Blue River Realty Pvt. Ltd., Ahmedabad V. ACIT, CPC TDS, Ghaziabad

ITA 36/AHD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8776 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 10-01-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR SHYAM PRASAD
• Assessee Lawyers: S V AGARWAL
• Keywords: Capital asset; TDS
• Section: 234E; 200A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH (CONDUCTED THROUGH VIRTUAL COURT) BEFORE: SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEM BER BLUE RIVER REALTY PVT. LTD. 2, RANGOLI COMPLEX, OPP. V.S. HOSPITAL, ELLISBRIDGE, AHMEDABAD-380006 PAN: AHMB04309E (APPELLANT) VS ACIT, CPC-TDS, GAZIABAD (RESPONDENT) REVENUE BY: DR. SHYAM PRASAD, SR. D.R. ASSESSEE BY: SHRI S.V. AGARWAL, A.R . DATE OF HEARING : 29-07-2021 DATE OF PRONOUNCEMENT : 30-07-202 1 /ORDER PER BENCH:- THESE TWO APPEALS FILED BY THE ASSESSEE FOR A.Y. 20 13-14 & 2014-15, ARISE FROM ORDER OF THE CIT(A)-8, AHMEDABAD DATED 18-04-2018, IN PROCEEDINGS UNDER SECTION 200A OF THE INCOME TAX AC T, 1961; IN SHORT THE ACT. ITA NOS. 36 &37/AHD/2019 ASSESSMENT YEAR 2013-14 & 2014-15 I.T.A NOS. 36 & 37/AHD/2019 A.Y. 2013-14 &20 14-15 PAGE NO BLUE RIVER REALTY PVT. LTD. VS. ACIT 2 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-8 AHMEDABAD IN CONFIRMING THE L EVY OF LATE FILING FEES FOR FORM 26Q AND FORM 24Q OF FINANCIAL YEAR 2012-13 AND 2013-14 U/S. 200A R.W.R. 234E OF THE I.T. ACT. 3. THE BRIEF FACT OF THE CASE IS THAT ACIT CPC TDS , GAZIABAD, THE ASSESSING OFFICER HAS LEVIED FEES U/S. 234E OF THE ACT FOR DELAY IN FURNISHING THE SUBMISSION OF TAX DEDUCTION AT SOURCE AND LEVIE D FEES U/S. 234E OF THE ACT TO THE AMOUNT OF RS. 89,065/- 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE L D. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE AFT ER REFERRING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF RAJESH KOURANI VS. UNION OF INDIA (2017) 83 TAXMANN.COM 137 (GUJ). TH E RELEVANT PART OF THE DECISION OF LD. CIT(A) IS REPRODUCED AS UNDER:- 5.1 I HAVE CAREFULLY GONE THROUGH THE FACTS OF CAS E AND THE SUBMISSIONS MADE, PROVISIONS OF SUB SECTION 3 OF SECTION 200 OF THE ACT REQUIRE ANY PER SON DEDUCTING TAX AT SOURCE TO PREPARE THE PRESCRIBED STATEMENT AND DELIVER OR CAUSE TO BE DEL IVERED THE SAME TO THE PRESCRIBED AUTHORITY WITHIN THE GIVEN TIME, THE FORMS FOR SUCH STATEMENT S ARE PRESCRIBED IN RULE 31A OF THE INCOME TAX RULES, 1962- SECTION 200 A OF THE ACT ENUMERATES TH E MANNER OF PROCESSING OF SUCH STATEMENTS AND SECTION 234E OF THE ACT INSERTED BY FINANCE ACT ,20 12 W.E.F. 1.7.2012 PROVIDES FOR LEVY OF FEES FOR DEFAULT IN FURNISHING THE STATEMENTS UNDER SUB SECT ION 3 OF SECTION 200 OF THE ACT . IN SECTION 200A WHICH DEALS WITH PROCESSING OF THE PRESCRIBED STATE MENTS, THE SPECIFIC PROVISION FOR LEVY OF FEE UNDER SECTION 234E WAS INSERTED W.E.F. 1.6, 2015. T HE GRIEVANCE OF THE APPELLANT IS THAT ALTHOUGH SECTION 234E CAME INTO EFFECT W.E.F. 1.7.2012 BUT S INCE THE ENABLING PROVISION FOR COMPUTATION OF FEE WHILE PROCESSING THE STATEMENTS WAS INSERTED IN SECTION 200A ONLY W.E.F. 1.6.2015, THE CHARGING SECTION I.E. SECTION 234 E CANNOT BE ENFOR CED PRIOR TO 1.6.2015. 5.2 ON PLAIN READING OF SECTION 234E, IT IS CLEAR T HAT THIS IS CHARGING SECTION AND SECTION 200A(1) IS A MACHINERY SECTION. CHARGING SECTION CANNOT BE SUBSERVIENT TO THE MACHINERY SECTION. FURTHER, I FIND THAT THIS VIEW HAS ALSO BEEN UPHELD BY THE H ON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF RAJESH KOURANI VS. UNION OF INDIA (2017) 83 TAXMANN.COM 137 (GUJARAT), JUDGMENT DELIVERED ON 20.06.2017. IN THIS CASE, THE HON'BLE GUJARAT HIGH COURT WHILE COMPREHENSIVELY DEALING WITH THE ISSUE HAVE CLEARLY HELD THAT UNDER NO CIRCUMSTANCES A MACHINERY PROVISION CAN OV ERRIDE THE CHARGING PROVISION. RELEVANT PART OF THE DECISION I S REPRODUCED AS BELOW: - '19. IN PLAIN TERMS, SECTION 200A OF THE ACT IS MAC HINERY PROVISION PROVIDING MECHANISM FOR PROCESSING A STATEMENT OF DEDUCTION OF TAX AT S OURCE AND FOR MAKING ADJUSTMENT, WHICH ARE AS NOTED EARLIER, ARITHMETICAL OR PRIMA-F ACIE IN NATURE. WITH EFFECT FROM 01.06.2015, THIS PROVISION SPECIFICALLY PROVIDES FO R COMPUTING THE FEE PAYABLE UNDER I.T.A NOS. 36 & 37/AHD/2019 A.Y. 2013-14 &20 14-15 PAGE NO BLUE RIVER REALTY PVT. LTD. VS. ACIT 3 SECTION 234E OF THE ACT. ON THE OTHER HAND, SECTION 234E IS A CHARGING PROVISION CREATING A CHARGE FOR LEVYING FEE FOR CERTAIN DEFAULT IN FIL ING THE STATEMENTS. UNDER NO CIRCUMSTANCES A MACHINERY PROVISION CAN OVERRIDE OR OVERRULE A CHARGING PROVISION. WE ARE UNABLE TO SEE THAT SECTION 200A OF THE ACT CREA TES ANY CHARGE IN ANY MANNER. IT ONLY PROVIDES A MECHANISM FOR PROCESSING A STATEMENT FOR TAX DEDUCTION AND THE METHOD IN WHICH THE SAME WOULD BE DONE. WHEN SECTION 234E HAS ALREADY CREATED A CHARGE FOR LEVYING FEE THAT WOULD THEREAFTER NOT BEEN NECESSAR Y TO HAVE YET ANOTHER PROVISION CREATING THE SAME CHARGE. VIEWING SECTION 200A AS C REATING A NEW CHARGE WOULD BRING ABOUT A DICHOTOMY. IN PLAIN TERMS, THE PROVISION IN OUR UNDERSTANDING IS A MACHINERY PROVISION AND AT BEST PROVIDES FOR A MECHANISM FOR PROCESSING AND COMPUTING BESIDES OTHER, FEE PAYABLE UNDER SECTION 234E FOR LATE FILI NG OF THE STATEMENTS. 20. EVEN IN ABSENCE IF SECTION 200A OF THE ACT WITH INTRODUCTIO N OF SECTION 234E, IT WAS ALWAYS OPEN FOR THE REVENUE TO DEMAND AND COLLECT THE FEE FOR L ATE FILING OF THE STATEMENT. SECTION 200A WOULD MERELY REGULATE THE MANNER IN WHICH THE COMPUTATION OF SUCH FEE WOULD BE MADE AND DEMAND RAISED. IN OTHER WORDS, WE CANNOT S UBSCRIBE TO THE VIEW THAT WITHOUT A REGULATORY PROVISION BEING FOUND FOR SECTION 200A F OR COMPUTATION OF FEE, THE FEE PRESCRIBED UNDER SECTION234E CANNOT BE LEVIED. ANY SUCH VIEW WOULD AMOUNT TO A CHARGING SECTION YIELDING TO THE MACHINERY PROVISIO N. IF AT ALL, THE RECASTED CLAUSE (C) OF SUB SECTION (1) OF SECTION 200A WOULD BE IN NATURE OF CLARIFICATORY AMENDMENT EVEN IN ABSENCE OF SUCH PROVISION, AS NOTED, IT WAS ALWAYS OPEN FOR THE REVENUE TO CHARGE THE FEE IN TERMS OF SECTION 234E OF THE ACT. BY AMENDMENT, THE ADJUSTMENT WAS BROUGHT WITHIN THE FOLD OF SECTION 200A OF THE ACT. THIS WOULD HAV E ONE DIRECT EFFECT. AN ORDER PASSED UNDER SECTION 200A OF THE ACT IS RECTIFIABLE UNDER SECTION 154 OF THE ACT AND IS ALSO APPEALABLE UNDER SECTION 246A. IN ABSENCE OF THE PO WER OF AUTHORITY TO MAKE SUCH ADJUSTMENT UNDER SECTION 200A OF THE ACT, ANY CALCU LATION OF THE FEE WOULD NOT PARTAKE THE CHARACTER OF THE INTIMATION UNDER SAID PROVISIO N AND IT COULD BE ARGUED THAT SUCH AN ORDER WOULD NOT BE OPEN TO 'ANY RECTIFICATION OR AP PEAL. UPON INTRODUCTION OF THE RECASTED CLAUSE (C), THIS SITUATION ALSO WOULD BE O BVIATED. EVEN PRIOR TO 01.06.2015, IT WAS ALWAYS OPEN FOR THE REVENUE TO CALCULATE FEE IN TERMS OF SECTION 234E OF THE ACT. THE KARNATAKA HIGH COURT IN CASE OF FATHERAJ SINGHVI (S UPRA) HELD THAT THE SECTION 200A WAS NOT MERELY A REGULATORY PROVISION, BUT WAS CONFERRI NG SUBSTANTIVE POWER ON THE AUTHORITY. THE COURT WAS ALSO OF THE OPINION THAT SECTION 234E OF THE ACT WAS IN THE NATURE PRIVILEGE TO THE DEFAULTER IF HE FAILS TO PAY FEES THEN HE WO ULD BE RID OF RIGOR OF THE PENAL PROVISION OF SECTION 271H OF THE ACT. WITH BOTH THESE PROPOSI TIONS, WITH RESPECT, WE ARE UNABLE TO CONCUR. SECTION 200A IS NOT A SOURCE OF SUBSTANTIVE POWER. SUBSTANTIVE POWER TO LEVY FEE CAN BE TRACED TO SECTION 234E OF THE ACT. FURTHER T HE FEE UNDER SECTION 234E OF THE ACT IS NOT IN LIEU OF THE PENALTY OF SECTION 271H OF THE A CT. BOTH ARE INDEPENDENT LEVIES. SECTION 271H ONLY PROVIDES THAT SUCH PENALTY WOULD NOT BE L EVY IF CERTAIN CONDITIONS ARE FULFILLED- ONE OF THE CONDITIONS IS THAT THE TAX WITH FEE AND INTEREST IS PAID. THE ADDITIONAL CONDITION BEING THAT THE STATEMENT IS FILED WITHIN ONE YEAR F ROM THE DUE DATE. 21. COUNSEL FOR THE PETITIONER HOWEVER, REFERRED TO THE DECISION OF SUPREME COURT IN CASE OF CIT V. B. C. SRINIVASA SETTY [1981] 128 ITR 294/ 5 TAXMAN 1 (SC), TO CONTENDED THAT WHEN A MACHINERY PROVISION IS NOT PROVIDED, THE LEV Y ITSELF WOULD FAIL. THE DECISION OF SUPREME COURT IN CASE OF B C. SRINIVASA SETTY (SUPR A) WAS RENDERED IN ENTIRELY DIFFERENT BACKGROUND. ISSUE INVOLVED WAS OF CHARGING CAPITA! GAIN ON TRANSFER OF CAPITAL ASSET IN CASE ON HAND, THE ASSET WAS IN THE NATURE OF GOODWI LL. THE SUPREME COURT REFERRING TO VARIOUS PROVISION CONCERNING CHARGING AND COMPUTING CAPITAL GAIN OBSERVED THAT NONE OF THE THESE PROVISIONS SUGGEST THAT THEY INCLUDE AN A SSET IN THE ACQUISITION OF WHICH NO COST CAN BE CONCEIVED. IN SUCH A CASE, THE ASSET IS SOLD AND THE CONSIDERATION IS BROUGHT TO TAX, WHAT IS CHARGED IS A CAPITAL VALUE OF THE ASSET AND NOT ANY PROFIT OR GAIN. THIS DECISION THEREFORE WOULD NOT APPLY IN THE PRESENT CASE.' THE JUDGMENT OF HON'BLE ITAT RELIED UPON BY THE APP ELLANT IN THE CASE OF TANISH INDUSTRIES PVT. LTD (SUPRA) WAS DELIVERED TO PRIOR TO THE JUDGMENT OF HON'BLE HIGH COURT. IN VIEW OF THE ABOVE CLEAR POSITION OF LAW AND RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE JURISDICTIONAL I.T.A NOS. 36 & 37/AHD/2019 A.Y. 2013-14 &20 14-15 PAGE NO BLUE RIVER REALTY PVT. LTD. VS. ACIT 4 HIGH COURT IN THE CASE OF RAJESH KOURANI (SUPRA) IT IS HELD THAT FEES LEVIED BY THE AO UNDER THE PROVISIONS OF SECTION 234E OF THE ACT IS CORRECT AN D APPEALS ON THIS GROUND ARE DISMISSED. 5. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. IT IS UNDISPUTED FACT THAT ASSESSEE HAS MADE DELAY IN FUR NISHING SUBMISSION OF TAX DEDUCTION AT SOURCE AS PRESCRIBED UNDER RULE 31A OF INCOME TAX RULE, 1962. CONSIDERING THE DECISION OF HONBLE GUJARAT HIGH CO URT AS ELABORATED IN THE CASE OF LD. CIT(A), WE DO NOT FIND ANY ERROR IN THE DECISION OF LD. CIT(A), THEREFORE, THE APPEAL OF THE ASSESSEE IS DISMISSED. ITA NO. 37/AHD/2019 A.Y. 2014-15 6. AS THE FACTS AND ISSUES INVOLVED IN THE APPEA L VIDE ITA NO. 36/AHD/2019 ASSESSMENT YEAR 2013-14 ARE SIMILAR AS IN ITA NO. 37/AHD/2019 ASSESSMENT YEAR 2014-15 THEREFORE AFTER APPLYING THE DECISION ADJUDICATED VIDE ITA NO. 36/AHD/2019 A S SUPRA IN THIS ORDER, THIS APPEAL OF THE ASSESSEE IS DISALLOW ED. 7. IN THE RESULT, BOTH THE APPEALS FILED BY A SSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30-07-2021 SD/- SD/- (MAHAVIR PRASAD) (AMARJIT SINGH) JUDICIAL MEMBER A CCOUNTANT MEMBER AHMEDABAD : DATED 30/07/2021 / COPY OF ORDER FORWARDED TO:- I.T.A NOS. 36 & 37/AHD/2019 A.Y. 2013-14 &20 14-15 PAGE NO BLUE RIVER REALTY PVT. LTD. VS. ACIT 5 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,