Elite Engineering & Construction (Hyd) Private Limited, Hyderabad V. Income Tax Officer, Ward-1(2), Hyderabad

ITA 2165/Hyd/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1387 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-11-2018
• Assessment Year: 2015-2016
• Appeal Filed On: 15-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: M. CHANDRAMOULESWARA RAO
• Keywords: Principle of natural justice; TDS; Set aside
• Section: 234E; 200A; 201; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER S. NO. ITA NO. AY APPELLANT RESPONDENT 1 TO 5 2155 TO 2159/H/17 2013 - 14 ELITE ENGINEERING AND CONSTRUCTION (HYD.) PVT. LTD., HYDERABAD INCOME - TAX OFFICER, WARD 1 ( 2 ), HYDERABAD 6 T O 9 2160 TO 2163/H/17 2014 - 15 - DO - - DO - 10 TO 13 2164 TO 2167/H/17 2015 - 16 - DO - - DO - ASSESSEE BY : SHRI M. CHANDRAMOULESWARA RAO REVENUE BY : S HRI NILANJAN DEY DATE OF HEARING : 2 6 / 1 1 /2018 DATE OF PRONOUNCEMENT : 29 / 1 1 / 201 8 O R D E R PER BENCH : ALL THESE APPEALS FILED BY DIFFERENT ASSESSEES ARE DIRECTED AGAINST THE ORDERS OF CIT(A) 8 , HYDERABAD, ALL DATED, 31 /0 8 /2017 FOR AY S 201 3 - 14 TO 2015 - 16 . AS IDENTICAL ISSUE IS INVOLVED IN THESE APPEALS, THE SAME WERE CLUBBED AND HEARD TOGETHER AND, THEREFORE, A COMMON ORDER IS PASSED FOR THE SAKE OF CONVENIENCE. 2. BRIEF FACTS OF THE CASE ARE, THE ASSESSEE COMPANY FILED ITS STATEMENTS IN FORM NO. 24Q FOR VARIOUS QUARTERS IN F YS 2012 - 13 TO 2014 - 15 RELEVANT TO AYS 2013 - 14 TO 2015 - 16. ON VERIFICATION OF THESE STATEMENTS, THE ACIT, CPC TDS NOTICED THAT THE ASSESSEE FILED ALL THESE STATEMENTS, BELATEDLY AND HENCE, RAISED A DEMAND IN ALL THE SAID FYS ON ACCOUNT OF LATE FILING LEVY U /S 234E BY ISSUING INTIMATIONS U/S 200A. 2 ITA NO. 2155 /HYD/1 7 AND OTHERS ELITE ENGG. AND CONSTRUCTION (HYD) PVT. LTD. , HYD. 3. AGAINST THE SAID ACTION OF ACIT CPC TDS, ASSESSEE PREFERRED APPEALS BEFORE THE CIT(A) RAISING A GROUND THAT THE PROVISIONS TO INCLUDE LATE FEE U/S 234E IN INTIMATION U/S 200A IS NOT PERMISSIBLE UNDER LAW AND CONSEQUENTLY SUCH LEVY IS UNSUSTAINABLE IN LAW AND HENCE THE LEVY IS LIABLE TO BE DELETED. 4. BEFORE THE CIT(A), THE AR OF THE ASSESSEE CONTENDED THAT THE PROVISIONS TO INCLUDE LATE FEE U/S 234E IN THE INTIMATION U/S 200A OF THE ACT CAME INTO EFFECT ONLY THROUGH THE FINANCE ACT, 2015 W.E.F. 01/06/2015 AND, HENCE, PRIOR TO 01/06/2015 SUCH INCLUSION OF LATE FEE U/S 234E IN THE INTIMATION U/S 200A IS NOT PERMISSIBLE UNDER THE LAW. FOR THIS CONTENTION, HE RELIED ON VARIOUS CASE LAW, WHICH WERE EXTRACTED BY THE CIT(A) AT PAGE 2 OF HIS ORDER. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) RELYING ON THE JUDGEMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF RAJESH KOURANI VS. UOI, [2017] 83 TAXMANN.COM 137 CONFIRMED THE LATE FILING LEVY U/S 234E BY THE ACIT CPOC TDS. 6. AGGRIEVED BY THE ORDERS OF CIT(A), THE ASSESSEE PREFERRED APPEALS BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL, WHICH ARE COMMON IN ALL THE APPEALS UNDER CONSIDERATION, EXCEPT THE QUANTUM OF LEVY: 1. THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - 8 IS BAD IN LAW AND AGAINST ALL CANNONS OF EQUITY AND NATURAL JUSTICE. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER ERRED IN CONFIRMING THE DEMAND OF RS.43,320/ - ( I.E. 200/ - PER DAY) REPRESENTING 'LATE FILING LEVY' U/S 234E RAISED BY THE ACIT, CPC TDS. 3. ANY OTHER GROUND OF APPEAL THAT MAY BE URGED AT THE TIME O F HEARING. 7. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE 3 ITA NO. 2155 /HYD/1 7 AND OTHERS ELITE ENGG. AND CONSTRUCTION (HYD) PVT. LTD. , HYD. THE COORDINATE BENCH OF THIS TRIBUNAL IN TH E CASE OF M/S TERRA INFRA DEVELOPMENT LTD., HYDERABAD IN ITA NOS. 1876 & 1875/HYD/2017 FOR AYS 2013 - 14 AND 2014 - 15, ORDER DATED 03/10/2018 (WHEREIN BOTH THE MEMBERS ARE PARTY), WHEREIN THE COORDINATE BENCH HAS HELD AS UNDER: 4. WE FIND THAT THOUGH THE PROV ISIONS FOR LEVY OF FEE IN CERTAIN CASES HAS BEEN BROUGHT INTO THE STATUTE BOOK W.E.F. 1.7.2012, IT HAS BEEN BROUGHT UNDER THE PURVIEW OF SECTION 200A ONLY W.E.F. 1.6.2015. THEREFORE, AS RIGHTLY HELD BY THE COORDINATE BENCH IN THE CASE OF M/S. SONALAC PAINTINGS & COATINGS LTD (CITED SUPRA) WE HOLD THAT THE INTEREST U/S 234E CANNOT BE LEVIED IN RESPEC T OF TDS RETURNS FILED PRIOR TO 1.6.2015. FOR THE SAKE OF READY REFERENCE, THE RELEVANT PARA IS REPRODUCED HEREUNDER: '10. NOW COMING TO THE MERITS OF THE CASE, WE FIND FORCE IN THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT PRIOR TO 01.06.2015, THERE WAS NO MANDATE, AS PER THE STATUTE, TO MAKE ANY ADJUSTMENT ON ACCOUNT OF LEVY OF FEES U/S 234E WHILE PROCESSING TDS RETURNS U/S 200A. WE HAVE TAKEN NOTE OF THE ORDER OF THE HON'BLE GUJARAT HIGH COURT HOLDING THE AMENDMENT MADE TO SECTION 200A W.E.F. 01.06.2015, GIVING POWER TO MAKE ADJUSTMENT ON ACCOUNT OF FEES U/S 234E WHILE PROCESSING RETUR NS U/S 200A TO BE RETROSPECTIVE IN NATURE, STATING THAT THIS POWER GIVEN TO THE AO IS A MACHINERY PROVISION WHILE THE SUBSTANTIVE PROVISION OF THE POWER TO LEVY FEES U/S 234E WAS ALWAYS THERE ON THE STATUTE FROM 01.06.2012. BUT AT THE SAME TIME, WE NOTE TH AT THE HON'BLE KARNATAKA HIGH COURT HELD THAT LEVY OF FEES U/S 234E WHILE PROCESSING RETURNS, TDS U/S 200A PRIOR TO 01.06.2015 WAS WITHOUT ANY AUTHORITY OF LAW. WITH TWO DIVERGENT VIEW OF THE HON'BLE HIGH COURTS ON THE ISSUE AND IN THE ABSENCE OF ANY DECIS ION BY THE JURISDICTIONAL HIGH COURT, WE CONCUR WITH THE LEARNED COUNSEL FOR THE ASSESSEE THAT AS PER THE WELL ACCEPTED RULE OF CONSTRUCTION, IF TWO REASONABLE CONSTRUCTIONS OF A STATUTE ARE POSSIBLE THE CONSTRUCTION WHICH FAVOURS THE ASSESSEE MUST BE ADOP TED. IN VIEW OF THE SAME, RESPECTFULLY FOLLOWING THE DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF FATHERAJ SINGHVI (SUPRA), WE HOLD THAT THE FEES LEVIED IN ALL THE PRESENT CASES U/S 234E PRIOR TO 01.06.2015 IN THE INTIMATIONS MADE U/S 200A WAS WITHO UT AUTHORITY OF LAW AND THE SAME IS THEREFORE, DIRECTED TO BE DELETED. IN VIEW OF THE ABOVE, ALL THE APPEALS OF THE ASSESSEE STAND ALLOWED'. 5. RESPECTFULLY FOLLOWING THE SAME, ASSESSEE'S APPEALS FOR BOTH THE A.YS ARE ALLOWED. 4 ITA NO. 2155 /HYD/1 7 AND OTHERS ELITE ENGG. AND CONSTRUCTION (HYD) PVT. LTD. , HYD. 7.1 IN THE CASE UNDER CONSIDERATION, ON PERUSAL OF RECORD, WE FIND THAT THE TDS RETURNS FILED BY THE ASSESSEE FOR THE RELEVANT PERIOD I.E., FYS 2012 - 13 TO 2014 - 15 WERE PRIOR TO 01/06/2015. THEREFORE, RESPECTFULLY FOLLOWING THE SAID DECISION OF THE COORDINATE B ENCH, WE SET ASIDE THE ORDERS OF CIT(A) AND DIRECT THE ACIT CPC TDS TO DELETE THE FEES LEVIED U/S 234E. ACCORDINGLY, THE GROUND RAISED ON THIS ISSUE IN ALL THE APPEALS UNDER CONSIDERATION ARE ALLOWED. 8. IN THE RESULT, ALL APPEALS UNDER CONSIDERATION, AR E ALLOWED. PRONOUNCED IN THE OPEN COURT ON 29 TH NOVEMBER , 2018 . SD/ - SD/ - ( P. MADHAVI DEVI ) (S . RIFAUR RAHMAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 29 TH NOVEMBER , 2018 KV C OPY TO: - 1) ELITE ENGINEERING AND CONSTRUCTION (HYD) PVT. LTD., NO. 19, VEDAS PRIME HOUSE, JAYABHERI ENCLAVE, GACHIBOWLI, HYDERABAD 032. 2) IT O , WARD 1 ( 2 ) , IT TOWERS, HYDERABAD. 3 ) CIT(A) 8 , HYDERABAD. 4 ) CIT (TDS) , HYD. 5 ) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6 ) GUARD FILE