KARUNASHKANAKR SHUKLA, KALYAN V. A.O. TDS WD KALYAN, KALYAN

ITA 4746/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7886 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 27-02-2017
• Assessment Year: misc
• Appeal Filed On: 14-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Assessee Lawyers: MEGHNA T CHANDARANA
• Keywords: Recovery proceedings; Retrospective amendment; Right to appeal; Condonation of delay
• Section: 10; 154; 11

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SH. R. C. SHARMA , AM & SH. SANDEEP GOSAIN, JM ./ I.T.A. NO . 4746 / MUM/ 2016 ( / ASSESSMENT YEAR: 2013 - 14 ) KARUNASHANKAR SHUKLA, 601, AKUF TOWER, THANGEWADI, KALYAN (W) - 421301 / VS. AO, TDS WARD, LALYAN, RANI MANSION, MURBAD ROAD, KALYAN(W) - 421301 ./ ./ PAN/GIR NO. A QUPS 7086 C ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : MEGHNA T. CHANDARANA / RESPONDENTBY : ARJU GARODIA / DATE OF HEARING : 27/11 /201 7 / DATE OF PRONOUNCEMENT : 27/12/2017 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. COMMISSI ONER OF INCOME TAX (APPEAL) 1 , MUMBAI DATED 21.03.16 F OR AY 2012 - 13 ON THE GROUNDS MENTIONED HEREIN BELOW: - 2 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, 1. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS DISMISSED THE REQUEST OF THE ASSESSEE IN THE APPEAL TO WAIVE THE LATE FEE LEVIED U/S 234E OF THE ACT, WITHOUT CONSIDERING THE SUBMISSIONS ON MERITS. 2. THAT THE SUB SECTION (3) OF THE SECTION 234E OF THE ACT STATES THAT IT SHALL BE PAID BEFORE DELIVERING A TDS STATEMENT. IT MEANS THAT ANY LATE FEES SHOULD HAVE BEEN DEPOSITED JUST AT THE TIME OF DELIVERING TDS STATEMENT AND NOT LATER THAN THIS. 3. THAT ONCE THE TDS STATEMENT HAS BEEN ACCEPTED WITHOUT LATE FEES, THEN SUCH LATE FEE CANNOT BE RECOVERED LATER ON. IN THE VIEW OF THE ABOVE, LATE FEE CANNOT BE RECOVERED LATER ON BY WAY OF ANY NOTICE, NO NOTICE OF DEMAND U/S 156 CAN BE ISSUED FOR THIS. 4. THAT THE SEC.200A OF THE ACT DOES NOT PERMIT PROCESSING OF TDS STATEMENT FOR DEFAULT IN PAYMENT OF LATE FEES, EXCEPT ANY ARITHMETICAL ERROR, OR INCORRECT CLAIM, OR DEFAULT IN PAYMENT OF INTERE ST AND TDS PAYABLE OR REFUNDABLE ETC. HENCE LATE FEES FOR TDS QUARTERLY STATEMENT CANNOT BE RECOVERED BY WAY OF PROCESSING UNDER SECTION 200A. THEREFORE NO DEMAND NOTICE CANNOT BE ISSUED UNDER THIS SECTION, BUT IF ISSUED, THEN IT IS ILLEGAL. HENCE LIABLE T O BE CANCELLED. 3 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, 5. THAT THE BASIC CONCEPT BEHIND TDS IS, TO DEPOSIT THE TAX ON THE INCOME OF DEDUCTEE AS HE EARNS THE INCOME. THEREFORE DEDUCTOR/RECEPIENT HAS DEPOSITED THE TAX TIMELY. NO SUCH OFFENCE HAS BEEN COMMITTED BY THE ASSESSEE THAT HE DEDUCTED THE TDS & NOT DEPOSITED THE TAX AND UTILIZING THE MONEY FOR HIS PURPOSE .THEREFORE NO LATE FEES CAN BE IMPOSED ON THE ASSESSEE. 6. IN VIEW OF THE ABOVE SUBMISSIONS ORDER U/S 200A OF THE ACT IMPOSING LATE FEES U/S 234E HAS TO BE CANCELLED AND QUASHED. 7. THE D EPARTMENT VIDE ITS PRESS RELEASE DATED 12TH MAY 2016 MADE KNOW THAT 'THE INCOME DECLARATION SCHEME 2016 & THE DIRECT TAX DISPUTE RESOLUTION SCHEME 2016' ('SCHEME' FOR SHORT) CAME INTO FORCE WITH EFFECT FROM 1ST JUNE, 2016, HAVING RETROSPECT EFFECT. THE SCH EME WAS BENEFICIAL TI THE CLASS OF ASSESSEE WHO HAD ARREARS OF TAX, WHICH IN SHORT MEANS AMOUNT OF TAX, INTEREST OR PENALTY DETERMINED UNDER THE IT ACT OR WT ACT, IN RESPECT OF WHICH APPEAL IS PENDING BEFORE THE CIT(A) OR CWT(A) AS ON 29.02.2016. THE PENDI NG APPEAL COULD BE AGAINST AN ASSESSMENT NRR1R NR N NNALTV ORDER AS ON 29TH FEBRUARY, 2016. NOW THE MATTER AS IT STANDS THAT WHETHER THE ASSESSEE BE GIVEN BENEFIT OF THE SCHEME TO SETTLE THE DUES WITHIN P HE FRAMEWORK OF THE SCHEME. 4 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, 8. THE APPELLANT CRAVE S, LEAVE TO ADD, ALTER, AMEND, MODIFY OR SUBSTITUTE ANY OR ALL THE ABOVE GROUNDS OF THE APPEAL, INCLUDING ARISING CONSEQUENTIAL TO THE POINTS RAISED DURING THE APPEAL PROCEEDINGS TILL THE FINAL DISPOSAL OF APPEAL, WHICH ARE WITHOUT PREJUDICE TO ONE ANOTHER ; 9. THE APPELLAN T THEREFORE PRAYS FOR THE RELIEF REQUESTED IN THE ABOVE GROUNDS. 2. ORDER ON PETITION FOR CONDONATION OF DELAY IN FILING THIS APPEAL. 2.1 ADMITTEDLY, THERE WAS A DELAY OF 17 DAYS IN FILING THIS APPEAL. THE ASSESSEE HAS FILED SEPARATE PET ITION FOR CONDONATION OF DELAY . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE HON'BLE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST. KATIJI & OTHERS (1987) (167 ITR 471) (SC), WHILE LAYING DOWN THE PRINCIPLES FOR CO NSIDERING MATTERS OF CONDONATION OF DELAY IN FILING APPEALS, HAS STATED THAT SUBSTANTIAL JUSTICE SHOULD PREVAIL OVER TECHNICAL CONSIDERATIONS. THE HON'BLE COURT ALSO EXPLAINED THAT EVERY DAYS DELAY MUST BE EXPLAINED, 5 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE TAKEN. THE DOCTRINE MUST BE APPLIED IN A NATURAL AND PRAGMATIC MANNER. CONSIDERING THE AFORESAID PRINCIPLES LAID DOWN BY THE HON'BLE APEX COURT, THE EXPLAN ATION PUT FORTH BY THE ASSESSEE AND THE MATERIAL ON RECORD, WE ARE OF T HE CONSIDERED OPINI ON THAT THIS IS A FIT CASE FOR CONDONATION OF DELAY OF 17 DAYS IN FILING APPEAL AND ACCORDINGLY IN THE INTEREST OF EQUITY AND JUSTICE CONDONE THE SAME. THIS APPEAL IS ACCORDINGLY ADMITTED FOR ADJUDICATION. 3. AS PER THE BRIEF FACTS OF THE CASE, THE ASSE SSEE HAD FILED ITS TDS QUARTERLY STATEMENT OF 4 TH QUARTER /26 Q OF AY 2013 - 14 ON 11.10.13 WHICH WAS DUE ON 15.05.13. THUS THE TDS RETURN WAS FILED LATE BY 148 DAYS. THE AO PROCESSED THE RETURN AND SENT INTIMATION U/S 200A. THE AO DETERMINED THE LATE FEE OF RS. 29,800/ - U/S 234 E OF THE I.T. ACT FOR DELAY IN FILING OF QUARTERLY TDS STATEMENT. AGGRIEVED BY THE ACTION OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT( A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES DISMISSED THE APPEAL OF THE ASSESSEE. 6 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, NOW BEFORE US, THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL ON THE GROUNDS MENTIONED HEREIN ABOVE. GROUND NO. (1 TO 8) 4 . SINCE ALL THE ABOVE GROUNDS RAISED BY THE ASSESSEE ARE INTER - CONNECTED AND INTER - RELATED AND RELATES TO CHALLENGING THE ORDER OF LD. CIT(A) IN UPHOLDING THE ACTION OF AO FOR LEVY OF LATE FEE U/S 234E OF THE ACT, THEREFORE WE THOUGHT IT FIT TO DISPOSE OF THE SAME THROUGH THE PRESENT COMMON ORDER. 5 . WE HAVE HEARD COUNSELS FOR BOTH THE PARTIES AT LENGTH AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. 6. LD. AR RAISED THE SAME ARGUMENTS AS WERE RAISED BY HIM BEFORE LD. CIT(A ). IT WAS FURTHER ARGUED BY LD. AR THAT THE ISSUE RAISED IN THIS APPEAL IS SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF THE COORDINATE BENCH OF HONBLE ITAT, MUMBAI BENCH IN THE CASE OF M/S ASIAN PIPES & PROFILES PVT. LTD. VRS. AO, TDS AND M/S DISHA DISTRIBUTORS VRS. AO TDS IN ITA NO. 4740 & 4742/MUM/2016 FOR AY 2013 - 14, WHEREIN IT WAS HELD 7 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, THAT THE AO IS NOT IS NOT EMPOWERED TO CHARGE THE FEES WHILE PROCESSING TDS STATEMENTS AND RETURNS FOR DEFAULT IN FURNISHING STATEMENTS UNDER SECTION 234E O F THE ACT, BY WAY OF INTIMATIONS ISSUED UNDER SECTION 200A OF THE ACT, IN RESPECT OF DEFAULTS BEFORE 01.06.2015. 7. ON THE OTHER HAND LD. DR RELIED UPON THE ORDERS PASSED BY REVENUE AUTHORITIES. 8. AFTER HAVING GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES AND THE ORDERS/JUDGMENTS CITED BY BOTH THE PARTIES, WE FIND THAT THE IDENTICAL ISSUE RAISED IN THE PRESENT APPEAL WERE DECIDED BY THE COORDINATE BENCH OF HONBLE ITAT, MUMBAI BENCH IN TH E CASE OF M/S ASIAN PIPES & PROFILES PVT. LTD. VRS. AO, TDS AND M/S DISHA DISTRIBUTORS VRS. AO TDS IN ITA NO. 4740 & 4742/MUM/2016 FOR AY 2013 - 14. THE OPERATIVE PORTION OF ORDER OF HONBLE ITAT WHILE DECIDING THESE ISSUES ARE AS UNDER: - 6.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD, INCLUDING THE JUDICIAL PRONOUNCEMENTS CITED. WE FIND THAT THE VERY SAME ISSUE WAS CONSIDERED AT LENGTH AND HELD IN FAVOUR OF THE ASSESSEE BY, INTER ALIA, THE 8 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, DECISION OF THE ITAT PUNE BENCH IN THE CASE OF GAJANAN CONSTRUCTIONS AND OTHERS IN ITA NOS.1292 & 1293/PN/2015 AND OTHERS DATED 23.09.2016 WHEREIN AT PARAS 15 TO 37 IT HAS BEEN HELD A UNDER: - 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE AR ISING IN THIS BUNCH OF APPEALS IS AGAINST LEVY OF FEES UNDER SECTION 234E OF THE ACT. IN ORDER TO ADJUDICATE THE ISSUE, FIRST REFERENCE IS BEING MADE TO THE RELEVANT PROVISIONS OF THE ACT. UNDER CHAPTER XVII HEADED COLLECTION AND RECOVERY OF TAXES AND UN DER CLAUSE B, DEDUCTION AT SOURCE, THE STATUTE LAYS DOWN THE DUTY OF THE PAYER OF CERTAIN AMOUNTS TO DEDUCT TAX AT SOURCE UNDER SECTIONS 192 TO 194LD, 195 TO 196D OF THE ACT. UNDER SECTION 198 OF THE ACT, IT IS PROVIDED THAT THE TAX DEDUCTED AT SOURCE SH ALL FOR THE PURPOSE OF COMPUTING THE INCOME OF ASSESSEE BE DEEMED TO BE INCOME RECEIVED. UNDER SECTION 199 OF THE ACT, IT IS FURTHER PROVIDED THAT ANY DEDUCTION MADE IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER AND PAID TO THE CENTRAL GOVERNMENT SHALL BE T REATED AS PAYMENT OF TAX ON BEHALF OF THE PERSON FROM WHOSE INCOME THE DEDUCTION WAS MADE. THE SUM REFERRED TO IN SUB - SECTION (1A) OF SECTION 192 OF THE ACT AND PAID TO THE CENTRAL GOVERNMENT SHALL BE TREATED AS THE TAX PAID ON BEHALF OF THE PERSON IN RESP ECT OF WHOSE INCOME SUCH PAYMENT OF TAX HAS BEEN MADE. 16. SECTION 200 OF THE ACT LAYS DOWN THE DUTY OF THE PERSON DEDUCTING TAX, WHICH READS AS UNDER: - 200. (1) ANY PERSON DEDUCTING ANY SUM IN ACCORDANCE WITH THE FOREGOING PROVISIONS OF THIS CHAPTER SHAL L PAY WITHIN THE PRESCRIBED TIME, THE SUM SO DEDUCTED TO THE CREDIT OF THE CENTRAL GOVERNMENT OR AS THE BOARD DIRECTS. (2) ANY PERSON BEING AN EMPLOYER, REFERRED TO IN SUB - SECTION (1A) OF SECTION 192 SHALL PAY, WITHIN THE PRESCRIBED TIME, THE TAX TO THE CR EDIT OF THE CENTRAL GOVERNMENT OR AS THE BOARD DIRECTS. (2A) IN CASE OF AN OFFICE OF THE GOVERNMENT, WHERE THE SUM DEDUCTED IN ACCORDANCE WITH THE FOREGOING 9 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, PROVISIONS OF THIS CHAPTER OR TAX REFERRED TO IN SUB - SECTION(1A) OF SECTION 192 HAS BEEN PAID TO THE CREDIT OF THE CENTRAL GOVERNMENT WITHOUT THE PRODUCTION OF A CHALLAN, THE PAY AND ACCOUNTS OFFICER OR THE TREASURY OFFICER OR THE CHEQUE DRAWING AND DISBUR SING OFFICER OR ANY OTHER PERSON, BY WHATEVER NAME CALLED, WHO IS RESPONSIBLE FOR CREDITING SUCH SUM OR TAX TO THE CREDIT OF THE CENTRAL GOVERNMENT, SHALL DELIVER OR CAUSE TO BE DELIVERED TO THE PRESCRIBED INCOME - TAX AUTHORITY, OR TO THE PERSON AUTHORISED BY SUCH AUTHORITY, A STATEMENT IN SUCH FORM, VERIFIED IN SUCH MANNER, SETTING FORTH SUCH PARTICULARS AND WITHIN SUCH TIME AS MAY BE PRESCRIBED. (3) ANY PERSON DEDUCTING ANY SUM ON OR AFTER THE 1ST DAY OF APRIL, 2005 IN ACCORDANCE WITH THE FOREGOING PROVIS IONS OF THIS CHAPTER OR, AS THE CASE MAY BE, ANY PERSON BEING AN EMPLOYER REFERRED TO IN SUBSECTION (1A) OF SECTION 192 SHALL, AFTER PAYING THE TAX DEDUCTED TO THE CREDIT OF THE CENTRAL GOVERNMENT WITHIN THE PRESCRIBED TIME, PREPARE SUCH STATEMENTS FOR SUC H PERIOD AS MAY BE PRESCRIBED AND DELIVER OR CAUSE TO BE DELIVERED TO THE PRESCRIBED INCOME - TAX AUTHORITY OR THE PERSON AUTHORISED BY SUCH AUTHORITY SUCH STATEMENT IN SUCH FORM AND VERIFIED IN SUCH MANNER AND SETTING FORTH SUCH PARTICULARS AND WITHIN SUCH TIME AS MAY BE PRESCRIBED: PROVIDED THAT THE PERSON MAY ALSO DELIVER TO THE PRESCRIBED AUTHORITY A CORRECTION STATEMENT FOR RECTIFICATION OF ANY MISTAKE OR TO ADD, DELETE OR UPDATE THE INFORMATION FURNISHED IN THE STATEMENT DELIVERED UNDER THIS SUB - SECTIO N IN SUCH FORM AND VERIFIED IN SUCH MANNER AS MAY BE SPECIFIED BY THE AUTHORITY. 17. UNDER SECTION 200(1) OF THE ACT, IT IS PROVIDED THAT ANY PERSON DEDUCTING ANY SUM IN ACCORDANCE WITH THE PROVISIONS OF THE CHAPTER SHALL PAY WITHIN THE PRESCRIBED TIME, THE SUM SO DEDUCTED TO THE CREDIT OF THE CENTRAL GOVERNMENT OR AS THE BOARD DIRECTS. UNDER SECTION 200(2) OF THE ACT, ANY PERSON BEING AN EMPLOYER, AS REFERRED TO IN SUB - SECTION (1A) OF SECTION 10 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, 192 OF THE ACT SHALL PAY, WITHIN THE PRESCRIBED TIME, THE TAX TO THE CREDIT OF THE CENTRAL GOVERNMENT OR AS THE BOARD DIRECTS. UNDER SUBSECTION (2A) OF THE ACT, IT IS PROVIDED THAT WHERE THE SUM HAS BEEN DEDUCTED IN ACCORDANCE WITH FOREGOING PROVISIONS OF THE CHAPTER, BY THE OFFICE OF THE GOVERNMENT, THEN DUTY IS UPO N THE TREASURY OFFICER OR THE DRAWING & DISBURSING OFFICER OR ANY OTHER PERSON, TO DELIVER OR CAUSE TO BE DELIVERED TO THE PRESCRIBED INCOME TAX AUTHORITIES, OR TO THE PERSON AUTHORIZED BY SUCH AUTHORITY, STATEMENT IN SUCH FORM, VERIFIED IN SUCH MANNER, SE TTING FORTH SUCH PARTICULARS WITHIN SUCH TIME AS MAY BE PRESCRIBED. UNDER SECTION 200(3) OF THE ACT, SIMILAR RESPONSIBILITY IS ON ANY PERSON DEDUCTING ANY SUM ON OR AFTER FIRST DAY OF APRIL, 2005 IN ACCORDANCE WITH FOREGOING PROVISIONS OF THE CHAPTER, INCL UDING ANY PERSON AS AN EMPLOYER REFERRED TO IN SECTION 192(1A) OF THE ACT. THE ONUS IS UPON SUCH PERSON THAT HE SHALL AFTER PAYING THE TAX TO THE CREDIT OF CENTRAL GOVERNMENT WITHIN PRESCRIBED TIME, PREPARE SUCH STATEMENT FOR SUCH PERIOD AS MAY BE PRESCRIB ED AND DELIVER OR CAUSE TO BE DELIVERED TO THE PRESCRIBED INCOME TAX AUTHORITY OR ANY PERSON SO AUTHORIZED, SUCH STATEMENT IN SUCH FORM AND VERIFIED IN SUCH MANNER AND SETTING FORTH SUCH PARTICULARS AND WITHIN SUCH TIME AS MAY BE PROVIDED. THE DUTY IS UPON A PERSON DEDUCTING ANY SUM IN ACCORDANCE WITH VARIOUS PROVISIONS UNDER THE CHAPTER AND ALSO UPON AN EMPLOYER WHO IS MAKING DEDUCTION OUT OF THE PAYMENTS MADE TO THE EMPLOYEES, THEN SUB - SECTION (3) REQUIRES THAT THE DEDUCTOR IS TO PREPARE A STATEMENT FOR S UCH PERIOD AS MAY BE PRESCRIBED, WHICH IS TO BE DELIVERED TO THE PRESCRIBED AUTHORITY, IN SUCH FORM AND VERIFIED AND SETTING FORTH SUCH PARTICULARS AS MAY BE PRESCRIBED. THE SAID STATEMENT IS TO BE DELIVERED WITHIN SUCH TIME AS MAY BE PRESCRIBED. 18. RULE 31A OF THE INCOME TAX RULES, 1962 (IN SHORT THE RULES) PROVIDES THAT EVERY PERSON WHO IS RESPONSIBLE FOR DEDUCTION OF TAX UNDER CHAPTER XVIIB SHALL IN ACCORDANCE WITH THE PROVISIONS OF SECTION 11 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, 200(3) OF THE ACT, DELIVER OR CAUSE TO BE DELIVERED, THE QUA RTERLY STATEMENTS TO THE DIRECTOR GENERAL OF INCOME TAX (SYSTEMS) OR THE PERSONS AUTHORIZED BY THEM I.E. IN RESPECT OF DEDUCTIONS UNDER VARIOUS PROVISIONS OF THE CHAPTER XVIIB. THE RULE FURTHER PROVIDES THAT THE STATEMENTS REFERRED TO IN SUBRULE (1) ARE TO BE DELIVERED QUARTERLY AND THE STIPULATED PERIOD OF DUE DATE OF FILING THE SAID STATEMENT IN RESPECT OF DEDUCTOR BEING AN OFFICE OF THE GOVERNMENT AND THE DEDUCTOR BEING OTHER THAN GOVERNMENT, ARE PROVIDED. THE SUB - RULE (3) OF RULE 31A OF THE RULES FURTHE R PROVIDES THAT THE STATEMENT REFERRED TO IN SUB - RULE (1) MAY BE FURNISHED IN ANY OF THE FOLLOWING MANNERS I.E. BY WAY OF FURNISHING THE STATEMENT IN PAPER FORM OR FURNISHING THE STATEMENT ELECTRONICALLY UNDER DIGITAL SIGNATURE OR AFTER VERIFICATION. INITI ALLY, SUCH STATEMENT HAD TO BE FURNISHED IN PAPER FORM AND LATER BY WAY OF AMENDMENT, THE PROCEDURE FOR FURNISHING THE STATEMENT ELECTRONICALLY WAS PROVIDED. ONCE THE STATEMENT HAS BEEN SO SUBMITTED BY THE DEDUCTOR OF TAX DEDUCTED AT SOURCE, THEN PROCESSIN G OF STATEMENT IS AS PER THE PROVISIONS OF SECTION 200A OF THE ACT. THE SAID SECTION WAS INSERTED BY THE FINANCE (NO.2) ACT, 2009 W.E.F. 01.04.2010. THE SAID SECTION 200A OF THE ACT READS AS UNDER: - 200A. (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 ITA NOS. 4740, 4741 & 4742/MUM/2016 ASIAN PIPES & PROFILES & DISHA DISTRIBUTORS 7 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 FOLLOWING ADJUSTMENTS, NAMELY: (I) ANY ARITHMETICAL ERROR IN THE STATEMENT; OR (II) AN INCORRECT CLAIM, APPARENT FROM ANY INFORMATION IN THE STATEMENT; 12 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, (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 CL AUSE (B) AGAINST ANY AMOUNT PAID UNDER SECTION 200 AND 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 A MOUNT 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 TH E 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 SUBSECTION (1), THE BOARD MAY MAKE A 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 REQUI RED UNDER THE SAID SUB - SECTION. 19. SECTION 200A OF THE ACT LAYS DOWN THE MANNER IN WHICH THE STATEMENTS OF TAX DEDUCTED AT SOURCE ARE TO 13 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, BE PROCESSED FOR ISSUING THE INTIMATION. FIRST OF ALL, THE SUMS DEDUCTIBLE UNDER THE CHAPTER ARE TO BE COMPUTED AND I NTEREST, IF ANY, SHALL BE COMPUTED ON THE BASIS OF SUCH SUMS DEDUCTIBLE AS COMPUTED IN THE STATEMENTS AS PER CLAUSE (A) AND (B) UNDER SECTION 200A(1) OF THE ACT. CLAUSES (C) TO (F) REPRODUCED ABOVE WERE SUBSTITUTED FOR CLAUSES (C) TO (E) BY THE FINANCE ACT , 2015 W.E.F. 01.06.2015. PRIOR TO THE SUBSTITUTION, CLAUSES (C) TO (E) READ AS UNDER: - (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 U NDER SECTION 200 AND 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 C LAUSE (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. 20. AS PER NEWLY SUBSTITUTED CLAUSE (C) W.E.F. 01.06.2015, THE FEES, IF ANY, IS TO BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 234E OF THE ACT. HOWEVER, UNDER THE EARLIER CLAUSE (C), THERE WAS NO SUCH PROVISION. 21. SECTION 234E(1) OF THE ACT PROVIDES THAT WHERE A PERSON FAILS TO DELIVER OR CAUSE TO BE DELIVERED, A STATEMENT WITHIN TIME PRESCRIBED I N SECTION 200(3) OF THE ACT OR THE PROVISO TO SECTION 206C(3) OF THE ACT, HE SHALL BE LIABLE TO PAY, BY WAY OF FEES, SUM OF RS.200/ - FOR EVERY DAY DURING WHICH THE FAILURE CONTINUES. THE SAID PROVISIONS WERE INSERTED BY THE FINANCE ACT, 2012 W.E.F. 01.07.2 012. UNDER SUBSECTION (2), IT IS FURTHER PROVIDED THAT THE AMOUNT OF FEES REFERRED TO IN SUB - SECTION (1) SHALL NOT EXCEED THE AMOUNT OF TAX DEDUCTIBLE OR COLLECTABLE, AS THE CASE MAY BE. SUB - SECTION (3) FURTHER LAYS DOWN THAT THE AMOUNT OF FEES REFERRED TO IN SUB - SECTION (1) SHALL BE PAID BEFORE 14 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, DELIVERING OR CAUSING TO BE DELIVERED A STATEMENT IN ACCORDANCE WITH SUB - SECTION 200(3) OF THE ACT OR THE PROVISO TO SECTION 206C(3) OF THE ACT. THE PROVISIONS OF SAID SECTION HAVE BEEN MADE APPLICABLE TO A STATEMEN T TO BE DELIVERED OR CAUSE TO BE DELIVERED ON OR AFTER THE FIRST DAY OF JULY, 2012. 22. READING THE ABOVE SAID PROVISIONS OF THE ACT, IT TRANSPIRES THAT WHERE TAX HAS BEEN DEDUCTED AT SOURCE BY A DEDUCTOR OUT OF THE ACCOUNT OF DEDUCTEE, THEN THE ONUS IS U PON THE DEDUCTOR UNDER SECTION 200 OF THE ACT TO PREPARE A STATEMENT IN SUCH FORM AND VERIFIED IN SUCH MANNER WHICH IS PRESCRIBED UNDER THE ACT IN WHICH THE PARTICULARS OF TAX DEDUCTION AT SOURCE ARE TO BE PROVIDED AND THE SAID STATEMENT IS TO BE DELIVERED OR CAUSE TO BE DELIVERED WITHIN SUCH TIME AS MAY BE PRESCRIBED. RULE 31A OF THE RULES PROVIDED THE TIME LIMIT FOR THE FURNISHING OF STATEMENT FOR TAX DEDUCTION AT SOURCE ON QUARTERLY BASIS. SECTION 234E OF THE ACT LEVIES FEES FOR DEFAULT IN FURNISHING THE STATEMENTS OF TAX DEDUCTED AT SOURCE. SUCH FEES IS TO BE PAID BEFORE DELIVERING OR CAUSING TO BE DELIVERED A STATEMENT IN ACCORDANCE WITH SECTION 200(3) OF THE ACT OR PROVISO TO SECTION 206C(3) OF THE ACT. IN OTHER WORDS, IN CASE THE ASSESSEE HAS DEFAULTE D IN NOT DELIVERING THE STATEMENT OR CAUSING TO DELIVER THE STATEMENT WITHIN TIME PRESCRIBED, THEN HE IS LIABLE TO PAY THE FEES WHICH IS SO PRESCRIBED UNDER THE ACT AND SUCH FEES SHALL NOT EXCEED THE AMOUNT OF TAX DEDUCTIBLE OR COLLECTABLE AT SOURCE BUT TH E SAME HAS TO BE PAID ALONG WITH STATEMENT WHICH IS TO BE DELIVERED UNDER THE PROVISIONS OF SECTION 200(3) OF THE ACT. THOUGH THE STATEMENT OF TAX DEDUCTED AT SOURCE HAS TO BE FURNISHED BY THE DEDUCTOR, NO DOUBT, UNDER SECTION 200 OF THE ACT, BUT THE SAME HAS TO BE PROCESSED BY THE PRESCRIBED AUTHORITY AS PER PROVISIONS OF SECTION 200A OF THE ACT. IN CASE THERE IS ANY VARIATION IN THE TAX, SUM DEDUCTIBLE UNDER THE CHAPTER AND / OR THEIR PAYMENT, THE ASSESSING OFFICER IS EMPOWERED TO MAKE ADJUSTMENTS IN THIS REGARD AND ALSO REJECT INCORRECT CLAIM MADE BY THE DEDUCTOR WHICH 15 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, IS APPARENT FROM THE INFORMATION IN THE STATEMENT FILED BY THE DEDUCTOR. FURTHER, THE INCOME - TAX AUTHORITY IS AUTHORIZED TO CHARGE INTEREST, IF ANY, AND THE SAME SHALL BE COMPUTED ON THE BA SIS OF SUMS DEDUCTIBLE IN ADDITION TO THE AMOUNT OF TAX DEDUCTED AT SOURCE, WHICH IS TO BE PAID TO THE ACCOUNT OF TREASURY BY THE DEDUCTOR. IN CASE OF ANY DEFAULT, INTEREST IS TO BE CHARGED AGAINST SUCH DEDUCTOR AND THE SAME IS TO BE COMPUTED AS PER PROVIS IONS OF SECTION 200A(1)(B) OF THE ACT. FURTHER, IN ADDITION TO BOTH THESE AMOUNTS, CLAUSE (C) TO SECTION 200A OF THE ACT PROVIDES FEES TO BE LEVIED WHICH SHALL BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 234E OF THE ACT. THE SAID PROVISION TO CHARGE FEES BY THE PRESCRIBED AUTHORITY HAS BEEN SUBSTITUTED FOR EARLIER PROVISIONS BY THE FINANCE ACT, 2015 W.E.F. 01.06.2015. PRIOR TO THE SAID SUBSTITUTION THOUGH THE PROVISIONS OF SECTION 234E OF THE ACT FOR PAYMENT OF FEES FOR DEFAULT IN FURNISHING TH E STATEMENT WERE INSERTED BY THE FINANCE ACT, 2012 W.E.F. 01.07.2012, THE PRESCRIBED AUTHORITY DID NOT HAVE THE POWER TO CHARGE THE SAID FEES, WHILE PROCESSING THE QUARTERLY STATEMENTS / RETURNS UNDER SECTION 200A OF THE ACT. 23. NOW, LOOKING AT VARIOUS P ROVISIONS OF THE ACT, THE ISSUE NEEDS TO BE ADJUDICATED IN THE CASE OF ASSESSEE, WHEREIN ADMITTEDLY, TDS RETURNS WHICH WERE DEEMED TO BE FILED BY THE ASSESSEE WERE FILED AFTER DELAY AND THE QUESTION WAS WHETHER THE ASSESSING OFFICER WHICH PROCESSING THE IN TIMATION UNDER SECTION 200A OF THE ACT COULD CHARGE LATE FEE UNDER THE PROVISIONS OF SECTION 234E OF THE ACT. THE ASSESSEE CLAIMS THAT THE ASSESSING OFFICER AT BEST COULD CHARGE THE DIFFERENCE IN TAX DEDUCTED AND NOT PAID IN TREASURY FROM THE DEDUCTOR AND / OR ANY INTEREST PAYABLE ON SUCH DEDUCTION OF TAX AT SOURCE. HOWEVER, TILL SUBSTITUTION OF CLAUSE (C) TO SECTION 200A(1) OF THE ACT BY THE FINANCE ACT, 2015 W.E.F. 01.06.2015, THE ASSESSING OFFICER WAS NOT EMPOWERED TO CHARGE FEES UNDER SECTION 234E OF TH E ACT. THE CASE OF REVENUE ON THE OTHER HAND, WAS THAT IT 16 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, WAS THE DUTY OF DEDUCTOR WHILE FURNISHING THE STATEMENT UNDER SECTION 200(3) OF THE ACT TO DEPOSIT THE FEES REFERRED TO IN SECTION 234E(1) OF THE ACT. THE LEARNED CIT - DR STRESSED THAT FEES REFERRED TO IN SUB - SECTION (1) HAD TO BE PAID WHILE DELIVERING OR CAUSING TO DELIVER THE STATEMENT IN ACCORDANCE WITH PROVISIONS OF SECTION 200(3) OF THE ACT OR THE PROVISO TO SECTION 206C(3) OF THE ACT. HOWEVER, VARIOUS REGULATIONS AND THE STATUTORY PROVISIONS IN THIS REGARD POINT OUT THAT UNDOUBTEDLY, THE RESPONSIBILITY OF THE DEDUCTOR WAS TO DEPOSIT THE TAX DEDUCTED AT SOURCE IN TIME AND IF NOT SO, THEN WITH INTEREST AND CONSEQUENTLY, WHERE THE TAX WAS NOT PAID IN TIME AND INTEREST WAS NOT PAID IN TIME AND THEN, WHERE THE STATEMENT OF TAX DEDUCTED AT SOURCE COULD NOT BE FILED BEFORE THE PRESCRIBED AUTHORITY WITHIN STIPULATED TIME, THE ASSESSEE WAS LIABLE TO LEVY OF FEES UNDER SECTION 234E OF THE ACT. HOWEVER, IN CASE ANY DEFAULT OCCURS DUE TO THE NON - PAYMENT OF FE ES BY THE ASSESSEE IN THIS REGARD, THEN THE PROVISIONS WHICH HAS TO BE CONSIDERED IS SECTION 200A(1)(C) OF THE ACT. THE POWER TO CHARGE / COLLECT FEES AS PER PROVISIONS OF SECTION 234E OF THE ACT WAS VESTED WITH THE PRESCRIBED AUTHORITY UNDER THE ACT ONLY ON SUBSTITUTION OF EARLIER CLAUSE (C) TO SECTION 200A OF THE ACT BY THE FINANCE ACT, 2015 W.E.F. 01.06.2015. ONCE ANY PROVISION OF THE ACT HAS BEEN MADE APPLICABLE FROM A RESPECTIVE DATE, THEN THE REQUIREMENT OF THE STATUTE IS TO APPLY THE SAID PROVISIONS FROM THE SAID DATE. 24. IN RESPECT OF THE ISSUE RAISED BEFORE US, IT IS CLEAR THAT THE PRESCRIBED AUTHORITY HAS BEEN VESTED WITH THE POWER TO CHARGE FEES UNDER SECTION 234E OF THE ACT ONLY WITH REGARD TO LEVY OF FEES BY THE SUBSTITUTION MADE BY FINANCE (N O.2) ACT, 2015 W.E.F. 01.06.2015. ONCE THE POWER HAS BEEN GIVEN, UNDER WHICH ANY LEVY HAS TO BE IMPOSED UPON TAX PAYER, THEN SUCH POWER COMES INTO EFFECT FROM THE DATE OF SUBSTITUTION AND CANNOT BE APPLIED RETROSPECTIVELY. THE SAID EXERCISE OF POWER HAS BE EN PROVIDED BY THE STATUTE TO BE FROM 01.06.2015 AND HENCE, IS TO BE APPLIED PROSPECTIVELY. 17 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, THERE IS NO MERIT IN THE CLAIM OF REVENUE THAT EVEN WITHOUT INSERTION OF CLAUSE (C) UNDER SECTION 200A(1) OF THE ACT, IT WAS INCUMBENT UPON THE ASSESSEE TO PAY FEES , IN CASE THERE IS DEFAULT IN FURNISHING THE STATEMENT OF TAX DEDUCTED AT SOURCE. ADMITTEDLY, THE ONUS WAS UPON THE ASSESSEE TO PREPARE STATEMENTS AND DELIVER THE SAME WITHIN PRESCRIBED TIME BEFORE THE PRESCRIBED AUTHORITY, BUT THE POWER TO COLLECT THE FEE S BY THE PRESCRIBED AUTHORITY VESTED IN SUCH AUTHORITY ONLY BY WAY OF SUBSTITUTION OF CLAUSE (C) TO SECTION 200A(1) OF THE ACT BY THE FINANCE ACT, 2015 W.E.F. 01.06.2015. PRIOR TO SAID SUBSTATION, THE ASSESSING OFFICER HAD NO AUTHORITY TO CHARGE THE FEES U NDER SECTION 234E OF THE ACT WHILE ISSUING INTIMATION UNDER SECTION 200A OF THE ACT. BEFORE EXERCISING THE AUTHORITY OF CHARGING ANY SUM FROM ANY DEDUCTOR OR THE ASSESSEE, THE PRESCRIBED AUTHORITY SHOULD HAVE NECESSARY POWER VESTED IN IT AND BEFORE VESTING OF SUCH POWER, NO ORDER CAN BE PASSED BY THE PRESCRIBED AUTHORITY IN CHARGING OF SUCH FEES UNDER SECTION 234E OF THE ACT, WHILE EXERCISING JURISDICTION UNDER SECTION 200A OF THE ACT. THUS, IN THE ABSENCE OF ENABLING PROVISIONS, UNDER WHICH THE PRESCRIBED AUTHORITY IS EMPOWERED TO CHARGE THE FEES, THE ASSESSING OFFICER WHILE PROCESSING THE RETURNS FILED BY THE DEDUCTOR IN RESPECT OF TAX DEDUCTED AT SOURCE CAN RAISE THE DEMAND ON ACCOUNT OF TAXES, IF ANY, NOT DEPOSITED AND CHARGE INTEREST. HOWEVER, PRIOR TO 01.06.2015, THE ASSESSING OFFICER DOES NOT HAVE THE POWER TO CHARGE FEES UNDER SECTION 234E OF THE ACT WHILE PROCESSING TDS RETURNS. IN THE ABSENCE OF ENABLING PROVISIONS, LEVY OF FEES COULD NOT BE EFFECTED IN THE COURSE OF INTIMATION ISSUED UNDER SECTION 200A OF THE ACT PRIOR TO 01.06.2015. 25. THE AMRITSAR BENCH OF TRIBUNAL IN SIBIA HEALTHCARE (P) LTD. VS. DCIT (2015) 121 DTR 81 (ASR) (TRIB) HAD HELD THAT THE ADJUSTMENT IN RESPECT OF LEVY OF FEES UNDER SECTION 234E OF THE ACT WAS INDEED BEYOND THE SCOPE OF PERMISSIBLE ADJUSTMENTS CONTEMPLATED UNDER SECTION 200A OF THE ACT. SUCH A LEVY COULD NOT BE 18 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, EFFECTED IN THE COURSE OF INTIMATION UNDER SECTION 200A OF THE ACT AND IN THE ABSENCE OF ANY OTHER PROVISIONS ENABLING THE DEMAND IN RESPECT OF THIS LEVY HAVING BEEN POINTED OUT, NO SUCH LEVY COULD BE EFFECTED. THE SAID PROPOSITION HAS BEEN APPLIED IN VARIOUS DECISIONS OF DIFFERENT BENCHES OF TRIBUNAL. REFERENCE WAS MADE TO THE DECISIONS OF CHENNAI BENCH OF TRIBUNAL IN G. INDIRANI VS. DCIT (SUPRA), AHMEDABAD BENC H OF TRIBUNAL IN M/S. GLOBE ECOLOGISTICS LTD. VS. DCIT IN ITA NOS.2689 - 2691/AHD/2015, ITA NO.2692/AHD/2015, RELATING TO ASSESSMENT YEAR 2014 - 15, ITA NO.2693/AHD/2015, RELATING TO ASSESSMENT YEAR 2013 - 14 AND ITA NOS.2694 - 2695/AHD/2014, RELATING TO ASSESSME NT YEAR 2013 - 14, VIDE CONSOLIDATED ORDER DATED 26.11.2015 AND CHANDIGARH BENCH OF TRIBUNAL IN M/S. KHANNA WATCHES LTD. VS. DCIT IN ITA NOS.731 TO 735/CHD/2015, RELATING TO ASSESSMENT YEARS 2014 - 15 & 2013 - 14, ORDER DATED 29.10.2015. 26. WHILE DECIDING THE PRESENT BUNCH OF APPEALS, THE REVENUE HAD PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN RASHMIKANT KUNDALIA VS. UNION OF INDIA (SUPRA) WHEREIN, THE CONSTITUTIONAL VALIDITY OF SECTION 234E OF THE ACT WAS CHALLENGED. THE HONBLE HIGH COURT NOTED THE FACT THAT WHERE THE DEDUCTOR WAS REQUIRED TO FURNISH PERIODICAL QUARTERLY STATEMENTS CONTAINING THE DETAILS OF DEDUCTION OF TAX MADE DURING THE QUARTER, BY THE PRESCRIBED DUE DATE AND THE DELAY IN FURNISHING SUCH TDS RETURNS WOULD HAVE CASCADING EFFECT. IT WAS FURTHER OBSERVED BY THE HONBLE HIGH COURT THAT UNDER THE INCOMETAX ACT, WHERE THERE IS AN OBLIGATION ON THE INCOME - TAX DEPARTMENT TO PROCESS THE INCOME - TAX RETURNS WITHIN SPECIFIED PERIOD FROM THE DATE OF FILING, THE RETURNS COUL D NOT BE ACCURATELY PROCESSED OF SUCH PERSON ON WHOSE BEHALF TAX HAS BEEN DEDUCTED I.E. DEDUCTEE, UNTIL INFORMATION OF SUCH DEDUCTIONS IS FURNISHED BY THE DEDUCTOR WITHIN THE PRESCRIBED TIME. SINCE THE SUBSTANTIAL NUMBER OF DEDUCTORS WERE NOT FILING THEIR TDS RETURNS / STATEMENTS WITHIN PRESCRIBED 19 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, TIME FRAME, THEN IT LEAD TO AN ADDITIONAL WORK BURDEN UPON THE DEPARTMENT DUE TO THE FAULT OF THE DEDUCTOR AND IN THIS LIGHT AND TO COMPENSATE FOR ADDITIONAL WORK BURDEN FORCED UPON THE DEPARTMENT, FEES WAS SOUGHT TO BE LEVIED UNDER SECTION 234E OF THE ACT. THE HONBLE HIGH COURT HELD THAT LOOKING AT THIS FROM THIS PERSPECTIVE, SECTION 234E OF THE ACT WAS NOT PUNITIVE IN NATURE BUT A FEE WHICH WAS A FIXED CHARGE FOR THE EXTRA SERVICE WHICH THE DEPARTMENT HAD TO PRO VIDE DUE TO THE LATE FILING OF TDS STATEMENTS. IT WAS FURTHER HELD BY THE HONBLE HIGH COURT THAT LATE FILING OF TDS RETURNS / STATEMENTS WAS REGULARIZED BY PAYMENT OF FEES AS SET OUT IN SECTION 234E OF THE ACT. THEREFORE, THE FINDINGS OF HONBLE HIGH COUR T WERE THUS, THAT THE FEES SOUGHT TO BE LEVIED UNDER SECTION 234E OF THE ACT WAS NOT IN THE GUISE OF TAX SOUGHT TO BE LEVIED ON THE DEDUCTOR. THE PROVISIONS OF SECTION 234E OF THE ACT WERE HELD TO BE NOT ONEROUS ON THE GROUND THAT SECTION DOES NOT EMPOWER THE ASSESSING OFFICER TO CONDONE THE DELAY IN LATE FILING THE INCOME TAX RETURNS OR THAT NO APPEAL IS PROVIDED FROM ARBITRARY ORDER PASSED UNDER SECTION 234E OF THE ACT. THE HONBLE HIGH COURT HELD THAT THE RIGHT TO APPEAL WAS NOT A MATTER OF RIGHT BUT WAS CREATURE OF STATUTE AND IF THE LEGISLATURE DEEMS FIT NOT TO PROVIDE REMEDY OF APPEAL, SO BE IT. THE HONBLE HIGH COURT FURTHER HELD THAT A PERSON CAN ALWAYS APPROACH THE COURT IN EXTRAORDINARY EQUITABLE JURISDICTION UNDER ARTICLE 226/227 OF THE CONSTITUTI ON AS THE CASE MAY BE. THE HONBLE HIGH COURT THEREFORE, OBSERVED THAT SIMPLY BECAUSE NO REMEDY OF APPEAL WAS PROVIDED FOR THE PROVISIONS OF SECTION 234E OF THE ACT, THE SAME CANNOT BE SAID TO BE ONEROUS AND SECTION 234E OF THE ACT WAS HELD TO BE CONSTITUT IONALLY VALID. THE CONSTITUTIONAL VALIDITY OF PROVISIONS OF SECTION 234E OF THE ACT HAS ALSO BEEN UPHELD BY THE HONBLE RAJASTHAN HIGH COURT IN M/S. DUNDLOD SHIKSHAN SANSTHAN & ANR. VS. UNION OF INDIA AND ORS (SUPRA). 27. IN VIEW OF THE ABOVE SAID RATIO L AID DOWN BY THE HONBLE BOMBAY HIGH COURT, THE CASE OF THE LEARNED 20 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, CIT - DR BEFORE US WAS THAT THERE IS NO MERIT IN THE PRESENT SET OF APPEALS FILED BY THE ASSESSEE AS THE HONBLE HIGH COURT HAS LAID DOWN THAT NO APPEAL IS PROVIDED FROM AN ORDER PASSED UNDER SECTION 234E OF THE ACT AND THE SAME MERITS TO BE DISMISSED AT THE OUTSET. IN THIS REGARD, HE HAS RAISED TWO ISSUES THAT (A) THE APPEAL FILED BY THE ASSESSEE IS NOT MAINTAINABLE AND ALSO (B) THERE IS NO MERIT IN THE CLAIM OF THE ASSESSEE THAT THE ASSESSIN G OFFICER IS NOT EMPOWERED TO CHARGE FEES UNDER SECTION 234E OF THE ACT BEFORE INSERTION OF CLAUSE (C) TO SECTION 200A(1) OF THE ACT BY THE FINANCE ACT, 2015 W.E.F. 01.06.2015. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ON THE OTHER HAND, DREW OUR ATTENTION TO THE MEMORANDUM TO THE FINANCE BILL, 2015 WHILE INTRODUCING THE SAID CLAUSE (C) TO SECTION 200A(1) OF THE ACT. THE FINANCE BILL TOOK NOTE OF THE PROVISIONS OF CHAPTER XVIIB, UNDER WHICH THE PERSON DEDUCTING TAX I.E. DEDUCTOR WAS REQUIRED TO FILE QUARTERLY TAX DEDUCTION AT SOURCE STATEMENT CONTAINING THE DETAILS OF DEDUCTION OF TAX MADE DURING THE QUARTER BY THE PRESCRIBED DUE DATES. SIMILAR RESPONSIBILITY IS ON A PERSON REQUIRED TO COLLECT TAX OF CERTAIN SPECIFIED RECEIPTS UNDER SECTION 206C OF THE ACT. IN ORDER TO PROVIDE EFFECTIVE DETERRENCE AGAINST THE DELAY IN FURNISHING TDS / TCS STATEMENTS, THE FINANCE ACT, 2012 INSERTED SECTION 234E OF THE ACT TO PROVIDE FOR LEVY OF FEES ON LATE FURNISHING OF TDS / TCS STATEMENTS. THE MEMO FURTHER TOOK NOTE OF THE FACT THAT THE FINANCE (NO.2) ACT, 2009 INSERTED SECTION 200A IN THE ACT, WHICH PROVIDED FOR FURNISHING OF TDS STATEMENTS FOR DETERMINING THE AMOUNT PAYABLE OR REFUNDABLE TO THE DEDUCTOR. IT FURTHER TOOK NOTE THAT HOWEVER, AS SECTION 234E OF TH E ACT WAS INSERTED AFTER THE INSERTION OF SECTION 200A IN THE ACT, THE EXISTING PROVISIONS OF SECTION 200A OF THE ACT DOES NOT PROVIDE FOR DETERMINATION OF FEES PAYABLE UNDER SECTION 234E OF THE ACT AT THE TIME OF PROCESSING OF TDS STATEMENTS. IT WAS THUS, PROPOSED TO AMEND THE PROVISIONS OF SECTION 200A OF THE ACT SO AS TO ENABLE THE COMPUTATION OF FEES PAYABLE UNDER SECTION 234E OF THE ACT AT THE TIME OF 21 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, PROCESSING OF TDS STATEMENTS UNDER SECTION 200A OF THE ACT. THE MEMO EXPLAINING THE FINANCE BILL, 2015 VERY CATEGORICALLY HELD THAT CURRENTLY THERE DOES NOT EXIST ANY PROVISION IN THE ACT TO ENABLE THE PROCESSING OF TCS RETURNS AND HENCE, A PROPOSAL WAS MADE TO INSERT A PROVISION IN THIS REGARD AND ALSO THE POST PROVISION SHALL INCORPORATE THE MECHANISM FO R COMPUTATION OF FEES PAYABLE UNDER SECTION 234E OF THE ACT. THE FINANCE BILL FURTHER REFERS TO THE EXISTING PROVISIONS OF THE ACT I.E. AFTER PROCESSING OF TDS STATEMENT, INTIMATION IS GENERATED SPECIFYING THE AMOUNT PAYABLE OR REFUNDABLE. THIS INTIMATION GENERATED AFTER PROCESSING OF TDS STATEMENT IS (I) SUBJECT TO RECTIFICATION UNDER SECTION 154 OF THE ACT; (II) APPEALABLE UNDER SECTION 246A OF THE ACT; AND (III) DEEMED AS NOTICE OF PAYMENT UNDER SECTION 156 OF THE ACT. THE FINANCE BILL FURTHER PROVIDED T HAT INTIMATION GENERATED AFTER THE PROPOSED PROCESSING OF TCS STATEMENT SHALL BE AT PAR WITH THE INTIMATION GENERATED AFTER PROCESSING OF TDS STATEMENT AND ALSO PROVIDED THAT FAILURE TO PAY TAX SPECIFIED IN THE INTIMATION SHALL ATTRACT LEVY OF INTEREST AS PER PROVISIONS OF SECTION 220(2) OF THE ACT. FURTHER, AMENDMENTS WERE ALSO MADE IN RESPECT OF THE SCHEME OF PAYMENT OF TDS / TCS BY THE GOVERNMENT, DEDUCTOR / COLLECTOR WHICH ARE NOT RELEVANT FOR DECIDING THE ISSUE IN THE PRESENT APPEAL AND HENCE, THE SAME ARE NOT BEING REFERRED TO. THE FINANCE BILL FURTHER PROVIDED THAT THE AMENDMENT WOULD TAKE EFFECT FROM 01.06.2015. 28. THE PERUSAL OF MEMO EXPLAINING THE PROVISION RELATING TO INSERTION OF CLAUSE (C) TO SECTION 200A OF THE ACT CLARIFIES THE INTENTION OF LEGISLATURE IN INSERTING THE SAID PROVISION. THE PROVISIONS OF SECTION 234E OF THE ACT WERE INSERTED BY THE FINANCE ACT, 2012, UNDER WHICH THE PROVISION WAS MADE FOR LEVY OF FEES FOR LATE FURNISHING TDS / TCS STATEMENTS. BEFORE INSERTION OF SECTION 234E OF THE ACT, THE FINANCE (NO.2) ACT, 2009 HAD INSERTED SECTION 200A IN THE ACT, UNDER THE SAID SECTION, MECHANISM WAS PROVIDED FOR PROCESSING OF 22 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, TDS STATEMENTS FOR DETERMINING THE AMOUNT PAYABLE OR REFUNDABLE TO THE DEDUCTOR, UNDER WHICH THE PROVISION WAS ALS O MADE FOR CHARGING OF INTEREST. HOWEVER, SINCE THE PROVISIONS OF SECTION 234E OF THE ACT WERE NOT ON STATUTE WHEN THE FINANCE (NO.2) ACT, 2009 WAS PASSED, NO PROVISION WAS MADE FOR DETERMINING THE FEES PAYABLE UNDER SECTION 234E OF THE ACT AT THE TIME OF PROCESSING THE TDS STATEMENTS. SO, WHEN SECTION 234E OF THE ACT WAS INTRODUCED, IT PROVIDED THAT THE PERSON WAS RESPONSIBLE FOR FURNISHING THE TDS RETURNS / STATEMENTS WITHIN STIPULATED PERIOD AND IN DEFAULT, FEES WOULD BE CHARGED ON SUCH PERSON. THE SAID SECTION ITSELF PROVIDED THAT FEES SHALL NOT EXCEED THE AMOUNT OF TAX DEDUCTED AT SOURCE OR COLLECTED AT SOURCE. IT WAS FURTHER PROVIDED THAT THE PERSON RESPONSIBLE FOR FURNISHING THE STATEMENTS SHALL PAY THE SAID AMOUNT WHILE FURNISHING THE STATEMENTS UNDE R SECTION 200(3) OF THE ACT. HOWEVER, POWER ENABLING THE ASSESSING OFFICER TO CHARGE / LEVY THE FEE UNDER SECTION 234E OF THE ACT WHILE PROCESSING THE TDS RETURNS / STATEMENTS FILED BY A PERSON DID NOT EXIST WHEN SECTION 234E OF THE ACT WAS INSERTED BY THE FINANCE ACT, 2012. THE POWER TO CHARGE FEES UNDER THE PROVISIONS OF SECTION 234E OF THE ACT WHILE PROCESSING THE TDS STATEMENTS, WAS DWELLED UPON BY THE LEGISLATURE BY WAY OF INSERTION OF CLAUSE (C) TO SECTION 200A(1) OF THE ACT BY THE FINANCE ACT, 2015 W .E.F. 01.06.2015. ACCORDINGLY, WE ITA NOS. 4740, 4741 & 4742/MUM/2016 ASIAN PIPES & PROFILES & DISHA DISTRIBUTORS 14 HOLD THAT WHERE THE ASSESSING OFFICER HAS PROCESSED THE TDS STATEMENTS FILED BY THE DEDUCTOR, WHICH ADMITTEDLY, WERE FILED BELATEDLY BUT BE FORE INSERTION OF CLAUSE (C) TO SECTION 200A(1) OF THE ACT W.E.F. 01.06.2015, THEN IN SUCH CASES, THE ASSESSING OFFICER IS NOT EMPOWERED TO CHARGE FEES UNDER SECTION 234E OF THE ACT WHILE PROCESSING THE TDS RETURNS FILED BY THE DEDUCTOR. 29. THE HONBLE B OMBAY HIGH COURT IN RASHMIKANT KUNDALIA VS. UNION OF INDIA (SUPRA) HAS UPHELD THE CONSTITUTIONAL VALIDITY OF SAID SECTION INTRODUCED BY THE 23 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, FINANCE ACT, 2015 W.E.F. 01.06.2015 BUT WAS NOT ABREAST OF THE APPLICABILITY OF THE SAID SECTION 234E OF THE ACT BY THE ASSESSING OFFICER WHILE PROCESSING TDS STATEMENT FILED BY THE DEDUCTOR PRIOR TO 01.06.2015. IN SUCH SCENARIO, WE FIND NO MERIT IN THE PLEA OF LEARNED CIT - DR THAT THE HONBLE BOMBAY HIGH COURT IN RASHMIKANT KUNDALIA VS. UNION OF INDIA (SUPRA) HAS LAID D OWN THE PROPOSITION THAT FEES UNDER SECTION 234E OF THE ACT IS CHARGEABLE IN THE CASE OF PRESENT SET OF APPEALS, WHERE THE ASSESSING OFFICER HAD ISSUED THE INTIMATION UNDER SECTION 200A OF THE ACT PRIOR TO 01.06.2015. 30. ANOTHER ASPECT OF THE ISSUE IS WH ETHER THE AMENDMENT BROUGHT IN BY THE FINANCE ACT, 2015 W.E.F. 01.06.2015 BY WAY OF INSERTION OF CLAUSE (C) TO SECTION 200A(1) OF THE ACT IS CLARIFICATORY OR IS PROSPECTIVE IN NATURE AND IS NOT APPLICABLE TO THE PENDING ASSESSMENTS. UNDOUBTEDLY, THE PROVIS IONS OF SECTION 234E OF THE ACT WERE INSERTED BY THE FINANCE ACT, 2012, UNDER WHICH THE LIABILITY WAS IMPOSED UPON THE DEDUCTOR IN SUCH CASES WHERE TDS STATEMENTS / RETURNS WERE FILED BELATEDLY TO PAY THE FEES AS PER SAID SECTION. HOWEVER, IN CASES, WHERE THE ASSESSEE HAS FAILED TO DEPOSIT THE SAID FEES, THEN IN ORDER TO ENABLE THE ASSESSING OFFICER TO COLLECT THE SAID FEES CHARGEABLE UNDER SECTION 234E OF THE ACT, IT IS INCUMBENT UPON THE LEGISLATURE TO PROVIDE MECHANISM FOR THE ASSESSING OFFICER TO CHARGE AND COLLECT SUCH FEES. IN THE ABSENCE OF ENABLING PROVISIONS, THE ASSESSING OFFICER WHILE PROCESSING THE TDS STATEMENTS, EVEN IF THE SAID STATEMENTS ARE BELATED, IS NOT EMPOWERED TO CHARGE THE FEES UNDER SECTION 234E OF THE ACT. THE AMENDMENT WAS BROUGHT IN BY THE FINANCE ACT, 2015 W.E.F. 01.06.2015 AND SUCH AN AMENDMENT WHERE EMPOWERMENT IS GIVEN TO THE ASSESSING OFFICER TO LEVY OR CHARGE THE FEES CANNOT BE SAID TO BE CLARIFICATORY IN NATURE AND HENCE, APPLICABLE FOR PENDING ASSESSMENTS. 24 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, 31. THE HONBLE SUPREME COURT IN CIT VS. VATIKA TOWNSHIP PVT. LTD. (SUPRA) HAS EXPLAINED THE GENERAL PRINCIPLE CONCERNING RETROSPECTIVITY AND HAVE HELD THAT OF THE VARIOUS RULES GUIDING HOW A LEGISLATION HAS TO BE INTERPRETED, ONE ESTABLISHED RULE IS THAT UNLESS CONTRARY INTENTION APPEARS, A LEGISLATION IS PRESUMED NOT TO BE INTENDED TO HAVE A RETROSPECTIVE OPERATION. IDEA BEHIND THE RULE IS THAT CURRENT LAW SHOULD GOVERN CURRENT ACTIVITIES. THE MEMO EXPLAINING THE FINANCE BILL, 2015 VERY CLEARLY ALSO RECOGNIZES THAT AND REFERS TO THE CURRENT PROVISIONS OF SUB - SECTION (3) TO SECTION 200 OF THE ACT, UNDER WHICH THE DEDUCTOR IS TO FURNISH TDS STATEMENTS. HOWEVER, AS SECTION 234E OF THE ACT WAS INSERTED AFTER INSERTION OF SECTION 200A IN THE ACT, THE EXISTING PROVISIONS OF S ECTION 200A OF THE ACT DID NOT PROVIDE FOR DETERMINATION OF FEES PAYABLE UNDER SECTION 234E OF THE ACT AT THE TIME OF PROCESSING OF TDS STATEMENTS. IN THIS REGARD, IT WAS THUS, PROPOSED TO AMEND THE PROVISIONS OF SECTION 200A OF THE ACT SO AS TO ENABLE THE COMPUTATION OF FEES PAYABLE UNDER SECTION 234E OF THE ACT AT THE TIME OF PROCESSING OF TDS STATEMENTS UNDER SECTION 200A OF THE ACT. IN OTHER WORDS, THE ASSESSING OFFICER IS EMPOWERED TO CHARGE FEES PAYABLE UNDER SECTION 234E OF THE ACT IN THE INTIMATION ISSUED AFTER INSERTION OF CLAUSE (C) TO SECTION 200A(1) OF THE ACT W.E.F. 01.06.2015. THE LEGISLATURE ITSELF RECOGNIZED THAT UNDER THE EXISTING PROVISIONS OF SECTION 200A OF THE ACT I.E. PRIOR TO 01.06.2015, THE ASSESSING OFFICER AT THE TIME OF PROCESSING THE TDS STATEMENTS DID NOT HAVE POWER TO CHARGE FEES UNDER SECTION 234E OF THE ACT AND IN ORDER TO COVER UP THAT, THE AMENDMENT WAS MADE BY WAY OF INSERTION OF CLAUSE (C) TO SECTION 200A OF THE ACT. IN SUCH SCENARIO, IT CANNOT BE SAID THAT INSERTION MADE B Y SECTION 200A(1)(C) OF THE ACT IS RETROSPECTIVE IN NATURE, WHERE THE LEGISLATURE WAS AWARE THAT THE FEES COULD BE CHARGED UNDER SECTION 234E OF THE ACT AS PER FINANCE ACT, 2012 AND ALSO THE PROVISIONS OF SECTION 200A OF THE ACT WERE INSERTED BY FINANCE (N O.2) ACT, 2009, UNDER WHICH THE MACHINERY WAS PROVIDED FOR THE 25 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, ASSESSING OFFICER TO PROCESS THE TDS STATEMENTS FILED BY THE ASSESSEE. THE INSERTION CATEGORICALLY BEING MADE W.E.F. 01.06.2015 LAYS DOWN THAT THE SAID AMENDMENT IS PROSPECTIVE IN NATURE AND CA NNOT BE APPLIED TO PROCESSING OF TDS RETURNS / STATEMENTS PRIOR TO 01.06.2015. 32. WE FURTHER FIND THAT IN RECENT JUDGMENT DATED 26.08.2016, THE HONBLE KARNATAKA HIGH COURT IN WRIT APPEAL NOS.2663 - 2674/2015(T - IT) & ORS IN SRI FATHERAJ SINGHVI & ORS VS. UNION OF INDIA & ORS HAS QUASHED THE INTIMATION ISSUED UNDER SECTION 200A OF THE ACT LEVYING THE FEES FOR DELAYED FILING THE TDS STATEMENTS UNDER SECTION 234E OF THE ACT. THE HONBLE HIGH COURT NOTES THAT THE FINANCE ACT, 2015 HAD MADE AMENDMENTS TO SECTIO N 200A OF THE ACT ENABLING THE ASSESSING OFFICER TO MAKE ADJUSTMENTS WHILE LEVYING FEES UNDER SECTION 234E OF THE ACT WAS APPLICABLE W.E.F. 01.06.2015 AND HAS HELD THAT IT HAS PROSPECTIVE EFFECT. ACCORDINGLY, THE HONBLE HIGH COURT HELD THAT INTIMATION RA ISING DEMAND PRIOR TO 01.06.2015 UNDER SECTION 200A OF THE ACT LEVYING SECTION 234E OF THE ACT LATE FEES IS NOT VALID. HOWEVER, THE HONBLE HIGH COURT KEPT OPEN THE ISSUE ON CONSTITUTIONAL VALIDITY OF SECTION 234E OF THE ACT. WE HAVE ALREADY REFERRED TO T HE DECISION OF HONBLE BOMBAY HIGH COURT IN RASHMIKANT KUNDALIA VS. UNION OF INDIA (SUPRA) IN THIS REGARD, WHEREIN THE CONSTITUTIONAL VALIDITY OF SECTION 234E OF THE ACT HAS BEEN UPHELD. 33. ACCORDINGLY, WE HOLD THAT THE AMENDMENT TO SECTION 200A(1) OF TH E ACT IS PROCEDURAL IN NATURE AND IN VIEW THEREOF, THE ASSESSING OFFICER WHILE PROCESSING THE TDS STATEMENTS / RETURNS IN THE PRESENT SET OF APPEALS FOR THE PERIOD PRIOR TO 01.06.2015, WAS NOT EMPOWERED TO CHARGE FEES UNDER SECTION 234E OF THE ACT. HENCE, THE INTIMATION ISSUED BY THE ASSESSING OFFICER UNDER SECTION 200A OF THE ACT IN ALL THESE APPEALS DOES NOT STAND AND THE DEMAND RAISED BY WAY OF CHARGING THE FEES UNDER SECTION 234E OF THE ACT IS NOT VALID AND THE 26 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, SAME IS DELETED. THE INTIMATION ISSUED BY THE ASSESSING OFFICER WAS BEYOND THE SCOPE OF ADJUSTMENT PROVIDED UNDER SECTION 200A OF THE ACT AND SUCH ADJUSTMENT COULD NOT STAND IN THE EYE OF LAW. 34. BEFORE PARTING WE MAY REFER TO RELIANCE PLACED UPON BY THE LEARNED CIT - DR ON THE RATIO LAID DOWN BY CHENNAI BENCH OF TRIBUNAL IN G. INDIRANI VS. DCIT (SUPRA) ON ANOTHER ASPECT WHEREIN IT WAS HELD THAT BEFORE 01.06.2015, WHETHER THE ASSESSING OFFICER HAD AUTHORITY TO PASS A SEPARATE ORDER UNDER SECTION 234E OF THE ACT LEVYING FEES FOR DELAY IN FILING THE TDS STATEMENTS UNDER SECTION 200(3) OF THE ACT; THE TRIBUNAL HELD YES THAT THE ASSESSING AUTHORITY HAD SUCH POWER AND AFTER 01.06.2015, THE ASSESSING OFFICER WAS WITHIN HIS LIMIT TO LEVY FEES UNDER SECTION 234E OF THE ACT EVEN WHILE PROCESSING THE TDS ST ATEMENTS UNDER SECTION 200A OF THE ACT. IN VIEW OF THE PRESENT SET OF FACTS, WHERE THE ASSESSING OFFICER HAD CHARGED FEES UNDER SECTION 234E OF THE ACT WHILE PROCESSING THE STATEMENTS UNDER SECTION 200A OF THE ACT BEFORE 01.06.2015, THERE IS NO MERIT IN TH E RELIANCE PLACED UPON BY THE LEARNED CIT - DR ON THE SAID PROPOSITION LAID DOWN BY THE CHENNAI BENCH OF TRIBUNAL AND WE DISMISS THE SAME. 35. ANOTHER RELIANCE PLACED UPON BY THE LEARNED CIT - DR WAS IN RESPECT OF AMENDMENT BEING RETROSPECTIVE OR PROSPECTIVE AND RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY HONBLE DELHI HIGH COURT IN CIT VS. NARESH KUMAR (SUPRA). HOWEVER, IN VIEW OF OUR DECISION IN THE PARAS HEREINABOVE, WHERE POWER IS BEING ENSHRINED UPON THE ASSESSING OFFICER TO LEVY OR CHARGE WHILE PROCESS ING THE TDS RETURNS W.E.F. 01.06.2015, SUCH PROVISION CANNOT HAVE RETROSPECTIVE EFFECT AS IT WOULD BE DETRIMENTAL TO THE CASE OF TAX PAYER. THE HONBLE DELHI HIGH COURT WAS CONSIDERING THE APPLICATION OF AMENDMENT TO SECTION 40(A)(IA) OF THE ACT BY THE FIN ANCE ACT, 2010, UNDER WHICH CERTAIN RELAXATIONS WERE GIVEN TO THE APPLICATION OF SAID SECTION AND IT WAS 27 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, HELD THAT THE SAME APPLIES RETROSPECTIVELY TO EARLIER YEARS. HOWEVER, IN THE PRESENT SET OF APPEALS, THE ISSUE IS AGAINST THE PROVISION UNDER WHICH A N EW ENABLING POWER IS BEING GIVEN TO CHARGE FEES UNDER SECTION 234E OF THE ACT WHILE PROCESSING TDS RETURNS / STATEMENTS AND SUCH POWER IS TO BE APPLIED PROSPECTIVELY. IN ANY CASE, THE PARLIAMENT ITSELF HAS RECOGNIZED ITS OPERATION TO BE PROSPECTIVE IN NATU RE WHILE INTRODUCING CLAUSE (C) TO SECTION 200A(1) OF THE ACT AND HENCE, CANNOT BE APPLIED RETROSPECTIVELY. SIMILARLY, RELIANCE PLACED UPON BY THE LEARNED CIT - DR ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN GOVINDDAS VS. ITO (SUPRA) IS MISPLACED BECAUSE OF THE DISTINGUISHABLE FACTS AND ISSUES. 36. NOW, COMING TO THE CONNECTED ISSUE RAISED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE BY WAY OF GROUND OF APPEAL NO.1 THAT WHETHER ANY APPEAL IS MAINTAINABLE AGAINST THE INTIMATION ISSUED UNDER SECTION 200A OF THE ACT AND / OR ORDER PASSED UNDER SECTION 154 R.W.S. 200A OF THE ACT BY ASSESSING OFFICER IN ITA NOS. 4740, 4741 & 4742/MUM/2016 ASIAN PIPES & PROFILES & DISHA DISTRIBUTORS 17 CHARGING THE FEES UNDER SECTION 234E OF THE ACT. BOTH TH E LEARNED AUTHORIZED REPRESENTATIVES HAVE RAISED VARIED ARGUMENTS IN RESPECT OF SAID ISSUE AND THE LEARNED CITDR HAS REFERRED TO THE ORDER OF CIT(A), WHO HAD HELD THAT NO APPEAL IS MAINTAINABLE AGAINST THE ORDER OF ASSESSING OFFICER PASSED WHILE PROCESSING THE TDS RETURNS / STATEMENTS AND CHARGING OF FEES UNDER SECTION 234E OF THE ACT. WITHOUT GOING INTO VARIOUS ASPECTS OF THE ISSUE, WE MAKE REFERENCE TO THE MEMORANDUM EXPLAINING THE FINANCE BILL, 2015, UNDER WHICH THE HEADING WAS RATIONALIZATION OF PROVISI ONS RELATING TO TAX DEDUCTION AT SOURCE (TDS) AND TAX COLLECTION AT SOURCE (TCS). THE SAID MEMORANDUM CATEGORICALLY RECOGNIZED THAT UNDER THE EXISTING PROVISIONS OF THE ACT, AFTER PROCESSING OF TDS STATEMENTS, AN INTIMATION IS GENERATED SPECIFYING THE AMOU NT PAYABLE OR REFUNDABLE. IT WAS FURTHER NOTED THAT THIS INTIMATION 28 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, GENERATED AFTER PROCESSING TDS STATEMENT IS (I) SUBJECT TO RECTIFICATION UNDER SECTION 154 OF THE ACT; (II) APPEALABLE UNDER SECTION 246A OF THE ACT; AND (III) DEEMED AS NOTICE OF PAYMENT UNDER SECTION 156 OF THE ACT. UNDER THE AMENDMENT, SIMILAR POSITION WAS GIVEN TO THE PROCESSING OF TCS STATEMENTS. IN OTHER WORDS, THE LEGISLATURE RECOGNIZES THAT A DEDUCTOR WHO HAS FILED HIS STATEMENT OF TAX DEDUCTED AT SOURCE, WHICH IN TURN, HAS BEEN PRO CESSED BY THE ASSESSING OFFICER AND INTIMATION IS GENERATED UNDER WHICH, IF ANY AMOUNT IS FOUND TO BE PAYABLE, THEN SUCH INTIMATION GENERATED AFTER PROCESSING OF TDS RETURNS IS SUBJECT TO RECTIFICATION UNDER SECTION 154 OF THE ACT AND / OR IS ALSO APPEALAB LE UNDER SECTION 246A OF THE ACT, SINCE THE DEMAND ISSUED BY THE ASSESSING OFFICER IS DEEMED TO BE A NOTICE OF PAYMENT UNDER SECTION 156 OF THE ACT. SINCE THE INTIMATION IN QUESTION ISSUED BY THE ASSESSING OFFICER WAS APPEALABLE ORDER UNDER SECTION 246A(1) (A) OF THE ACT, THEREFORE, THE CIT(A) SHOULD HAVE EXAMINED THE LEGALITY OF ADJUSTMENT MADE UNDER INTIMATION ISSUED UNDER SECTION 200A OF THE ACT. THE CIT(A) HAS REJECTED THE PRESENT SET OF APPEALS ON THE SURMISE THAT FIRST OF ALL, NO APPEAL IS PROVIDED AGA INST THE INTIMATION ISSUED UNDER SECTION 200A OF THE ACT. FURTHER, THE CIT(A) HAS ALSO DECIDED THE ISSUE ON MERITS AND THE ASSESSEE IS IN APPEAL BEFORE US ON BOTH THESE GROUNDS. VIS - - VIS THE FIRST ISSUE OF MAINTAINABILITY OF APPEAL AGAINST THE INTIMATION ISSUED UNDER SECTION 200A OF THE ACT, WE HOLD THAT SUCH INTIMATION ISSUED BY THE ASSESSING OFFICER AFTER PROCESSING THE TDS RETURNS IS APPEALABLE. THE DEMAND RAISED BY WAY OF CHARGING OF FEES UNDER SECTION 234E OF THE ACT IS UNDER SECTION 156 OF THE ACT AN D ANY DEMAND RAISED UNDER SECTION 156 OF THE ACT IS APPEALABLE UNDER SECTION 246A(1)(A) AND (C) OF THE ACT. ACCORDINGLY, WE REVERSE THE FINDINGS OF CIT(A) IN THIS REGARD. WE FIND SUPPORT FROM THE SIMILAR PROPOSITION BEING LAID DOWN BY MUMBAI BENCH OF TRIBU NAL IN BUNCH OF CASES WITH LEAD ORDER IN M/S. KASH REALTORS PVT. LTD. VS. ITO IN ITA NO.4199/M/2015, RELATING TO ASSESSMENT YEAR 2013 - 14, CONSOLIDATED ORDER DATED 29 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, 27.07.2016, WHICH HAD ALSO DECIDED THE ISSUE OF CHARGING OF FEES UNDER SECTION 234E OF THE A CT IN FAVOUR OF THE ASSESSEE FOLLOWING THE DECISIONS OF OTHER BENCHES OF TRIBUNAL. ONCE INTIMATION ISSUED UNDER SECTION 200A(1) OF THE ACT IS APPEALABLE ORDER BEFORE THE CIT(A) UNDER SECTION 246A(1)(A) OF THE ACT, THEN SUCH APPEALABLE ORDER PASSED BY THE C IT(A) UNDER SECTION 250 OF THE ACT IS FURTHER APPEALABLE BEFORE THE TRIBUNAL UNDER SECTION 253 OF THE ACT. HENCE, WE ADMIT THE PRESENT APPEALS FILED BY THE ASSESSEE EVEN ON THIS PRELIMINARY ISSUE. WE HAVE ALREADY ADJUDICATED THE ISSUE OF CHARGING FEES UNDE R SECTION 234E OF THE ACT BY THE ASSESSING OFFICER WHILE PROCESSING RETURNS / STATEMENTS IN THE PARAS HEREINABOVE AND IN VIEW THEREOF, WE HOLD THAT THE ASSESSING OFFICER IS NOT EMPOWERED TO CHARGE THE FEES UNDER SECTION 234E OF THE ACT BY WAY OF INTIMATION ISSUED UNDER SECTION 200A OF THE ACT IN RESPECT OF DEFAULTS BEFORE 01.06.2015, WE ALLOW THE CLAIM OF ASSESSEE ON BOTH THE ASPECTS. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 37. IN THE RESULT, ALL THE APPEALS FILED BY DIFFERENT ASSES SEES FOR DIFFERENT QUARTERS RELATING TO DIFFERENT YEARS ARE ALLOWED. 6.2 FOLLOWING THE ABOVE REFERRED DECISION OF THE HON'BLE ITAT PUNE BENCH IN THE CASE OF GAJANAN CONSTRUCTIONS AND OTHERS IN ITA NOS.1292 & 1293/PN/2015 AND OTHERS DATED 23.09.2016, WE HOLD THAT THE AMENDMENT TO SECTION 200A(1) OF THE ACT IS PROSPECTIVE IN NATURE AND THEREFORE THE AO WHILE PROCESSING THE TDS STATEMENTS/RETURNS IN THE PRESENT THREE AP PEALS FOR THE PERIOD PRIOR TO 01.06.2015 WAS NOT EMPOWERED TO CHARGE FEES UNDER SECTION 234E OF 30 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, THE ACT. THEREFORE THE INTIMATIONS ISSUED BY THE AO UNDER SECTION 200A OF THE ACT IN THESE APPEALS ARE UNSUSTAINABLE AND THE DEMAND RAISED BY WAY OF CHARGING OF THE FEES UNDER SECTION 234E OF THE ACT NOT BEING VALID IS DELETED. IN THIS VIEW OF THE MATTER, WE HOLD THAT THE AO IS NOT EMPOWERED TO CHARGE FEES UNDER SECTION 234E OF THE ACT BY WAY OF INTIMATIONS ISSUED UNDER SECTION 200A OF THE ACT IN RESPECT OF DEFAU LTS BEFORE 01.06.2015 AND CONSEQUENTLY ALLOW THE GROUND OF ALL APPEALS RAISED BY THE ASSESSEES. 9. AFTER ANALYZING THE ABOVE ORDERS , WE FIND THAT IDENTICAL ISSUES INVOLVED IN THE PRESENT CASE HAS ALREADY BEEN DECIDED BY THE COORDINATE BENCH OF ITAT MUMBA I BENCH . THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH AND IN ORDER TO MAINTAIN JUDICIAL CONSISTENCY AND JUDICIAL DISCIPLINE, WE ALSO HOLD THAT THE AMENDMENT TO SECTION 200A(1) OF THE ACT IS PROSPECTIVE IN NATURE AND THEREFORE THE A O WHILE PROCESSING THE TDS STATEMENTS/RETURNS IN THE PRESENT APPEAL FOR THE PERIOD PRIOR TO 01.06.2015 WAS NOT EMPOWERED TO CHARGE FEES UNDER SECTION 234E OF THE ACT. THEREFORE THE INTIMATION ISSUED BY THE AO UNDER SECTION 200A OF THE ACT IN THIS APPEAL I S UNSUSTAINABLE AND 31 I.T.A. NO. 47 46 /MUM/201 6 KARUNASHANKAR SHUKLA, THE DEMAND RAISED BY WAY OF CHARGING OF THE FEES UNDER SECTION 234E OF THE ACT NOT BEING VALID IS DELETED. IN THIS VIEW OF THE MATTER, WE HOLD THAT THE AO IS NOT EMPOWERED TO CHARGE FEES UNDER SECTION 234E OF THE ACT BY WAY OF INTIMATIO N ISSUED UNDER SECTION 200A OF THE ACT IN RESPECT OF DEFAULTS BEFORE 01.06.2015 AND CONSEQUENTLY ALLOW THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 10. IN THE NET RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH DEC , 2017 SD/ - SD/ - ( R. C. SHARMA ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 27 . 12 .201 7 SR.PS . DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI