SILA SOLUTIONS PVT. LTD., MUMBAI V. ACIT (TDS)-CPC , GHAZIABAD & DCIT ,TDS CIRCLE - 2(2), MUMBAI

ITA 5685/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3236 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 04-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Keywords: Charitable institution; Retrospective amendment; TDS; Set aside
• Section: 234E; 200A; 201; 192

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G MUMBAI BEFORE SHRI RAJESH KUMAR, HON. ACCOUNTANT MEMBER & SHRI AMARJIT SINGH, HON. JUDICIAL MEMBER ITA NO S . 5685 TO 5688 / MUM /201 8 (ASST. YEAR S : 20 14 - 1 5, 20 14 - 1 5, 20 14 - 1 5 & 2013 - 14 ) SILA SOLUTIONS PRIVATE LTD., 2 ND FLOOR, GORDHAN BUILDING, PAREKH STREET, PRATHANA SAMAJ, MUMBAI 400 004 VS. A CIT (TDS) - CPC , GHAZIABAD & DCIT, TDS CIRCLE - 2(2), MUMBAI. PAN NO. AANCS 3695 D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJESH MEHTA C A DEPARTMENT BY : SHRI V. VINOD KUMAR SR. D R DATE OF HEARING : 02 / 12 /201 9 . DATE OF PRONOUNCEMENT : 04 / 12 /201 9 . O R D E R PER RAJESH KUMAR , ACCOUNTANT MEMBER THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST SEPARATE ORDERS COMMISSIONER OF INCOME TAX (APPEALS) - 60 , MUMBAI , ALL DATED 12 /0 7 /201 8 FOR THE A.YS. 2014 - 15, 2014 - 15, 2014 - 15 & 2013 - 14 RESPECTIVELY . SINCE THE FACTS AND ISSUES ARE COMMON , THEREFORE THESE APPEALS ARE CLUBBED AND HEARD TOGETHER AND DISPOSED OF BY WA Y OF THIS CONSOLIDATED ORDER. 2 ITA NO S . 5685 - 5688 / MUM /201 8 (SILA SOLUTIONS PRIVATE LTD.) ITA NO.5685/MUM/2018 2. THE ONLY COMMON ISSUE RAISED IN ALL THESE APPEALS BY THE ASSESSEE IS AGAINST THE ORDER OF LD.CIT(A) WHO CONFIRMED THE LATE FEE AS IMPOSED BY THE AO (TDS - CPC) U/S 234E OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') IN RESPECT OF TDS RETURNS FILED AFTER DUE DATE BY THE ASSESSEE BUT PRIOR TO 1.6.2015. 3 . FACTS OF THE CASE IN BRIEF ARE THAT FOR F.Y. 2013 - 14 RELEVANT TO THE A.Y. 2014 - 15 , THE ASSESSEE HAS FILED ITS TDS RETURNS IN RESPECT OF PAYMENTS/CREDITS ON WHICH ASSESSEE HAS DEDUCTED TAX AT SOURCE IN THE PRESCRIBED FORMAT, HOWEVER, THE SAID RETURNS WERE FILED AFTER DUE DATE OF FILING OF THE RETURNS. THE SAID TDS RETURNS WERE PROCESSED BY THE CENTRAL PROCESSING CELL (CPC) , GAZIABAD AND INTIMATION S U/S 200A OF THE ACT W ERE ISSUED TO THE ASSESSEE WHEREIN THE LATE FEE WAS IMPOSED U/SEC. 234E OF THE ACT. THE DETAILS OF THE SAID LEVY ARE AS UNDER: - QUARTER DATE OF INTIMATION U/SEC. 200A F.Y. A.Y. LATE FILING FEE U/SEC. 234E (24Q - 1) 23/09/2014 2013 - 14 2014 - 15 16,000/ - (26Q - Q2) 23/09/2014 2013 - 14 2014 - 15 67,600/ - (27Q - Q2) 31/03/2014 2013 - 14 2014 - 15 47,200/ - (26Q - Q3) 23/09/2014 2013 - 14 2014 - 15 49,200/ - (24Q - Q4) 23/09/2014 2013 - 14 2014 - 15 25,200/ - (26Q - Q4) 29/07/2014 2013 - 14 2014 - 15 15,610/ - (26Q - Q1) 86,000/ - TOTAL 3 , 06 , 810/ - 3 ITA NO S . 5685 - 5688 / MUM /201 8 (SILA SOLUTIONS PRIVATE LTD.) 4 . AGGRIEVED , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A) CHALLENGING THE ORDER OF THE AO (TDS - CPC) DATED 23/0 7 /2014 FOR Q UARTER - 4, 23/09/2014 FOR Q UARTER - 3 , 23/09/2014 FOR QUARTER - 2 AND 19/12/2016 FOR QUARTER - 1 . THE LD.CIT(A) AF T ER CONSIDERING THE CONTENTIONS AND SUBMISSIONS OF THE ASSESSEE, DISMISSED THE APPEAL OF THE ASSESSEE BY HOLDING THE LATE FEE WAS CORRECTLY LEVIED EVEN IF THE RETURN WERE FILED AND PROCESSED PRIOR TO 0 1. 0 6.2015 . 5. LD.AR , WHILE REFERRING TO THE PROVISO TO SECTION 234E R.W.S. 200A OF THE ACT , SUBMITTED BEFORE THE BENCH THAT THE PENALTY / LATE FEE LEVIED BY THE AO (TDS - CPC) WAS WRONG AND AGAINST THE PROVISIONS OF THE ACT AS THE RETURNS WERE FILED AND PROCESSED PRIOR TO THE AMENDMENT CARRIED OUT IN SECTION 200A W.E.F. 01/06/2015 BY THE FINANCE ACT, 2015 BY INSERTING NEW CLAUSES (C) & ( E ) TO SUB - SECTION (1) TO SECTION 200A OF THE ACT . THE LD.AR FURTHER SUBMITTED THAT ONLY THOS E RETURNS WERE FILED AFTER THE SAID DATE COULD BE SUBJECTED TO IMPOSITION OF LATE FEE U/S 234E OF THE ACT AND NOT TO THE CASES FILED PRIOR TO THE SAID AMENDMENT . T HE RE FORE, THE LD COUNSEL OF THE ASSESSEE SUBMITTED THAT INTIMATION S U/S 200A ISSUED BY THE AO ARE BEYOND THE SCOPE AND AMBIT OF SECTION 200A OF THE ACT SO FAR AS RELATE TO IMPOSITION OF LATE FEE U/S 234E OF THE ACT AND ACCORDINGLY AND LATE FEE CHARGED 4 ITA NO S . 5685 - 5688 / MUM /201 8 (SILA SOLUTIONS PRIVATE LTD.) U/S 234E OF THE ACT DESERVES TO BE DELETED . IN SUPPORT OF HIS ARGUMENT S , LD.AR SUBMITTED THAT AMENDMENT VIDE FINANCE ACT, 2015 MAKES ITS CLEAR THAT IN ABSENCE OF ENABLING THE PROVISIONS OF SEC. 200A OF THE ACT , LEVY OF FEE U/S 234E OF THE ACT FOR TDS STATEMENTS FALLING PRIOR TO 01/06/2015 IS INVALID. IN SUPPORT OF HIS ARGUMENTS, LD.AR RELIED ON THE FOLLOWING ORDERS: - 1 . FATHERAJ SINGHVI & ORS. VS . UOI & ORS. [(2016) 73 TAXMANN.COM 252 (KAR.)] 2. SUDARSHAN GOYAL VS DCIT - (TDS) IN ITA NO. 442/AGR/2017, DATED 09/04/2018 (ITAT - AGRA BENCH) 3. KAMALA ENTERPRISES VS ITO - (TDS) IN ITA NO. 3324/MUM/2015 (ITAT MUMBAI BENCH) 4. KASH REALTORS PVT. LTD. & ANR. VS ITO & ANR. [(2016) 47 CCH 523 ; AND 5. SREE AYYAPPA EDUCATIONAL CHARITABLE TRUST VS DCIT & ANOTHER IN W.P.NO. 618/2015 C/W W.P. NO. 5831 & 5990 - 6001/2015 (KARNATAKA HC) LD.AR , THEREFORE, PRAYED FOR THE BENCH THAT IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE KARNATAKA HIGH COURT AS STATED ABOVE, THE APPEAL OF THE ASSESSEE MAY KINDLY BE ALLOWED. 6 . LD.DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT LATE FEE IS MANDATORY AND THE AMENDMENT CARRIED OUT IN SECTION 200A W.E.F. 01/06/2015 DOES NOT BAR IMPOSITION OF SUCH LATE FEE EVEN FOR THOSE RETURNS 5 ITA NO S . 5685 - 5688 / MUM /201 8 (SILA SOLUTIONS PRIVATE LTD.) RELATING TO THE PERIOD WHICH FALLS PRIOR TO 01/06/2015 , THEREFORE HE PRAYED THAT THE SAID ORDER OF THE LD.CIT(A) MAY KINDLY BE CONFIRMED. 7 . WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS UNDISPUTED FACT THAT RETURNS WERE FILED FOR THE A.Y. 2014 - 15 (F.Y. 2013 - 14) PRIOR TO THE 0 1. 0 6.2015 AND WERE ALSO PROCESSED PRIOR TO 01/06/2015 . IN OUR VIEW, LATE FEE COULD NOT BE CHARGED AS THE ENABLING THE PROVIS I O NS OF SECTION 200A OF THE ACT DO NOT PROVIDE FOR THE SAME . IT IS CORRECT THAT THE CLAUSES (C) TO (E) TO SUB - SECTION (1) OF SECTION 200A BROUGHT ON THE STA TUTE TOOK W.E.F. 01/06/2015 BY THE FI N ANCE ACT, 2015 . ACCORDINGLY, WE ARE OF THE VIEW THAT THE LATE FEE AS IM P OSED BY THE AO (TDS - CPC) IS WRONG AND CONSEQUENT ORDER UPHOLDING THE SAID IMPOSITION BY THE LD.CIT(A) IS ALSO NOT CORRECT. THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE SERIES OF DECISION REFERRED TO BY THE ASSESSEE . I N THE CASE OF SUDARSHAN GOYAL (SUPRA) WHEREIN THE COORDINATE BEN CH OF THIS TRIBUNAL HAS CONSIDERED THE DECISION PASSED BY THE HON'BLE GUJ A RAT HIGH COURT IN THE CASE OF RAJESH KOURANI VS . UOI AND THE DECISION OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF FATHERAJ SINGHVI & ORS. (SUPRA) . THE COORDINATE BENCH OF THIS TR IBUNAL HAS CAME TO A CONCLUSION THAT THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT WHICH IS IN 6 ITA NO S . 5685 - 5688 / MUM /201 8 (SILA SOLUTIONS PRIVATE LTD.) FAVOUR OF THE ASSESSEE IS TO BE FOLLOWED IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS . VEGETABLE PRODUCTS LTD. [88 ITR 192 (SC)] . I N THE CASE OF FATHERAJ SINGHVI & ORS. (SUPRA) THE HON'BLE KARNATAKA HIGH COURT 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 IM PLIEDLY DEMONSTRATED, ANY PROVISION OF STATUTE IS TO BE READ AS HAVING PROSPECTIVE EFFECT AND NOT RETROSPECTIVE EFFECT. UNDER THE CIRCUMSTANCES, 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 200AFOR COMPUTATION AND INTIMATION FOR THE PAYMENT OF FEE UNDER SECTION 234 COULD NOT BE MADE IN PURPORTED EXERCISE OF POWER UNDER SECTION 200A BY TH E RESPONDENT FOR THE PERIOD OF THE RESPECTIVE ASSESSMENT YEAR PRIOR TO 01/06/2015 . ' 9. ANOTHER DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF RAJESH KOURANI VS . UOI IN SPECIAL CIVIL APPLICATION NO . 302 OF 2014 DATED 20/06/2017 HAS RULED AGAINST THE ASSESSEE BY HOLDING THAT 234E IS CHARGING SECTION AND SECTION 234E IS A CONSTITUTIONALLY VALID AND THERE IS NO NEED OR IN ABSENCE OF SUCH SPECIFIC MENTION IN SECTION 200A , LATE FEE CAN BE LEVIED. THEREAFTER , THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF SREE AYYAPA EDUCATIONAL CHARITABLE TRUST (SUPRA) UPHELD THE VIEW TAKEN BY THE HIGH COURT IN THE EARLIER DECISION IN THE CASE OF FATHERAJ SINGHVI & ORS. (SUPRA) . NOW, IN OUR OPINION, THERE ARE CONFLICTING DECISION S ON THE SAME ISSUE OF VARIOUS HIGH COURTS , THE DECISION WHICH ARE IN 7 ITA NO S . 5685 - 5688 / MUM /201 8 (SILA SOLUTIONS PRIVATE LTD.) FA V OUR OF THE ASSESSEE ARE TO BE FOLLOWED IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF VEGETABLE PRODUCTS LTD. (SUPRA) . IN OUR OPINION, THE COORDINATE BENCH OF AGR A TRIBUNAL IN THE CASE OF SUDARSHAN GOYAL (SUPRA) HAS CORRECTLY LAID DOWN THE RATIO CONSIDERING THE FACTS OF THE ASSESSEES CASE IN THE LIGHT OF THE ABOVE DECISION S . ACCORDINGLY, W E ARE INCLINED TO SET ASIDE THE ORDER OF THE LD.CIT(A) AND DIRECT THE AO (TDS - CPC) TO DELETE THE LATE FEE AS LEVIED U/S 234E OF THE ACT. ITA NOS. 5686 - 5688/MUM/2018 10 . WE HAVE ALREADY DECIDED THE ISSUE UNDER IDENTICAL FACTS IN FAVOUR OF THE ASSESSEE IN ITA NO. 5685/MUM/2018 AND ALLOWED THE APPEAL OF THE ASSESSEE BY DIRECT ING THE AO (TDS - CPC) TO DEL E TE THE LEVY OF FEE/ PENALTY U/S 234E OF THE ACT. T HEREFORE, OUR DECISION IN ITA NO. 5685/MUM/2018 SHALL AP P LY , MUTATIS MUTANDIS , TO THESE APPEALS ALSO AND ACCORDINGLY WE ALLOW THESE APPEALS BY DIRECTING THE AO( TDS - CPC) TO DELETE THE LATE FEE . 11 . IN THE RESULT, ALL THE APPEAL S FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 4 T H DECEMBER , 201 9 S D / - S D / - ( AMARJIT SINGH ) ( RAJESH KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 0 4 T H DECEMBER , 201 9 . 8 ITA NO S . 5685 - 5688 / MUM /201 8 (SILA SOLUTIONS PRIVATE LTD.) VR/ - COPY TO: 1 . THE ASSESSEE SILA SOLUTIONS PRIVATE LTD., 2ND FLOOR, GORDHAN BUILDING, PAREKH STREET, PRATHANA SAMAJ, MUMBAI. 2 . THE REVENUE - ACIT (TDS) - CPC, GHAZIABAD & DCIT, TDS CIRCLE - 2(2), MUMBAI. 3 . THE CIT (TDS) - 2, MUMBAI. 4 . THE CIT(A) - 60, MUMBAI. 5 . THE D.R . , MUMBAI. 6 . GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., MUMBAI