Wonder Waves Entertainment Pvt. Ltd., Ahmedabad V. The Dy.CIT, CPC, TDS, Gaziabad

ITA 2146/AHD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94525 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 20-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P M MEHTA WITH G M THAKOR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC B BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI MANISH BORAD, ACCOUNTAT MEMBER) ITA NOS: 2143 TO 2146/AHD/2015 (ASSESSMENT YEAR: 2014-15) WONDER WAVES ENTERTAINMENT PVT. LTD., 707, SHITIRATNA COMPLEX, PANCHVATI CROSS ROADS, AHMEDABAD- 380 009 V/S DCIT, CPC, TDS, AAYKAR BHAVAN, SECTOR-3, VAISHALI, GHAZIABAD, U.P. 201010 (APPELLANT) (RESPONDENT) PAN: AAACW 4475C APPELLANT BY : SHRI P.M. MEHTA WITH G.M. THAKO R, A.R. RESPONDENT BY : SMT. SMITI SAMANT, SR. D.R. ( )/ ORDER DATE OF HEARING : 22-09-2015 DATE OF PRONOUNCEMENT : 14 -10-2015 PER RAJPAL YADAV, JUDICIAL MEMBER 1. THE PRESENT FOUR APPEALS ARE DIRECTED AT THE INSTAN CE OF ASSESSEE AGAINST THE SEPARATE ORDERS OF LD. CIT(A) DATED 12 TH MAY, 2015 PASSED IN A.Y. 2014- 2015. ITA NOS. 214 3 TO 2146/AHD/2015 . A.Y. 2014 -2015 2 2. THE FACTS ON VITAL POINTS ARE COMMON IN ALL THESE F OUR APPEALS. FOR THE FACILITY OF REFERENCE, WE ARE TAKING OF THE FACTS F ROM ITA NO. 2143/AHD/2015. 3. THE BRIEF FACTS ARE THAT ASSESSEE WAS REQUIRED TO S UBMIT TDS STATEMENT U/S. 200 (3) OF I.T. ACT 1961. WITH REGARD TO THE 1 ST QUARTER, IT WAS TO SUBMIT THE STATEMENT BY 15 TH JULY, 2013, HOWEVER, IT HAS SUBMITTED THAT STATEME NT ON 28 TH MAY, 2014, THUS THERE WAS A DELAY IN THE SUBMISSION OF THE STATEMENT. THE DEPARTMENT HAS PROCESSED THE STATEMENT U/S. 200A AN D RAISED A DEMAND OF RS. 41,005/- AS A LATE FEE CHARGED U/S. 234E OF THE INCOME TAX ACT. UNDER IDENTICAL CIRCUMSTANCES, THE LATE FEES OF RS. 45,53 0/- HAS BEEN CHARGED FOR THE 2 ND QUARTER, RS. 27,860 FOR THE 3 RD QUARTER AND RS. 2600/- FOR THE LAST QUARTER. THE LD. FIRST APPELLATE AUTHORITY HAS CONF IRMED THE CHARGING OF LATE FEE U/S. 234E OF THE ACT. THE ASSESSEE HAS CHA LLENGED CONFIRMATION OF LEVY OF LATE FEE BY THE LD. CIT(A) IN THE PRESENT F OUR APPEALS. 4. THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT ISSUE IN DISPUTE IS SQUARELY COVERED BY THE DECISION OF ITAT , AMRITSAR RENDERED IN ITA NO. 90/ASR/2015 IN THE CASE OF SIBIA HEALTHCARE PRIVATE LTD. VS. D.C.I.T. THE TRIBUNAL AFTER DETAIL ANALYSIS OF THE PROVISIONS ARRIVED AT A CONCLUSION THAT WHILE PROCESSING THE TDS STATEMENT U/S. 200A, THE D.C.I.T. CANNOT CHARGE LATE FEE U/S. 234E, BECAUSE SUCH AN A DJUSTMENT IS BEYOND THE SCOPE OF PERMISSIBLE ADJUSTMENT CONTEMPLATED U/S. 2 00A. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT THIS ORDER HAS BEEN FOLLOWED BY ITAT, AHMEDABAD SMC BENCH IN THE CASE OF INDIAN O VERSEAS BANK VS. D.C.I.T. HE PLACED ON RECORD THE COPIES OF BOTH THE SE ORDERS. ITA NOS. 214 3 TO 2146/AHD/2015 . A.Y. 2014 -2015 3 5. THE LD. D.R. ON THE OTHER HAND RELIED UPON THE ORDE RS OF LD. REVENUE AUTHORITIES. 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. WE DEEM IT PERTINENT TO TAKE NOTE OF THE LUCID ENUNCIATION OF LAW AND FACTS MADE BY THE ITAT, AMRITSAR WHILE DELETING THE CHARGING OF LATE FEE U/S. 234E OF THE ACT. THE FINDINGS READS 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 AP PLICABLE LEGAL POSITION. IN ADDITION TO HIS ARGUMENT ON THE MERITS, LEARNED COUNSEL HAS ALSO IN VITED OUR ATTENTION TO THE REPORTS ABOUT THE DECISIONS OF VARIOUS HONBLE HIGH COURTS, INCLUDING HONBLE KERALA HIGH COURT, IN THE CASE OF NARATH MAPILA LP SCHOOL VS UN ION OF INDIA [WP (C) 31498/2013(J)], HONBLE KARANATAKA HIGH COURT IN TH E CASE OF ADITHYA BIZOR P SOLUTIONS VS UNION OF INDIA [WP NO. 6918-6938/2014( T-IT), HONBLE RAJASTHAN HIGH COURT IN THE CASE OF OM PRAKASH DHOOT VS UNION OF I NDIA [WP NO. 1981 OF 2014] 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 RAIS ED IN RESPECT OF FEES UNDER SECTION 234E. THE FULL TEXT OF THESE DECISIONS WERE NOT PRO DUCED BEFORE US. HOWEVER, AS ADMITTEDLY THERE ARE NO ORDERS FROM THE HONBLE COU RTS ABOVE RETRAINING US FROM OUR ADJUDICATION ON MERITS IN RESPECT OF THE ISSUES IN THIS APPEAL, AND AS, IN OUR HUMBLE UNDERSTANDING, THIS APPEAL REQUIRES ADJUDICATION 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 PROVISION IS AS FOLLOWS: 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 TIM E PRESCRIBED IN SUB-SECTION (3) OF SECTION 200 OR THE PROVISO TO SUBSECTION (3) OF SECTION 206C, HE SHALL BE LIABLE TO PAY, BY WAY OF FEE, A SUM OF TWO HUNDRED RUPEES FOR EVERY DAY DURING WHICH THE FAILURE CONTINUES. (2) THE AMOUNT OF FEE REFERRED TO IN SUB-SECTION (1 ) SHALL NOT EXCEED THE AMOUNT OF TAX DEDUCTIBLE OR COLLECTIBLE, AS THE CASE MAY B E. (3) THE AMOUNT OF FEE REFERRED TO IN SUB-SECTION (1 ) SHALL BE PAID BEFORE DELIVERING OR CAUSING TO BE DELIVERED A STATEMENT I N ACCORDANCE WITH SUB-SECTION (3) OF SECTION 200 OR THE PROVISO TO SUB-SECTION (3 ) OF SECTION 206C. ITA NOS. 214 3 TO 2146/AHD/2015 . A.Y. 2014 -2015 4 (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-SE CTION (3) OF SECTION 206C WHICH IS TO BE DELIVERED OR CAUSED TO BE DELIVERED FOR TA X DEDUCTED AT SOURCE OR TAX COLLECTED AT SOURCE, AS THE CASE MAY BE, ON OR AFTE R 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 STATUTOR Y PROVISION, AS IT STOOD AT THE RELEVANT POINT 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 DEDUCTING ANY SUM (HEREAFTER REFER RED TO IN THIS SECTION AS DEDUCTOR) UNDER SECTION 200, SUCH STATEMENT SHALL BE PROCESSE D IN THE FOLLOWING MANNER, NAMELY: (A) THE SUMS DEDUCTIBLE UNDER THIS CHAPTER SHALL BE COMPUTED AFTER MAKING THE FOLLOWING ADJUSTMENTS, NAMELY: (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 AMOUNT COMPUTED UNDE R CLAUSE (B) AGAINST ANY AMOUNT PAID UNDER SECTION 200 AND SECTION 201, AND ANY AMO UNT PAID OTHERWISE 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 PAYABLE BY, OR THE AMOUNT OF R EFUND 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 FINANCIAL YEAR IN WHICH TH E STATEMENT IS FILED. EXPLANATION : FOR THE PURPOSES OF THIS SUB-SECTION, 'AN INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN THE STATEMENT' SHALL MEAN A CLAI M, ON THE BASIS OF AN ENTRY, IN THE STATEMENT (I) OF AN ITEM, WHICH IS INCONSISTENT WITH ANOTHER ENTRY OF THE SAME OR SOME OTHER ITEM IN SUCH STATEMENT; ITA NOS. 214 3 TO 2146/AHD/2015 . A.Y. 2014 -2015 5 (II) IN RESPECT OF RATE OF DEDUCTION OF TAX AT SOUR CE, WHERE SUCH RATE IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT; (2) FOR THE PURPOSES OF PROCESSING OF STATEMENTS UN DER SUB-SECTION (1), THE BOARD MAY MAKE A SCHEME FOR CENTRALISED PROCESSING OF STATEME NTS 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. 7. BY WAY OF FINANCE ACT 2015, AND WITH EFFECT FROM 1ST JUNE 2015, THERE IS AN AMENDMENT IN SECTION 200A AND THIS AMENDMENT, AS ST ATED 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 THE AMOUNT COMPUTED UNDER CLAUSE (B) AND CLAUSE (C) AGAINST ANY AMOUNT PAID UNDER SECTION 200 OR SECTIO N 201 OR SECTION 234E 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 PAYABLE BY, OR THE AMOUNT OF R EFUND 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 SECTION 200A IN RE SPECT THEREOF, AN ADJUSTMENT COULD ALSO BE MADE IN 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 APP EAL BEFORE US IS THE INTIMATION UNDER SECTION 200A 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 ENABLING 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 MANDATE OF SECTION 200A, W HICH, AT THE RELEVANT POINT OF TIME, PERMITTED COMPUTATION OF AMOUNT RECOVERABLE FROM, O R PAYABLE TO, THE TAX DEDUCTOR AFTER MAKING THE FOLLOWING ADJUSTMENTS: (A). AFTER MAKING ADJUSTMENT ON ACCOUNT OF ARITHME TICAL ERRORS AND INCORRECT CLAIMS APPARENT FROM ANY INFORMATION IN THE STATEMENT - SECTION 200A(1)(A) ITA NOS. 214 3 TO 2146/AHD/2015 . A.Y. 2014 -2015 6 (B) AFTER MAKING ADJUSTMENT FOR INTEREST, IF ANY, COMPUTED ON THE BASIS OF SUMS DEDUCTIBLE AS COMPUTED IN THE STATEMENT. - SECTION 200A(1)(B) 9. NO OTHER ADJUSTMENTS IN THE AMOUNT REFUNDABLE T O, OR RECOVERABLE FROM, THE TAX DEDUCTOR, WERE PERMISSIBLE IN ACCORDANCE WITH THE L AW 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 INDE ED BEYOND THE SCOPE OF PERMISSIBLE ADJUSTMENTS CONTEMPLATED UNDER SECTION 200A. THIS I NTIMATION IS AN APPEALABLE ORDER UNDER SECTION 246A(A), AND, THEREFORE, THE CIT(A) O UGHT TO HAVE EXAMINED 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 TH E LEVY OF FEES ON THE BASIS OF THE PROVISIONS OF SECTION 234E. THAT IS NOT THE ISSUE H ERE. THE ISSUE IS WHETHER SUCH A LEVY COULD BE EFFECTED IN THE COURSE OF INTIMATION UNDER SECTION 200A. THE ANSWER IS CLEARLY IN NEGATIVE. NO OTHER PROVISION ENABLING A DEMAND IN R ESPECT OF THIS LEVY HAS BEEN POINTED OUT TO US AND IT IS THUS AN ADMITTED POSITION THAT IN THE ABSENCE OF THE ENABLING PROVISION UNDER SECTION 200A, NO SUCH LEVY COULD BE EFFECTED. AS INTIMATION UNDER SECTION 200A, RAISING A DEMAND OR DIRECTING A REFUND TO THE TAX D EDUCTOR, CAN ONLY BE PASSED WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR WITHIN WHIC H THE RELATED TDS STATEMENT IS FILED, AND AS THE RELATED TDS STATEMENT WAS FILED ON 19TH FEBRUARY 2014, SUCH A LEVY 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 MIND ENTIRETY OF THE CASE, THE IMPUGNED LEVY OF FEES UNDER SECTION 234 E IS UNSUSTAINABLE IN LAW. WE, THEREFORE, UPHOLD THE GRI EVANCE OF THE ASSESSEE AND DELETE THE IMPUGNED LEVY OF FEE UNDER SECTION 234E OF THE ACT. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 7. THERE IS NO DISPARITY ON FACTS, RESPECTFULLY FOLLOW ING THE ORDER OF ITAT, AMRITSAR. WE ALLOW THESE ALL APPEALS AND DELETE THE LATE FEE CHARGED FROM THE ASSESSEE U/S. 234E OF THE ACT. ORDER PRONOUNCED IN OPEN COURT ON 14 - 10 - 2015. SD/- SD/- (MANISH BORAD) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD DATED: TRUE COPY