Manorama Enterprises, Visakhapatnam V. Income Tax Officer, TDS, Ward-1, , Visakhapatnam

ITA 385/VIZ/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9780 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 13-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D V SUBBA RAO
• Assessee Lawyers: R L N SOMAYAJULU
• Keywords: Charitable institution; Retrospective amendment; TDS; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 38 5 /VIZ/201 8 ( / ASSESSMENT YEAR : 20 13 - 14 ) M/S MANORAMA ENTERPRISES D.NO.31 - 32 - 41 NEAR LEELAMAHAL THEATRE VISAKHAPATNAM [PAN : A ADFM5585H ] VS. INCOME TAX OFFICER TDS, WARD - 1 VISAKHAPATNAM ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI R.L.N.SOMAYAJULU , AR / RESPONDENT BY : S HRI D. V .S UBBA RAO , DR / DATE OF HEARING : 2 1 . 0 6 . 201 9 / DATE OF PRONOUNCEMENT : 03 .0 7 . 201 9 / O R D E R P ER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), [CIT(A)] - 9, VISAKHAPATNAM VIDE ITA NO.10436/ITO, WARD - 6(2), VISAKHAPATNAM DATED 26.03.2018 FOR THE ASSESSMENT YEAR (A.Y.) 2013 - 14. 2 I.T.A. NO . 38 5 /VIZ/201 8 M/S MANORAMA ENTERPRISES, VISAKHAPATNAM 2. ALL THE GROUNDS OF APPEAL ARE RELATED TO THE DEMAND RAISED BY THE ASSESSING OFFICER (AO) U/S 234E OF THE INCOME TAX ACT, 1961 (IN SHORT ACT). THE ASSESSEE FILED TDS RETURN WITH THE DELAY AND CPC HAS PROCESSED THE TDS RETURN FILED BY THE ASSESSEE ON 16.11.2018 AND RAISED DEMAND OF RS.28,130/ - U/S 234E AS PER THE DETAILS GIVEN BELOW : NUMBER OF QUARTERS AMOUNT Q1 270 Q2 9,540 Q3 9,140 Q4 9,180 TOTAL 28,130 3. AGAINST THE ORDER PASSED BY THE AO, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) ALLOWED RELIEF OF RS.400/ - AND CONFIRMED THE BALANCE AMOUNT OF RS.27,730/ - . 4. AGAINST THE ORDER OF THE LD.CIT(A), THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL. THE LD.AR ARGUED THAT THE ASSESSEE HAD FILED TDS RETURNS PRIOR TO 01.06.2015. THOUGH THE ACT PROVI DES FOR LEVY OF LATE FEE FOR FURNISHING TDS RETURNS BELATEDLY, THERE IS NO PROVISION IN THE ACT TO RAISE THE DEMAND U/S 201 /201A INTIMATING THE LATE FEE. THEREFORE ARGUED THAT THE DEMAND RAISED BY THE CPC IS ERRONEOUS AND REQUESTED TO SET ASIDE THE 3 I.T.A. NO . 38 5 /VIZ/201 8 M/S MANORAMA ENTERPRISES, VISAKHAPATNAM ORDER OF THE LOWER AUTHORITIES AND GIVE RELIEF TO THE ASSESSEE. THE LD.AR FURTHER SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THIS TRIBUNAL IN I.T.A NO.459 & 460/VIZ/2018 IN THE CASE OF MRS A.V.N.C.HIGH SCHOOL, VISAKHAPATNAM FOR THE A.Y.2013 - 14 AND 2014 - 15. 5. ON THE OTHER HAND, THE LD.DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. THERE IS NO DISPUTE THAT THE ISSUE IS RELATED TO PERIOD PRIOR TO 01.06.2015. TH E ISSUE ON IDENTICAL FACTS WAS CONSIDERED BY THIS TRIBUNAL IN MRS.A.V.N.C. HIGH SCHOOL CITED SUPRA AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND CANCELLED THE LATE FEE LEVIED BY THE AO. FOR THE SAKE OF CLARITY AND CONVENIENCE, WE EXTRACT RELEVANT PA RT OF THE ORDER OF THIS TRIBUNAL IN PARA NO. 7 TO 11 WHICH READS AS UNDER : 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. 8 . THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETHER LEVY OF LATE FEE UNDER SECTION 234E CAN BE CHARGED PRIOR TO 01/06/2015 OR NOT. ACCORDING TO THE ASSESSING OFFICER AND THE LD. CIT(A), SECTION 200A(1)(C) IS A CLARIFICATORY IN NATURE, THEREFORE, IT APPLIES EVEN THE PERIOD PRIOR TO 01/06/2015 BY FOLLOWING THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF RAJESH KOURANI (SUPRA). THE COORDINATE BENCH OF THE VISAKHAPATNAM TRIBUNAL IN THE CASE OF SRI SAI DURGA HOUSING ESTATES VS. ACIT, CPC (TDS) IN ITA NOS. 2 & 3/VIZ/2018, DATED 26/04/2018 WHEREI N BY CONSIDERING THE JUDGMENTS OF THE HON'BLE GUJARAT & KARNATAKA HIGH COURTS AND ALSO THE JUDGMENT OF THE HON'BLE APEX 4 I.T.A. NO . 38 5 /VIZ/201 8 M/S MANORAMA ENTERPRISES, VISAKHAPATNAM COURT IN THE CASE OF CIT VS. M/S. VEGETABLES PRODUCTS LTD. (88 ITR 192) HAS OBSERVED THAT THE DECISION OF THE HON'BLE KARNATAKA HIGH COU RT IS MOST FAVOURABLE TO THE ASSESSEE, REQUIRED TO BE ADOPTED. 9 . THE HON'BLE KARNATAKA HIGH COURT HAS CONSIDERED THE SAME ISSUE IN THE CASE OF SREE AYYAPPA EDUCATIONAL CHARITABLE TRUST VS. DCIT [(2018) 301 CTR 150 (KAR.)] BY CONSIDERING THE JUDGMENT OF T HE SAME HIGH COURT IN THE CASE OF FATHERAJ SINGHVI & ORS. (SUPRA) AND HELD THAT WHEN THE AMENDMENT MADE UNDER SECTION 200A OF THE ACT, WHICH HAS COME INTO EFFECT ON 01/06/2015 IS HELD TO BE HAVING PROSPECTIVE EFFECT, NO COMPUTATION OF FEE FOR THE DEMAND O R THE INTIMATION FOR THE FEE UNDER SECTION 234E COULD BE MADE FOR THE TDS DEDUCTED FOR THE RESPECTIVE ASSESSMENT YEAR PRIOR TO 01/06/2015. HENCE, THE DEMAND NOTICES UNDER SECTION 200A BY THE RESPONDENT AUTHORITY FOR INTIMATION FOR PAYMENT OF FEE UNDER SEC TION 234E CAN BE SAID AS WITHOUT ANY AUTHORITY OF LAW AND THE SAME ARE QUASHED AND SET ASIDE TO THAT EXTENT. 10 . THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF FATHERAJ SINGHVI & ORS. (SUPRA) HAS HELD AS UNDER: - 22. IT IS HARDLY REQUIRED TO BE STATED THAT, AS PER THE WELL - ESTABLISHED PRINCIPLES OF INTERPRETATION OF STATUTE, UNLESS IT IS EXPRESSLY PROVIDED OR IMPLIEDLY DEMONSTRATED, ANY PROVISION OF STATUTE IS TO BE READ AS HAVING PROSPECTIVE EFFECT AND NOT RETROSPECTIVE EFFECT. UNDER THE CIRCUMS TANCES, WE FIND THAT SUBSTITUTION MADE BY CLAUSE (C) TO (F) OF SUB - SECTION (1) OF SECTION 200A CAN BE READ AS HAVING PROSPECTIVE EFFECT AND NOT HAVING RETROACTIVE CHARACTER OR EFFECT. RESULTANTLY, THE DEMAND UNDER SECTION 200A FOR COMPUTATION AND INTIMATIO N FOR THE PAYMENT OF FEE UNDER SECTION 234E COULD NOT BE MADE IN PURPORTED EXERCISE OF POWER UNDER SECTION 200A BY THE RESPONDENT FOR THE PERIOD OF THE RESPECTIVE ASSESSMENT YEAR PRIOR TO 1.6.2015. HOWEVER, WE MAKE IT CLEAR THAT, IF ANY DEDUCTOR HAS ALREAD Y PAID THE FEE AFTER INTIMATION RECEIVED UNDER SECTION 200A, THE AFORESAID VIEW WILL NOT PERMIT THE DEDUCTOR TO REOPEN THE SAID QUESTION UNLESS HE HAS MADE PAYMENT UNDER PROTEST. 23. IN VIEW OF THE AFORESAID OBSERVATION AND DISCUSSION, SINCE THE IMPUGNED I NTIMATION GIVEN BY THE RESPONDENT - DEPARTMENT AGAINST ALL THE APPELLANTS UNDER SECTION 200A ARE SO FAR AS THEY ARE FOR THE PERIOD PRIOR TO 1.6.2015 CAN BE SAID AS WITHOUT ANY AUTHORITY UNDER LAW. HENCE, THE SAME CAN BE SAID AS ILLEGAL AND INVALID. 24. IF THE FACTS OF THE PRESENT CASES ARE EXAMINED IN LIGHT OF THE AFORESAID OBSERVATION AND DISCUSSION, IT APPEARS THAT IN ALL MATTERS, THE INTIMATION GIVEN IN PURPORTED EXERCISE OF POWER UNDER SECTION 200A ARE IN RESPECT OF FEES UNDER SECTION 234E FOR THE P ERIOD PRIOR TO 5 I.T.A. NO . 38 5 /VIZ/201 8 M/S MANORAMA ENTERPRISES, VISAKHAPATNAM 1.6.2015. AS SUCH, IT IS ON ACCOUNT OF THE INTIMATION GIVEN MAKING DEMAND OF THE FEES IN PURPORTED EXERCISE OF POWER UNDER SECTION 200A, THE SAME HAS NECESSITATED THE APPELLANT - ORIGINAL PETITIONER TO CHALLENGE THE VALIDITY OF SECTION 234E OF THE ACT. IN VIEW OF THE REASONS RECORDED BY US HEREINABOVE, WHEN THE AMENDMENT MADE UNDER SECTION 200A OF THE ACT WHICH HAS COME INTO EFFECT ON 1.6.2015 IS HELD TO BE HAVING PROSPECTIVE EFFECT, NO COMPUTATION OF FEE FOR THE DEMAND OR THE INTIMATION FOR TH E FEE UNDER SECTION 234E COULD BE MADE FOR THE TDS DEDUCTED FOR THE RESPECTIVE ASSESSMENT YEAR PRIOR TO 1.6.2015. HENCE, THE DEMAND NOTICES UNDER SECTION 200A BY THE RESPONDENT - AUTHORITY FOR INTIMATION FOR PAYMENT OF FEE UNDER SECTION 234E CAN BE SAID AS W ITHOUT ANY AUTHORITY OF LAW AND THE SAME ARE QUASHED AND SET ASIDE TO THAT EXTENT. 11 . IN THE PRESENT CASE, THE LATE FEE CHARGED BY THE ASSESSING OFFICER PERIOD IS PRIOR TO 01/06/2015, THEREFORE, WE RESPECTFULLY FOLLOWING THE DECISIONS OF THE HON'BLE KARNA TAKA HIGH COURT IN THE CASES OF FATHERAJ SINGHVI & SREE AYYAPA EDUCATIONAL CHARITABLE TRUST (SUPRA), THE LATE FEE LEVIED BY THE ASSESSING OFFICER IS CANCELLED. ACCORDINGLY, LATE FEE LEVIED BY THE ASSESSING OFFICER FOR BOTH THE ASSESSMENT YEARS 2013 - 14 & 2 014 - 15 ARE CANCELLED. THUS, BOTH THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. 6.1. SINCE THE FACTS ARE IDENTICAL, RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THIS TRIBUNAL, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND CANCEL THE LATE FEE LEVIED B Y THE AO. ACCORDINGLY, APPEAL OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD JU LY 2019. S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 03 .0 7 .2019 L.RAMA, SPS 6 I.T.A. NO . 38 5 /VIZ/201 8 M/S MANORAMA ENTERPRISES, VISAKHAPATNAM / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE - M/S MANORAMA ENTERPRISES , D.NO.31 - 32 - 41 , NEAR LEELAMAHAL THEATRE , VISAKHAPATNAM 2. / THE REVENUE INCOME TAX OFFICER, TDS, WARD - 1, VISAKHAPATNAM 3. THE PR. COMMISSIONER OF INCOME TAX - 2 , VI SAKHAPATNAM 4. THE COMMISSIONER OF INCOME TAX (APPEALS) - 9, HYDERABAD 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM