Kanak Castor Products (P)Ltd., Ahmedabad V. The Dy.CIT, CPC-TDS, Gaziabad

ITA 2724/AHD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94821 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 28-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LAL PHILIPS
• Section: 246

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.2724 AND 2725/AHD/2015 [ASSTT/YEAR 2013-2014] M/S.KANAK CASTOR PRODUCTS P. LTD. NIRMA HOUSE, ASHRAM ROAD AHMEDABAD. PAN : AAACK 6280 B VS DCIT (CPC)-TDS GHAZIABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI HIMANSHU SHAH REVENUE BY : MR. LAL PHILIPS, SR ! / DATE OF HEARING : 19/11/2015 '#$ ! / DATE OF PRONOUNCEMENT: 08/12/2015 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANC E OF THE ASSESSEE AGAINST COMMON ORDER OF THE CIT(A)-8, AMBA WADI, AHMEDABAD DATED 24.8.2015 PASSED IN THE ASSTT.YEAR 2013-14. 2. THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT (A) HAS ERRED IN CONFIRMING THE LEVY OF FEES AMOUNTING TO RS.4,000/- IN QUARTER NO.3 PERTAINING TO FORM NO.26Q RELEVANT TO THE F.Y.2012- 13. THE ASSESSEE HAS SUBMITTED TDS STATEMENT UNDER SECTION 200(3). THESE STATEMENTS WERE FILED BY THE ASSESSEE BEYOND THE PRESCRIBED DU E DATE. THE LD.AO WHO PROCESSED THESE RETURNS IMPOSED PENALTY OF RS.4 ,000/- EACH IN RESPECT OF A.NO.331 & 332 WHICH PERTAINED TO QUARTE R NO.3. ITA NO.2724/AHD/2015 (2 APPEALS) 2 3. DISSATISFIED WITH CHARGING OF LATE FEE UNDER SEC TION 234E, THE ASSESSEE FILED APPEAL BEFORE THE LD.CIT(A). THE LD .CIT(A) HAS DECIDED FOUR APPEALS OF THE ASSESSEE PERTAINED TO DIFFERENT QUARTERS. THE LD.CIT(A) HAS ALLOWED THE APPEAL WITH RESPECT TO A. NO.331 AND 333, BUT CONFIRMED THE LEVY OF FEES WITH REGARD TO TWO QUART ERS. 4. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE ORDER O F THE TRIBUNAL. HE HAS RELIED UPON ORDER OF THE ITAT PASSED IN ITA NO. 54/AHD/2015 AND 2282 AND 2283/AHD/2015. HE PLACED ON RECORD COPIES OF THE ORDERS OF THE TRIBUNAL IN BOTH THE CASES. THE LD.DR WAS UNAB LE TO CONTROVERT THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. TH E TRIBUNAL IN THE CASE OF SHIV SHAKTI SPECIFIC FAMILY TRUST VS. DCIT, CPC, TDS IN ITA NO.2282 AND 2283/AHD/2015 HAS DISCUSSED THIS ISSUE AS UNDER : 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE W AS SUPPOSED TO SUBMIT TDS RETURN, BUT, IT REVEALED IN F.Y.2012- 13 THAT IT HAS NOT SUBMITTED THE RETURN IN TIME FOR QUARTER-3 AND 4. THESE RETURNS WERE SUBMITTED ON 24.3.2015. THE LD.DCIT, CPC, TDS HAS IMPOSED LATE FILING FEE UNDER SECTION 234E OF RS.10 ,400/- FOR THE QUARTER-3 AND RS.6,600/- FOR THE QUARTER NO.4. THE LD.FIRST APPELLATE AUTHORITY HAS UPHELD THE LEVY OF FEES BY DISMISSING THE APPEAL OF THE ASSESSEE BEING TIME BARRED. SINCE, T HE LD.FIRST APPELLATE AUTHORITY HAS NOT ADJUDICATED THE ISSUE O N MERIT, THEREFORE, IN NORMAL CIRCUMSTANCES, WE OUGHT TO HAV E SET ASIDE THE ISSUE TO THE FILE OF THE CIT(A), BUT ALONG WITH THESE TWO APPEALS, WE HAVE HEARD SIX MORE APPEALS ON IDENTICA L ISSUES. THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE DECISIO N OF THE ITAT, AMRISTAR BENCH IN THE CASE OF SIBIA HEALTHCARE PVT. LTD. VS. DCIT, ITA NO,.90/ASR/2015, WHICH HAS BEEN FOLLOWED BY THE ITAT, AHMEDABAD BENCH IN THE CASE OF INDIAN OVERSEAS BANK VS. DCIT, GHAZIABAD IN ITA NO.3271/AHD/2014. THE TRIBUNAL HA S HELD THAT WHILE PROCESSING THE TDS RETURN UNDER SECTION 200A, THE AO WAS NOT AUTHORIZED TO MAKE ADJUSTMENT BY RAISING THE DE MAND UNDER SECTION 234E ALSO. THE DISCUSSIONS MADE BY THE TRI BUNAL ARE AS UNDER: 5. I FIND THAT THE ISSUE IN APPEAL IS NOW SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT A MRITSAR BENCH IN THE CASE OF SIBIA HEALTHCARE PRIVATE LIMIT ED VS. DCIT - ITA NO.90/ASR/2015, VIDE ORDER DATED 9TH JUN E, ITA NO.2724/AHD/2015 (2 APPEALS) 3 2015, WHEREIN THE DIVISION BENCH HAS INTER ALIA OBS ERVED AS UNDER :- 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSIT ION. IN ADDITION TO HIS ARGUMENT ON THE MERITS, LEARNED COUNSEL HAS ALSO INVITED OUR ATTENTION TO THE REPOR TS 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) 31498/2013(J)], HONBLE KARANATAKA HIGH COURT IN TH E 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 CASE OF RASHMIKANT KUNDALIA VS UNION OF INDIA [WP NO. 771 OF 2014], GRANTING STAY ON THE DEMANDS RAISED IN RESPECT OF F EES UNDER SECTION 234E. THE FULL TEXT OF THESE DECISION S WERE NOT PRODUCED BEFORE US. HOWEVER, AS ADMITTEDLY THERE ARE NO ORDERS FROM THE HONBLE COURTS ABOVE RETRAINING US FROM OUR ADJUDICATION 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 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 234E OF THE ACT, WHICH WAS INSERTED BY THE FINANCE ACT 2012 AND WAS BROUGHT 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 STATEMENT 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 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 COLLECTIBLE, AS THE CASE MAY BE. ITA NO.2724/AHD/2015 (2 APPEALS) 4 (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-SECTIO N (3) OF SECTION 200 OR THE 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 1 ST APRIL 2010. THIS STATUTORY PROVISION, AS IT STOOD AT THE RELEVANT POINT OF TIME, WAS AS FOLLOWS: 200A: PROCESSING OF STATEMENTS OF TAX DEDUCTED AT SOURCE (1) WHERE A STATEMENT OF TAX DEDUCTION AT SOURCE, O R A CORRECTION STATEMENT, HAS BEEN MADE BY A PERSON DED UCTING ANY SUM (HEREAFTER REFERRED TO IN THIS SECTION AS D EDUCTOR) UNDER SECTION 200, SUCH STATEMENT SHALL BE PROCESSE D 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; (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; ITA NO.2724/AHD/2015 (2 APPEALS) 5 (D) AN INTIMATION SHALL BE PREPARED OR GENERATED AN D SENT TO THE DEDUCTOR SPECIFYING THE SUM DETERMINED TO BE PA YABLE BY, OR THE AMOUNT OF REFUND DUE TO, HIM UNDER CLAUS E (C); AND (E) THE AMOUNT OF REFUND DUE TO THE DEDUCTOR IN PUR SUANCE OF THE DETERMINATION UNDER CLAUSE (C) SHALL BE GRAN TED TO THE DEDUCTOR: PROVIDED THAT NO INTIMATION UNDER THIS SUB-SECTION SHALL BE SENT AFTER THE EXPIRY OF ONE YEAR FROM THE END OF T HE FINANCIAL YEAR IN WHICH THE STATEMENT IS FILED. EXPLANATION : FOR THE PURPOSES OF THIS SUB-SECTION, 'AN INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN TH E STATEMENT' SHALL MEAN A CLAIM, ON THE BASIS OF AN E NTRY, 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 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 SUB SECTION. 7. BY WAY OF FINANCE ACT 2015, AND WITH EFFECT FROM 1ST JUNE 2015, THERE IS AN AMENDMENT IN SECTION 200A AN D 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 WITH EFFECT FROM THE 1ST DAY OF JUNE, 2 015, 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) AGA INST ITA NO.2724/AHD/2015 (2 APPEALS) 6 ANY AMOUNT PAID UNDER SECTION 200 OR SECTION 201 OR SECTION 234E AND ANY AMOUNT PAID OTHERWISE BY WAY O F 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 PA YABLE BY, OR THE AMOUNT OF REFUND DUE TO, HIM UNDER CLAUS E (D); AND (F) THE AMOUNT OF REFUND DUE TO THE DEDUCTOR IN PUR SUANCE OF THE DETERMINATION UNDER CLAUSE (D) SHALL BE GRAN TED 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 SECTION 200A IN RESPECT THEREOF, AN ADJUSTMEN T COULD ALSO BE MADE IN RESPECT OF THE FEE, IF ANY, SHALL BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SECTI ON 234E. THERE IS NO DISPUTE THAT WHAT IS IMPUGNED IN APPEAL BEFORE US IS THE INTIMATION UNDER SECTION 200A OF T HE ACT, AS STATED IN SO MANY WORDS IN THE IMPUGNED INTIMATION ITSELF, AND, AS THE LAW STOOD, PRIOR TO 1ST JUNE 2015, THER E 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, W E HAVE TO BE GUIDED BY THE LIMITED MANDATE OF SECTION 200A , WHICH, AT THE RELEVANT POINT OF TIME, PERMITTED COM PUTATION 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 INF ORMATION 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 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 UND ER SECTION 234E WAS INDEED BEYOND THE SCOPE OF PERMISSIBLE ITA NO.2724/AHD/2015 (2 APPEALS) 7 ADJUSTMENTS CONTEMPLATED UNDER SECTION 200A. THIS INTIMATION IS AN APPEALABLE ORDER UNDER SECTION 246 A(A), AND, THEREFORE, THE CIT(A) OUGHT TO HAVE EXAMINED L EGALITY OF THE ADJUSTMENT MADE UNDER THIS INTIMATION IN THE LIGHT OF THE SCOPE OF THE SECTION 200A. LEARNED CIT(A) HAS N OT DONE SO. HE HAS JUSTIFIED THE LEVY OF FEES ON THE BASIS OF THE PROVISIONS OF SECTION 234E. THAT IS NOT THE ISSUE H ERE. THE ISSUE IS WHETHER SUCH A LEVY COULD BE EFFECTED IN T HE COURSE OF INTIMATION UNDER SECTION 200A. THE ANSWER IS CLE ARLY IN NEGATIVE. NO OTHER PROVISION ENABLING A DEMAND IN R ESPECT OF THIS LEVY HAS BEEN POINTED OUT TO US AND IT IS T HUS AN ADMITTED POSITION THAT IN THE ABSENCE OF THE ENABLI NG 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 FINAN CIAL YEAR WITHIN WHICH THE RELATED TDS STATEMENT IS FILED, AN D AS THE RELATED TDS STATEMENT WAS FILED ON 19TH FEBRUARY 20 14, SUCH A LEVY COULD ONLY HAVE BEEN MADE AT BEST WITHI N 31ST MARCH 2015. THAT TIME HAS ALREADY ELAPSED AND THE D EFECT IS THUS NOT CURABLE EVEN AT THIS STAGE. IN VIEW OF THE SE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF TH E CASE, THE IMPUGNED LEVY OF FEES UNDER SECTION 234 E IS UNSUST AINABLE IN LAW. WE, THEREFORE, UPHOLD THE GRIEVANCE OF THE ASSESSEE AND DELETE THE IMPUGNED LEVY OF FEE UNDER SECTION 2 34E OF THE ACT. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 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 TH E ORDERS OF THE AUTHORITIES BELOW. HE FAIRLY DID NOT DISPUT E THAT THE PROVISIONS ACCEPTING LEVY OF LATE FILING FEES UNDER SECTION 234E HAVE INDEED BEEN BROUGHT TO THE STATUTE W.E.F. 1ST JUNE, 2015 AND 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 IMPUGN ED INTIMATION ISSUED. THE ASSESSEE GETS THE RELIEF AC CORDINGLY. 8. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUN CED IN THE OPEN COURT ON THIS 3RD DAY OF SEPTEMBER, 2015. 5. THERE IS NO DISPARITY ON FACTS. CONSIDERING SMA LLNESS OF THE ISSUES WHICH IS CLEARLY COVERED IN FAVOUR OF THE AS SESSEE BY THE ORDER OF THE ITAT, WE DO NOT FIND ANY REASON TO INC REASE THE ITA NO.2724/AHD/2015 (2 APPEALS) 8 MULTIPLICITY OF LITIGATION BY SETTING ASIDE THE ISS UE FOR ADJUDICATING AFRESH. WE, THEREFORE ALLOW THE APPEALS OF THE ASS ESSEE, AND DELETE THE DEMAND RAISED UNDER SECTION 234E OF THE ACT ALONG WITH CONSEQUENTIAL INTEREST ON NON-PAYMENT ON THESE DEMANDS. 5. A PERUSAL OF THE ABOVE ORDER WOULD INDICATE THAT THE ITAT, AMRISTAR BENCH HAS HELD THAT WHILE PROCESSING THE R ETURN UNDER SECTION 200A OF THE ACT, THE LD.AO CANNOT IMPOSE LEVY OF FE ES UNDER SECTION 234E OF THE ACT. RESPECTFULLY FOLLOWING THE ORDER OF THE ITAT, AMRISTAR BENCH AS WELL AS OF ITAT, AHMEDABAD CITED SUPRA, WE ALLOW BOTH THE APPEALS AND DELETE IMPOSITION OF FEES UNDER SECTION 234E OF THE INCOME TAX ACT. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 8 TH DECEMBER, 2015 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER