M/s. Ujjwal Fabrics, Surat V. The Dy.CIT, CPC-TDS,

ITA 3273/AHD/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1282 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 09-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L SHARMA

Judgement Text

ITA NO .3 273 / AHD/ 20 1 4 ASSESSMENT YEAR: 2 0 13 - 14 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH , SMC , AHMEDABAD [CORAM: PRAMOD KUMAR AM ] ITA NO. 3273 / AHD / 2 0 1 4 ASSESSMENT YEAR: 20 13 - 14 UJJWAL FABRICS, ....... .. . ..... APPELLANT 1 49, SARJAN SOCIETY, ATHWALINES, SURAT [PAN A BTPP 855 0 G ] VS. DY. COMMISSIONER OF INCOME TAX, .... .................. .... .. RESPONDENT CPC - TDS , GHAZIABAD. APPEARANCES BY: NONE FOR THE APPELLANT B.L. SHARMA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : SEPTEMBER 3 RD , 201 5 DATE OF PRONOUNCING T HE ORDER : SEPTEMBER 23 RD , 2015 O R D E R 1. BY WAY OF THIS APPEAL, THE A SSESS EE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 29 TH SEPTEMBER, 2014 PASSED BY THE LEARNED CIT(A) UPHOLDING LEVY OF FEES, UNDER SECTION 234E OF THE INCOME TAX ACT, 1 961 ( THE ACT HEREINAFTER), ON THE ASSESSEE AND BY WAY OF INTIMATION ISSUED UNDER SECTION 200 A IN RESPECT OF PROCESSING OF TDS FOR THE ASSESSMENT YEAR 20 1 3 - 14 . 2. ALTHOUGH THE ASSESSEE HAS RAISED AS MANY AS 13 GROUNDS OF APPEAL, THE SHORT GRIEVANCE OF T HE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED BY UPHOLDING DECISION OF THE LD. A.O. (TDS CPC) TO LEVY FEE U/S. 234E OF RS.30,000/ - AS PER ORDER PASSED UNDER SECTION 200A OF THE ACT. ITA NO .3 273 / AHD/ 20 1 4 ASSESSMENT YEAR: 2 0 13 - 14 PAGE 2 OF 6 3. NONE APPEARED FOR THE ASSESSEE BUT I HAVE HEARD THE LD. DEPARTMENTAL R EPRESENTATIVE, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED THE FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 4. I FIND THAT THE ISSUE IN APPEAL IS NOW SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT AMRITSAR BEN CH 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 THE MATERIAL ON RECORD AND D ULY 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 DECISIONS OF VARIOUS HON BLE HIGH COURTS, INCLUDING HON BLE K ERALA HIGH COURT, IN THE CASE OF NARATH MAPILA LP SCHOOL VS UNION OF INDIA [WP (C) 31498/2013(J)], HON BLE KARANATAKA HIGH COURT IN THE CASE OF ADITHYA BIZOR P SOLUTIONS VS UNION OF INDIA [WP NO. 6918 - 6938/2014(T - IT), HON BLE RAJASTHAN HIGH COURT IN THE CA SE OF OM PRAKASH DHOOT VS UNION OF INDIA [WP NO. 1981 OF 2014] AND OF HON BLE 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 T EXT OF THESE DECISIONS WERE NOT PRODUCED BEFORE US. HOWEVER, AS ADMITTEDLY THERE ARE NO ORDERS FROM THE HON BLE COURTS ABOVE RETRAINING US FROM OUR ADJUDICATION ON MERITS IN RESPECT OF THE ISSUES IN THIS APPEAL, AND AS, IN OUR HUMBLE UNDERSTANDING, THIS AP PEAL 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 A CT 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 AMOU NT 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 .3 273 / AHD/ 20 1 4 ASSESSMENT YEAR: 2 0 13 - 14 PAGE 3 OF 6 (3) THE AMOUNT OF FEE REFERRED TO IN SUB - SECTION (1) SHALL BE PAID BEFORE DELIVERING OR CAUSING TO BE DELIVERED A STATEMENT IN ACCOR DANCE WITH SUB - SECTION (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 WHIC H 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 EFF ECT FROM 1ST 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, OR A CORRECTION STATEMENT, HAS BEEN M ADE BY A PERSON DEDUCTING ANY SUM (HEREAFTER REFERRED TO IN THIS SECTION AS DEDUCTOR) UNDER SECTION 200, SUCH STATEMENT SHALL BE PROCESSED IN THE FOLLOWING MANNER, NAMELY: (A) THE SUMS DEDUCTIBLE UNDER THIS CHAPTER SHALL BE COMPUTED AFTER MAKING THE FOLL OWING 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 BASIS OF THE SUMS DEDUCTIBLE AS COMPUTED IN THE STATE MENT; (C) THE SUM PAYABLE BY, OR THE AMOUNT OF REFUND DUE TO, THE DEDUCTOR SHALL BE DETERMINED AFTER ADJUSTMENT OF AMOUNT COMPUTED UNDER CLAUSE (B) AGAINST ANY AMOUNT PAID UNDER SECTION 200 AND SECTION 201, AND ANY AMOUNT PAID OTHERWISE BY WAY OF TAX OR I NTEREST; (D) AN INTIMATION SHALL BE PREPARED OR GENERATED AND 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 PURSUANCE 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 YEAR IN WHICH THE STATEMENT IS FILED. ITA NO .3 273 / AHD/ 20 1 4 ASSESSMENT YEAR: 2 0 13 - 14 PAGE 4 OF 6 EXPLANATION : FOR THE PUR POSES OF THIS SUB - SECTION, 'AN INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN THE STATEMENT' SHALL 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 SOURCE, WHERE SUCH RATE IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT; (2) FOR THE PURPOSES OF PROCESSING OF STATEMENTS UNDER SUB - SECTION (1), THE BOARD MAY MAKE A SCHEME FOR CENTRALISED PR OCESSING 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 SUBSECTION. 7. BY WAY OF FINANCE ACT 2015, AND WITH EFFECT FROM 1ST JUNE 2015, THERE IS AN AMENDM ENT 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 - SECTION (1), FOR CLAUSES (C) TO (E), THE FOLLOWING CLAUSES SHALL BE SUBSTITUTED WITH EFFECT FROM THE 1 ST DAY OF JUNE, 2 015, NAMELY: (C) THE FEE, IF ANY, SHALL BE COMPUTED IN ACCORDANCE 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 200 OR SECTION 201 OR SECTION 234E AND ANY AMOUNT PAID OTHERWISE BY WAY OF TAX OR INTEREST OR FEE; (E) AN INTIMATION SHALL BE PREPARED OR GENERATED AND 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 PURSUANCE OF THE DETERMINATION UNDER CLAUSE (D) SHALL BE GRANTED TO THE DEDUCTOR. 8. IN EFFECT THUS, POST 1ST JUNE 2015, IN THE COU RSE OF PROCESSING OF A TDS STATEMENT AND ISSUANCE OF INTIMATION UNDER SECTION 200A IN RESPECT 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 DISPUT E 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 THE 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 TIME, PERMITTED ITA NO .3 273 / AHD/ 20 1 4 ASSESSMENT YEAR: 2 0 13 - 14 PAGE 5 OF 6 COMPUTATION OF AMOUNT R ECOVERABLE FROM, OR PAYABLE TO, THE TAX DEDUCTOR AFTER MAKING THE FOLLOWING ADJUSTMENTS: (A). AFTER MAKING ADJUSTMENT ON ACCOUNT OF ARITHMETICAL ERRORS AND INCORRECT CLAIMS APPARENT FROM ANY INFORMATION IN THE STATEMENT - SECTION 200A(1)(A) (B). AFTE R 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 TO, OR RECOVERABLE FROM, THE TAX DEDUCTOR, WERE PERMISSIBLE IN ACCORD ANCE WITH THE LAW AS IT EXISTED AT THAT POINT OF TIME. 10. IN VIEW OF THE 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 CONTEMPLATED UNDER SE CTION 200A. THIS INTIMATION IS AN APPEALABLE ORDER UNDER SECTION 246A(A), AND, THEREFORE, THE CIT(A) OUGHT TO HAVE EXAMINED LEGALITY OF THE ADJUSTMENT MADE UNDER THIS INTIMATION IN THE LIGHT OF THE SCOPE OF THE SECTION 200A. LEARNED CIT(A) HAS NOT DONE SO. HE HAS JUSTIFIED THE LEVY OF FEES ON THE BASIS OF THE PROVISIONS OF SECTION 234E. THAT IS NOT THE ISSUE HERE. THE ISSUE IS WHETHER SUCH A LEVY COULD BE EFFECTED IN THE COURSE OF INTIMATION UNDER SECTION 200A. THE ANSWER IS CLEARLY IN NEGATIVE. NO OTHER PR OVISION 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 D EMAND 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 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 I S UNSUSTAINABLE 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 ACCORDINGLY. 5. WHEN THE ABOVE JUDICIAL PRECEDENT WAS BROUGHT TO THE NOTICE OF THE LD. DEPARTMENTAL REPRESENTATIVE, HE DID NOT HAVE MUCH TO SAY EXCEPT TO PLACE HIS RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. HE FAIRLY DID NOT DISPUTE THAT THE PROVISIONS ACCEPTING LEVY OF LATE FILING FEES UNDER SECTION 234E HAVE INDEED BEEN BROUGHT TO THE STATUTE W.E.F. 1 ST JUNE, 2015 AND THE IMPUGNED ORDER WAS PASSED MUCH BEFORE THAT DATE. ITA NO .3 273 / AHD/ 20 1 4 ASSESSMENT YEAR: 2 0 13 - 14 PAGE 6 OF 6 6. IN VIEW OF THE ABOVE DISCUSSIONS AND BEARING IN MIND ENTIRETY OF THE CASE, I HEREBY DELETE THE LEVY OF LATE FILING FEES UNDER SECTION 234E OF THE ACT BY WAY O F IMPUGNED INTIMATION ISSUED. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 7. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF SEPTEMBER, 2015. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) AHMEDABAD, THE 23 RD DAY OF SEPTEMBER , 2015 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSIS TANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD