Bhoorathnom Construction Company Private Limited, Secunderabad V. Asst. Commissioner of Income Tax(TDS), Circle-1(1), Hyderabad

ITA 526/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8129 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 15-03-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 19-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V. SRINIVAS
• Keywords: TDS; Set aside
• Section: 2; 234E; 200A; 201; 13; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIRTUAL CONFERENCE) BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI L AXMI PRASAD SAHU, ACCOUNTANT MEMBER IT A NO S . 524, 525 & 526 /H/201 8 ASSESSMENT YEAR S : 20 1 3 - 1 4 , 2014 - 15 & 2015 - 16 BHOORATHNOM CONSTRUCTION PVT. LTD., SECUNDERABAD. PAN AACCB2077M VS. ASST. COMMISSIONER OF INCOME - TAX (TDS) , CIRCLE 1 (1), HYDERABAD. (APPELLANT S ) (RESPONDENT) ASSESSEE BY : SHRI V. SRINIVAS REVENUE BY : SHRI ROHIT MUJUMDAR DATE OF HEARING: 16 /0 3 /2021 DATE OF PRONOUNCEMENT: 19 / 0 3 /2021 O R D E R PER LAXMI PRASAD SAHU, A.M. : TH E S E ARE THE APPEALS FILED BY ASSESSEE FOR AY 20 13 - 14 TO 2015 - 16 DIRECTED AGAINST THE C I T(A) - 8 , HYDERABAD S SEPARATE ORDER S , ALL DATED 25/01/ 201 8 , INVOLVING PROCEEDINGS U/S 200A OF THE INCOME TAX ACT, 1961 ; IN SHORT THE ACT . I TA NO S . 524 TO 526 / HYD/1 8 M/S BHOORATHNOM CONSTRUCTION COMPANY PVT. LTD. , SECBAD. : - 2 - : 2. THE SUBSTANTIVE GROUND RAISED BY THE ASSESSEE IN THESE APPEALS IS THAT THE CIT(A) ERRED IN UPHOLDING THE LATE FEE LEVIED BY THE AO U/S 234E . 3 . BRIEF FACTS OF THE CASE ARE, THE ASSESSEE COMPANY FILED ITS STATEMENTS IN FORMS 24Q AND 26Q FOR ALL QUARTERS F OR FYS 2012 - 13 TO 2014 - 15 RELEVANT TO AYS 2013 - 14 TO 2015 - 16. ON VERIFICATION OF THESE STATEMENTS, THE AO NOTICED THAT THE ASSESSEE FILED ALL THESE STATEMENTS, BELATEDLY AND HENCE, RAISED A DEMAND IN ALL THE SAID FYS ON ACCOUNT OF LATE FILING LEVY U/S 234 E BY ISSUING INTIMATIONS U/S 200A. 4 . AGAINST THE SAID ACTION OF AO, ASSESSEE PREFERRED APPEALS BEFORE THE CIT(A) RAISING A GROUND THAT THE PROVISIONS TO INCLUDE LATE FEE U/S 234E IN INTIMATION U/S 200A IS NOT PERMISSIBLE UNDER LAW AND CONSEQUENTLY SU CH LEVY IS UNSUSTAINABLE IN LAW AND HENCE THE LEVY IS LIABLE TO BE DELETED. 5 . BEFORE THE CIT(A), THE AR OF THE ASSESSEE CONTENDED THAT THE PROVISIONS TO INCLUDE LATE FEE U/S 234E IN THE I TA NO S . 524 TO 526 / HYD/1 8 M/S BHOORATHNOM CONSTRUCTION COMPANY PVT. LTD. , SECBAD. : - 3 - : INTIMATION U/S 200A OF THE ACT CAME INTO EFFECT ONLY THROUGH THE FI NANCE ACT, 2015 W.E.F. 01/06/2015 AND, HENCE, PRIOR TO 01/06/2015 SUCH INCLUSION OF LATE FEE U/S 234E IN THE INTIMATION U/S 200A IS NOT PERMISSIBLE UNDER THE LAW. FOR THIS CONTENTION, HE RELIED ON VARIOUS CASE LAW, WHICH WERE EXTRACTED BY THE CIT(A) AT PAG E 2 OF HIS ORDER. 6 . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) RELYING ON THE JUDGEMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF RAJESH KOURANI VS. UOI, [2017] 83 TAXMANN.COM 137 CONFIRMED THE LATE FILING LEVY U/S 234E BY THE ACIT CP C TDS. 7 . AGGRIEVED BY THE ORDERS OF CIT(A), THE ASSESSEE PREFERRED APPEALS BEFORE THE TRIBUNAL. 8 . WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED THE MATERIAL RELEVA NT. WE FIND THAT WHILE DECIDING THE ISSUE AGAINST THE APPELLANT ASSESSEE THE LD. CIT(A) HAS PLACED RELIANCE ON RAJESH KAURANI VS. UNION OF INDIA, 83 COM 137 (GUJ.) WHEREIN IT WAS HELD THAT SECTION 200A OF THE ACT IS A I TA NO S . 524 TO 526 / HYD/1 8 M/S BHOORATHNOM CONSTRUCTION COMPANY PVT. LTD. , SECBAD. : - 4 - : MACHINERY PROVISION PROVIDING THE MEC HANISM FOR PROCESSING A TDS STATEMENT OF DEDUCTION OF TAX AT SOURCE AND FOR MAKING ADJUSTMENT. THE LD. CIT(A) HAS FURTHER HELD THAT THIS DECISION WAS DELIVERED AFTER CONSIDERING NUMEROUS ITAT AND HIGH COURT DECISIONS AND THEREFORE THIS DECISION IN RAJESH KAURANI (SUPRA), HOLDS THE FIELDS. 8 .1 IT IS SEEN THAT PRIOR TO 01.06.2015, THERE WAS NO ENABLING PROVISION IN THE ACT U/S 200A FOR RAISING DEMAND IN RESPECT OF LEVY OF FEE U/S 234E OF THE ACT. THE PROVISION OF SECTION 234E OF THE ACT IS CHARGING PROVISION I.E. SUBSTANTIVE PROVISION WHICH COULD NOT BE APPLIED RETROSPECTIVELY, UNLESS IT IS EXPRESSLY PROVIDED IN THE ACT, TO LEVY THE LATE FEE FOR ANY DELAY IN FILING THE TDS STATEMENT FOR THE PERIOD PRIOR TO 01.06.2015. THE COUNSEL FOR THE ASSESSEE HAS RIGHTLY C ONTENDED THAT IN THE ABSENCE OF ENABLING PROVISIONS U/S 200A OF THE ACT, SUCH LEVY OF LATE FEE IS NOT VALID . 8 .2 WE FIND THAT SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S TERRA INFRA DEVELOPMENT LT D., HYDERABAD IN ITA NOS. I TA NO S . 524 TO 526 / HYD/1 8 M/S BHOORATHNOM CONSTRUCTION COMPANY PVT. LTD. , SECBAD. : - 5 - : 1876 & 1875/HYD/2017 FOR AYS 2013 - 14 AND 2014 - 15, ORDER DATED 03/10/2018, WHEREIN THE COORDINATE BENCH HAS HELD AS UNDER: 4. WE FIND THAT THOUGH THE PROVISIONS FOR LEVY OF FEE IN CERTAIN CASES HAS BEEN BROUGHT INTO THE STATUTE BOO K W.E.F. 1.7.2012, IT HAS BEEN BROUGHT UNDER THE PURVIEW OF SECTION 200A ONLY W.E.F. 1.6.20 15. THEREFORE, AS RIGHTLY HELD BY THE COORDINATE BENCH IN THE CASE OF M/S. SONALAC PAINTINGS & COATINGS LTD (CITED SUPRA) WE HOLD THAT THE INTEREST U/S 234E CANNOT BE LEVIED IN RESPECT OF TDS RETURNS FILED PRIOR TO 1.6.2015. FOR THE SAKE OF READY REFERENCE , THE RELEVANT PARA IS REPRODUCED HEREUNDER: '10. NOW COMING TO THE MERITS OF THE CASE, WE FIND FORCE IN THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT PRIOR TO 01.06.2015, THERE WAS NO MANDATE, AS PER THE STATUTE, TO MAKE ANY ADJUSTMENT ON ACCOUNT OF LEVY OF FEES U/S 234E WHILE PROCESSING TDS RETURNS U/S 200A. WE HAVE TAKEN NOTE OF THE ORDER OF THE HON'BLE GUJARAT HIGH COURT HOLDING THE AMENDMENT MADE TO SECTION 200A W.E.F. 01.06.2015, GIVING POWER TO MAKE ADJUSTMENT ON ACCOUNT OF FEES U/S 234E WHILE PROCESSING RETURNS U/S 200A TO BE RETROSPECTIVE IN NATURE, STATING THAT THIS POWER GIVEN TO THE AO IS A MACHINERY PROVISION WHILE THE SUBSTANTIVE PROVISION OF THE POWER TO LEVY FEES U/S 234E WAS ALWAYS THERE ON THE STATUTE FROM 01.06.2012. BUT AT THE SAME TIME, WE NOTE THAT THE HON'BLE KARNATAKA HIGH COURT HELD THAT LEVY OF FEES U/S 234E WHILE PROCESSING RETURNS, TDS U/S 200A PRIOR TO 01.06.2015 WAS WITHOUT ANY AUTHORITY OF LAW. WITH TWO DIVERGENT VIEW OF THE HON'BLE HIGH COURTS ON THE ISSUE AND IN THE ABSENCE OF ANY DECISION BY THE JURISDICTIONAL HIGH I TA NO S . 524 TO 526 / HYD/1 8 M/S BHOORATHNOM CONSTRUCTION COMPANY PVT. LTD. , SECBAD. : - 6 - : COURT, WE CONCUR WITH THE LEARNED COUNSEL FOR THE ASSESSEE THAT AS PER THE WELL ACCEPTED RULE OF CONSTRUCTION, IF TWO REASON ABLE CONSTRUCTIONS OF A STATUTE ARE POSSIBLE THE CONSTRUCTION WHICH FAVOURS THE ASSESSEE MUST BE ADOPTED. IN VIEW OF THE SAME, RESPECTFULLY FOLLOWING THE DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF FATHERAJ SINGHVI (SUPRA), WE HOLD THAT THE FEES LE VIED IN ALL THE PRESENT CASES U/S 234E PRIOR TO 01.06.2015 IN THE INTIMATIONS MADE U/S 200A WAS WITHOUT AUTHORITY OF LAW AND THE SAME IS THEREFORE, DIRECTED TO BE DELETED. IN VIEW OF THE ABOVE, ALL THE APPEALS OF THE ASSESSEE STAND ALLOWED'. 5. RESPECTFUL LY FOLLOWING THE SAME, ASSESSEE'S APPEALS FOR BOTH THE A.YS ARE ALLOWED. 8 . 3 IN THE CASE UNDER CONSIDERATION, ON PERUSAL OF RECORD, WE FIND THAT THE TDS RETURNS FILED BY THE ASSESSEE FOR THE RELEVANT PERIOD I.E., FYS 2012 - 13 TO 2014 - 15 RELEVANT TO AYS 2013 - 14 TO 2015 - 16 WERE PRIOR TO 01/06/2015. THEREFORE, RESPECTFULLY FOLLOWING THE SAID DECISION OF THE COORDINATE BENCH, WE SET ASIDE THE ORDERS OF CIT(A) AND DIRECT THE AO TO DELETE THE FEES LEVIED U/S 234E IN ALL THE APPEALS UNDER CONSIDERATION. I TA NO S . 524 TO 526 / HYD/1 8 M/S BHOORATHNOM CONSTRUCTION COMPANY PVT. LTD. , SECBAD. : - 7 - : 9 . IN THE RESULT, ALL THE APPEAL S OF THE ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 19 TH MARCH , 2021 . SD/ - SD/ - ( S.S. G ODARA ) (LAXMI PRASAD SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDE RABAD, DATED : 19 TH MARCH , 20 2 1 . K V C OPY TO : 1 M/S BHOORATHNOM CONSTRUCTION COMPANY PVT. LTD., 7 - 3 - 720, RP ROAD, SECUNDERABAD 500 003. 2 AC IT (TDS) , CIRCLE 1(1) HYDERABAD 3 C I T( A ) - 8 , HYDERABAD 4 CIT (TDS), HYDERABAD 5 ITAT, DR, HYDERABAD. 6 GUARD FILE.