Varun Radiators Pvt. Ltd., Kalol V. The DY.CIT, CPC- TDS, Gaziabad

ITA 3241/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9649 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-12-2015
• Assessment Year: misc
• Appeal Filed On: 16-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MAURYA
• Assessee Lawyers: A L THAKKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMADABAD , BEFORE: SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER SHRI RAJPAL YADAV, JUDICIAL MEMBER ITA NO. 3241/AHD/2015 ASSESSMENT YEAR : 2013-14 VARUN RADIATORS PVT. LTD. 1106, GIDC ESTATE, CHHATRAL, TAL KALOL 382729, DIST. GANDHINAGAR V/S . THE DEPUTY COMM. OF INCOME TAX, CPC TDS, GAZIABAD PAN NO. AAACV7073K (APPELLANT) .. (RESPONDENT) /BY ASSESSEE SHRI A. L. THAKKAR, A.R. /BY REVENUE SHRI R. P. MAURYA, D.R. /DATE OF HEARING 22.12.2015 /DATE OF PRONOUNCEMENT 05.02.2016 O R D E R PER : RAJPAL YADAV, JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LD. CIT(A)-8, AHMEDABAD DATED 04.09.2015 PASSED FOR A.Y. 2013-14. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING THE LEVY OF FEE AMOUNTING TO RS.63,600/- UNDER SECTION 234E OF THE INCOME TAX ACT. ITA NO. 3241/AHD/15 A.Y.13-14 (VARUN RADIATORS PVT. LTD. VS. DCIT CPC TDS) PAGE 2 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA S COMMITTED A DEFAULT WITH REGARD TO LATE SUBMISSION OF FORM NO.24Q FOR QUARTE R NO. 4 FOR F.Y.2012-13. THE RETURN PROCESSING UNIT OF THE DEPARTMENT HAS IM POSED A FEE OF RS.63,600/- U/S.234E OF THE ACT ON ACCOUNT OF LATE FILING OF SU CH FORM. THE ASSESSEE CHALLENGED THE LEVY OF SUCH FEE BEFORE THE LD. CIT( A). THE LD. CIT(A) REJECTED THE PRAYER OF ASSESSEE ON THE GROUND THAT LEVY OF F EE U/S.234E OF THE ACT IS MANDATORY JUST LIKE IN THE CASE OF MANDATORY SECTIO N OF 234A, B,C & D OF THE ACT. THE LD. CIT(A) FURTHER OBSERVED THAT BY FINA NCE ACT, 2015 AMENDMENT TO SECTION 200A HAS BEEN EFFECTED IN ORDER TO BRING CL ARITY AND MODALITY IN PROCEDURE. THIS IS A MERE SIMPLIFICATION OF THE PR OCEDURE. 4. LD. COUNSEL FOR THE ASSESSEE, AT THE VERY OUTSET , SUBMITTED THAT THIS ISSUE HAS BEEN CONSIDERED BY ITAT, AMRISTAR BENCH IN THE CASE OF SIBIA HEALTHCARE PVT. LTD. VS. DCIT, WHEREIN ITAT HAS OBSERVED THAT DCIT, CPC HAS NO POWER U/S.200A OF THE ACT TO LEVY SUCH FEE WHILE PROCESSI NG SUCH RETURNS OF THE ASSESSEE. ACCORDING TO THE TRIBUNAL, A PERUSAL OF SECTION 200A WOULD INDICATE THAT ADJUSTMENT IN RESPECT OF LEVY OF FEE HAS NOT B EEN PROVIDED AND THEREFORE, SUCH FEE CANNOT BE LEVIED. 5. ON THE OTHER HAND, LD. D.R. CONTENDED THAT THIS PLEA WAS RAISED BEFORE THE LD. CIT(A) WHO HAS REJECTED THIS CONTENTION BY OBSE RVING THAT FEE LEVIABLE U/S.234E OF THE ACT IS MANDATORY AND IT FALLS WITHI N THE EXPRESSIONS OF SUM PAYABLE U/S.200A(1)(C) OF THE ACT. THUS, ACCORDING TO THE LD. D.R. THE LD. CIT(A) HAS RIGHTLY UPHELD THE LEVY OF SUCH FEE. 6. WE HAVE DULY CONSIDERED THE RIVAL SUBMISSIONS AN D GONE THROUGH THE RECORD CAREFULLY. ALL ASPECTS HAVE BEEN DULY CONSI DERED BY THE ITAT, AMRISTAR BENCH IN THE CASE OF SIBIA HEALTHCARE PVT. LTD. VS. DCIT, ITA NO.90/ASR/2015. THE ORDER OF THE DIVISION BENCH DATED 09.06.2015 RE AD AS UNDER: ITA NO. 3241/AHD/15 A.Y.13-14 (VARUN RADIATORS PVT. LTD. VS. DCIT CPC TDS) PAGE 3 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE AP PLICABLE LEGAL POSITION. IN ADDITION TO HIS ARGUMENT ON THE MERITS, LEARNED COUNSEL HAS ALS O 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) 31498/2013(J)], HONBLE KARANATAKA HIGH COURT I N THE 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 I NDIA [WP NO. 1981 OF 2014] AND OF HONBLE BOMBAY HIGH COURT IN THE CASE OF RAS HMIKANT KUNDALIA VS UNION OF INDIA [WP NO. 771 OF 2014], GRANTING STAY ON THE DE MANDS RAISED IN RESPECT OF FEES 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 TH E 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 MATERIAL FACTS, W E ARE PROCEEDING TO DISPOSE OF THIS APPEAL ON MERITS. 5. WE MAY PRODUCE, FOR READY REFERENCE, SECTION 234 E 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 SUBSEC TION (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 CAS E MAY BE. (3) THE AMOUNT OF FEE REFERRED TO IN SUB-SECTION (1 ) SHALL 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. (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-SE CTION (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 WAS INSERTED BY THE FINANCE ACT 2009 WITH EFFECT FROM 1ST APRIL 2010. THIS STATUTOR Y PROVISION, AS IT STOOD AT THE RELEVANT POINT OF TIME, WAS AS FOLLOWS: 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 ITA NO. 3241/AHD/15 A.Y.13-14 (VARUN RADIATORS PVT. LTD. VS. DCIT CPC TDS) PAGE 4 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; (C) THE SUM PAYABLE BY, OR THE AMOUNT OF REFUND DUE TO, THE DEDUCTOR SHALL BE DETERMINED AFTER ADJUSTMENT OF AMOUNT COMPUTED UNDE R CLAUSE (B) AGAINST ANY AMOUNT PAID UNDER SECTION 200 AND SECTION 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 ENTR Y 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 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 ST ATED IN THE FINANCE ACT 2015, IS AS FOLLOWS: ITA NO. 3241/AHD/15 A.Y.13-14 (VARUN RADIATORS PVT. LTD. VS. DCIT CPC TDS) PAGE 5 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 EFF ECT FROM THE 1ST 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 COMPUTED UNDER CLAUSE (B) AND CLAUSE (C) AGAINST ANY AMOUNT PAID UNDER SECTION 20 0 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 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 COURS E OF PROCESSING OF A TDS STATEMENT AND ISSUANCE OF INTIMATION UNDER SECTION 200A IN RE SPECT THEREOF, AN ADJUSTMENT COULD ALSO BE MADE IN RESPECT OF THE FEE, IF ANY, SHALL BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 234E. THERE IS NO DISPUTE TH AT 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, THERE WAS NO ENABLING PROVISION THEREIN FOR RAISING A DEM AND IN RESPECT OF LEVY OF FEES UNDER SECTION 234E. WHILE EXAMINING THE CORRECTNESS OF THE INTIMATION UNDER SECTION 200A, WE HAVE TO BE GUIDED BY THE LIMITED MANDATE O F SECTION 200A, WHICH, AT THE RELEVANT POINT OF TIME, PERMITTED COMPUTATION OF AM OUNT RECOVERABLE FROM, OR PAYABLE TO, THE TAX DEDUCTOR AFTER MAKING THE FOLLOWING ADJ USTMENTS: (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. - SE CTION 200A(1)(B) 9. NO OTHER ADJUSTMENTS IN THE AMOUNT REFUNDABLE TO , OR RECOVERABLE FROM, THE TAX DEDUCTOR, WERE PERMISSIBLE IN ACCORDANCE WITH THE L AW AS IT EXISTED AT THAT POINT OF TIME. 10. IN VIEW OF THE ABOVE DISCUSSIONS, IN OUR CONSID ERED VIEW, THE ADJUSTMENT IN RESPECT OF LEVY OF FEES UNDER SECTION 234E WAS INDEED BEYON D THE SCOPE OF PERMISSIBLE ADJUSTMENTS CONTEMPLATED UNDER SECTION 200A. THIS I NTIMATION IS AN APPEALABLE ORDER UNDER SECTION 246A(A), AND, THEREFORE, THE CIT(A) O UGHT TO HAVE EXAMINED LEGALITY OF THE ADJUSTMENT MADE UNDER THIS INTIMATION IN THE LI GHT OF THE SCOPE OF THE SECTION 200A. LEARNED CIT(A) HAS NOT DONE SO. HE HAS JUSTIF IED THE LEVY OF FEES ON THE BASIS OF THE PROVISIONS OF SECTION 234E. THAT IS NOT THE ISS UE HERE. THE ISSUE IS WHETHER SUCH A LEVY COULD BE EFFECTED IN THE COURSE OF INTIMATION UNDER SECTION 200A. THE ANSWER IS ITA NO. 3241/AHD/15 A.Y.13-14 (VARUN RADIATORS PVT. LTD. VS. DCIT CPC TDS) PAGE 6 CLEARLY IN NEGATIVE. NO OTHER PROVISION ENABLING A DEMAND IN RESPECT OF THIS LEVY HAS BEEN POINTED OUT TO US AND IT IS THUS AN ADMITTED P OSITION 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 REFUND 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 THE RELATED TDS STATEMENT WAS FILED ON 19TH FEBRUARY 2014, SUCH A LEVY COULD ONLY HAVE BEEN MAD E 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 BEARIN G IN MIND ENTIRETY OF THE 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 234E OF THE ACT. THE ASSESSEE GETS THE RELIEF ACCOR DINGLY. 7. RESPECTFULLY FOLLOWING THE ORDER OF THE CO-ORDIN ATE BENCH, WE ALLOW THE APPEAL OF THE ASSESSEE AND DELETE THE FEE CHARGED F ROM THE ASSESSEE U/S.234E OF THE INCOME TAX ACT AMOUNTING TO RS.63,600/-. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . THIS ORDER PRONOUNCED IN OPEN COURT ON 05.02.2016 SD/- SD/- ( PRAMOD KUMAR) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 05.02.2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. ! / RESPONDENT 3. '#'$% ! ! & / CONCERNED CIT 4. ! ! & - / CIT (A) 5. '( )! **$% , ! ! $% , # / DR, ITAT, AHMEDABAD 6. ) -. / GUARD FILE. BY ORDER/ , / ! ' ! ! $% , #