Cicilia Pinto, Mangalore V. Assistant Commissioner Of Income Tax, CPC, Ghaziabad

ITA 621/BANG/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 2309 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 21-11-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: VANAJA
• Keywords: Reasonable cause; TDS
• Section: 250; 234E; 200A; 201

Judgement Text

ITA Nos.621 & 622/Bang/2021 Cicilia Pinto, Mangalore IN THE INCOME TAX APPELLATE TRIBUNAL “C’’ BENCH: BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA No.621/Bang/2021 Assessment Year: 2013-14 Cicilia Pinto D.No.17-6-362/8, Shanthi Kendra Silva Cross Road, Jeppu Mangalore 575 002 PAN NO : AFVPP5294B Vs. AO, New Delhi APPELLANT RESPONDENT ITA No.622/Bang/2021 Assessment Year: 2014-15 Cicilia Pinto Mangalore 575 002 Vs. CIT, Ghaziabad APPELLANT RESPONDENT Appellant by : Smt. Vanaja, A.R. Respondent by : Smt. Priyadarshini Basaganni, D.R. Date of Hearing : 19.04.2022 Date of Pronouncement : 13.05.2022 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: These two appeals by the assessee are directed against the common order of CIT(A) dated 12.8.2021, wherein the assessment ITA Nos.621 & 622/Bang/2021 Cicilia Pinto, Mangalore Page 2 of 8 involved was for the A.Ys 2013-14 & 2014-15. Since the issue in these appeals are identical, they are clubbed together and disposed of for the sake of convenience. In these two appeals, the common grounds are raised but the only changes are in the figures with regard to the levy of penalty u/s 234E of the Act, which are as follows:- Grounds for A.Y. 2013-14:- 1. The intimation issued by the learned Assessing officer (AO) Assistant Commissioner of Income Tax CPC-TDS Ghaziabad U/s 200A of the Income Tax Act,1961, which was even upheld CIT appeals in order pass in U/s 250 of the IT ACT 1961, which is erroneous arbitrary and opposed to the facts of the case and the law and is liable to be negated. 2. The subsection 3 of the section 234E of the acts states that it shall be paid before delivering or causing to be delivered a statement in accordance with subsection (3) of section 200 or the proviso to sub section (3) of section 206C. Therefore, any late fee should have been deposited just at the time of delivering TDS statement and not later than this. 3. That once the TDS statement has been accepted without late fee, then such late fee cannot be recovered later 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. 4. The section 200A of the Act does not permit processing of statement of TDS statement for default in payment of late fee except any arithmetical error, incorrect claim, or default in payment of interest and TDS payable and refundable etc. Hence late fee for TDS quarterly return cannot be recovered by way of processing under this section, but if issued then it is illegal. Hence it is liable to be cancelled. 5. Recovery of amount can be made only when it is legally recoverable. Hence the recovery of late fee is illegal has to be cancelled and quashed. 6. The appellant craves leave to add, alter or withdraw any of the grounds of appeal. ITA Nos.621 & 622/Bang/2021 Cicilia Pinto, Mangalore Page 3 of 8 Grounds for A.Y. 2014-15:- 1. The intimation issued by the learned Assessing officer (AO) Assistant Commissioner of Income Tax CPC-TDS Ghaziabad U/s 200A of the Income Tax Act,1961 is erroneous arbitrary and opposed to the facts of the case and the law and is liable to be negated. 2. The learned AO' erred in imposing penalty without interpreting provisions of the section 234E(3) and 200A(1). Therefore levy of late fee is illegal, wrong and not in accordance with lams 3. Here we can examine the relevant provisions of Income Tax Act as follows. 4. Section 243E(3):"The amount of fee referred to in sub-section (I) shall be paid before delivering or causing to be delivered a statement in accordance with subsection (3) of section 200 or the proviso to sub-section (3) of section 206C" 5. Therefore, once the TDS statement has been accepted without late fee, then such late fee cannot be recovered later 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. 6. Section200A: "(I) Where a statement of tax deduction at source or 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 information 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 fee, if any, shall be computed in accordance 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 the amount computed under clause (b) and clause (c) against any amount paid under section 200 or section 201 or section 234E and any amount paid otherwise by way of tax or interest or fee; ITA Nos.621 & 622/Bang/2021 Cicilia Pinto, Mangalore Page 4 of 8 (e) an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, him under clause (d),: and the amount of refund due to the deductor in pursuance of the determination under clause (d) shall be granted to the deductor:" 7. The provision of section 200A(1)(c), (d) and (f) provides for imposing penalty U/s243E,,vide processing and sending intimation under that section. However, 200A(1)(c) . ; (d) and (f)have come into force only with effect from 1-6-2015 and hence, there was no authority or competence or jurisdiction on the part of the concerned Officer or the Department to compute and determine the fee under section 234E in respect returns prior to 1-6-2015. 8. When no express authority was conferred by the statute under section 200A prior to 1-6-2015 for computation of any fee under section 234E nor the determination thereof, the demand or the intimation for the previous period or previous year prior to 1-6-2015 is not valid. 9. Same principles were held in the case of Fatheraj Singhvi v. UOl by the Hon. Karnataka High Court. Decision id enclosed as per Annexure — 1, for your kind perusal. 10. That once the TDS statement has been accepted without late fee, then such late fee cannot be recovered later 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. 11. The section 200A of the Act does not permit processing of statement of TDS statement for default in payment of late fee except any arithmetical error, incorrect claim, or default in payment of interest and TDS payable and refundable etc. Hence late fee for TDS quarterly return cannot be recovered by way of processing under this section, but if issued then it is illegal. Hence it is liable to be cancelled. 12. Recovery of amount can be made only when it is legally recoverable Hence the recovery of late fee is illegal has to be cancelled and quashed. ying penalty U/s 243E vide intimation U/s200A is illegal as there is no express provisions under law for the same. Action of the assessing officer is against the provisions of law and is invalid. Therefore, it is begged at the time of personal hearing to delete the penalty demand raise vide intimation. ITA Nos.621 & 622/Bang/2021 Cicilia Pinto, Mangalore Page 5 of 8 2. The A.O. levied penalty at Rs.20,544/- for the assessment year 2013-14 and Rs.14,800/- for the assessment year 2014-15, which is the penalty levied u/s 234E of the Act for delay in filing the TDS quarterly status of Q2 (26Q) for these two assessment years. As per provisions of section 234E of the Act, where a person fails to deliver or cause to be delivered, a statement within the time prescribed in section 200(3) of the Act or the proviso to section 206C(3) of the Act, he shall be liable to pay by way of fee, a sum of Rs.200/- for every day during which the failure continues. Accordingly, the A.O. levied penalty for the delay in filing the statement Q2(26Q) in these assessment years as discussed by AO in his order. On appeal, Ld. CIT(A) observed that there is a delay of 902 days in filing appeal before him and the Ld. CIT(A) did not condone the delay on the reason that the assessee has not explained the delay with reasonable information. Against this, the assessee is in appeal before us by way of following common grounds for these two assessment years. At the time of hearing, Ld. A.R. submitted that this issue squarely covered by the judgement of Karnataka High Court in the case of Fatheraj Singhvi Vs. UOI 289 CTR 602, wherein it was held as follows:- “When the intimation of the demand notices under Section 200A is held to be without authority of law so far as it relates to computation and demand of fee under Section 234E, the question of further scrutiny for testing the constitutional validity of Section 234E would be rendered as an academic exercise because there would not be any cause on the part of the petitioners to continue to maintain the challenge to constitutional validity under Section 234E of the Act. At this stage, the learned counsels appearing for the appellant had also declared that if the impugned notices under Section 200A are set aside, so far as it relates to computation and intimation for payment of fee under Section 234E, the appellant-petitioners would not press the challenge to the constitutional validity of Section 234E of the Act. But, they submitted that the question of constitutional validity of Section 234E may be kept open to be considered by the Division Bench and the Judgment of the learned Single Judge may not conclude the constitutional validity of Section 234E of the Act. (Para ITA Nos.621 & 622/Bang/2021 Cicilia Pinto, Mangalore Page 6 of 8 25) Under these circumstances, no further discussion would be required for examining the constitutional validity of Section 234E of the Act. Save and except to observe that the question of constitutional validity of Section 234E of the Act before the Division Bench of this Court shall remain open and shall not be treated as concluded. (Para 26) In view of the aforesaid observations and discussion, the impugned notices under Section 200A of the Act for computation and intimation for payment of fee under Section 234E as they relate to for the period of the tax deducted prior to 1.6.2015 are set aside. It is clarified that the present judgment would not be interpreted to mean that even if the payment of the fees under Section 234E already made as per demand/intimation under Section 200A of the Act for the TDS for the period prior to 01.04.2015 is permitted to be reopened for claiming refund. The judgment will have prospective effect accordingly. It is further observed that the question of constitutional validity of Section 234E shall remain open to be considered by the Division Bench and shall not get concluded by the order of the learned Single Judge. (Para 27) The appeals are partly allowed to the aforesaid extents" 2.1 Accordingly, the Ld. A.R. submitted that the issue may be decided in favour of the assessee. 3. On the other hand, Ld. D.R. submitted that there was inordinate delay in filing the appeal before Ld. CIT(A) and the appeal was not admitted by him, hence there is no question of deciding appeal on merit unless delay in filing appeal before Ld. CIT(A) has been duly condoned by the Tribunal. 4. We have heard both the parties, perused the material available on record and gone through the orders of the authorities below. Admittedly, there was an inordinate delay of 902 days in filing appeals before Ld CIT(A). The Ld CIT(A) has not condoned the delay by observing that the assessee has not adduced any reasonable cause which prevented the assessee from filing the appeal within 30 days time limit and there is inordinate delay in filing the appeal of 902 days in each case and the assessee has not explained it with ITA Nos.621 & 622/Bang/2021 Cicilia Pinto, Mangalore Page 7 of 8 reasonable causes and accordingly, he dismissed the appeal. Before us, the Ld. A.R. pleaded that issue on merit with regard to the levy of penalty u/s 234E of the Act is squarely covered by the judgement of the jurisdictional High Court in the case of Fatheraj Singhvi (supra). However, the assessee not explained the delay in inordinate delay before the Ld. CIT(A). As such, though the issue is covered in favour of the assessee, the assessee is duty bound to explain the delay in filing the appeal before Ld. CIT(A). The Ld. D.R. conquered the argument with regard to the issue on merit, though there is a delay in filing the appeals. The assessee is duty bound to explain the same. In the present case, the Ld. A.R. was not able to place any material to explain the delay in filing the appeal before Tribunal, being so, we are not in a position to condone the delay in filing the appeals before Ld. CIT(A). As such, we refrain from going into the merit of the issue raised by the assessee in these appeals as there was no ground raised by the assessee with regard to the condonation of delay. The appeals are dismissed in limine. 5. In the result, the appeals filed by the assessee are dismissed. Order pronounced in the open court on 13 th May, 2022 Sd/- (Beena Pillai) Judicial Member Sd/- (Chandra Poojari) Accountant Member Bangalore, Dated 13 th May, 2022. VG/SPS ITA Nos.621 & 622/Bang/2021 Cicilia Pinto, Mangalore Page 8 of 8 Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore.