M/s GHS Sangudhaun ICT Society, Muktsar V. The Dy. Commissioner of Income-tax, Ghaziabad

ITA 260/ASR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0531 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 29-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL
• Assessee Lawyers: P N ARORA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO.260(ASR)/2015 ASSESSMENT YEAR: 2012-13 G.H.S. SANGUDHAUN ICT SOCIETY, VILL. SANGUDHAUN DISTT. MUKTSAR. PAN:AMRG1516G VS. DCIT, (CPC) TDS, GHAZIABAD. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P. N. ARORA (ADV.) RESPONDENT BY: SH. S.S. KANWAL (DR.) DATE OF HEARING: 14.07.2016 DATE OF PRONO UNCEMENT: 19.07.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE OR DER OF LEARNED CIT(A), BATHINDA, DATED 27.03.2015 FOR ASST. YEAR: 2012-13. 2. THE ASSESSEE IS AGGRIEVED WITH THE ACTION OF LEA RNED CIT(A), BY WHICH HE HAD CONFIRMED ACTION OF ASSESSING OFFICER FOR IMPOSING FEE U/S 234E OF THE ACT. 3. AT THE OUTSET, THE LEARNED AR SUBMITTED THAT THE CASE OF THE ASSESSEE IS COVERED IN ITS FAVOUR BY THE ORDER OF T RIBUNAL IN ITA NO.08(ASR)2015 FOR ASST. YEAR 2013-14 AND FILED A C OPY OF THE TRIBUNAL ORDER DATED 27.05.2016. ITA NO.260 (ASR)/2015 ASST. YEAR : 2012-13 2 4. THE LEARNED DR, HEAVILY PLACED HIS RELIANCE ON T HE ORDER OF AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT IN ASST. YE AR: 2013-14, THE HONBLE TRIBUNAL IN A BUNCH OF APPEALS VIDE ORDER D ATED 27.05.2016 HAS DEALT WITH THE SIMILAR ISSUE OF IMPOSITION OF FEE U /S 234E OF THE ACT AND THE HONBLE TRIBUNAL HAS DELETED THE PENALTY CONFIR MED BY LEARNED CIT(A) BY FOLLOWING THE TRIBUNAL ORDER DATED 19 TH JUNE, 2015, IN APPEAL, ITA NO.102(ASR)/2015. FOR THE SAKE OF CONVENIENCE THE O BSERVATIONS OF THE TRIBUNAL ARE REPRODUCED BELOW. 2. DURING THE COURSE OF HEARING, LEARNED REPRESENT ATIVES FAIRLY ACCEPT THAT THE ISSUE INVOLVED IN THIS APPEAL IS THAT SAME AS W AS IN ITA NO. 90/ASR/2015 (AY.2013-14) IN THE CASE OF SIOBIA HELA THCARE PRIVATE LIMITED, BATHINDA VS.DCIT (TDS), WHEREIN THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE VIDE ORDER OF THE EVEN DATE OBSERVING AS FOLLOWS: 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF T HE APPLICABLE LEGAL POSITION. IN ADDITION TO HIS ARGUMENT ON THE MERITS , LEARNED COUNSEL HAS ALSO INVITED 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 INDIA [WP (C) 3 1498/2013(J)], HONBLE KARANATAKA HIGH COURT IN THE CASE OF ADITHY A BIZOR P SOLUTIONS VS UNION OF INDIA [WP NO. 6918- 6938/2014(T-IT), HONB LE RAJASTHAN HIGH COURT IN THE CASE OF OM PRAKASH DHOOT VS UNION OF I NDIA [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], GR ANTING STAY ON THE DEMANDS RAISED IN RESPECT OF FEES UNDER SECTION 234 E. THE FULL TEXT OF THESE DECISIONS WERE NOT PRODUCED BEFORE US. HOWEVE R, AS ADMITTEDLY THERE ARE NO ORDERS FROM THE HONBLE COURTS ABOVE R EFRAINING US FROM OUR ADJUDICATION ON MERITS IN RESPECT OF THE ISSUES IN THIS APPEAL, AND AS, IN OUR HUMBLE UNDERSTANDING, THIS APPEAL REQUIRES ADJU DICATION ON A VERY SHORT LEGAL ISSUE, WITHIN A NARROW COMPASS OF MATER IAL FACTS, WE ARE PROCEEDING TO DISPOSE OF THIS APPEAL ON MERITS. ITA NO.260 (ASR)/2015 ASST. YEAR : 2012-13 3 5. WE MAY PRODUCE, FOR READY REFERENCE, SECTION 234 E OF THE ACT, WHICH WAS INSERTED BY THE FINANCE ACT 2012 AND WAS BROUGH T INTO EFFECT FROM 1 ST JULY 2012. THIS STATUTORY PROVISION IS AS FOLLOWS: 234E. FEE FOR DEFAULTS IN FURNISHING STATEMENTS A) WITHOUT PREJUDICE TO THE PROVISIONS OF THE ACT, WH ERE A PERSON FAILS TO DELIVER OR CAUSE TO BE DELIVERED A STATEMENT WIT HIN 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 S UM OF TWO HUNDRED RUPEES FOR EVERY DAY DURING WHICH THE FAILURE CONTI NUES. B) THE AMOUNT OF FEE REFERRED TO IN SUB-SECTION (1) S HALL NOT EXCEED THE AMOUNT OF TAX DEDUCTIBLE OR COLLECTIBLE, AS THE CAS E MAY BE. C) THE AMOUNT OF FEE REFERRED TO IN SUB-SECTION (1) S HALL BE PAID BEFORE DELIVERING OR CAUSING TO BE DELIVERED A STATEMENT I N ACCORDANCE WITH SUB- SECTION (3) OF SECTION 200 OR THE PROVISO TO SUB-SE CTION (3) OF SECTION 206C. D) THE PROVISIONS OF THIS SECTION SHALL APPLY TO A ST ATEMENT REFERRED TO IN SUB-SECTION (3) OF SECTION 200 OR THE PROVISO TO SUBSECTION (3) OF SECTION 206C WHICH IS TO BE DELIVERED OR CAUSED TO BE DELIV ERED 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 WAS INSERTED BY THE FINANCE ACT 2009 WITH EFFECT FROM 1 ST APRIL 2010. THIS STATUTORY PROVISIONS, AS IT STOOD AT THE RELEVANT POINT OF TIME, WAS AS F OLLOWS: 200A: PROCESSING OF STATEMENT OF TAX DEDUCTED AT SO URCE (1) WHERE A STATEMENT OF TAX DEDUCTION AT SOURCE, OR A CORRECTION STATEMENT, HAS BEEN MADE BY A PERSON DEDUCTING ANY SUM (HEREAFTER REFERRED TO IN IN THIS SECTION AS DEDUCTOR) UNDER S ECTION 200, SUCH STATMENT SHALL BE PROCESSED IN THE FOLLOWING MANNER, (A) THE SUMS DEDUCTIBLE UNDER THIS CHAPTER SHALL BE COM PUTED AFTER MAKING THE FOLLWING ADJUSTMENTS, NAMELY:-; (I) ANY ARITHMETICAL ERROR IN THE STATEMENT ; OR (II) AN INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN THE STATEMENT, (B) THE INTEREST, IF ANY, SHALL BE COMPUTED ON THE BASI S OF THE SUMS DEDUCTIBLE AS COMPUTED IN THE STATESMEN. (C) THE SUM PAYABLE BY, OR THE AMOUNT OF REFUND DUE TO, THE DEDUCTOR SHALL BE DETERMINED AFTER ADJUSTMENT OF AMOUNT COMP UTED UNDER CLAUSE (B) AGAINST ANY AMOUNT PAID UNDER SECTION 20 0 AND SECTION 201, AND ANY AMOUNT PAID OTHERWISE BY WAY OF TAX O R INTEREST; ITA NO.260 (ASR)/2015 ASST. YEAR : 2012-13 4 (D) AN INTIMATION SHALL BE PREPARED OR GENERATED AND SE NT TO THE DEDUCTOR SPECIFYING THE SUM DETERMINED TO BE PAYABL E BY, OR THE AMOUNT OF REFUND DUE, TO, HIM UNDER CLAUSE ; AND (E) THE AMOUNT OF REFUND DUE TO THE DEDUCTION IN PURSUA NCE OF THE DETERMINATION UNDER CLAUSE 9C) SHALL BE GRANTED TO THE DEDUCTOR: (F) 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 STATEMENT' SHA LL MEAN ,CLAIM, ON THE BASIS OF AN ENTRY IN THE STATEMENT (I) OF AN ITEM, WHICH IS INCONSISTENT WITH ANOTHER ENT RY OF THE SAME OR SOME OTHER ITEM IN SUCH STATEMENT; (II) IN RESPECT OF RATE OF DEDUCTION OF TAX AT SOU RCE, WHERE SUCH RATE IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT; (2) FOR THE PURPOSES OF PROCESSING OF STATEMENTS UN DER SUBSECTION (1), THE BOARD MAY MAKE A SCHEME FOR CENTRALIZED 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 SUB-SECTION. (7) BY WAY OF FINANCE ACT 2015, AND WITH EFFECT FRO M 1 ST 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 SUBSTITUTED WITH EFFECT FROM THE 1ST DAY OF JUNE, 2015} NAMELY:- (C) THE FEE, IF ANY, SHALL -BE COMPUTED INT-ACCORD ANCE WITH THE PROVISIONS OF SECTION 234E; A) THE SUM PAYABLE BY, OR THE AMOUNT OF REFUND DUE TO , THE DEDUCTOR SHALL BE DETERMINED AFTER ADJUSTMENT OF THE AMOUNT COMPUTED UNDER CLAUSE (B)AND CLAUSE (C) AGAINST ANY AMOUNT PAID UN DER SECTION 200 OR SECTION 201 OR SECTION 234E AND ANY AMOUNT PAID OTH ERWISE BY WAY OF TAX OR INTEREST OR FEE; B) AN INTIMATION SHALL BE PREPARED OR GENERATED AND SE NT TO THE DEDUCTOR SPECIFYING THE SUM DETERMINED TO BE PAYABL E BY, OR THE AMOUNT OF REFUND DUE TO HIM UNDER CLAUSE (D); AND C) THE AMOUNT OF REFUND DUE TO THE DEDUCTOR IN PURSUA NCE OF THE DETERMINATION UNDER CLAUSE (D) SHALL BE GRANTED TO THE DEDUCTOR. E) IN EFFECT THUS, POST 1 ST JUNE 2015, IN THE COURSE OF PROCESSING OF A TDS STATEMENT AND ISSUANCE OF INTIMATION UNDER, SE CTION 200A IN RESPECT THEREOF? AN ADJUSTMENT COULD ALSO BE MADE' IN RESPE CT OF THE FEE, IF ANY, SHALL BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 234E, ITA NO.260 (ASR)/2015 ASST. YEAR : 2012-13 5 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 ST OOD, PRIOR TO 1 ST JUNE 2015, THERE WAS NO ENABLING PROVISION THEREIN FOR R AISING A DEMAND IN RESPECT OF FEES UNDER SECTION 234E. WHILE EXAMININ G THE CORRECTNESS OF THE INTIMATION UNDER SECTION 200A, WE HAVE TO BE GUIDED BY THE LIMITED MANDATE OF SECTION 200A} WHICH, AT THE RELEVANT POI NT OF TIME, 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 HE STATEMENT - SECTION 200A(1)(B) 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 REFUND TO, OR RECOVERABLE FROM, THE TAX DEDUCTOR, WERE PERMISSIBLE IN ACCORDANCE WI TH THE LAW AS IT EXISTED AT THAT POINT OF TIME. 10. IN VIEW OF ABOVE DISCUSSIONS, IN OUR CONSIDERED 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, AND ONLY BE PASSED WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR WITHIN WHICH THE RELATED TDS STATEMENT IS FILED, AN D AS THE RELATED TDS STATEMENT WAS FILED ON 19 TH FEBRUARY 2014, SUCH A LEVY COULD ONLY HAVE BEEN MADE AT BEST WITHIN 31 ST MARCH 2015. THAT TIME HAS ALREADY ELAPSED AND THE DEFECT IS THUS NOT CURABLE EVEN AT THIS STA GE. IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF TH E CASE, THE IMPUGNED LEVY OF FEES UNDER SECTION 234 E IS UNSUSTAINABLE I N LAW. WE, THEREFORE, UPHOLD THE GRIEVANCE OF THE ASSESSEE AND DELETE THE IMPUGNED LEVY OF FEE UNDER SECTION 234E OF THE ACT. THE ASSESSEE GETS TH E RELIEF ACCORDINGLY.' (3). WE DO NOT SEE ANY REASON TO TAKE ANY VIEW O THER THAN THAT ALREADY ADOPTED IN THE ABOVE CASE. WE, THEREFORE, UPHOLD TH E GRIEVANCE OF THE ITA NO.260 (ASR)/2015 ASST. YEAR : 2012-13 6 ASSESSEE AND REVERSE THE ORDER OF THE LEARNED CIT(A ). THE ASSESSEE GETS THE RELIEF ACCORDINGLY. FINDING THE ISSUE UNDER APPEAL IS SIMILAR AND THERE FORE, RESPECTFULLY FOLLOWING THE JUDICIAL PRECEDENT, WE REVERSE THE OR DER OF LEARNED CIT(A) AND ASSESSEE GETS RELIEF ACCORDINGLY. 6. IN VIEW OF THE ABOVE, THE APPEAL FILED BY ASSESS EE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 .07.2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:19.07.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER