Anukool Furniture Pvt. Ltd., Ahmedabad V. ACIT, CPC -TDS, Ghaziabad

ITA 539/AHD/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8332 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 31-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; TDS
• Section: 154; 234E; 200A

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठअहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठ ‘बी’ अहमदाबाद। अहमदाबाद।अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD (through web-based video conferencing platform) ] ] BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA No. 539/Ahd/2019 Assessment Years : 2015-16 Anukool Furniture Pvt Ltd B-12, Doctor House, Nr. Parimal Railway Crossing, Ellisbridge, Ahmedabad-380006 PAN : AABCA 6053 F Vs ACIT, CPC-TDS, Ghaziabad अपीलाथ牸 अपीलाथ牸अपीलाथ牸 अपीलाथ牸/ (Appellant) 灹त् 灹त् 灹त् 灹त् यथ牸 यथ牸यथ牸 यथ牸/ (Respondent) Assessee by : Shri Bharat Shah, AR Revenue by : Shri R.R. Makwana, Sr DR सुनवाई क琉 तारीख/Date of Hearing : 15/11/2021 घोषणा क琉 तारीख /Date of Pronouncement: 17/11/2021 आदेश आदेशआदेश आदेश/O R D E R PER RAJPAL YADAV, VICE PRESIDENT : The assessee is in appeal before the Tribunal against the order of the learned Commissioner of Income-Tax (Appeals)-8, Ahmedabad [“CIT(A) in short] dated 25 th January 2019 passed for Assessment Year 2015-16. 2. The solitary grievance of the assessee is that the learned CIT(A) has erred in confirming the penalty of Rs.74,000/- which was imposed under Section 234E of the Income Tax Act, 1961. 3. With the assistance of the learned representatives, we have gone through the record carefully. It emerges out from the record that the assessee failed to submit its TDS return well in time during the accounting period relevant to the Assessment Year 2015-16. Therefore, a penalty under Section 234E of the Act amounting to Rs.74,000/- was imposed upon the assessee. ITA No. 539/Ahd/2019 Anukool Furniture Pvt Ltd Vs. ACIT AY : 2015-16 2 4. Dissatisfied with the imposition of penalty, the assessee carried the matter in appeal before the learned CIT(A) who confirmed the penalty by following the judgment of Hon’ble jurisdictional High Court in the case of Rajesh Kourani Vs. Union of India, reported in (2017) 83 taxmann.com 137 (Guj.). We find that learned First Appellate Authority has rightly placed reliance on the decision of Hon’ble Gujarat High Court (supra) and held as under:- “4.5 As regards the contention of the appellant that that fee cannot be levied prior to the amendment in section 200A w.e.f. 1.6, 2015 it has to be stated that Section 200A is a machinery-provision for processing the TDS statements and it has been held by the Hon'ble Gujarat High Court in the case of Rajesh Kourani V. Union Of India (2017) 83 taxmann.com 137 (Gujarat) that a machinery provision cannot override the substantive provision of law. The relevant part of judgment is reproduced as below: "19. In plain terms, section 200A of the Act is machinery provision providing mechanism for processing a statement of deduction of tax at source and for making adjustment, which are as noted earlier, arithmetical or prima-facie in nature. With effect from 01.06.2015, this provision specifically provides for computing the fee payable under section 234E of the Act. On the other hand, section 234E is a charging provision creating a charge for levying fee for certain default in filing the statements. Under no circumstances a machinery provision can override or overrule a charging provision. We are unable to see that section 200A of the Act creates any charge in any manner. It only provides a mechanism for processing a statement for tax deduction and the method in which the same would be done. When section 234E has already created a charge for levying fee that would thereafter not been necessary to have yet another provision creating the same charge. Viewing section 200A as creating a new charge would bring about a dichotomy. In plain terms, the provision in our understanding is a machinery provision and at best provides for a mechanism for processing and computing besides other, fee payable under section 234E for late filing of the statements. 20. Even in absence if section 200A of the Act with introduction of section 234E, it was always open for the Revenue to demand and collect the fee for late filing of the statement. Section 200A would merely regulate the manner in which the computation of such fee would be made and demand raised. In other words, we cannot ITA No. 539/Ahd/2019 Anukool Furniture Pvt Ltd Vs. ACIT AY : 2015-16 3 subscribe to the view that without a regulatory provision being found for section 200A for computation of fee, the fee prescribed under section 234E cannot be levied. Any such view would amount to a charging section yielding to the machinery provision. If at all, the recasted clause (c) of sub section (1) of section 200A would be in nature of clarificatory amendment. Even in absence of such provision, as noted, it was always open for the Revenue to charge the fee in terms of section 234E of the Act. By amendment, the adjustment was brought within the fold of section 200A of the Act This would have one direct effect An order passed under section 200A of the Act is rectifiable under section 154 of the Act and is also appealable under section 246A. in absence of the power of authority to make such adjustment under section 200A of the Act, any calculation of the fee would not partake the character of the intimation under said provision and it could be argued that such an order would not be open to any rectification or appeal. Upon introduction of the recasted clause (c), this situation also would be obviated. Even prior to 01.06.2015, it was always open for the Revenue to calculate fee in terms of section 234E of the Act The Karnataka High Court in case of Fatheraj Singhvi (supra) held that the section 200A was not merely a regulatory provision, but was conferring substantive power on the authority. The court was a/so of the opinion that section 234E of the Act was in the nature privilege to the defaulter if he fails to pay fees then he would be rid of rigor of the penal provision of section 271H of the Act. With both these propositions, with respect, we are unable to concur. Section 200A is not a source of substantive power. Substantive power to levy fee can be traced to section 234E of the Act. Further the fee under section 234E of the Act is not in lieu of the penalty of section 271H of the Act Both are independent levies. Section 271H only provides that such penalty would not be levy if certain conditions are fulfilled. One of the conditions is that the tax with fee and interest is paid. The additional condition being that the statement is filed within one year from the due date. 21. Counsel for the petitioner however, referred to the decision of Supreme Court in case of CIT v. B. C. Srinivasa Setty [1981] 128 ITR 294/5 Taxman 1 (SC), to contended that when a machinery provision is not provided, the levy itself would fail. The decision of Supreme Court in case of B C Srinivasa Setty (supra) was rendered in entirely different background. Issue involved was of charging capital gain on transfer of capital asset. In case on hand, the asset was in the nature of goodwill. The Supreme Court referring to various provision concerning charging and computing capital gain observed that none of the these provisions suggest that they include an asset in the ITA No. 539/Ahd/2019 Anukool Furniture Pvt Ltd Vs. ACIT AY : 2015-16 4 acquisition of which no cost can be conceived. In such a case, the asset is sold and the consideration is brought to tax, what is charged is a capital value of the asset and not any profit or gain. This decision therefore would not apply in the present case." 4.6 Appellant has further contended that Section 200A does not permit processing of TDS Statement if there is default in payment of late fees. In this regard, it has to be stated that the provision of Section 200A were amended and the processing of TDS statements include charging of late fees as has been charged in the case at hand.” 5. After perusal of this well reasoned findings of learned CIT(A), we do not find any error in it. Hence, this appeal of the assessee is devoid of any merit; therefore it is rejected. 6. In the result, the appeal of the assessee is dismissed. Order pronounced in the Court on 17 th November 2021 at Ahmedabad. Sd/- Sd/- (WASEEM AHMED) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE-PRESIDENT Ahmedabad, Dated 17/11/2021 *Bt आदेश क琉 灹ितिलिप अ灡ेिषत/Copy of the Order forwarded to : 1. अपीलाथ牸 / The Appellant 2. 灹瀄यथ牸 / The Respondent. 3. संबंिधत आयकर आयु猴 / Concerned CIT 4. आयकर आयु猴)अपील (/ The CIT(A)- 5. िवभागीय 灹ितिनिध ,आयकर अपीलीय अिधकरण/DR,ITAT, Ahmedabad, 6. गाड榁 फाईल /Guard file. आदेशानुसार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण ITAT, Ahmedabad ITA No. 539/Ahd/2019 Anukool Furniture Pvt Ltd Vs. ACIT AY : 2015-16 5 1. Date of dictation- ...15.11.2021...... 2. Date on which the typed draft is placed before the Dictating Member ...15.11.2021............ Other member ......17..11.2021............... 3. Date on which the approved draft comes to the Sr.P.S./P.S. - ......17..11.2021............ 4. Date on which the fair order is placed before the Dictating Member for Pronouncement ..17..11.2021.. 5. Date on which the file goes to the Bench Clerk...17..11.2021................ 6. Date on which the file goes to the Head Clerk.................................. 7. The date on which the file goes to the Assistant Registrar for signature on the order..................... 8. Date of Despatch of the Order..................