Aaryavart Commodities Pvt. Ltd., Ahmedabad V. The Dy. CIT., CPC TDS, Gaziabad

ITA 2409/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8076 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 22-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

SMC-ITA NO. 2409/AHD/2016 AARYAVRAT COMMODITIES PVT LTD VS. DCIT AY : 2013-14 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD [ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ] ITA NO. 2409/AHD/2016 ASSESSMENT YEAR : 2013-14 AARYAVRAT COMMODITIES PVT LTD ............A PPELLANT 210, CHITRARATH COMPLEX, B/4, PRESIDENT HOTEL, OPP. MUNICIPAL MARKET, C.G. ROAD, AHMEDABAD [PAN : AAECA 7330 G] VS. THE DY. COMMISSIONER OF INCOME-TAX .......................RESPONDENT CPC TDS, GHAZIABAD APPEARANCES BY: ASEEM THAKKAR FOR THE APPELLANT VK SINGH FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 18.06.2018 DATE OF PRONOUNCING THE ORDER : 18.06.2018 O R D E R 1. BY WAY OF THIS APPEAL, THE ASSESSEE-APPELLANT HA S CHALLENGED CORRECTNESS OF THE ORDER DATED 18 TH JULY 2016 PASSED BY THE BY THE CIT(A)-8, AHMEDABAD , IN THE MATTER OF LEVY OF LATE FILING FEES UNDER SECTIO N 234E, IN THE COURSE OF PROCESSING UNDER SECTION 200A OF THE INCOME-TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2013-14. 2. THE GRIEVANCES RAISED BY THE ASSESSEE ARE AS FOL LOWS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN DISMISSING THE APPEAL FOR ALLEGED LATE FILING OF AP PEAL ONLY ON THE BASIS OF ASSUMPTIONS AND PRESUMPTIONS AND NOT ACCEPTING T HE REASONS ASSIGNED HENCE THE SAME SHOULD BE CANCELLED. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ORDER PASSED BY THE DY. COMM. OF INC OME TAX, CENTRALIZED PROCESSING CELL-TDS, GHAZIABAD, U.P. U/ S.200A OF THE INCOME TAX ACT, 1961 VIDE COMM. REF. NO.TDS/1213/26Q/D/100012169487 IN RESPECT OF FORM N O.26Q, FILED BY THE APPELLANT FOR QUARTER - 4 OF F.YR.2012-13 WHICH IS ILLEGAL AND BAD IN LAW. HENCE THE SAME SHOULD BE CANCELLED. SMC-ITA NO. 2409/AHD/2016 AARYAVRAT COMMODITIES PVT LTD VS. DCIT AY : 2013-14 PAGE 2 OF 6 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN CONFIRMING THE ACTION OF THE DY. COMM. OF INCOME TA X, CENTRALIZED PROCESSING CELL - TDS, GHAZIABAD, U.P. HAS ERRED IN PASSING AN INTIMATION ORDER U/S.200A OF THE I.T. ACT, 1961 WIT HOUT GIVING SHOW CAUSE NOTICE TO THE APPELLANT. HENCE THE ORDER SO P ASSED WITHOUT GIVING AN OPPORTUNITY OF BEING HEARD TO THE APPELLA NT BEING AGAINST THE PRINCIPLES OF NATURAL JUSTICE IS ILLEGAL AND BAD IN LAW. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE DY. COMM. OF INCOME TA X, CENTRALIZED PROCESSING CELL - TDS, GHAZIABAD, UP IN CHARGING IN TEREST OF RS.756/- ON ALLEGED LATE PAYMENT OF TDS. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERR ED IN CONFIRMING THE ACTION OF THE DY. COMM. OF INCOME TAX, CENTRALI ZED PROCESSING CELL - TDS, GHAZIABAD, UP. IN CHARGING RS.51,248/- FOR THE ALLEGED LATE FILING FEES U/S.234E OF THE IT ACT, 1961. 2. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE AP PLICABLE LEGAL POSITION. 3. THE PERIOD OF DELAY IN QUESTION IS PRIOR TO 1 ST JUNE 2015, I.E. PRIOR TO THE PERIOD IN WHICH THE RELEVANT AMENDMENT IN SECTION 2 00A WAS MADE. ON THESE FACTS, THERE IS NO DISPUTE THAT THE ISSUE IS SQUARE LY COVERED IN FAVOUR OF THE ASSESSEE BY THE DIVISION BENCH DECISION OF ITAT AMR ITSAR BENCH IN THE CASE OF SIBIA HEALTHCARE PRIVATE LIMITED VS. DCIT - ITA NO. 90/ASR/2015, VIDE ORDER DATED 9 TH JUNE, 2015, WHEREIN THE DIVISION BENCH HAS INTER ALIA OBSERVED 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 APPLICABLE LEGAL POSITION. IN ADDITION TO HIS ARGUMENT ON THE MERITS , LEARNED COUNSEL HAS ALSO INVITED OUR ATTENTION TO THE REPORTS ABOUT THE DECI SIONS OF VARIOUS HONBLE HIGH COURTS, INCLUDING HONBLE KERALA HIGH COURT, I N THE CASE OF NARATH MAPILA LP SCHOOL VS UNION OF INDIA [WP (C) 31498/20 13(J)], HONBLE KARANATAKA HIGH COURT IN THE CASE OF ADITHYA BIZOR P SOLUTIONS VS UNION OF INDIA [WP NO. 6918-6938/2014(T-IT), HONBLE RAJASTH AN 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 CASE OF RASHMIKANT KUNDALIA VS UNION OF INDIA [WP NO. 771 OF 2014], GRANTING STAY ON THE DEMANDS RAISED IN RESPECT OF FEES UNDER SECTION 234E. THE FULL TEXT O F THESE DECISIONS WERE NOT PRODUCED BEFORE US. HOWEVER, AS ADMITTEDLY THERE AR E NO ORDERS FROM THE HONBLE COURTS ABOVE RETRAINING US FROM OUR ADJUDIC ATION ON MERITS IN RESPECT OF THE ISSUES IN THIS APPEAL, AND AS, IN OU R HUMBLE UNDERSTANDING, THIS APPEAL REQUIRES ADJUDICATION ON A VERY SHORT L EGAL ISSUE, WITHIN A NARROW COMPASS OF MATERIAL FACTS, WE ARE PROCEEDING TO DIS POSE OF THIS APPEAL ON MERITS. SMC-ITA NO. 2409/AHD/2016 AARYAVRAT COMMODITIES PVT LTD VS. DCIT AY : 2013-14 PAGE 3 OF 6 5. WE MAY PRODUCE, FOR READY REFERENCE, SECTION 23 4E OF THE ACT, WHICH WAS INSERTED BY THE FINANCE ACT 2012 AND WAS BROUGH T 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 STATEME NT WITHIN THE TIME 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 DURI NG 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 BE. (3) THE AMOUNT OF FEE REFERRED TO IN SUB-SECTION (1 ) SHALL BE PAID BEFORE DELIVERING OR CAUSING TO BE DELIVERED A STAT EMENT IN ACCORDANCE WITH SUB-SECTION (3) OF SECTION 200 OR T HE PROVISO TO SUB- SECTION (3) OF SECTION 206C. (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-SECTION (3) OF SECTION 206C WHICH IS TO BE DELIVERED OR CAUSED TO BE DELIVERED FOR TAX DEDUCTED AT SOURCE OR TAX COLLECTED AT SOURCE, AS THE CASE MAY BE, ON OR AFTER 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. T HIS STATUTORY PROVISION, AS IT STOOD AT THE RELEVANT POINT OF TIME, WAS AS F OLLOWS: 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 (HEREAF TER REFERRED TO IN THIS SECTION AS DEDUCTOR) UNDER SECTION 200, SUCH STATEM ENT SHALL BE PROCESSED 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; SMC-ITA NO. 2409/AHD/2016 AARYAVRAT COMMODITIES PVT LTD VS. DCIT AY : 2013-14 PAGE 4 OF 6 (C) THE SUM PAYABLE BY, OR THE AMOUNT OF REFUND DUE TO, THE DEDUCTOR SHALL BE DETERMINED AFTER ADJUSTMENT OF AMOUNT COMPUTED U NDER CLAUSE (B) AGAINST ANY AMOUNT PAID UNDER SECTION 200 AND SECTI ON 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 PAYABLE 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: PROVIDED THAT NO INTIMATION UNDER THIS SUB-SECTION SHALL BE SENT AFTER THE EXPIRY OF ONE YEAR FROM THE END OF THE FINANCIAL YE AR IN WHICH THE STATEMENT IS FILED. EXPLANATION : FOR THE PURPOSES OF THIS SUB-SECTION, 'AN INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN THE STATEMENT' SHA LL 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 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 STATEMENTS OF TAX DEDUCTED AT SOURCE TO EXPEDITIOUSLY DETERMINE THE T AX PAYABLE BY, OR THE REFUND DUE TO, THE DEDUCTOR AS REQUIRED UNDER THE S AID 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 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 WIT H 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 COMPUT ED UNDER CLAUSE (B) AND CLAUSE (C) AGAINST ANY AMOUNT PAID UNDER SECTIO N 200 OR SECTION 201 OR SECTION 234E AND ANY AMOUNT PAID OTHERWISE BY WAY O F TAX OR INTEREST OR FEE; SMC-ITA NO. 2409/AHD/2016 AARYAVRAT COMMODITIES PVT LTD VS. DCIT AY : 2013-14 PAGE 5 OF 6 (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 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 INTIMATION UNDER SECT ION 200A IN RESPECT THEREOF, AN ADJUSTMENT COULD ALSO BE MADE IN RESPEC T OF THE FEE, IF ANY, SHALL BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 234E. THERE IS NO DISPUTE THAT WHAT IS IMPUGNED IN APPEAL 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 TH E CORRECTNESS OF THE INTIMATION UNDER SECTION 200A, WE HAVE TO BE GUIDED BY THE LIMITED MANDATE OF SECTION 200A, WHICH, AT THE RELEVANT POINT OF TI ME, PERMITTED 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 STATEMENT. - SECTION 200A(1)(B) 9. NO OTHER ADJUSTMENTS IN THE AMOUNT REFUNDABLE T O, OR RECOVERABLE FROM, THE TAX DEDUCTOR, WERE PERMISSIBLE IN ACCORDA NCE 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 SECTION 234E WAS INDEED BEYOND THE SCOPE OF PERMISSIBLE ADJUSTMENTS CONTEMP LATED UNDER SECTION 200A. THIS INTIMATION IS AN APPEALABLE ORDER UNDER SECTION 246A(A), AND, THEREFORE, THE CIT(A) OUGHT TO HAVE EXAMINED LEGALI TY OF THE ADJUSTMENT MADE UNDER THIS INTIMATION IN THE LIGHT OF THE SCOP E 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 NO T THE ISSUE HERE. THE ISSUE IS WHETHER SUCH A LEVY COULD BE EFFECTED IN T HE COURSE OF INTIMATION UNDER SECTION 200A. THE ANSWER IS CLEARLY IN NEGATI VE. NO OTHER PROVISION ENABLING A DEMAND IN RESPECT 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 REFUN D TO THE TAX DEDUCTOR, CAN ONLY BE PASSED WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR WITHIN WHICH THE RELATED TDS STATEMENT IS FILED, AND AS TH E RELATED TDS STATEMENT SMC-ITA NO. 2409/AHD/2016 AARYAVRAT COMMODITIES PVT LTD VS. DCIT AY : 2013-14 PAGE 6 OF 6 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, THEREFOR E, UPHOLD THE GRIEVANCE OF THE ASSESSEE AND DELETE THE IMPUGNED LEVY OF FEE UNDER SECTION 234E OF THE ACT. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 4. WHEN THE ABOVE JUDICIAL PRECEDENT WAS BROUGHT TO THE NOTICE OF THE LD. DEPARTMENTAL REPRESENTATIVE, HE DID NOT HAVE MUCH T O SAY EXCEPT TO PLACE HIS RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 5. IN VIEW OF THE ABOVE DISCUSSIONS AND BEARING IN MIND ENTIRETY OF THE CASE, I HEREBY DELETE THE IMPUGNED LEVY OF LATE FILING FEES UNDER SECTION 234E OF THE ACT. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED PRONOUNCED IN THE OPEN COURT TODAY ON THE 18 TH DAY OF JUNE, 2018. SD/- PRAMOD KUMAR (ACCOUNTANT MEMBER) AHMEDABAD, THE 18 TH DAY OF JUNE, 2018 **BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF DICTATION: ...18.06.2018 COVERED BY IT AT ORDER 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 18.06.2018...... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S.: . 18.06.2018....... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: . 18.06.2018... 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : ... 18.06.2018 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 8. DATE OF DESPATCH OF THE ORDER: ......