Shri Vijaysinh Mansinh Mangrola, Tapi V. The Income Tax Officer, TDS-2, Surat

ITA 3359/AHD/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9863 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-12-2015
• Assessment Year: 2013-2014
• Appeal Filed On: 15-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAMIES KURIAN
• Keywords: Charitable institution

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ./ ITA NO. 3359/AHD/2014 / ASSESSMENT YEAR: 2013-14 VIJAYSINGH MANSINH MANGROLA, DHULIA NATIONAL HIGHWAY-6, FORT SONGADH, TAPI .. APPELLANT PAN : ABPPM 8699 F VS INCOME TAX OFFICER, TDS-2, SURAT (NEW) DCIT, CPC, TDS, GHAZIABAD .. RESPONDENT AS SESSEE(S) BY : WRITTEN SUBMISSION REVENUE BY : SHRI JAMIES KURIAN , SR - DR / DATE OF HEARING 11/12/2015 /DATE OF PRONOUNCEMENT 13/01/2016 / O R D E R THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -IV, SURAT, DATED 29.09.2014 FOR ASSESSMENT YEAS 2013-14. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED FOLLOW ING GROUNDS:- 1. THE LD CIT (A) HAS ERRED BY UPHOLDING DECISION O F THE LD. AO (TDS CPC) TO LEVY FEE U/S. 234E OF RS.11,535 /- AS PER ORDER PASSED U/S. 200A. ITA NO. 3359/AHD/2014 VIJAYSINH MANSINH MANGROLA VS. ITO AYS : 2013-14 2 2. THE ASSESSEE HAS DULY PAID INTEREST ON LATE DEDU CTION AND LATE PAYMENT OF TDS. 3. THE ASSESSEE FILED ITS TDS RETURN ON 16/05/2013. 4. THE LD. ASSESSING OFFICER APPEARS TO HAVE NOT AP PLIED HIS MIND ABOUT THE LATE DEDUCTION AND PAYMENT OF IN TEREST THEREON AND HAS ISSUED ORDER RELYING ON REPORT GENE RATED BY TRACES COMPUTERIZED SYSTEM. 5. THE LD. ASSESSING OFFICER HAS ERRED BY NOT CONSI DERING THE PROVISION OF SECTION 200A WHICH DO NOT AUTHORIZ E THE ASSESSING OFFICER TO LEVY CHARGES U/S 234E AS PER T HE PROVISIONS OF SECTION 200 AND 200A. 6. THE RETURN COULD NOT BE FILED WITHIN THE PRESCRI BED TIME AS ONE TDS CHALLAN WAS PAID LATE IN THE MONTH OF FEBRUARY-2013. 7. RULE 31A OF INCOME TAX RULES, 1962 DIRECTS THE A SSESSEE TO FILE STATEMENT OF DEDUCTION OF TAX. SO UNTIL THE TAX IS DEDUCTED AND PAID, LIABILITY TO FILE RETURN DOCS NO T ARISE. 8. OBJECT OF LEVY OF LATE FEE AS PER PROVISION OF SECTION 234E IS TO PENALIZE ASSESSEE FOR LATE FILING AFTER PAYMENT OF TDS. THEREFORE IN EFFECT THE LEVY OF LATE FEE IS I N NATURE OF PENALTY NOTWITHSTANDING THE NOMENCLATURE. THEREFORE , BEFORE LEVYING ANY PENALTY THE ASSESSEE SHOULD HAVE BEEN GIVEN AN OPPORTUNITY TO EXPLAIN THE REASON OF DELAY AND THE ASSESSING OFFICER IS DUTY BOUND TO CONSIDER THE REASONS JUDICIOUSLY BEFORE LEVYING SUCH PENALTY. 3. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE HAS FILED WRITTEN SUBMISSION ON 03.12.2015, WHEREIN HE POINTED OUT THAT SIMILAR ISSUE AROSE BEFORE THE TRIBUNAL IN THE CASE OF LIONS CLUB OF NORTH SURAT CHARITABLE TRUST VS. ITO IN ITA NOS. 3274 TO 3276/AHD/2014, WHEREIN THE TRIBUNAL, FOLLOWING T HE ITA NO. 3359/AHD/2014 VIJAYSINH MANSINH MANGROLA VS. ITO AYS : 2013-14 3 DECISION OF ITAT, AMRITSAR BENCH RENDERED IN ITA NO.90/ASR/2015 IN THE CASE OF SIBIA HEALTHCARE PRIV ATE LTD VS. DCIT, HAS DECIDED THE SIMILAR ISSUE IN FAVOUR OF TH E ASSESSEE, BY OBSERVING AS UNDER:- 4. I FIND THAT THE ISSUE IN ALL APPEALS IS NOW SQU ARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F ITAT AMRITSAR BENCH IN THE CASE OF SIBIA HEALTHCARE PRIV ATE LIMITED VS. DCIT ITA NO.90/ASR/2015, VIDE ORDER D ATED 9 TH JUNE, 2015, WHEREIN THE DIVISION BENCH HAS INTER A LIA OBSERVED AS UNDER:- '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 APPLICABLE LEGAL POSITION. IN ADDITION TO HIS ARGUMENT ON THE MERITS, LEARNED COUNSEL HAS ALSO INVITED OUR ATTENTION TO THE REPOR TS ABOUT THE DECISIONS OF VARIOUS HON'BLE HIGH COURTS, INCLUDING HON'BLE KERALA 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 CASE 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 TEXT O F 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 APPEAL REQUIRES ADJUDICATION ON A VERY SHORT LEGAL ISSUE, WITHIN A NARROW COMPASS OF MATERIAL FACTS, W E ARE PROCEEDING TO DISPOSE OF THIS APPEAL ON MERITS. ITA NO. 3359/AHD/2014 VIJAYSINH MANSINH MANGROLA VS. ITO AYS : 2013-14 4 5. WE MAY PRODUCE, FOR READY REFERENCE, SECTION 234E OF THE ACT, WHICH WAS INSERTED BY THEFINANCE 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. (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- 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 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 STATUTORY PROVISION, AS I T 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 MADE 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:-- ITA NO. 3359/AHD/2014 VIJAYSINH MANSINH MANGROLA VS. ITO AYS : 2013-14 5 (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 INFORMATION 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 UNDER CLAUSE (B) AGAINST ANY AMOUNT PAID UNDER SECTION 200AND SECTION 201, AND ANY AMOUNT PAID OTHERWISE BY WAY OF TAX OR INTEREST; (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. EXPLANATION : FOR THE PURPOSES 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 ITA NO. 3359/AHD/2014 VIJAYSINH MANSINH MANGROLA VS. ITO AYS : 2013-14 6 SCHEME FOR CENTRALISED 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 SUBSECTION. 7. BY WAY OF FINANCE ACT 2015, AND WITH EFFECT FROM 1ST JUNE 2015, THERE IS AN AMENDMENT INSECTION 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 1ST DAY OF JUNE, 2015, 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 COURS E OF PROCESSING OF A TDS STATEMENT AND ISSUANCE OF INTIMATION UNDER SECTION 200A IN RESPECT THEREOF, A N ADJUSTMENT COULD ALSO BE MADE IN RESPECT OF THE 'FE E, 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 THE ACT, AS STATED IN ITA NO. 3359/AHD/2014 VIJAYSINH MANSINH MANGROLA VS. ITO AYS : 2013-14 7 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 234 E. 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 COMPUTATION OF AMOUNT RECOVERABLE 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) 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 TO , OR RECOVERABLE FROM, THE TAX DEDUCTOR, WERE PERMISSIBLE IN ACCORDANCE WITH THE LAW AS IT EXISTE D 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 SECTION 200A. THIS INTIMATION IS AN APPEALABL E 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 N OT DONE SO. HE HAS JUSTIFIED THE LEVY OF FEES ON THE B ASIS 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 PROVISION ENABLING A DEMAND IN RESPECT OF THIS LEVY HAS BEEN POINTED OUT TO US AND IT IS THUS AN ADMITT ED ITA NO. 3359/AHD/2014 VIJAYSINH MANSINH MANGROLA VS. ITO AYS : 2013-14 8 POSITION THAT IN THE ABSENCE OF THE ENABLING PROVIS ION 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 FINANCIA L YEAR WITHIN WHICH THE RELATED TDS STATEMENT IS FILE D, 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, A S ALSO BEARING IN MIND ENTIRETY OF THE CASE, THE IMPUGNED LEVY OF FEES UNDER SECTION 234 E IS 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 T O THE NOTICE OF THE LD . DEPARTMENTAL REPRESENTATIVE, HE DID NOT HAVE MUCH TO SAY EXCEPT TO PLACE HIS RELIANCE ON TH E ORDERS OF THE AUTHORITIES BELOW. HE FAIRLY DID NOT DISPUTE THAT THE PROVISIONS ACCEPTING LEVY OF LATE FILING F EES UNDER SECTION 234E HAVE INDEED BEEN BROUGHT TO THE STATUT E W.E.F. 1 ST JUNE, 2015 AND THE IMPUGNED ORDER WAS PASSED MUCH BEFORE THAT DATE. 6. IN VIEW OF THE ABOVE DISCUSSIONS AND HEARING IN MIND ENTIRETY OF THE CASE, WE HEREBY DELETE THE LEVY OF LATE FILING FEES IN ALL THESE THREE APPEALS UNDER SECTION 234E OF THE ACT BY WAY OF IMPUGNED INTIMATION ISSUED. THE ASSE SSEE GETS THE RELIEF ACCORDINGLY. 4. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE ON BEHALF OF THE REVENUE. FACTS BEING SIMILAR, SO FOLLOWING T HE SAME REASONING I AM NOT INCLINED TO CONCUR WITH THE FIND INGS OF THE LD. CIT(A); THEREFORE, RESPECTFULLY FOLLOWING THE D ECISION OF CO- ORDINATE BENCH IN THE CASE OF LIONS CLUB OF NORTH S URAT ITA NO. 3359/AHD/2014 VIJAYSINH MANSINH MANGROLA VS. ITO AYS : 2013-14 9 CHARITABLE TRUST (SUPRA), I ALLOW THIS APPEAL FILED BY THE ASSESSEE AND DELETE THE LATE FEE CHARGED FROM THE A SSESSEE U/S 234E OF THE ACT. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE COURT ON 13TH JANUARY, 2016 AT AHMEDABAD. SD/- SD/- (RAJESH KUMAR) ACCOUNTANT MEMBER (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER AHMEDABAD; DATED /12/2015 *BT !' #'$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' ' # / CONCERNED CIT 4. ' ' # ( ) / THE CIT(A) 5. &'( ! , ' ! , / DR, ITAT, AHMEDABAD 6. (- . / GUARD FILE. / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD