HARILAL DESAR RANA CLOTHING COMPANY LLP, MUMBAI V. DCIT (CPC)-TDS,

ITA 2934/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1222 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 07-03-2017
• Assessment Year: misc
• Appeal Filed On: 15-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ASHIWINI KUMAR H SHAH
• Keywords: Right to appeal; Condonation of delay

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D MUMBAI BEFORE SHRI D.T.GARASIA , JM AND SHRI RAJESH KUMAR, AM I.T.A. NO. 2934 /MUM/20 1 5 ( / ASSESSMENT YEAR : 20 1 4 - 15 ) (26Q - 2) HARILAL DESAR R ANA CLOTHING COMPANY LLP, BLOCK NO.10, 2 ND FLOOR, SANSKAR BUILDING 53 - A, HIRCHAND DESAI ROAD, GHATKOPAR (W), MUMBAI - 400086 / VS. DY . COMMISSIONER OF INCOME TAX - (CPC) - TDS, ROOM NO.1000B, 10 TH FLOOR, K G MITTAL BLDG, CHARNI ROAD, MUMBAI - 4000 02 ./ PAN : AACCH6470J ( / APPELLANT) : ( / RESPONDENT ) / APPELLANT BY : SHRI ASHIWINI KUMAR H SHAH / RESPONDENT BY : SHRI PURUSHOTTAM KUMAR / DATE OF HEARING : 7 .3.2017 / DATE OF PRONOUNCEMENT : 12. 4 . 201 7 / O R D E R PER RAJESH KUMAR, A. M: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT(A) - 5 9 , MUMBAI DATED 6.4. 2015 FOR THE ASSESSMENT YEAR 20 1 4 - 15(26Q - 2) 2 I.T.A. NO. 2934 /MUM/201 5 2. THE IS SUE RAISED IN THE VARIOUS GROUNDS OF APPEAL IS AGAINST THE CONFIRMATION OF INTEREST OF RS.99 FOR LATE DEPOSIT OF TDS AND PENALTY OF RS.5800/ - FOR LATE FILING OF TDS RETURN IN THE OR 26Q BY 29 DAYS. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MMENCED ITS BUSINESS ACTIVITIES ON 17.8.2013 AND FOR THE PURPOSE OF C ARRYING ON AND C ONDUCTING BUSINESS , THE ASSESSEE HAS TAKEN THE PREMISES ON R ENTAL BASIS ON 6.7.2013 ON MONTHLY RENTAL OF RS.40,000/ - WHICH WAS TO BE PAID BY 10 TH OF THE SUCCEEDING CALEN DAR MONTH AND THE TDS ON RENT U/S 194I OF THE INCOME TAX ACT, 1961 WAS TO BE DEDUCTED AT THE TIME OF PAYMENT OF TH E RENT. THE ASSESSEE FILED FORM NO.26C FOR SECOND QUARTER ON 13.11.2013 WHICH WAS DUE TO FILE ON 15.10.2013 IN RESPECT OF TAX DEDUCTED OF RS.7300/ - THEREBY DELAY IN FILING HE RETURN BY 29 DAYS FOR WHICH PENALTY OF RS.5800/ - WAS IMPOSED UNDER SECTION 234E AND ALSO INTEREST OF RS.99 WAS CHARGED FOR LATE PAYMENT UNDER SECTION 201A OF THE ACT VIDE INTIMATION DATED 6.1.2014 RECEIVED FROM TDS , CPC, AAYAKAR BHAVAN, SECTOR - 3, VAISHALI, GAZIABAD, UP - 201010. THE APPEAL FILED BY THE ASSESSEE BEFORE THE LD.CIT(A) ALSO STOOD DISMISSED BY FOLLOWING THE DECISION OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF RASHMIKA N T KUNDALIA V/S UNION OF INDIA DATED, 9 TH FEB, 2015 IN WHICH THE HONBLE BOMBAY HIGH COURT HAS HELD THAT THE FEE SO UGHT TO BE LEVIED UNDER SECTION 234E IS NOT IN THE GUISE OF THE TAX THAT IS SOUGHT TO BE LEVIED ON THE DEDUCTOR. THE COURT FURTHER HELD THAT THE PROVISIONS OF SECTI ON 234E ARE NOT 3 I.T.A. NO. 2934 /MUM/201 5 ONEROUS ON THE GROUND THAT THE SECTION DOES NOT EMPOWER THE AO TO CONDONE THE DELAY IN LATE FILING OF THE TDS RETURN/STATEMENTS, OR THAT NO APPEAL IS PROVIDED FOR FROM AN ARBITRARY ORDER PASSED UNDER SECTION 234E. THE HONBLE COURT OBSERVE D THAT THE RIGHT OF APPEAL IS NOT A MATTER OF RIGHT BUT A CREATURE OF STATUTE AND IF THE LEGISLATURE DEEMS IT FIT NOT TO PROVIDE A REMEDY OF APPEAL, SO BE IT AND EVEN IN SUCH SCENARIO IT IS NOT AS IF THE AGGRIEVED PARTY IS REMEDILESS. SUCH PERSON CAN A LWAYS APPROACH THIS COURT IN EXTRA ORDINARY EQUITABLE JURISDICTION UNDER ARTICLE 226/227 OF THE CONSTITUTION OF INDIA AS THE CASE MAY BE. THE HONBLE COURT HAS HELD THAT WE CANNOT AGREE WITH THE ARGUMENTS OF THE PETITIONER THAT SIMPLY BECAUSE NO REMEDY OF APPEAL IS PROVIDED FOR , THE PROVISION S OF SECTION 234E OF THE ACT ARE ONEROUS. SIMILARLY, ON THE SAME PARITY OF REASONING, WE FIND THE ARGUMENTS REGARDING THE CONDONATION OF DELAY ALSO TO BE WHOLLY WITHOUT ANY MERITS. 4 . WE HAVE HEARD THE RIVAL CONT ENTIONS, PERUSED THE MATERIAL PLACED BEFORE US INCLUDING THE CASE LAW RELIED UPON BY BOTH THE PARTIES. THE LD. AR VEHEMENTLY ARGUED BEFORE US THAT THE LATE FILING FEE U/S 234E OF THE ACT IS NOT LEVIABLE UNDER THE PROVISIONS OF THE ACT AND WAS WRONGLY LEVI ED BY THE AO AND UPHELD BY THE FAA. THE LD. AR DREW OUR ATTENTION TO THE PROVISIONS OF SECTIONS 234E, 200A (A,B,C,D,E AND F) AND ALSO THE PROVISIONS OF SECTION 200 SUBSECTION (3) OF THE ACT. THE LD. AR ARGUED BEFORE US THAT THE PROVISIONS OF SECTION 200(3) OF THE ACT REQUIRE THE ASSESSEE TO FILE A STA TE MEN T WITHIN A 4 I.T.A. NO. 2934 /MUM/201 5 PRESCRIBED PERIOD FOR EACH QUARTER WHICH WAS INSERTED FROM 1.4.2005 AND THE PROVISIONS OF SECTION 272A(2)(K) PROVID ING FOR LEVY OF PENALTY OF RS.100 PER DAY FOR EACH DAY OF DEFAULT IN FILING TDS ALSO CAME TO BE INSERTED FROM 1.4.2005. THE LD. AR SUBMITTED THAT ON 1.4.2010 SECTION 200A WAS INSERTED PROVIDING FOR THE PROCESSING OF THE TDS STATEMENT AND THE CONSEQUENT ISSUANCE OF THE INTIMATION TO THE DEDUCTOR, DETERMIN ING THE AMOUNT PAYABLE OR REFUNDABLE BY IT. BUT IN THE INITIAL PROVISIONS OF SECTION 200A, THERE WAS NO REFERENCE FOR FEE PAYABLE UNDER SECTION 234E. ON 1.7.2012, SECTION 234E PROVIDED FOR LE VY ING OF FEE O F RS.200/ - PER DAY FOR EACH DAY OF DEFAULT IN FILING THE T DS. WE FIND MERIT IN THE ARGUMENT OF THE LD.AR THAT THE PROVISIONS OF SECTION 20 0A (1)(C) OF THE ACT THERE WAS NO AUTHORITY OR COMPETENCE OR JURISDICTION ON THE PART OF THE CONCERNED OFFICER OR DEPARTMENT TO COMPUTE OR DETERMINE THE FEE UNDER SECTION 23 4E IN RESPECT OF ASSESSMENT WHICH FALLS PRIOR TO 1.6.2 01 5 AS THE SAID PROVISIONS WAS ALSO BROUGHT ON THE STATUTE BOOK W.E.F. 1.6.2015 AND CONSEQUENTLY NO DEMAND U/S 234E SHOULD HAVE BEEN DETERMINED AND RAISED UPON THE ASSESSEE. IN THE CASE OF FATHERAJ SI NGHVI V/S UNION OF INDIA 2016] 73 TAXMANN.COM 252 (KARNATAKA), THE HONBLE KARNATAKA HIGH COURT HAS DECIDED AN IDENTICAL ISSUE WHEREIN IT HAS BEEN HELD THAT NO FEE UNDER SECTION 234E WAS PAYABLE IN RESPECT OF PERIOD WHICH RELATES TO OR FALLS PRIOR TO 1. 6.2015. THE RELEVANT EXTRACT IS REPRODUCED BELOW : 5 I.T.A. NO. 2934 /MUM/201 5 27. IN VIEW OF THE AFORESAID OBSERVATIONS AND DISCUSSION, THE IMPUGNED NOTICES UNDER SECTION 200A OF THE ACT FOR COMPUTATION AND INTIMATION FOR PAYMENT OF FEE UNDER SECTION 234E AS THEY RELATE TO FOR THE PERIOD OF THE TAX DEDUCTED PRIOR TO 1.6.2015 ARE SET ASIDE. IT IS CLARIFIED THAT THE PRESENT JUDGMENT WOULD NOT BE INTERPRETED TO MEAN THAT EVEN IF THE PAYMENT OF THE FEES UNDER SECTION 234E ALREADY MADE AS PER DEMAND/INTIMATION UNDER SECTION 200A OF THE ACT FOR THE TDS FOR THE PERIOD PRIOR TO 01.04.2015 IS PERMITTED TO BE REOPENED FOR CLAIMING REFUND. THE JUDGMENT WILL HAVE PROSPECTIVE EFFECT ACCORDINGLY. IT IS FURTHER OBSERVED THAT THE QUESTION OF CONSTITUTIONAL VALIDITY OF SECTION 234E SHALL REMAIN OPEN TO BE CONSIDERED BY THE DIVISION BENCH AND SHALL NOT GET CONCLUDED BY THE ORDER OF THE LEARNED SINGLE JUDGE. 28. THE APPEALS ARE PARTLY ALLOWED TO THE AFORESAID EXTENT . WE FIND THAT THE RELEVANT PERIOD IS 31 ST MAY, 2015 THE LAST DATE FOR FILING TDS STA TEMENT AND HENCE PERIOD FALLS PRIOR TO 1.6.2015. WE, THEREFORE, RESPECTFULLY FOLLOWING THE SAME RATIO AS LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT IN THE ABOVE MENTIONED CASE AND OUR AFORESAID OBSERVATIONS AND DISCUSSION AND THE PROVISIONS OF LAW, W E ARE INCLINED TO SET ASIDE THE ORDER OF THE LD.CIT(A) ON THIS ISSUE AND DIRECT THE AO TO DELETE THE LATE FILING FEE U/S 234E OF THE ACT OF RS. 5,800/ - . WE WOULD LIKE TO MENTION THAT THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT WAS RENDERED ON DIFFERENT CONTEXT THAT THE ISSUE OF LEVY OF LATE FILING UNDER SECTION 234E OF THE ACT WAS NOT APPEALABLE AND THEREFORE NOT ONEROUS. SINCE THE AO HAS NO POWER TO IMPOSE LATE FILING FEE, WE SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE AO TO DELETE T HE FEE OF RS.5,800/ - WHEREAS THE INTEREST FOR LATE PAYMENT OF TDS OF RS.99 / - IS SUSTAINED BEING MANDATORY. 6 I.T.A. NO. 2934 /MUM/201 5 5 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 12TH APRIL , 2017 . SD SD ( D.T.GARASIA ) ( RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 12. 4 .2017 SR.PS:SRL: / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT (A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, TRUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI