Siddhi Vinayak Developers, Ahmedabad V. The Dy.CIT, CPC, TDS, Gaziabad

ITA 2321/AHD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94528 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 05-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FS B VS DCIT CPC TDS GHAZIABAD
• Assessee Lawyers: S V AGRAWAL SMT SMITI SAMANT
• Section: 6

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.2321 AND 2322/AHD/2015 / ASSTT. YEAR: 2013-2014 AND 2014-15 SIDDHI VINAYAK DEVELOPERS GANESH PLAZA NR. CITYPOINT RESTAURANT NR. AJIT MILL GROUND AHMEDABAD 380 021. PAN : ABYFS 8240 B VS DCIT, CPC, TDS GHAZIABAD 201 010. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S.V. AGRAWAL REVENUE BY : SMT.SMITI SAMANT, SR.DR ! / DATE OF HEARING : 22/09/2015 '#$ ! / DATE OF PRONOUNCEMENT: 14 /10/2015 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE PRESENT TWO APPEALS ARE DIRECTED AT THE INSTAN CE OF THE ASSESSEE AGAINST COMMON ORDER OF THE LD.CIT(A)-8 DA TED 21.5.2015 PASSED FOR THE ASSTT.YEAR AND 2013-14 AND 2014-15. THE LD.FIRST APPELLATE AUTHORITY HAS DISPOSED OF THREE APPEALS O F THE ASSESSEE VIDE IMPUGNED ORDER. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WA S SUPPOSED TO SUBMIT TDS RETURN WITHIN THE TIME. INCOME TAX DEPA RTMENT HAS PROCESSED TDS RETURN UNDER SECTION 200A OF THE INCO ME TAX ACT, 1961. THE DEPARTMENT HAS INTIMATED TO THE ASSESSEE THAT I N F.Y. 2012-13, THE RETURN FILED BY THE ASSESSEE FOR THE QUARTER-3 WAS TIME BARRED, AND ITA NO.2321/AHD/2015 (2 APPEALS) 2 THEREFORE, IT IS REQUIRED TO PAY A PENALTY UNDER SE CTION 234E OF THE INCOME TAX ACT. THE PENALTY OF RS.3,115/- WAS IMPO SED UPON THE ASSESSEE. THIS ORDER WAS PASSED ON 9.11.2013. IT WAS INTIMATED TO THE ASSESSEE. THIS ORDER WAS CHALLENGED BY THE ASSESSE E IN APPEAL NO.172 BEFORE THE CIT(A), WHICH HAS ALSO BEEN DISPOSED WIT H THE IMPUGNED ORDER. SIMILARLY, THE TDS RETURN OF THE ASSESSEE F OR THE QUARTER-4 IN THE F.Y.2013-14 WAS FOUND TO BE TIME BARRED, WHILE PROC ESSING ITS RETURN UNDER SECTION 200A. THE DCIT, CPC, TDS HAS INTIMAT ED THE ASSESSEE ABOUT THE LATE FILING FEE OF RS.9800/- REQUIRED TO BE PAID BY THE ASSESSEE UNDER SECTION 234E OF THE INCOME TAX ACT. 3. DISSATISFIED WITH THIS DEMAND, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 4. THE LD. COUNSEL FOR THE ASSESSEE, AT THE VERY OU TSET, SUBMITTED THAT THE ITAT, AMRISTAR BENCH HAS CONSIDERED THIS I SSUE IN ITA NO.90/ASR/2015 AND HELD THAT SECTION 200A DOES NOT AUTHORIZE THE AO TO MAKE ADJUSTMENT AS CONTEMPLATED UNDER SECTION 23 4E AND ASKED THE ASSESSEE TO MAKE PAYMENT OF LATE FEE. HE FURTHER C ONTENDED THAT THIS ORDER HAS BEEN FOLLOWED BY THE ITAT, AHMEDABAD BENC H IN ITA NO.3271/AHD/2014. THEREFORE, THE APPEALS OF THE AS SESSEE DESERVE TO BE ALLOWED. 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. THE ITAT, AMRISTAR BENCH HAS MAD E ELABORATE DISCUSSION ON THIS ISSUE. THE FINDING HAS BEEN REP RODUCED IN THE CASE OF INDIAN OVERSEAS BANK VS. DCIT, GHAZIABAD RENDERED I N ITA NO.3271/AHD/2014. IT READS AS UNDER: 5. I FIND THAT THE ISSUE IN APPEAL IS NOW SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT AMRI TSAR BENCH IN THE CASE OF SIBIA HEALTHCARE PRIVATE LIMITED VS. DC IT - ITA NO.90/ASR/2015, VIDE ORDER DATED 9TH JUNE, 2015, WH EREIN THE DIVISION BENCH HAS INTER ALIA OBSERVED AS UNDER :- ITA NO.2321/AHD/2015 (2 APPEALS) 3 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 APPLICABLE LEGAL POSITION. IN ADDI TION 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 UNION OF IND IA [WP (C) 31498/2013(J)], HONBLE KARANATAKA HIGH COURT I N THE 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 INDIA [WP NO. 1981 OF 2014] AND OF HONBLE BOMBAY HIGH COURT IN THE CA SE OF RASHMIKANT KUNDALIA VS UNION OF INDIA [WP NO. 771 O F 2014], GRANTING STAY ON THE DEMANDS RAISED IN RESPE CT OF FEES UNDER SECTION 234E. THE FULL TEXT OF THESE DEC ISIONS WERE NOT PRODUCED BEFORE US. HOWEVER, AS ADMITTEDLY THERE ARE NO ORDERS FROM THE HONBLE COURTS ABOVE RETRAIN ING US FROM OUR ADJUDICATION ON MERITS IN RESPECT OF THE I SSUES IN THIS APPEAL, AND AS, IN OUR HUMBLE UNDERSTANDING, T HIS 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 S TATUTORY 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 TIME PRESCRIBED IN SUB-SECTION (3) OF SE CTION 200 OR THE PROVISO TO SUBSECTION (3) OF SECTION 206C, H E 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 COLLECTI BLE, AS THE CASE MAY BE. (3) THE AMOUNT OF FEE REFERRED TO IN SUB-SECTION (1 ) SHALL BE PAID BEFORE DELIVERING OR CAUSING TO BE DELIVERED A STATEMENT IN ACCORDANCE WITH SUB-SECTION (3) OF SEC TION 200 OR THE PROVISO TO SUB-SECTION (3) OF SECTION 206C. ITA NO.2321/AHD/2015 (2 APPEALS) 4 (4) THE PROVISIONS OF THIS SECTION SHALL APPLY TO A STATEMENT REFERRED TO IN SUB-SECTION (3) OF SECTION 200 OR TH E PROVISO TO SUB-SECTION (3) OF SECTION 206C WHICH IS TO BE D ELIVERED OR CAUSED TO BE DELIVERED FOR TAX DEDUCTED AT SOURC E 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 1 ST APRIL 2010. THIS STATUTORY PROVISION, AS IT STOOD AT THE RELEVA NT 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 REFERRED TO IN THIS SECTION AS DEDUCTOR) UNDER SECTION 200, SUCH STATEMENT SHALL BE PROCESSED IN THE FOLLO WING 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 AM OUNT COMPUTED UNDER CLAUSE (B) AGAINST ANY AMOUNT PAID U NDER SECTION 200 AND SECTION 201, AND ANY AMOUNT 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 PAYABL E BY, OR THE AMOUNT OF REFUND 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: ITA NO.2321/AHD/2015 (2 APPEALS) 5 PROVIDED THAT NO INTIMATION UNDER THIS SUB-SECTION SHALL BE SENT AFTER THE EXPIRY OF ONE YEAR FROM THE END OF THE FI NANCIAL YEAR IN WHICH THE STATEMENT IS FILED. EXPLANATION : FOR THE PURPOSES OF THIS SUB-SECTION, 'AN INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN THE STATEMEN T' SHALL MEAN A CLAIM, 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; (II) IN RESPECT OF RATE OF DEDUCTION OF TAX AT SOUR CE, WHERE SUCH RATE IS NOT IN ACCORDANCE WITH THE PROVISIONS OF TH IS ACT; (2) FOR THE PURPOSES OF PROCESSING OF STATEMENTS UN DER SUB- SECTION (1), THE BOARD MAY MAKE A SCHEME FOR CENTRA LISED PROCESSING OF STATEMENTS 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 THI S AMENDMENT, AS STATED 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 1ST 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 TH E AMOUNT COMPUTED UNDER CLAUSE (B) AND CLAUSE (C) AGAINST AN Y AMOUNT PAID UNDER SECTION 200 OR SECTION 201 OR SECTION 23 4E 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 PAYABL E BY, OR THE AMOUNT OF REFUND 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 INTIM ATION UNDER ITA NO.2321/AHD/2015 (2 APPEALS) 6 SECTION 200A IN RESPECT THEREOF, AN ADJUSTMENT COUL D ALSO BE MADE IN RESPECT OF THE FEE, IF ANY, SHALL BE COMPU TED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 234E. TH ERE IS NO DISPUTE THAT WHAT IS IMPUGNED IN APPEAL BEFORE US I S THE INTIMATION UNDER SECTION 200A OF THE ACT, AS STATED IN SO MANY WORDS IN THE IMPUGNED INTIMATION ITSELF, AND, AS TH E LAW STOOD, PRIOR TO 1ST JUNE 2015, THERE WAS NO ENABLING PROVI SION THEREIN FOR RAISING A DEMAND IN RESPECT OF LEVY OF FEES UNDER S ECTION 234E. WHILE EXAMINING THE CORRECTNESS OF THE INTIMATION U NDER SECTION 200A, WE HAVE TO BE GUIDED BY THE LIMITED MANDATE O F SECTION 200A, WHICH, AT THE RELEVANT POINT OF TIME, PERMITT ED COMPUTATION OF AMOUNT RECOVERABLE FROM, OR 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) (B). AFTER MAKING ADJUSTMENT FOR INTEREST, IF ANY, COMPUTED ON THE BASIS OF SUMS DEDUCTIBLE AS COMPUTED IN THE STA TEMENT. - SECTION 200A(1)(B) 9. NO OTHER ADJUSTMENTS IN THE AMOUNT REFUNDABLE T O, OR RECOVERABLE FROM, THE TAX DEDUCTOR, WERE PERMISSIBL E IN ACCORDANCE WITH THE LAW 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 SEC TION 234E WAS INDEED BEYOND THE SCOPE OF PERMISSIBLE ADJUSTMENTS CONTEMPLATED UNDER SECTION 200A. THIS INTIMATION IS AN APPEALABLE ORDER UNDER SECTION 246A(A), AND, THEREFORE, THE CI T(A) OUGHT 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 THE LEVY O F FEES ON THE BASIS OF THE PROVISIONS OF SECTION 234E. THAT IS NO T THE ISSUE HERE. THE ISSUE IS WHETHER SUCH A LEVY COULD BE EFFECTED IN THE COURSE OF INTIMATION UNDER SECTION 200A. THE ANSWER IS CLEARL Y IN NEGATIVE. NO OTHER PROVISION ENABLING A DEMAND IN RESPECT OF THIS LEVY HAS BEEN POINTED OUT TO US AND IT IS THUS AN ADMITTED P OSITION 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 DEDUCTOR, C AN ONLY BE PASSED WITHIN ONE YEAR FROM THE END OF THE FINANCIA L YEAR WITHIN WHICH THE RELATED TDS STATEMENT IS FILED, AND AS TH E RELATED TDS STATEMENT WAS FILED ON 19TH FEBRUARY 2014, SUCH A L EVY COULD ITA NO.2321/AHD/2015 (2 APPEALS) 7 ONLY HAVE BEEN MADE AT BEST WITHIN 31ST MARCH 2015. THAT TIME HAS ALREADY ELAPSED AND THE DEFECT IS THUS NOT CURA BLE EVEN AT THIS STAGE. IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARIN G IN MIND ENTIRETY OF THE CASE, THE IMPUGNED LEVY OF FEES UND ER SECTION 234 E IS UNSUSTAINABLE IN LAW. WE, THEREFORE, UPHOLD TH E GRIEVANCE OF THE ASSESSEE AND DELETE THE IMPUGNED LEVY OF FEE UN DER SECTION 234E OF THE ACT. THE ASSESSEE GETS THE RELIEF ACCOR DINGLY. 6. WHEN THE ABOVE JUDICIAL PRECEDENT WAS BROUGHT TO THE NOTICE OF THE LD. DEPARTMENTAL REPRESENTATIVE, HE D ID NOT HAVE MUCH TO SAY EXCEPT TO PLACE HIS RELIANCE ON THE ORD ERS OF THE AUTHORITIES BELOW. HE FAIRLY DID NOT DISPUTE THAT THE PROVISIONS ACCEPTING LEVY OF LATE FILING FEES UNDER SECTION 23 4E HAVE INDEED BEEN BROUGHT TO THE STATUTE W.E.F. 1ST JUNE, 2015 A ND THE IMPUGNED ORDER WAS PASSED MUCH BEFORE THAT DATE. 7. IN VIEW OF THE ABOVE DISCUSSIONS AND BEARING IN MIND ENTIRETY OF THE CASE, I HEREBY DELETE THE LEVY OF L ATE FILING FEES UNDER SECTION 234E OF THE ACT BY WAY OF IMPUGNED IN TIMATION ISSUED. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 8. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUN CED IN THE OPEN COURT ON THIS 3RD DAY OF SEPTEMBER, 2015. 6. WE DO NOT FIND ANY DISPARITY ON THE FACTS, THERE FORE, RESPECTFULLY FOLLOWING THE ABOVE, WE ALLOW THE APPEALS OF THE AS SESSEE AND DELETE THE DEMAND RAISED UNDER SECTION 234E OF THE INCOME TAX ACT. 7. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOW ED. ORDER PRONOUNCED IN THE COURT ON 14 TH OCTOBER, 2015 AT AHMEDABAD. SD/- SD- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER