M/s Satyam Pathology Private Lt., Lucknow V. Dy. Commissioner of Income Tax-TDS,

ITA 501/LKW/2015

• Counselvise Citation: 50123714 RSA 2015
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-10-2015
• Assessment Year: misc
• Appeal Filed On: 15-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.499 TO 501/LKW/2015 ASSESSMENT YEAR 2013-14 (Q2,Q3 & Q4) DCIT, CENTRALISED PROCESSING CELL TDS. GHAZIABAD VS M/S SATYAM PATHOLOGY PRIVATE LTD. LUCKNOW TAN LKNS09602F (RESPONDENT) (APPELLANT) SRI YOGESH AGARWAL, ADVOCATE APPELLANT BY SHRI AMIT NIGAM, DR RESPONDENT BY 13/10/2015 DATE OF HEARING 21 / 10 /2015 DATE OF PRONOUNCEMENT O R D E R PER SUNIL KUMAR YADAV, JM. 1. THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF THE LD. CIT(A) ON COMMON GROUNDS EXCEPT DIFFERENCE IN QUANT UM. HOWEVER, FOR THE SAKE OF REFERENCE WE EXTRACT GROUNDS RAISED IN ITA NO. 4 99/LKW/2015:- I. THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS)-II, LUCKNOW [HERE-IN-AFTER REFERRED TO AS THE LD. CIT (APPEALS) ] GROSSLY ERRED ON FACTS AND IN LAW IN CONFIRMING THE LEVY OF FEE FOR AN AMOUNT OF RS.31067/- U/S 234E OF THE I.T. ACT, 1961 BY HOLDIN G THAT THE SAME IS NOT AN APPEALABLE ORDER U/S 246A OF THE ACT AND FURTHER THAT THERE IS NO DISCRETION OR APPLICATION OF MIND INVOL VED BY THE AO (C.P.C.) WHILE LEVYING THIS FINE AND IS MANDATORY I N NATURE AND THUS THE FINDING BEING AGAINST ALL SETTLED PRINCIPLES OF LAW MAY KINDLY BE ORDERED TO BE QUASHED. NOTWITHSTANDING GROUND NO. I TAKEN ABOVE:- 2 II. THE LD. CIT (APPEALS) FURTHER GROSSLY ERRED ON FACTS AND IN LAW IN CONFIRMING THE LEVY OF FEE ON THE PRESENT SET OF FA CTS AND CIRCUMSTANCES ON MERITS ALSO AND IN NOT APPRECIATIN G THE SUBMISSIONS SO FILED BEFORE HIM DURING THE COURSE O F APPELLATE PROCEEDINGS. III. IN CONFORMING THE LEVY OF FEE THE LD. CIT (APP EALS) CHOSE TO IGNORE OR RATHER FAILED TO COMPLETELY APPRECIATE THE FACT THAT PRIOR TO 1ST JUNE 2015 THERE WAS NO ENABLING PROVISION IN PROCES SING THE INTIMATION U/S 200A FOR RAISING A DEMAND IN RESPECT OF LEVY OF FEES U/S 234E OF THE ACT AND THUS ANY LEVY OF SUCH FEE P RIOR TO THE AMENDMENT MADE BY THE FINANCE ACT 2015 IN SECTION 2 00A IS ILLEGAL, BAD-IN-LAW AND VOID-AB-INITIO. IV. ON THE FACTS AND IN THE PECULIAR CIRCUMSTANCES OF THE PRESENT CASE THE LD. CIT (APPEALS) GROSSLY ERRED ON FACTS AND IN LAW IN NOT APPLYING HIS MIND TO THE RELEVANT PROVISIONS OF LAW AND IN MECHANICALLY CONFORMING THE LEVY OF FEE WHICH IN TH E PRESENT CASE IS NOT SUSTAINABLE IN LAW. V. THE FEE SO LEVIED AND CONFIRMED BY THE CIT(APPEA LS) IS BAD-IN-LAW, CONTRARY TO FACTS, LAWS AND PRINCIPLES OF NATURAL J USTICE AND FAIR-PLAY AND THUS MAY KINDLY BE ORDERED TO BE DELETED.2. THO UGH VARIOUS GROUNDS ARE RAISED BUT THEY ALL RELATE TO LEVY OF F EES WHILE PROCESSING THE TDS RETURN U/S 200A OF THE INCOME TA X ACT, 1961 (HEREINAFTER CALLED AS ACT). VI. THE LD. CIT(APPEALS) DID NOT AFFORD THE APPELLA NT CO. ANY PROPER OF SUFFICIENT OPPORTUNITY TO HAVE ITS SAY OR MAKE NECE SSARY COMPLIANCE OF THE REASONS RELIED UPON BY HIM IN PASSING THE PR ESENT ORDER. 2. LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED T HAT AS PER PROVISION OF SECTION 200 AND 206C STATEMENTS OF TDS ARE TO BE DE LIVERED DURING THE TIME PRESCRIBED AND IF THE ASSESSEE FAILS TO DELIVER OR CAUSE TO BE DELIVERED THE STATEMENT, HE SHALL BE LIABLE TO PAY BY WAY OF FEES A SUM OF RS.200/- FOR EVERY DAY DURING WHICH THE FAILURE CONTINUES. AS PER PROV ISIONS OF SECTION 234E OF THE ACT FOR LEVY OF FEES A SPECIFIC ORDER IS TO BE PASS ED U/S 234E BY THE ACT BUT AFTER THE INSERTION OF CLAUSE C IN SUB SECTION (1) OF SEC TION 200A W.E.F. 1.06.2015 AS PER PROVISION OF SECTION 234E FEE CAN BE LEVIED WHI LE PROCESSING OF STATEMENT OF 3 TDS BUT BEFORE THE AMENDMENT IN SECTION 200A THAT F EE CAN ONLY BE LEVIED BY PASSING A SPECIFIC ORDER U/S 234E OF THE ACT AND NO T WHILE PROCESSING THE STATEMENT OF TDS. LD. COUNSEL FOR THE ASSESSEE FURT HER INVITED OUR ATTENTION TO THE STATEMENT PROCESSED U/S 200A OF THE ACT WITH TH E SUBMISSION THAT IT WAS PROCESSED ON 08.01.2014 THEREFORE, IT WAS PRIOR TO THE INTRODUCTION OF CLAUSE C IN SUB SECTION 5 OF SECTION 200A OF THE ACT. THEREFORE , IF THE ASSESSING OFFICER WANTS TO LEVY THE FEES HE IS REQUIRED TO PASS AN OR DER U/S 234E OF THE ACT AND NOT WHILE PROCESSING THE STATEMENT OF TDS U/S 200A OF THE ACT. IN SUPPORT OF HIS CONTENTION, HE INVITED OUR ATTENTION TO THE ORDERS OF THE TRIBUNAL IN THE CASE OF G. INDHIRANI VS. DCIT IN ITA NO. 1019 TO 2021/MDS/ 2015 DATED 10.07.2015 AND THE ORDER OF AMRITSAR BENCH IN THE CASE OF SIBIA HE ALTHCARE PRIVATE LTD. VS. DCIT IN ITA NO.90/ASR/2015. COPIES OF THE ORDER OF THE T RIBUNAL ARE PLACED ON RECORD FOR PERUSAL. 3. LD. DR SIMPLY PLACED RELIANCE UPON THE ORDER OF THE CIT(A). 4. HAVING CAREFULLY EXAMINED THE ORDER OF THE LOWER AUTHORITIES, IN THE LIGHT OF RIVAL SUBMISSIONS, WE FIND THAT IMPUGNED ISSUE IS S QUARELY COVERED BY THE ORDERS OF THE TRIBUNAL IN WHICH IT WAS HELD THAT THE ASSES SING OFFICER CANNOT LEVY THE FEES AS PER PROVISION OF SECTION 234E OF THE ACT WH ILE PROCESSING THE STATEMENT U/S 200A BEFORE THE AMENDMENT MADE BY THE FINANCE A CT, 2015. THE RELEVANT OBSERVATIONS OF THE ORDERS OF THE TRIBUNAL ARE EXTR ACTED HEREUNDER FOR THE SAKE OF REFERENCE:- 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE 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 THEREPORTS 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) 3 1498/2013(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), HONBL E RAJASTHAN HIGH 4 COURT IN THE CASE OF OM PRAKASH DHOOT VS UNION OF I NDIA [WP NO. 1981 OF 2014] AND OF HONBLE BOMBAY HIGH COURT IN THE CASE OF RASHMIKANT KUNDALIA VS UNION OF INDIA [WP NO. 771 OF 2014], GR ANTING STAY ON THE DEMANDS RAISED IN RESPECT OF FEES UNDER SECTION 234 E. THE FULL TEXT OF THESE DECISIONS WERE NOT PRODUCED BEFORE US. HOWEVE R, AS ADMITTEDLY THERE ARE NO ORDERS FROM THE HONBLE COURTS ABOVE R ETRAININGUS FROM OUR ADJUDICATION ON MERITS IN RESPECT OF THE ISSUES IN THIS APPEAL, AND AS, IN OUR HUMBLE UNDERSTANDING, THIS APPEAL REQUIRES ADJUDICA TION ON A VERY SHORT LEGAL ISSUE, WITHIN A NARROW COMPASS OF MATERIAL FA CTS, 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 BROUGH T 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 STATEME NT 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 DURI NG 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 STAT EMENT IN ACCORDANCE WITH SUB-SECTION (3) OF SECTION 200 OR T HE 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 SOUR CE, 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. T HIS STATUTORY PROVISION, AS IT STOOD AT THE RELEVANT POINT OF TIME, WAS AS F OLLOWS: 200A: PROCESSING OF STATEMENTS OF TAX DEDUCTED AT S OURCE 5 (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 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 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 UNDER SECTION 200 AND S ECTION 201, AND ANY AMOUNT PAID OTHERWISE 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 (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 FINANCIA L 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 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 SOUR CE, WHERE SUCH RATE IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THIS AC T; 6 (2) FOR THE PURPOSES OF PROCESSING OF STATEMENTS UN DER SUB-SECTION (1), THE BOARD MAY MAKE A SCHEME FOR CENTRALISED PR OCESSING OF STATEMENTS OF TAX DEDUCTED AT SOURCE TO EXPEDITIOUS LY 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 THIS 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 1 ST 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 234E AN D ANY AMOUNT PAID OTHERWISE BY WAY OF TAX OR INTEREST OR FEE; (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 BE MADE IN RESPEC T OF THE FEE, IF ANY, SHALL BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 234E. THERE IS NO DISPUTE THAT WHAT IS IMPUGNED IN APPEAL BEFORE US IS THE INTIMATION UNDER SECTION 200A OF THE ACT, AS STATED IN SO MANY WORDS IN THE IMPUGNED INTIMATION ITSELF, AND, AS THE LAW STO OD, PRIOR TO 1ST JUNE 2015, THERE WAS NO ENABLING PROVISION THEREIN FOR R AISING 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, WHICH, AT THE RELEVANT POINT OF TIME, PERMITTED COMPUTATION OF AMOUNT RECOVERABLE FROM, O R PAYABLE TO, THE TAX DEDUCTOR AFTER MAKING THE FOLLOWING ADJUSTMENTS: 7 (A). AFTER MAKING ADJUSTMENT ON ACCOUNT OF ARITHME TICAL ERRORS AND INCORRECT CLAIMS APPARENT FROM ANY INFORMATION IN HE STATEMENT - SECTION 200A(1)(A) (B). AFTER MAKING ADJUSTMENT FOR INTEREST, IF ANY, COMPUTED ON THE BASIS OF SUMS DEDUCTIBLE AS COMPUTED IN THE STATEME NT. - SECTION 200A(1)(B) 9. NO OTHER ADJUSTMENTS IN THE AMOUNT REFUNDABLE TO , OR RECOVERABLE FROM, THE TAX DEDUCTOR, WERE PERMISSIBLE IN ACCORDANCE WI TH 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 CONTEMP LATED UNDER SECTION 200A. THIS INTIMATION IS AN APPEALABLE ORDER UNDER SECTION 246A(A), AND, THEREFORE, THE CIT(A) OUGHT TO HAVE EXAMINED LEGALI TY OF THE ADJUSTMENT MADE UNDER THIS INTIMATION IN THE LIGHT OF THE SCOP E OF THE SECTION 200A. LEARNED CIT(A) HAS NOT DONE SO. HE HAS JUSTIFIED TH E LEVY OF FEES ON THE BASIS OF THE PROVISIONS OF SECTION 234E. THAT IS NO T THE ISSUE HERE. THE ISSUE IS WHETHER SUCH A LEVY COULD BE EFFECTED IN T HE COURSE OF INTIMATION UNDER SECTION 200A. THE ANSWER IS CLEARLY IN NEGATI VE. 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 ENABLING PROVISION UNDER SECTION 200A, NO SUCH LEVY COULD BE EFFECTED. AS INTIMATION UNDER SECTION 200A, RAISING A DEMAND OR DIRECTING A REFUN D TO THE TAX DEDUCTOR, CAN ONLY BE PASSED WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR WITHIN WHICH THE RELATED TDS STATEMENT IS FILED, AN D AS THE RELATED TDS STATEMENT WAS FILED ON 19TH FEBRUARY 2014, SUCH A L EVY 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 STA GE. IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF TH E CASE, THE IMPUGNED LEVY OF FEES UNDER SECTION 234 E IS UNSUSTAINABLE I N 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 TH E RELIEF ACCORDINGLY. 5. SINCE THE ISSUE IS SQUARELY COVERED BY THE AFORE SAID ORDER OF THE TRIBUNAL, WE FIND NO JUSTIFICATION TO TAKE A CONTRARY VIEW IN THIS APPEAL. ACCORDINGLY, WE SET 8 ASIDE THE ORDER OF THE CIT(A), WHO HAS CONFIRMED TH E LEVY OF FEES BY THE AO WHILE PROCESSING STATEMENT OF TDS. 6. IN THE RESULT APPEALS OF THE ASSESSEE STAND ALLO WED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (A.K. GARODIA ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21/10/2015 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASST T. REGISTRAR