SAM AND CO, COIMBATORE V. Commissioner of Income Tax (Appeals) National Faceless Appeal Centre, National Faceless Appeal Centre

ITA 595/CHNY/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6506 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 20-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; TDS; Set aside
• Section: 234E; 200A; 201; 139(1); 272A

Judgement Text

आयकरअपीलसं./ITA No.595/Chny/2021 िनधा रणवष /Assessment Year: 2013-14 M/s.Sam & Co, 12/12A, 3 rd Floor, Poombuhar Nagar, Avinashi Road, Near Millennium Motors, Coimbatore-641 014. v. The Asst. Commissioner- of Income Tax, CPC-TDS, Ghaziabad. [PAN:ACEFS 3472 Q] (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओर से/ Appellant by : None यथ क ओर से /Respondent by : Mr.Hema Bhupal, JCIT सुनवाईक तारीख/Date of Hearing : 16.08.2022 घोषणाक तारीख /Date of Pronouncement : 16.08.2022 आदेश / O R D E R PER DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 30.09.2021,and pertains to assessment year 2013-14. 2. The assessee has raised the following grounds of appeal: 1. The Learned Assessing Officer erred in levying fee U/S 234E to the extent of Rs.38,400/-. While processing statement of TDS in respect of Q3 of FY 2012-13. 2. The Learned Assessing Officer failed to note that clause (c) of Section.200A(1), Which authorizes the Assessing Officer to charge fee U/S.234E while processing आयकर अपीलीय अिधकरण, ’सी’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI ी महावीर िसंह, उपा , एवं डॉ।दीपक पी. रपोटे, लेखा सद के सम BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER Sam & Co ITA No.595/Chny/2021AY 2013-14 :: 2 :: the statement of TDS was introduced by the Finance Act, 2015 W.e.f. 01.08.2015. 2.1 The learned Assessing Officer failed to note that in view of the said amendment, the levy of fee U/S.234 E for purposes of sec.200Aeffect from 01.08.2015 and does not apply to quarterly statements of earlier periods. 2.2T he Seamed Assessing Officer failed to note that prior to 01-06-2015 there was no enabling provision U/S 200A of the Act for raising a demand towards fee LI/8 234 E. 2.3 The learned Assessing Officer failed tonote of the instructions of the CBDT contained in paras. 47.4 and 47.20 of Circular No 19 of 2015 dated 27 th Nov, 2015. 3. That the Sub section (3) of the Section 234E of the Act that it 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. 4. That once the TDS statement been accepted without late fees, then such Sate fee cannot be recovered 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. 5. That the provisions of Sec.204 of the Act has made the person responsible for Sec. 190 to Sec.203 AA and sec.285, this phrase does not cover Sec.234E, it means no one is responsible for default U/s 234E of the Act. it clears that if late are due but not deposited along with the IDS statement none can be held responsible to deposit it later on. 6. That the Section 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 interest and TDS payable or refundable etc. Late fees for TDS quarterly statement cannot be recovered by way of processing under section 200A. 8. That as per provisions of Section 201 (1) of the Act also an Assesse cannot be treated in default & TDS statement cannot be treated as defective due to non- payment of fate U/s 234E, like non-payment of self-assessment tax & interest along with return U/s 139(1) treats an income tax return as defective U/s.139(9) of the Act. 9. Sec. 201(2) of the act states that if a person has failed to deposit tax and interest then it shall be a charge upon all the asset of that person, so it also not cover/recover late fee if no deposited along with TDS statement 10. The Learned Assessing Officer failed to take note of decisions of 1) IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, CHENNAI 1. Smt.G.Indhirani VS The Deputy Commissioner of income Tax, CPC- TDS- Ghaziabad, (ITA No.1019, 1020& 1021 /Mds/2015) 2. M/s.Rajaguru Spinning Mills Ltd VS The Deputy Commissioner of Income Tax, CPC- TDS- Ghaziabad ITA No.1089/Mds/2015) Sam & Co ITA No.595/Chny/2021AY 2013-14 :: 3 :: 3. Shri A.DhakshinamurthyVS The Deputy Commissioner of Income Tax, CPC-TDS-Ghaziabad.(ITA No.1090/Mds/2015) 4. M/s.Padma Textiles VS The Deputy Commissioner of Income Tax, CPC-TDS-Ghaziabad (ITA No.1091 /Mds/2015) 5. M/s.Murthy Lungi Company VS The Deputy Commissioner of Income Tax, CPC-TDS-Ghaziabad, (ITA No.1092 /Mds/2015) 2).APTUS SoftwareLaps Pvt Ltd Vs ITO-TDS-Sa!em(ITA No.186/2017- 18,CIT(A)-Salem. 3} Sibia Healthcare Pvt Ltd VS DCIT-ITAT-Amirtsar Bench 4). A.R.R Charitable Trust VS The Assist. Commissioner of income Tax,CPC- TDS- Ghaziabad. (ITA No. 1307/Chennai/2017&238,239,240,241/Channai/2018) 5) Sri. Fatherajsinghvi&Ors. Vs.UOI& Others (2016) 289 CTR 602 (Karn- HC): 2016 (Karn-HC) 6) GIT XIII VsNareshkumar, M/s.Taibros (p) Ltd.(2014) 362 ITR 258 (Del- HC) : 2013 (Del-HC) 11. Your Appellant has filed Appeal with Commissioner of income Tax - (Appeal),Coimbatore against the order U/S 200A for fate fees 234E with Condonation of delay in filing of Appeal. After migration of national Faceless Appeal Centre, Our Appeal dismissed due to rejection of condonation of delay. 12. The order by TDS-CPC Dated 04.10.2018 for the correction statement filed in respect of Q3 and order for regular TDS Statement and subsequent correction statements are not properly served on the Assessee. As the issue involved intricate provisions of the income tax Act, 1861, the could not get immediate legal advice in the matter. The delay in filing of Appeal is not an intentional and deliberate one. 13. That the appellant craves leave to add, alter, amend or vary and/or withdraw any or a!! of the aforesaid grounds of or at time of hearing of the above appeal. In view of the foregoing grounds and such others that may be urged before the honourable Income -Tax Appellate Tribunal at the time of hearing, your appellant prays that the appeal may be allowed and justice rendered. 3. The assessee field an affidavit with a request to condone the delay. We find that the delay was mainly because of pandemic. Hence, delay in filing of the appeal is condoned. 4. None appeared on behalf of the assessee. Therefore, this case is decided based on the merits of the case with the help of ld.DR. Sam & Co ITA No.595/Chny/2021AY 2013-14 :: 4 :: 5. We have heard the ld.DR and perused the materials available on record. The only issue involved is levy of late fees u/s.234E of the Income tax Act for the FY 2012-13 Quarter 3 (AY 2013-14).In this case the Ld.Commissioner of Income tax (Appeal) has dismissed the appeal on the ground of delay without discussing merits of the case. As per the form number 35 filed by the Appellant Assessee, the assessee had filed TDS return for Quarter 3 of FY 2012-13 on 26-07-2013. Thus admittedly there was delay. The Assessing Officer Assistant Commissioner of Income Tax (CPC)(TDS) levied late fee u/s 234E. This issue has already been held in favor of the Assessee by various benches of ITAT. 6. It is observed that the Hon’ble ITAT Pune Bench in the case of Medical Superintendent Rural Hospital DOBI BK v. DCIT reported in [2016] 100 Taxman.com 78 (Pune-Trib.), wherein, it has been held as under: 13. The Hon'ble High Court of Karnataka in the case of FatherajSinghvi (supra) had also laid down similar proposition that theamendment to section 200A of the Act w.e.f. 01.06.2015 hasprospective effect and is not applicable for the period ofrespective assessment years prior to 01.06.2015. The relevantfindings of the Hon'ble High Court are in paras 21 and 22, which read as under:- "21. However, if Section 234E providing for fee was broughton the state book, keeping in view the aforesaid purpose andthe intention then, the other mechanism provided forcomputation of fee and failure for payment of fee underSection 200A which has been brought about with effect from1.6.2015 cannot be said as only by way of a regulatory modeor a regulatory mechanism but it can rather be termed asconferring substantive power upon the authority. It is truethat, a regulatory mechanism by insertion of any provisionmade in the statute book, may have a retroactive characterbut, whether such provision provides for a mere regulatorymechanism or confers substantive power upon the authoritywould also be a aspect which may be required to beconsidered before such provisions is held to be retroactive innature. Further, when any provision is inserted for liability topay any tax or the fee by way of compensatory in nature orfee independently simultaneously mode and the manner of itsenforceability is also required to be considered andexamined. Not only that, but, if the mode and the manner isnot expressly prescribed, the provisions may also bevulnerable. All such aspects will be required to be consideredbefore one considers regulatory mechanism or provision forregulating Sam & Co ITA No.595/Chny/2021AY 2013-14 :: 5 :: the mode and the manner of recovery and itsenforceability as retroactive. If at the time when the fee wasprovided under Section 234E, the Parliament also providedfor its utility for giving privilege under Section 271H(3) thattoo by expressly put bar for penalty under Section 272A byinsertion of proviso to Section 272A(2), it can be said that aparticular set up for imposition and the payment of fee underSection 234E was provided but, it did not provide for makingof demand of such fee under Section 200A payable underSection 234E. Hence, considering the aforesaid peculiar factsand circumstances, we are unable to accept the contention ofthe learned counsel for respondent-Revenue that insertion ofclause (c) to (f) under Section 200A(1) should be treated asretroactive in character and not prospective. 22. It is hardly required to be stated that, as per the well-established principles of interpretation of statute, unless it isexpressly provided or impliedly demonstrated, any provisionof statute is to be read as having prospective effect and notretrospective effect. Under the circumstances, we find thatsubstitution made by clause (c) to (f) of sub-section (1) ofSection 200A can be read as having prospective effect andnot having retroactive character or effect. Resultantly, thedemand under Section 200A for computation and intimationfor the payment of fee under Section 234E could not be madein purported exercise of power under Section 200A by therespondent for the period of the respective assessment yearprior to 1.6.2015. However, we make it clear that, if anydeductor has already paid the fee after intimation receivedunder Section 200A, the aforesaid view will not permit thedeductor to reopen the said question unless he has madepayment under protest." 14. The Hon'ble High Court thus held that where the impugnednotices given by Revenue Department under section 200A of theAct were for the period prior to 01.06.2015, then same wereillegal and invalid. Vide para 27, it was further held that theimpugned notices under section 200A of the Act were forcomputation and intimation for payment of fees under section234E of the Act as they relate for the period of tax deducted at source prior to 01.06.2015 were being set aside. 15. In other words, the Hon'ble High Court of Karnataka explained the position of charging of late filing fees under section234E of the Act and the mechanism provided for computation offees and failure for payment of fees under section 200A of the Actwhich was brought on Statute w.e.f. 01.06.2015. The saidamendment was held to be prospective in nature and hence,notices issued under section 200A of the Act for computation andintimation for payment of late filing fees under section 234E ofthe Act relating to the period of tax deduction prior to 01.06.2015were not maintainable and were set aside by the Hon'ble HighCourt. In view of said proposition being laid down by the Hon'bleHigh Court of Karnataka (supra), there is no merit inobservations of CIT(A) that in the present case, where the returnsof TDS were filed for each of the quarters after 1st day of June,2015 and even the order charging late filing fees was passedafter June, 2015, then the same are maintainable, since theamendment had come into effect. The CIT(A) has overlooked thefact that notices under section 200A of the Act were issued forcomputing and charging late filing fees under section 234E of theAct for the period of tax deducted prior to 1st day of June, 2015.The same cannot be charged by issue of notices after 1st day ofJune, 2015 even where the returns were filed belatedly by thedeductor after 1st June, 2015, where it clearly related to theperiod prior to 01.06.2015. 16. We hold that the issue raised in the present bunch of appealsis identical to the issue raised before the Tribunal in differentbunches of appeals and since the amendment to section 200A ofthe Act was prospective in nature, the Assessing Officer whileprocessing TDS returns / statements for the period prior to01.06.2015 was not empowered to charge late filing fees undersection 234E of the Act, even in cases where such TDS returnswere filed belatedly after June, 2015 and even in cases where theAssessing Officer processed the said TDS returns after June,2015. Accordingly, we hold that intimation issued by AssessingOfficer under section 200A of the Act in all the Sam & Co ITA No.595/Chny/2021AY 2013-14 :: 6 :: appeals does notstand and the demand raised by charging late filing fees undersection 234E of the Act is not valid and the same is deleted. 7. The facts in the present case are identical. The AO has levied late fees u/s.234E of the Act for the AY 2013-14. Thus, it was levied for period prior to 01.06.2015. Therefore, respectfully following the decision of ITAT Pune Bench in the case of Medical Superintendent Rural Hospital DOBI BK(supra), which in turn has relied on the decision of Hon’ble Karnatak High Court in the case of Fateraj Singhvai , we hold that the late fees u/s.234E of the Act, is not applicable for period prior to 01.06.2015. Accordingly, the AO is directed to delete the late fees levied u/s.234E of the Act for the Quarter 3 of FY 2012-13 ( AY 2013-14). 8. In the result, the appeal filed by the assessee is allowed. Order pronounced on the 16 th day of August, 2022, in Chennai. Sd/- (महावीरिसंह) (MAHAVIR SINGH) उपा /VICE PRESIDENT Sd/- (डॉ।दीपकपी रपोटे) (DR. DIPAK P. RIPOTE) लेखासद य/ACCOUNTANT MEMBER चे ई/Chennai, !दनांक/Dated: 16 th August, 2022. TLN आदेशक ितिलिपअ&ेिषत/Copy to: 1. अपीलाथ /Appellant 4. आयकरआयु'/CIT 2. यथ /Respondent 5. िवभागीय ितिनिध/DR 3. आयकरआयु' (अपील)/CIT(A) 6. गाड फाईल/GF