M/s. Transpose Solutions (India) Private Limited, Bengaluru V. Additional Commissioner Of Income Tax, CPC, TDS, Bengaluru

ITA 2200/BANG/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1881 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-02-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 10-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PREETHI PATEL
• Keywords: TDS; Set aside
• Section: 234B; 234E; 200A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI. B.R BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NOS.2200 TO 2202/BANG/2019 ASSESSMENT YEAR : 2013-14 TO 2015-16 M/S TRANSPOSE SOLUTIONS (INDIA), NO.22, 2 ND FLOOR, CENTRAL STREET, 5 TH BLOCK, KUMARA PARK WEST, BENGA,LURU-560 020. PAN AADCT 7981 K VS. THE ADDL. COMMISSIONER OF INCOME-TAX, CPC, TDS, BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SMT. PREETHI PATEL, ADVOCATE REVENUE BY : SHRI KANNAN NARAYANAN, JCIT (DR) DATE OF HEARING : 15-02-2021 DATE OF PRONOUNCEMENT : 08-03-2021 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEALS HAS BEEN FILED BY ASSESSE E AGAINST COMMON ORDER DATED 25/07/2019 PASSED BY LD.CIT(A)- 9, BANGALORE FOR ASSESSMENT YEARS 2013-14 TO 2015-16. THE ISSUE PAGE 2 OF 6 ITA NO.2200 2202/BANG/2019 THAT ARISES OUT OF THE PRESENT APPEAL IS CHALLENGIN G THE LATE FEE LEVIED UNDER SECTION 234E OF THE ACT, FOR DELAY IN FURNISHING THE TAX DEDUCTED AT SOURCE STATEMENT. 2. THE LD.AR SUBMITTED THAT THERE WAS VARIOUS ISSUE S THAT ASSESSEE HAD TO FACE THEREBY CAUSING FINANCIAL DIST RESS. ASSESSEE THEREFORE DELAYED IN CLEARING THE DUES. IT WAS SUBM ITTED THAT ASSESSEE WAS NOT HAVING SUFFICIENT INCOME TO SUSTAI N ITS BUSINESS DURING THE RELEVANT PERIOD DUE TO CASH CRISIS. IT H AS BEEN SUBMITTED THAT SECTION 200A WAS AMENDED INCORPORATI NG LEVY OF FEE UNDER SECTION 234E IN CLAUSE ( C) READ WITH SEC TION 200 A (1) OF THE ACT VIDE FINANCE ACT NO.2, 2015 ,W.E.F. 01/0 6/2015. IT WAS SUBMITTED THAT, THE RELEVANT ASSESSMENT YEARS ARE P RIOR TO THE DATE OF AMENDMENT IN SECTION 234E OF THE ACT READ W ITH SECTION 200A(1) IS NOT APPLICABLE. 3. ON THE CONTRARY THE LD.SR.DR SUBMITTED THAT ASSE SSEE HAS MADE THE TDS PAYMENTS AFTER THE DATE OF INSERTION O F THE RELEVANT PROVISION IN THE STATUTE AND THEREFORE SUPPORTED TH E ORDERS PASSED BY AUTHORITIES BELOW. 4. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN LIGHT OF RECORDS PLACED BEFORE US. 5. ADMITTEDLY, THE LEVY OF LATE FEES UNDER SECTION 234E HAS BEEN EXERCISED UNDER SECTION 200A FOR PERIOD PRIOR TO 01/06/2015. WE NOTE THAT THE AMENDMENT TO SECTION 2 00A OF THE ACT CAME INTO EFFECT FROM 01/06/2015 AND IS HELD TO BE PROSPECTIVE IN NATURE AND THEREFORE NO COMPUTATION OF FEE FOR THE DEMAND OR INTIMATION FOR FEE UNDER SECTION 234 E CO ULD BE MADE PAGE 3 OF 6 ITA NO.2200 2202/BANG/2019 FOR LATE DEPOSIT OF TDS FOR THE ASSESSMENT YEARS PR IOR TO 01/06/2015. THIS VIEW IS SUPPORTED BY THE DECISION OF HONBLE KARNATAKA HIGH COURT IN CASE OF FATHERAJ SINGHVI & ORS VS UOI REPORTED IN (2016) 142 DTR JUDGEMENTS 281 . HONBLE COURT HELD AS UNDER: '23. IN VIEW OF THE AFORESAID OBSERVATION AND DISC USSION, SINCE THE IMPUGNED INTIMATION GIVEN BY THE RESPONDENT-DEPARTM ENT AGAINST ALL THE APPELLANTS UNDER SECTION 200A ARE SO FAR AS THEY AR E FOR THE PERIOD PRIOR TO 1.6.2015 CAN BE SAID AS WITHOUT ANY AUTHORITY UN DER LAW. HENCE, THE SAME CAN BE SAID AS ILLEGAL AND INVALID. 24. IF THE FACTS OF THE PRESENT CASES ARE EXAMINED IN LIGHT OF THE AFORESAID OBSERVATION AND DISCUSSION, IT APPEARS THAT IN ALL MATTERS, THE INTIMATION GIVEN IN PURPORTED EXERCISE OF POWER UNDER SECTION 200A ARE IN RESPECT OF FEES UNDER SECTION 234E FOR THE PERIOD PRIOR TO 1.6 .2015. AS SUCH, IT IS ON ACCOUNT OF THE INTIMATION GIVEN MAKING DEMAND OF TH E FEES IN PURPORTED EXERCISE OF POWER UNDER SECTION 200A, THE SAME HAS NECESSITATED THE APPELLANT-ORIGINAL PETITIONER TO CHALLENGE THE VALI DITY OF SECTION 234E OF THE ACT. IN VIEW OF THE REASONS RECORDED BY US HEREINAB OVE, WHEN THE AMENDMENT MADE UNDER SECTION 200A OF THE ACT WHICH HAS COME INTO EFFECT ON 1.6.2015 IS HELD TO BE HAVING PROSPECTIVE EFFECT, NO COMPUTATION OF FEE FOR THE DEMAND OR THE INTIMATION FOR THE FEE UNDER SECTION 234E COULD BE MADE FOR THE TDS DEDUCTED FOR THE RESPECTI VE ASSESSMENT YEAR PRIOR TO 1.6.2015. HENCE, THE DEMAND NOTICES UNDER STION200A BY THE RESPONDENT-AUTHORITY FOR INTIMATION FOR PAYMENT OF FEE UNDER SECTION 234E CAN BE SAID AS WITHOUT ANY AUTHORITY OF LAW AND THE SAME ARE QUASHED AND SET ASIDE TO THAT EXTENT. 25. AS SUCH, AS RECORDED EARLIER, IT IS ON ACCOUNT OF THE INTIMATION RECEIVED UNDER SECTION 200A FOR MAKING COMPUTATION AND DEMAN D OF FEES UNDER SECTION 234E, THE SAME HAS NECESSITATED THE APPELLA NT TO CHALLENGE THE CONSTITUTIONAL VALIDITY OF SECTION 234E. WHEN THE I NTIMATION OF THE DEMAND NOTICES UNDER SECTION 200A IS HELD TO BE WITHOUT AUTHORITY OF LAW SO FAR AS IT RELATES TO COMPUTATION AND DEMAND OF FEE UNDER SECTION 234E, W E FIND THAT THE QUESTION OF FURTHER SCRUTINY FOR TESTING THE CONSTI TUTIONAL VALIDITY OF SECTION 234E WOULD BE RENDERED AS AN ACADEMIC EXERCISE BECA USE THERE WOULD NOT BE ANY CAUSE ON THE PART OF THE PETITIONERS TO CONTINUE TO MAINTAIN THE CHALLENGE TO CONSTITUTIONAL VALIDITY UNDER SECTION 234E OF THE ACT. AT THIS STAGE, WE MAY ALSO RECORD THAT THE LEARNED COUNSELS APPEARING FOR THE APPELLANT HAD ALSO DECLARED THAT IF THE IMPUGNED NO TICES UNDER SECTION 200A ARE SET ASIDE, SO FAR AS IT RELATES TO COMPUTA TION AND INTIMATION FOR PAYMENT OF FEE UNDER SECTION 234E, THE APPELLANT-PE TITIONERS WOULD NOT PAGE 4 OF 6 ITA NO.2200 2202/BANG/2019 PRESS THE CHALLENGE TO THE CONSTITUTIONAL VALIDITY OF SECTION 234E OF THE ACT. BUT, THEY SUBMITTED THAT THE QUESTION OF CONST ITUTIONAL VALIDITY OF SECTION 234E MAY BE KEPT OPEN TO BE CONSIDERED BY T HE DIVISION BENCH AND THE JUDGMENT OF THE LEARNED SINGLE JUDGE MAY NO T CONCLUDE THE CONSTITUTIONAL VALIDITY OF SECTION 234E OF THE ACT. 26. UNDER THESE CIRCUMSTANCES, WE FIND THAT NO FURT HER DISCUSSION WOULD BE REQUIRED FOR EXAMINING THE CONSTITUTIONAL VALIDI TY OF SECTION 234E OF THE ACT. SAVE AND EXCEPT TO OBSERVE THAT THE QUESTION O F CONSTITUTIONAL VALIDITY OF SECTION 234E OF THE ACT BEFORE THE DIVISION BENC H OF THIS COURT SHALL REMAIN OPEN AND SHALL NOT BE TREATED AS CONCLUDED. 27. IN VIEW OF THE AFORESAID OBSERVATIONS AND DISCU SSION, THE IMPUGNED NOTICES UNDER SECTION 200A OF THE ACT FOR COMPUTATI ON 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 I S CLARIFIED THAT THE PRESENT JUDGMENT WOULD NOT BE INTERPRETED TO MEAN T HAT EVEN IF THE PAYMENT OF THE FEES UNDER SECTION 234E ALREADY MADE AS PER DEMAND/ INTIMATION UNDER SECTION 200A OF THE ACT FOR THE TD S 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 FUR THER OBSERVED THAT THE QUESTION OF CONSTITUTIONAL VALIDITY OF SECTION 234E SHALL REMAIN OPEN TO BE CONSIDERED BY THE DIVISION BENCH AND SHALL NOT GET CONCLUDED BY THE ORDER OF THE LEARNED SINGLE JUDGE. 28. THE APPEALS ARE PARTLY ALLOWED TO THE AFORESAID EXTENT. CONSIDERING THE FACTS AND CIRCUMSTANCES, NO ORDER AS TO COSTS'. 6. RESPECTFULLY FOLLOWING THE SAME, WE ARE OF THE O PINION THAT, LATE FEE UNDER SECTION 234B CANNOT BE LEVIED FOR A PERIOD UP TO 01/06/2015. IN THE PRESENT YEARS UNDER CONSIDERATIO N, INTEREST U/S 234B IS NOT LEVIABLE FOR ASST. YEAR 2013-14 & 2 014-15. HOWEVER FOR ASST. YEAR 2015-16 THE AMENDED PROVISIO NS WOULD BE APPLICABLE. IN RESPECT OF ASST. YEAR 2015-16, NO I NTEREST WOULD BE CHARGEABLE FOR THE FIRST QUARTER. WE THEREFORE DIRECT LD.AO TO DELETE THE ADDITION MA DE UNDER SECTION 234B OF THE ACT IN THE HANDS OF ASSESSEE FO R THE RELEVANT ASSESSMENT YEARS UNDER CONSIDERATION. PAGE 5 OF 6 ITA NO.2200 2202/BANG/2019 ACCORDINGLY GROUNDS RAISED BY ASSESSEE STANDS ALLOW ED FOR ASSESSMENT YEARS 2013-14 & 2014-15 AND ASST. YEAR 2 015-16 STANDS PARTY ALLOWED. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOW ED FOR ALL YEARS UNDER CONSIDERATION. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH MARCH, 2021 SD/- SD/- (B.R BASKARAN) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE, DATED, THE 8 TH MARCH, 2021. /VMS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE PAGE 6 OF 6 ITA NO.2200 2202/BANG/2019 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -3-2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -3-2021 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -3-2021 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -3-2021 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -3-2021 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -3-2021 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -3-2021 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS