Asan Memorial Association, CHENNAI V. ACIT Centralized Processing Cell TDS, Ghaziabad

ITA 2358/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4011 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 14-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SRINIVASA RAO
• Assessee Lawyers: V S JAYAKUMAR
• Keywords: TDS
• Section: 201(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !', $ '% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NOS.2356, 2357 & 2358/CHNY/2018 ' (' / ASSESSMENT YEARS : 2013-14(Q4), 2014-15(Q1) & 201 4-15(Q4) M/S ASAN MEMORIAL ASSOCIATION, NO.12, DR.T.V. ROAD, CHETPET, CHENNAI - 600 031. PAN : AAATA 0256 B V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRALIZED PROCESSING CELL-TDS GHAZIABAD. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI V.S. JAYAKUMAR, ADVOCATE ,-*+ . / / RESPONDENT BY : SHRI M. SRINIVASA RAO, CIT 0 . 1$ / DATE OF HEARING : 21.01.2019 23( . 1$ / DATE OF PRONOUNCEMENT : 06.02.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : ALL THE THREE APPEALS OF THE ASSESSEE ARE DIRECTE D AGAINST THE COMMON ORDER PASSED BY THE COMMISSIONER OF INCO ME TAX (APPEALS) -17, CHENNAI, DATED 28.05.2018 CONFIRMING THE FEE LEVIED BY THE ASSESSING OFFICER UNDER SECTION 234E OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FOR LATE FILING OF QUARTE RLY TDS RETURNS FOR THE FINANCIAL YEARS RELEVANT TO ASSESSMENT YEARS 2013-1 4 TO 2015-16. 2 I.T.A. NOS.2356 TO 2358/CHNY/18 2. WE HEARD SHRI V.S. JAYAKUMAR, THE LD.COUNSEL FOR THE ASSESSEE AND SHRI M. SRINIVASA RAO, THE LD. DEPARTM ENTAL REPRESENTATIVE. DURING THE COURSE OF HEARING, IT W AS BROUGHT TO OUR NOTICE THAT IN RESPECT OF VERY SAME ORDER OF THE CI T(APPEALS) FOR OTHER YEARS, THIS TRIBUNAL BY PLACING RELIANCE ON T HE JUDGMENT OF KARNATAKA HIGH COURT IN FATHERAJ SINGHVI V. UNION O F INDIA (2016) 73 TAXMANN.COM 252, FOUND THAT THERE WAS A CLEAVAGE OF OPINION BETWEEN THE DIFFERENT COURTS OF THE COUNTRY. THERE FORE, REFERRING TO THE JUDGMENT OF APEX COURT IN CIT V. VEGETABLE PROD UCTS LTD. (88 ITR 192), THIS TRIBUNAL FOUND THAT THE DECISION WHI CH IS IN FAVOUR OF THE ASSESSEE HAS TO BE FOLLOWED. IN OTHER WORDS, S INCE THERE WAS CONFLICTING VIEWS EXPRESSED BY THE GUJARAT HIGH COU RT IN RAJESH KAURANI V. UNION OF INDIA (83 TAXMANN.COM 137) AND KARNATAKA HIGH COURT IN FATHERAJ SINGHVI (SUPRA) AND THE DECI SION OF KARNATAKA HIGH COURT IS IN FAVOUR OF THE ASSESSEE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE JUDGMENT OF KARNATA KA HIGH COURT HAS TO BE PREFERRED IN PREFERENCE TO JUDGMENT OF GU JARAT HIGH COURT. IN FACT, THIS TRIBUNAL HAS OBSERVED AS FOLLOWS WHEN THE APPEAL OF THE ASSESSEE CAME BEFORE THIS TRIBUNAL AGAINST THE VERY SAME COMMON ORDER IN I.T.A. NOS.2352 TO 2355/CHNY/2018 DATED 02 .01.2019:- 3 I.T.A. NOS.2356 TO 2358/CHNY/18 7. THE ONLY ISSUE INVOLVED IN THE PRESENT APPEALS IS WHETHER THE FEES U/S.234E CAN BE LEVIED EVEN PRIOR TO INTRODUCTION OF THE SAID PROVISION IN THE STATUTE. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF RAJESH KOURANI (S UPRA) HAS HELD THAT THE PROVISIONS OF SEC.234E CAN BE APPLIED RETROSPECTIVELY EVEN PRIOR TO 01.06.2015. THE COOR DINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SMT.G.INDHIRA NI IN ITA NOS.1019, 1020 & 1021/MDS./2015 DATED 10.07.2015 FO R THE AY 2013-14, HAD DISTINGUISHED THE SAID DECISION BY HOLDING AS UNDER: 11. IN VIEW OF THE ABOVE DISCUSSION, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE A.O HAS EXCEEDED HIS JURISDICTION IN LEVYING FEE UNDER SECTION 234E WHILE PROCESSING THE STATEMENT AND MAKE ADJUSTMENT UNDER SECTION 200A OF THE ACT. THEREFORE, THE IMPUGNED INTIMATION OF THE LOWER AUTHORITIES LEVYING FEE UND ER SECTION 234E OF THE ACT CANNOT BE SUSTAINED IN LAW. HOWEVER, IT IS MADE CLEAR THAT IT IS OPEN TO THE ASSESSING OFFICER TO PASS A SEPARATE ORDER UNDER SECTION 234E OF THE ACT LEVY ING FEE PROVIDED THE LIMITATION FOR SUCH A LEVY HAS NOT EXPIRED. ACCORDINGLY, THE INTIMATION UNDER SECTION 200A AS CONFIRMED BY THE CIT(APPEALS) IN SOFAR AS LEVY OF FEE UNDER SECTION 234E IS SET ASIDE AND FEE LEVIED IS DELETED. HOWEVER, THE OTHER ADJUSTMENT MADE BY THE ASSESSING OFFICER IN THE IMPUGNED INTIMATION SHALL STAND AS SUCH. HERE, WE HAVE TO M ENTION THAT THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF RAJESH KOURANI HA S NOT BEEN CONSIDERED AS IT WAS NOT AVAILABLE AT THAT POINT OF TIME. THE CO-ORDINATE BE NCH OF AGRA BENCH IN THE CASE OF STATE BANK OF INDIA IN ITA NO.03,06, AND 07/AG./2018 FOR ASSESSMENT YEAR 2013-14 DATED 31.05.2018 BY CONSIDERING THE DECISION OF THE HONB LE GUJARAT HIGH COURT IN THE CASE OF RAJESH KOURANI HAS HELD IN PARAS 8 TO 11 AS FOLLOWS :- 8. HEARD THE RIVAL CONTENTION AND PERUSED THE MATERIAL RELEVANT. WE FIND THAT WHILE D ECIDING THE ISSUE AGAINST THE APPELLANT ASSESSEE THE ID. CIT(A) HAS PLACED RELIANCE ON RAJ ESH KAURANI VS. UNION OF INDIA, 83 TAXMANNCOM 137 (GUJ.) WHEREIN IT WAS HELD THAT SECT ION 200A OF THE ACT IS A MACHINERY PROVISION PROVIDING THE MECHANISM FOR PROCESSING A TDS STATEMENT OF DEDUCTION OF TAX AT SOURCE AND FOR MAKING ADJUSTMENT. THE LD. CIT(A) HA S FURTHER HELD THAT THIS DECISION WAS DELIVERED AFTER CONSIDERING NUMEROUS ITAT AND HIGH COURT DECISIONS AND THEREFORE THIS DECISION IN RAJESH KAURANI (SUPRA), HOLDS THE FIE LDS. 9. IT IS SEEN THAT PRIOR 01.06.2015, THERE WAS NO ENABLING PROVISION IN THE ACT U/S 200A FOR RAISING DEMAND IN RESPECT OF LEVY OF FEE U/S 234E OF THE ACT. THE PROVISION OF SECTIO N 234E OF THE ACT IS CHARGING PROVISION I.E. SUBSTANTIVE PROVISION WHICH COULD NOT BE APPLI ED RETROSPECTIVELY, UNLESS IT IS EXPRESSLY PROVIDED IN THE ACT, TO LEVY THE LATE FEE FOR ANY D ELAY IN FILING THE TDS STATEMENT FOR THE PERIOD PRIOR TO 01.06.2015. THE COUNSEL FOR THE ASS ESSEE HAS RIGHTLY CONTENDED THAT IN THE ABSENCE OF ENABLING PROVISIONS U/S 200A OF THE ACT, SUCH LEVY OF LATE FEE IS NOT VALID RELYING ON THE DECISIONS IN THE CASES OF CIT VS. VATIKA TO WNSHIP PVT. LTD. (2014) 367 ITR 466 (SC), SUDARSHAN GOYAL VS DCIT (TDS) ITA NO.442/AG R/2017 AND FATEHRAJ SINGHVI VS. UOI (2016) 289 CTR 0602 (KARN) (HC). THE DECISIONS RELI ED ON BY THE LD. DR ARE DISTINGUISHABLE ON FACTS, AS THE ISSUE INVOLVED IN THOSE CASES PERTAINS TO INTEREST U/S 201(1) AND 201(1A) ON THE AMOUNT OF TDS WHEREAS IN THE PRESENT CASES THE ISSUE WERE PERTAINS TO LIABILITY OF LATE FEE U/S 234E OF THE A CT FOR DELAY IN FILING TDS STATEMENT WHICH WAS INSERTED FROM 01.06.2015. 10. ON SIMILAR FACTS, WE HAVE DECIDED THE SAME ISSUE IN THE ASSESSEES OWN CASE SUDERSHAN GOYAL VS. DCIT (TDS) , IN ITA NO. 442/AGRA/2017 DTD. 09.04.2018 AUTHORED BY ONE OF US (THE LD. J.MJ. THE RELEVANT PART OF THE ORDER IS REPRODUCED AS FOLLOWS: 3. HEARD. THE ID. CIT(A), W HILE DECIDING THE MATTER AGAINST THE ASSESSEE, HAS PLACED RELIANCE ON RAJESH KAURANI VS . UOI, 83 TAXMANN.COM 137 (GUJ), WHEREIN, IT HAS BEEN HELD THAT SECTION 200A OF THE ACT IS A MACHINEIY PROVISION PROVIDING THE MECHANISM FOR PROCESSING A STATEMENT OF DEDUCTI ON OF TAX AT SOURCE AND FOR MAKING ADJUSTMENTS. THE ID. CIT(A) HAS HELD THAT THIS DECI SION WAS DELIVERED AFTER CONSIDERING NUMEROUS ITAT/HIGH COURT DECISIONS AND SO, THIS DEC ISION IN RAJESH KAURANI (SUPRA) HOLDS THE FIELD. 4. WE DO NOT FIND THE VIEW TAKEN BY THE ID. CIT(A) TO BE CORRECT IN LAW. AS 4 I.T.A. NOS.2356 TO 2358/CHNY/18 AGAINST RAJESH KAURANI (SUPRA), SHRI FATEHRAJ SI NGHVI AND OTHERS VS. UOI, 73 TAXMANN.COM 252 (KER), AS ALSO ADMITTED BY THE LD. CIT(A) HIMSELF DECIDES THE ISSUE IN FAVOUR OF THE ASSESSEE. THE ONLY OBJECTION OF THE I D. CIT(A) IS THAT THIS DECISION AND OTHERS TO THE SAME EFFECT HAVE BEEN TAKEN INTO CONSIDERATI ON BY THE HON BLE GUJARAL HIGH COURT WHILE PASSING RAJESH KAURANI (SUPRA). HOWEVER, WH ILE OBSERVING SO, THE ID. IT(A) HAS FAILED TO TAKE INTO CONSIDERATION THE SETTLED LAW T HAT WHERE THERE IS A CLEAVAGE OF OPINION BETWEEN DIFFERENT HIGH COURTS ON AN ISSUE, THE ONE IN FAVOUR OF THE ASSESSEE NEEDS TO BE FOLLOWED. IT HAS SO BEEN HELD BY THE HON BLE SUPRE ME COURT IN CIT VS. VEGETABLE PRODUCTS LTD., 88 ITR 192 (SC). IT IS ALSO NOT A CASE WHERE THE DECISION AGAINST THE ASSESSEE HAS BEEN RENDERED BY THE JURISDICTIONAL HIGH COURT QUA THE ASSESSEE. 5. IN SHRI FAREHRAJ SIN GHVI AND OTHERS (SUPRA) IT HAS BEEN HELD, INTER ALI A, AS FOLLOWS: 22. IT IS HARDLY REQUIRED TO BE STATED THAT, AS PER THE WELL ESTABLISHED PRINCIP LES OF INTERPRETATION OF STATUTE, UNLESS IT IS EXPRESSLY PROVIDED OR IMPLIEDLY DEMONSTRATED, ANY P ROVISION OF STATUTE IS TO BE READ AS HAVING PROSPECTIVE EFFECT AND NOT RETROSPECTIVE EFF ECT. UNDER THE CIRCUMSTANCES, WE FIND THAT SUBSTITUTION MADE BY CLAUSE (C) TO (F) OF SUB- SECTION (1) OF SECTION 200A CAN BE READ AS HAVING PROSPECTIVE EFFECT AND NOT HAVING RETROAC TIVE CHARACTER OR EFFECT. RESULTANTLY, THE DEMAND UNDER SECTION 200A FOR COMPUTATION AND INTIM ATION FOR THE PAYMENT OFFEE UNDER SECTION 234E COULD NOT BE MADE IN PURPORTED EXERCIS E OF POWER UNDER SECTION 200A BY THE RESPONDENT FOR THE PERIOD OF THE RESPECTIVE ASSESSM ENT YEAR PRIOR TO 1 .6.2015. HOWEVER, WE MAKE IT CLEAR THAT, IF ANY DEDUCTOR HAS ALREADY PAID THE FEE AFTER INTIMATION RECEIVED UNDER SECTION 200A, THE AFORESAID VIEW WILL NOT PER MIT THE DEDUCTOR TO REOPEN THE SAID QUESTION UNLESS HE HAS MADE PAYMENT UNDER PROTEST. 6. IN VIEW OF THE ABOVE, RESPECTFULLY FOLLOWING SHRI FATEHRAJ SINGHVI AND OTHERS (SUPRA) , SIBIA HEALTHCARE PVT. LTD. VS. DCIT (TDS), ORDER DATED 09.06.2015 PASSED IN JTA NO.90/ ASR/20]5, FOR A.Y.20]3-14, BY THE AMRITSAR BENCH OF THE TRIBUNAL, AND SHRI KAUR CHAN D JAM VS. DGJT, CPC (TDS.) GHAZIABAD, ORDER DATED 15.09.2016, IN ITA NO.378/A SR/2015, FOR A.Y. 2012-13, THE GRIEVANCE OF THE ASSESSEE IS ACCEPTED AS JUSTIFIED. THE ORDER UNDER APPEAL IS REVERSED. THE LEVY OF THE FEE IS CANCELLED. 11. IN THE ABOVE VIE W, RESPECTFULLY FOLLOWING SHRI FATEHRAJ SINGHVI AND ORS(289 CTR 602), SIBIA HEALTHCARE PVT LTD., VS.DCIT(ITA NO.90/ASR/2015), SHRI KAUR CHAND JAIN VS.DCIT(ITA NO.378/ASR/2015) A ND OUR OWN FINDING IN THE CASE OF SUDERSHAN GOYAL (ITA NO.442/AGRA/2017 DT.9.4.2018), WE ACCEPT THE GRIEVANCE OF THE ASSESSEE AS GENUINE. ACCORDINGLY, THE ORDERS OF THE CIT(A) ARE REVERSED AND THE FEE SO LEVIED U/S.234E OF THE ACT IS CANCELLED. IN OUR VIEW, THE DECISION OF THE COORDINATE BENCH O F THIS TRIBUNAL IS MORE REASONED ONE SINCE IT FOLLOWED THE SALUTARY PRINCIPLE OF LAW LAID DOWN BY THE HONBLE SUPREME C OURT IN THE CASE OF CIT V. SRINIVASA SETTY (B.C.) (1981) 12 8 ITR 294 THAT NO TAX CAN BE LEVIED IN THE ABSENCE OF ANY COM PUTATION PROVISIONS. THE RELEVANT EXTRACT OF THE JUDGMENT I S AS UNDER: ..THIS INFERENCE FLOWS FROM THE GENERAL ARRANG EMENT OF THE PROVISIONS IN THE INCOME-TAX ACT, WHERE UNDER EACH HEAD OF INCOME THE CHARGING PROVISION IS ACCOMPANIED BY A SET OF PROVISIONS FOR COMPUTING THE INCOME SUB JECT TO THAT CHARGE. THE CHARACTER OF THE COMPUTATION PROVISIONS IN EACH CASE BEARS A REL ATIONSHIP TO THE NATURE OF THE CHARGE. THUS, THE CHARGING SECTION AND THE COMPUTATION PROV ISIONS TOGETHER CONSTITUTE AN INTEGRATED CODE. WHEN THERE IS A CASE TO WHICH THE COMPUTATION PROVISIONS CANNOT APPLY AT ALL, IT IS EVIDENT THAT SUCH A CASE WAS NOT INTENDE D TO FALL WITHIN THE CHARGING SECTION. OTHERWISE ONE WOULD BE DRIVEN TO CONCLUDE THAT WHILE A CERTAIN INCOME SEEMS TO FALL WITHIN THE CHARGING SECTION, THERE IS NO SCHEME OF COMPUTA TION FOR QUANTIFYING IT. THE LEGISLATIVE PATTERN DISCERNIBLE IN THE ACT IS AGAINST SUCH A CO NCLUSION. IT MUST BE BORNE IN MIND THAT THE LEGISLATIVE INTENT IS PRESUMED TO RUN UNIFORMLY THROUGH THE ENTIRE CONSPECTUS OF PROVISIONS PERTAINING TO EACH HEAD OF INCOME. NO DO UBT THERE IS A QUALITATIVE DIFFERENCE BETWEEN THE CHARGING PROVISION AND A COMPUTATION PR OVISION. AND ORDINARILY THE OPERATION OF THE CHARGING PROVISION CANNOT BE AFFECTED BY THE CONSTRUCTION OF A PARTICULAR COMPUTATION PROVISION. BUT THE QUESTION HERE IS WHE THER IT IS POSSIBLE TO APPLY THE 5 I.T.A. NOS.2356 TO 2358/CHNY/18 COMPUTATION PROVISION AT ALL IF A CERTAIN INTERPRET ATION IS PRESSED ON THE CHARGING PROVISION. THAT PERTAINS TO THE FUNDAMENTAL INTEGRITY OF THE S TATUTORY SCHEME PROVIDED FOR EACH HEAD. 8. IN THE PRESENT CASE, THE PROVISIONS OF SEC.234E WERE INTRODUCED W.E.F. 01.06.2015 AND THE PROVISIONS ARE IN THE NATURE OF BOTH COMPUTATION AS WELL AS CHARGING. IN THE ABSENCE OF THESE PROVISIONS DURING THE PERIOD UNDER CONSIDERATION IN THE LIGHT OF THE RATIO LAID DOWN B Y THE HONBLE SUPREME COURT IN THE CASE OF B.C.SRINIVASA SETTY (S UPRA), NO FEES CAN BE LEVIED U/S.234E RETROSPECTIVELY. THE DE CISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE O F G.INDHIRANI AS CITED SUPRA IS IN CONFORMITY TO THE RATIO OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF B.C.SRINIV ASA SETTY. HENCE, WE PREFER TO FOLLOW THE DECISION OF COORDINA TE BENCH TO THE HONBLE GUJARAT HIGH COURT DECISION IN THE CASE OF RAJESH KOURANI (SUPRA). THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL, WE ALLOW THE APPEALS FILED BY THE TRUST. 3. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDERS OF BOTH THE AUTHORITIES BELOW. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE FEE LEV IED BY THE ASSESSING OFFICER, AS CONFIRMED BY THE CIT(APPEALS) , WHILE PROCESSING THE QUARTERLY STATEMENT FILED UNDER SECT ION 200A IS DELETED. 4. IN THE RESULT, ALL THE THREE APPEALS FILED BY TH E ASSESSEE ARE ALLOWED. 6 I.T.A. NOS.2356 TO 2358/CHNY/18 ORDER PRONOUNCED IN THE COURT ON 6 TH FEBRUARY, 2019 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 6 TH FEBRUARY, 2019. KRI. . ,167 87(1 /COPY TO: 1. *+/ APPELLANT 2. ,-*+/ RESPONDENT 3. 0 91 () /CIT(A)-17, CHENNAI 4. CIT (TDS), CHENNAI 5. 7: ,1 /DR 6. ' ; /GF.