Darshan Sharadchandra Shah, Ahmedabad V. The Dy.CIT, TDS, CPC, Gaziabad

ITA 37/AHD/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9476 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 05-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER ./ ITA.NO.37/AHD/2016 / ASSTT. YEAR: 2013-2014 DARSHAN SHARADCHANDRA SHAH 1, CHARANKRUPA SOCIETY PART I SATELLITE ROAD AHMEDABAD 380 015. PAN : BFEPS 8595 C VS DCIT, CPS, TDS GHAZIABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI HIMANSHU SHAH, AR REVENUE BY : SHRI ALBINUS TIRKEY, SR.DR / DATE OF HEARING : 22/02/2016 / DATE OF PRONOUNCEMENT: 22/02/2016 $%/ O R D E R THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF THE LD.CIT(A)-4, AHMEDABAD DATED 5.2.2015 PASSED FOR TH E ASSESSMENT YEAR 2013-14. 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) IS ERRED IN CONFIRMING LEVY OF LATE FILING FEE U/S.234E OF THE INCOME TAX ACT OF RS.3,750 FOR FORM NO.26Q-Q4 FOR F.Y.2012-13. 3. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE ASSESSEE HAS PAID TDS AMOUNT OF RS.3,750/- IN TIME AND THERE WAS NO S HORT PAYMENT OR SHORT DEDUCTION, AND THAT, THE DEMAND OF LATE FEE CANNOT BE RAISED BY WAY OF ITA NO.37/AHD/2016 2 PROCESSING OF TDS STATEMENT, BECAUSE PROVISION OF S ECTION 200A OF THE ACT DOES NOT COVER DEFAULT IN PAYMENT OF LATE FEES, EXC EPT ANY ARITHMETICAL ERROR ETC. AND THEREFORE, REVENUE AUTHORITIES ARE NOT JUS TIFIED IN IMPOSING LEVY PENALTY OF RS.200/- PER DAY OR EQUAL TO TDS DEDUCTI BLE. THE LD.COUNSEL FOR THE ASSESSEE FURTHER BROUGHT TO MY NOTICE ORDERS OF THE ITAT, AHMEDABAD BENCH IN THE CASE OF SHREE HARSIDDH SEVA SAMITI TRUST VS. DCIT, IN ITA NOS.54/AHD/2015 DATED 15.9.2015 WHICH FOLLOWED THE ORDER OF THE ITAT, AMRISTAR BENCH IN THE CASE OF SIBIA HEALTHCARE PVT. LTD. IN ITA NO.90/ASR/2015 WHEREIN IN SIMILAR FACTS AND CIRCUMS TANCES, THE TRIBUNAL HAS DELETED THE PENALTY. COPY OF THIS ORDER OF THE TRIB UNAL HAS BEEN PLACED ON RECORD BY THE LD.COUNSEL FOR THE ASSESSEE. 4. ON THE OTHER HAND, THE LD.DR, RELIED UPON THE OR DERS OF THE REVENUE AUTHORITIES. 5. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS ON RECORD AND ALSO THE ORDERS OF THE TRIBUNAL RELIED ON BY THE LD . COUNSEL FOR THE ASSESSEE. THE ASSESSEE HAS SUBMITTED TDS RETURN LATE. THERE IS NO DISPUTE TO THAT EXTENT. HOWEVER, THE ITAT, AHMEDABAD BENCH IN THE CASE OF SHREE HARSIDH SEVA SAMIT TRUST (SUPRA) WHILE ALLOWING SIMILAR CLA IM OF THE ASSESSEE, HAS RELIED UPON THE DECISION OF AMRISTAR BRANCH IN THE CASE OF SIBIA HEALTHCARE PVT.LTD. VS. DCIT, ITA NO.90/ASR/2015 ORDER DATED 9 .6.2015 WHEREIN IT HAS HELD THAT WHILE PROCESSING UNDER SECTION 200A, THE AO WAS NOT EMPOWER TO CHARGE FEE UNDER SECTION 234E. THE RELEVANT PORTIO N OF THE ORDER OF THE ITAT, AHMEDABAD CITED SUPRA READ AS UNDER: 4. WE FIND THAT THE ISSUE IN THIS APPEAL IS NOW SQ UARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT AMRI TSAR BENCH IN THE CASE OF SIBIA HEALTHCARE PRIVATE LIMITED VS. DCIT - ITA NO.90/ASR/2015, VIDE ORDER DATED 9TH JUNE, 2015, WH EREIN THE DIVISION BENCH HAS INTER ALIA OBSERVED AS UNDER :- ITA NO.37/AHD/2016 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 APPLICABLE LEGAL POSITION. IN ADDITION TO HIS ARGUM ENT ON THE MERITS, LEARNED COUNSEL HAS ALSO INVITED OUR ATTENT ION 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) 31498/20 13(J)], HONBLE KARANATAKA HIGH COURT IN THE CASE OF ADITHY A BIZOR P SOLUTIONS VS UNION OF INDIA [WP NO. 6918-6938/2014( T-IT), HONBLE RAJASTHAN HIGH COURT IN THE CASE OF OM PRAK ASH DHOOT VS UNION OF INDIA [WP NO. 1981 OF 2014] AND OF HON BLE BOMBAY HIGH COURT IN THE CASE OF RASHMIKANT KUNDALI A VS UNION OF INDIA [WP NO. 771 OF 2014], GRANTING STAY ON THE DEMANDS RAISED IN RESPECT OF FEES UNDER SECTION 234 E. THE FULL TEXT OF THESE DECISIONS WERE NOT PRODUCED BEFORE US . HOWEVER, AS ADMITTEDLY THERE ARE NO ORDERS FROM THE HONBLE COU RTS ABOVE RETRAINING US FROM OUR ADJUDICATION ON MERITS IN RE SPECT OF THE ISSUES IN THIS APPEAL, AND AS, IN OUR HUMBLE UNDERS TANDING, THIS APPEAL 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 234 E OF THE ACT, WHICH WAS INSERTED BY THE FINANCE ACT 2012 AND WAS BROUGHT INTO EFFECT FROM 1ST JULY 2012. THIS STATUTORY PROV ISION 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 SE CTION 200 OR THE PROVISO TO SUBSECTION (3) OF SECTION 206C, H E SHALL BE LIABLE TO PAY, BY WAY OF FEE, A SUM OF TWO HUNDR ED RUPEES FOR EVERY DAY DURING WHICH THE FAILURE CONTI NUES. (2) THE AMOUNT OF FEE REFERRED TO IN SUB-SECTION (1 ) SHALL NOT EXCEED THE AMOUNT OF TAX DEDUCTIBLE OR COLLECTI BLE, 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 DELIVERE D A ITA NO.37/AHD/2016 4 STATEMENT IN ACCORDANCE WITH SUB-SECTION (3) OF SEC TION 200 OR THE PROVISO TO SUB-SECTION (3) OF SECTION 20 6C. (4) THE PROVISIONS OF THIS SECTION SHALL APPLY TO A STATEMENT REFERRED TO IN SUB-SECTION (3) OF SECTION 200 OR TH E PROVISO TO SUB-SECTION (3) OF SECTION 206C WHICH IS TO BE D ELIVERED OR CAUSED TO BE DELIVERED FOR TAX DEDUCTED AT SOURC E OR TAX COLLECTED AT SOURCE, AS THE CASE MAY BE, ON OR AFTE R 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 IT STOOD AT THE RELEVANT PO INT 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 (HEREAFTER REFERRED TO IN THIS SECTION AS DEDUCTOR) UNDER SECTION 200, SUCH STATEMENT SHALL BE PROCESSED IN THE FOLLO WING 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 AM OUNT COMPUTED UNDER CLAUSE (B) AGAINST ANY AMOUNT PAID U NDER SECTION 200 AND SECTION 201, AND ANY AMOUNT PAID OT HERWISE 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 PAYABL E BY, OR THE AMOUNT OF REFUND DUE TO, HIM UNDER CLAUSE (C); AND ITA NO.37/AHD/2016 5 (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 FI NANCIAL YEAR IN WHICH THE STATEMENT IS FILED. EXPLANATION : FOR THE PURPOSES OF THIS SUB-SECTION, 'AN INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN THE STATEMEN T' SHALL MEAN A CLAIM, ON THE BASIS OF AN ENTRY, IN THE STAT EMENT (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 TH IS ACT; (2) FOR THE PURPOSES OF PROCESSING OF STATEMENTS UN DER SUB- SECTION (1), THE BOARD MAY MAKE A SCHEME FOR CENTRA LISED 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 IN SECTION 200A AND THI S AMENDMENT, AS STATED IN THE FINANCE ACT 2015, IS AS FOLLOWS: 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 EFFECT 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 TH E AMOUNT COMPUTED UNDER CLAUSE (B) AND CLAUSE (C) AGAINST AN Y AMOUNT PAID UNDER SECTION 200 OR SECTION 201 OR SECTION 23 4E AND ANY AMOUNT PAID OTHERWISE BY WAY OF TAX OR INTEREST OR FEE; ITA NO.37/AHD/2016 6 (E) AN INTIMATION SHALL BE PREPARED OR GENERATED AN D SENT TO THE DEDUCTOR SPECIFYING THE SUM DETERMINED TO BE PAYABL E 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 RESPECT THEREOF, AN ADJUSTMENT COULD ALSO B E MADE IN RESPECT OF THE FEE, IF ANY, SHALL BE COMPUTED IN A CCORDANCE WITH THE PROVISIONS OF SECTION 234E. THERE IS NO DISPUT E THAT WHAT IS IMPUGNED IN APPEAL BEFORE US IS THE INTIMATION UNDE R 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 E XAMINING THE CORRECTNESS OF THE INTIMATION UNDER SECTION 200A, W E HAVE TO BE GUIDED BY THE LIMITED MANDATE OF SECTION 200A, WHIC H, AT THE RELEVANT POINT OF TIME, PERMITTED COMPUTATION OF AM OUNT RECOVERABLE FROM, OR PAYABLE TO, THE TAX DEDUCTOR A FTER MAKING THE FOLLOWING ADJUSTMENTS: (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 STA TEMENT. - SECTION 200A(1)(B) 9. NO OTHER ADJUSTMENTS IN THE AMOUNT REFUNDABLE TO , OR RECOVERABLE FROM, THE TAX DEDUCTOR, WERE PERMISSIBL E IN ACCORDANCE WITH THE LAW 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 BEYOND THE SCOPE OF PERMISSIBLE ADJUSTMENTS CONTEMPLATED UNDER SECTION 200A. THIS INTIMATION IS AN APPEALABLE ORDER UNDER SECTION 246A(A), AND, THEREF ORE, THE CIT(A) OUGHT TO HAVE EXAMINED LEGALITY OF THE ADJUS TMENT MADE UNDER THIS INTIMATION IN THE LIGHT OF THE SCOPE OF THE SECTION 200A. ITA NO.37/AHD/2016 7 LEARNED CIT(A) HAS NOT DONE SO. HE HAS JUSTIFIED TH E LEVY OF FEES ON THE BASIS OF THE PROVISIONS OF SECTION 234E. THA T IS NOT THE ISSUE HERE. THE ISSUE IS WHETHER SUCH A LEVY COULD BE EFFECTED IN THE COURSE OF INTIMATION UNDER SECTION 200A. THE AN SWER 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 ADMITTED POSITION THAT IN THE ABSENCE OF THE ENABLI NG 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 YEA R FROM THE END OF THE FINANCIAL YEAR WITHIN WHICH THE RELATED TDS STATEMENT IS FILED, AND AS THE RELATED TDS STATEMENT WAS FILE D ON 19TH FEBRUARY 2014, SUCH A LEVY COULD ONLY HAVE BEEN MAD E AT BEST WITHIN 31ST MARCH 2015. THAT TIME HAS ALREADY ELAPS ED AND THE DEFECT IS THUS NOT CURABLE EVEN AT THIS STAGE. IN V IEW OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF TH E CASE, THE IMPUGNED LEVY OF FEES UNDER SECTION 234 E IS UNSUST AINABLE IN LAW. WE, THEREFORE, UPHOLD THE GRIEVANCE OF THE ASS ESSEE 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 T HE AUTHORITIES BELOW. HE FAIRLY DID NOT DISPUTE THAT THE PROVISION S ACCEPTING LEVY OF LATE FILING FEES UNDER SECTION 234E HAVE IN DEED BEEN BROUGHT TO THE STATUTE W.E.F. 1ST JUNE, 2015 AND TH E IMPUGNED ORDER WAS PASSED MUCH BEFORE THAT DATE. 6. IN VIEW OF THE ABOVE DISCUSSIONS AND BEARING IN MIND ENTIRETY OF THE CASE, WE HEREBY DELETE THE LEVY OF LATE FILI NG FEES UNDER SECTION 234E OF THE ACT BY WAY OF IMPUGNED INTIMATI ON ISSUED ON 11.12.2013. THE ASSESSEE GETS THE RELIEF ACCORDINGL Y. 5. WHEN THE ABOVE JUDICIAL PRECEDENT WAS BROUGHT TO THE NOTICE OF THE LD.DEPARTMENTAL REPRESENTATIVES, HE DID NOT HAV E MUCH TO SAY EXCEPT TO PLACE HIS RELIANCE ON THE ORDERS OF THE A UTHORITIES BELOW. HE FAIRLY DID NOT DISPUTE THAT PROVISIONS ACCEPTING LE VY 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 B EFORE THAT DATE. 6. IN VIEW OF THE ABOVE DISCUSSIONS AND BEARING IN MIND ENTIRETY OF THE FACTS, I HEREBY DELETE THE LEVY OF LATE FILING FEES IN ALL THESE THREE ITA NO.37/AHD/2016 8 APPEALS UNDER APPEAL UNDER SECTION 234E OF THE ACT BY WAY OF IMPUGNED INTIMATION ISSUED. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 6. SINCE, THE LD.DR HAS NOT BROUGHT TO MY NOTICE AN Y CONTRARY JUDGMENT TO CONVINCE ME TO TAKE A DIFFERENT VIEW ON THE ISSUE O F LEVY OF PENALTY UNDER SECTION 234E, THEREFORE, AS JUDICIAL PRECEDENT, I A M INCLINED TO RESPECTFULLY FOLLOW THE ORDER OF THE TRIBUNAL IN THE CASE CITED SUPRA, I ALLOW THE APPEAL OF THE ASSESSEE AND DELETE THE LEVY OF LATE FILING FEE IMPOSED UPON THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 22 ND FEBRUARY, 2016 AT AHMEDABAD. SD/- ( GEORGE GEORGE K. ) JUDICIAL MEMBER