE NOTICED THAT RULE 31A OF I.T.A NO S . 2129 TO 2143 /AHD/20 16 A.Y. 2013 - 1 4 TO 2015 - 16 PAGE NO EPT EXIM SERVICES PVT. LTD. VS. DCIT 4 IT RULE LAID DOWN THE TIME LIMIT FOR FILING QUARTERLY STATEMENT FOR DEDUCTION OF TAX U/S. 200(3) OF THE ACT. SECTION 234F PRESCRIBES THE CHARGING OF FEES FOR EVERY DAY DEFAULT IN FILING OF STATEMENT U/S. 200(3) OF THE ACT O R ANY PROVISO TO SUB - SECTION (3) OF SECTION 206 OF THE ACT . SECTION 200A PERTAINED TO PROCESSING OF STATEMENT OF TAX DEDUCTED AT SOURCE AND PRIOR TO 01 - 06 - 2015 T HIS PROVISION DID NOT INCLUDE ANY REFERENCE O F THE FEES PAYABLE U/S. 234E OF THE ACT . W .E.F. 1 ST JUNE, 2015 , T HIS PROVISION SPECIFICALLY PROVIDES FOR CO MPUTING FEES PAYABLE U/S. 234E OF THE ACT. THE HON BLE JURISDICTIONAL HIGH COURT OF GU JARAT IN THE CASE CITED SUPRA H AS HELD THAT WHEN SE C TI O N 234E HAS ALREADY CREATED A CHARGE FOR LEVYING FEES , IT WOULD THEREAFTER NOT HAVE BE E N NECESSARY TO HAVE YET ANOTHER PROVISION CREATING THE SAME CHARGE. EVEN IN ABSENCE OF SECTION 200A WI TH INTRODUCTION OF SECTION 234E, IT WAS ALWAYS OPEN FOR THE REVENUE TO DEMAND AND COLLECT THE FEES FOR LATE FILING OF TH E STATEMENT. THE HON BLE HIGH COURT HAS ALSO HELD THAT SECTION 234E I S A CHARGING PROVISION AND IT WAS ALWAYS OPEN FOR THE REVENUE TO CHARGE FEES IN TERMS OF SECTION 234E OF THE ACT EVEN PRIOR TO 1 ST JUNE, 2015. THE RELEVANT PART OF THE DECISION OF THE H ON BLE JURISDICTIONAL HIGH COURT DELIVERED IN THE CASE OF RAJESH KOURANI VS. UNION OF INDIA (2017) 83 TAXMANN.COM 137(GUJ) IS REPRODUCED AS UNDER: - 16. WE NOW COME TO THE PETITIONER'S CENTRAL CHALLENGE VIZ. OF NON PERMISSIBILITY TO LEVY FEE UNDER SECTION 234E OF THE ACT TILL SECTION 200A OF THE ACT WAS AMENDED WITH EFFECT FROM 01.06.2015. WE HAVE NOTICED THE RELEVANT STATUTORY PROVISIONS. THE PICTURE THAT EMERGES IS THAT PRIOR TO 01.07.2012, THE ACT CONTAINED A SINGLE PROVISION IN SECTION 272A PROVIDING FO R PENALTY IN CASE OF DEFAULT IN FILING THE STATEMENTS IN TERMS OF SECTION 200 OR PROVISO TO SECTION 206C. SUCH PENALTY WAS PRESCRIBED AT THE RATE OF RS.100 FOR EVERY DAY DURING WHICH THE FAILURE CONTINUED. WITH EFFECT FROM 01.06.2012, THREE MAJOR CHANGES W ERE INTRODUCED IN THE ACT. SECTION 234E AS INTRODUCED FOR THE FIRST TIME TO PROVIDE FOR CHARGING OF FEE FOR LATE FILING OF THE STATEMENTS. SUCH FEE WOULD BE LEVIED AT THE RATE OF RS.200/ - FOR EVERY DAY OF FAILURE SUBJECT TO THE MAXIMUM AMOUNT OF TAX DEDUCT IBLE OR COLLECTIBLE AS THE CASE MAY BE. SECTION 271H WAS ALSO INTRODUCED FOR THE FIRST TIME FOR LEVYING PENALTY FOR FAILURE TO FURNISH THE STATEMENTS. SUCH PENALTY WOULD BE IN THE RANGE OF RS.10,000/ - AND RS.1 LAKH. NO PENALTY WOULD BE IMPOSED IF THE TAX I S DEPOSITED WITH FEE AND INTEREST AND THE STATEMENT IS FILED WITHIN ONE YEAR OF THE DUE DATE. WITH ADDITION TO THESE TWO PROVISIONS PRESCRIBING FEE AND PENALTY RESPECTIVELY, CLAUSE (K) OF SUB - SECTION (2) OF SECTION 272A BECAME REDUNDANT AND BY ADDING A PRO VISO TO THE SAID SECTION, THIS EFFECT WAS THEREFORE LIMITED UPTO 01.07.2012. 17. IN ESSENCE, SECTION 234E THUS PRESCRIBED FOR THE FIRST TIME CHARGING OF A FEE FOR EVERY DAY OF DEFAULT IN FILING OF STATEMENT UNDER SUB - SECTION (3) OF SECTION 200 OR ANY PROVI SO TO SUB - SECTION (3) OF SECTION 206C. THIS PROVISION WAS APPARENTLY ADDED FOR MAKING THE I.T.A NO S . 2129 TO 2143 /AHD/20 16 A.Y. 2013 - 1 4 TO 2015 - 16 PAGE NO EPT EXIM SERVICES PVT. LTD. VS. DCIT 5 COMPLIANCE OF DEDUCTION AND COLLECTION OF TAX AT SOURCE, DEPOSITING IT WITH GOVERNMENT REVENUE AND FILING OF THE STATEMENTS MORE STRINGENT. 18. IN THIS CONTEXT, WE MA Y NOTICE THAT SECTION 200A WHICH PERTAINS TO PROCESSING OF STATEMENTS OF TAX DEDUCTED AT SOURCE PROVIDES FOR THE PROCEDURE ONCE A STATEMENT OF DEDUCTION OF TAX AT SOURCE IS FILED BY THE PERSON RESPONSIBLE TO DO SO AND AUTHORIZES THE ASSESSING OFFICER TO MA KE CERTAIN ADJUSTMENTS WHICH ARE PRIMA - FACIE OR ARITHMETICAL IN NATURE. THE OFFICER WOULD THEN SEND AN INTIMATION OF A STATEMENT TO THE ASSESSEE. PRIOR TO 01.06.2015, THIS PROVISION DID NOT INCLUDE ANY REFERENCE TO THE FEE PAYABLE UNDER SECTION 234E OF THE ACT. BY RECASTING SUB - SECTION (1), THE NEW CLAUSE - C PERMITS THE AUTHORITY TO COMPUTE THE FEE, IF ANY, PAYABLE BY THE ASSESSEE UNDER SECTION 234E OF THE ACT AND BY VIRTUE OF CLAUSE - D, ADJUST THE SAID SUM AGAINST THE AMOUNT PAID UNDER THE VARIOUS PROVISIONS OF THE ACT. 19. IN PLAIN TERMS, SECTION 200A OF THE ACT IS A MACHINERY PROVISION PROVIDING MECHANISM FOR PROCESSING A STATEMENT OF DEDUCTION OF TAX AT SOURCE AND FOR MAKING ADJUSTMENTS, WHICH ARE, AS NOTED EARLIER, ARITHMETICAL OR PRIMA - FACIE IN NATURE. W ITH EFFECT FROM 01.06.2015, THIS PROVISION SPECIFICALLY PROVIDES FOR COMPUTING THE FEE PAYABLE UNDER SECTION 234E OF THE ACT. ON THE OTHER HAND, SECTION 234E IS A CHARGING PROVISION CREATING A CHARGE FOR LEVYING FEE FOR CERTAIN DEFAULTS IN FILING THE STATE MENTS. UNDER NO CIRCUMSTANCES A MACHINERY PROVISION CAN OVERRIDE OR OVERRULE A CHARGING PROVISION. WE ARE UNABLE TO SEE THAT SECTION 200A OF THE ACT CREATES ANY CHARGE IN ANY MANNER. IT ONLY PROVIDES A MECHANISM FOR PROCESSING A STATEMENT FOR TAX DEDUCTION AND THE METHOD IN WHICH THE SAME WOULD BE DONE. WHEN SECTION 234E HAS ALREADY CREATED A CHARGE FOR LEVYING FEE THAT WOULD THEREAFTER NOT BEEN NECESSARY TO HAVE YET ANOTHER PROVISION CREATING THE SAME CHARGE. VIEWING SECTION 200A AS CREATING A NEW CHARGE W OULD BRING ABOUT A DICHOTOMY. IN PLAIN TERMS, THE PROVISION IN OUR UNDERSTANDING IS A MACHINERY PROVISION AND AT BEST PROVIDES FOR A MECHANISM FOR PROCESSING AND COMPUTING BESIDES OTHER, FEE PAYABLE UNDER SECTION 234E FOR LATE FILING OF THE STATEMENTS. 20. EVEN IN ABSENCE OF SECTION 200A OF THE ACT WITH INTRODUCTION OF SECTION 234E, IT WAS ALWAYS OPEN FOR THE REVENUE TO DEMAND AND COLLECT THE FEE FOR LATE FILING OF THE STATEMENTS. SECTION 200A WOULD MERELY REGULATE THE MANNER IN WHICH THE COMPUTATION OF SUC H FEE WOULD BE MADE AND DEMAND RAISED. IN OTHER WORDS, WE CANNOT SUBSCRIBE TO THE VIEW THAT WITHOUT A REGULATORY PROVISION BEING FOUND FOR SECTION 200A FOR COMPUTATION OF FEE, THE FEE PRESCRIBED UNDER SECTION 234E CANNOT BE LEVIED. ANY SUCH VIEW WOULD AMOU NT TO A CHARGING SECTION YIELDING TO THE MACHINERY PROVISION. IF AT ALL, THE RECASTED CLAUSE (C) OF SUB - SECTION (1) OF SECTION 200A WOULD BE IN NATURE OF CLARIFICATORY AMENDMENT. EVEN IN ABSENCE OF SUCH PROVISION, AS NOTED, IT WAS ALWAYS OPEN FOR THE REVEN UE TO CHARGE THE FEE IN TERMS OF SECTION 234E OF THE ACT. BY AMENDMENT, THIS ADJUSTMENT WAS BROUGHT WITHIN THE FOLD OF SECTION 200A OF THE ACT. THIS WOULD HAVE ONE DIRECT EFFECT. AN ORDER PASSED UNDER SECTION 200A OF THE ACT IS RECTIFIABLE UNDER SECTION 15 4 OF THE ACT AND IS ALSO APPEALABLE UNDER SECTION 246A. IN ABSENCE OF THE POWER OF AUTHORITY TO MAKE SUCH ADJUSTMENT UNDER SECTION 200A OF THE ACT, ANY CALCULATION OF THE FEE WOULD NOT PARTAKE THE CHARACTER OF THE INTIMATION UNDER SAID PROVISION AND IT COU LD BE ARGUED THAT SUCH AN ORDER WOULD NOT BE OPEN TO ANY RECTIFICATION OR APPEAL. UPON INTRODUCTION OF THE RECASTED CLAUSE (C), THIS SITUATION ALSO WOULD BE OBVIATED. EVEN PRIOR TO 01.06.2015, IT WAS ALWAYS OPEN FOR THE REVENUE TO CALCULATE FEE IN TERMS OF SECTION 234E OF THE ACT. THE KARNATAKA HIGH COURT IN CASE OF FATHERAJ SINGHVI (SUPRA) HELD THAT SECTION 200A WAS NOT MERELY A REGULATORY PROVISION, BUT WAS CONFERRING SUBSTANTIVE POWER ON THE AUTHORITY. THE COURT WAS ALSO OF THE OPINION THAT SECTION 234E OF THE ACT WAS IN THE NATURE OF PRIVILEGE TO THE DEFAULTER IF HE FAILS TO PAY FEES THEN HE WOULD BE RID OF RIGOR OF THE PENAL PROVISION OF SECTION 271H OF THE ACT. WITH BOTH THESE PROPOSITIONS, WITH RESPECT, WE ARE UNABLE TO CONCUR. SECTION 200A IS NOT A S OURCE OF SUBSTANTIVE POWER. SUBSTANTIVE POWER TO LEVY FEE CAN BE TRACED TO SECTION 234E OF THE ACT. FURTHER THE FEE UNDER SECTION I.T.A NO S . 2129 TO 2143 /AHD/20 16 A.Y. 2013 - 1 4 TO 2015 - 16 PAGE NO EPT EXIM SERVICES PVT. LTD. VS. DCIT 6 234E OF THE ACT IS NOT IN LIEU OF THE PENALTY OF SECTION 271H OF THE ACT. BOTH ARE INDEPENDENT LEVIES. SECTION 271H ONLY PROVI DES THAT SUCH PENALTY WOULD NOT BE LEVY IF CERTAIN CONDITIONS ARE FULFILLED. ONE OF THE CONDITIONS IS THAT THE TAX WITH FEE AND INTEREST IS PAID. THE ADDITIONAL CONDITION BEING THAT THE STATEMENT IS FILED LATEST WITHIN ONE YEAR FROM THE DUE DATE. AFTER C ONSIDERING THE ABOVE FACTS AND JUDICIAL FINDINGS, WE ARE NOT INCLINED WITH THE CONTENTION OF THE LD. COUNSEL THAT CPC WAS NOT AUTHORIZED TO LEVY U/S. 234E OF THE ACT , WE ARE ALSO NOT AFFIRMED WITH HIS VIEW THAT THE ORDER PASSED U/S. 154 WAS BAD IN LAW . TH EREFORE, RESPECTFULLY FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT AS MENTIONED SUPRA , WE DISMISS BOTH THE GROUNDS OF APPEALS OF THE ASSESSEE . 7. IN THE RESULT, ALL THE FIFTEEN APPEALS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 23 - 03 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 2 3 /03 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,