SIVA RAM YARNS PVT LTD, VIJAYAWADA V. NFAC, DELHI

ITA 71/VIZ/2023

AI Insights

The case involves Siva Ram Yarns Private Limited, which appealed against the orders of the Commissioner of Income Tax (Appeals) regarding the levy of late fees under Section 234E for delayed filing of TDS returns for the assessment years 2013-14 and 2016-17. The Tribunal consolidated the appeals due to identical issues across the years. For AY 2013-14, the Tribunal found that the late fee could not be applied as the relevant provision was enacted after the due date for filing the TDS return. Conversely, for AY 2016-17, the Tribunal upheld the late fee as the returns were filed after the enactment of the provision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128639 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 21-05-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 02-03-2023
• Other Referred Cases: Rashmikant Kundalia vs. Union of India, Rajesh Kourani vs. Union of India, Fatheraj Singhvi vs. Union of India, United Metals vs. ITO (TDS), Medical Superintendent Rural Hospital, Nashik vs. DCIT, CPC (TDS)
• Laws Referred To: Income Tax Act, 1961, Insolvency and Bankruptcy Code-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Retrospective amendment; TDS
• Section: 234E; 200A; 73; 72; 272A

Judgement Text

आयकर अपीलȣयअͬधकरण, ͪवशाखापटणम ‘SMC’ पीठ, ͪवशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM ‘SMC’ BENCH, VISAKHAPATNAM Įी दुåवूǽ आर एल रेɬडी, ÛयाǓयक सदèय के सम¢ BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER आयकर अपील सं./ I.T.A. No.70, 71, 72 & 73/Viz/2023 (Ǔनधा[रण वष[ / Assessment Year : 2013-14 & 2016-17) Siva Ram Yarns Private Limited, D.No.74-14-49, Yanamalakuduru, Vijayawada – 520007, Andhra Pradesh. PAN: AADCD 1240 R Vs. Deputy Commissioner of Income Tax, Circle-1(1), Vijayawada. (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : None Ĥ×याथȸ कȧ ओर से / Respondent by : Sri Sankar Pandi Sr. AR सुनवाई कȧ तारȣख / Date of Hearing : 22/05/2023 घोषणा कȧ तारȣख/Date of Pronouncement : 01/06/2023 O R D E R PER DUVVURU RL REDDY, Judicial Member : All the captioned appeals are filed by the assessee against the orders of the Ld. Commissioner of Income Tax (Appeals) [Ld. CIT(A)], National Faceless Appeal Centre (NFAC), Delhi in various orders dated 21/02/2023 for the AYs 2013-14 & 2016-17 . Since the issues involved in all the appeals are identical, for the sake of 2 convenience, these appeals are clubbed, heard together and disposed off in this consolidated order. 2. The assessee has raised three identical grounds in all these appeals and therefore, for the sake of convenience the grounds raised by the assessee in its appeal for the AY 2013-14 are extracted herein below: “1. On the facts and circums tances of the case an d in l aw the Ld. CIT( A) erre d in hol ding the del ay i n fil ing the appeal before him to be wi thout re ason abl e cause and thereby refusing to condone the del ay in fil ing the appe al before him. The appell ant h aving fil ed the appeal immedi atel y on do wnl o ading the intimation as informed by the ne w consul tants, the del ay as counted from the date of sending the intimation on mail by CPC-TDS ought to have been condoned by the CIT(A). 2. On the facts and circums tances of the case and in l aw, the Ld. CIT (A) erre d in confirming the l evy of fees U/s. 234E on del ayed fil ing of TDS return. 3. Under the facts and circums tances of the case and in l aw, appel l ant h as undergone in insol vency resol ution process under Insol vency and Bankruptcy Code-2016 accordingl y Hon’bl e NCLT has approved the waive r of the l iabil ity of l ate fee and other l iabil ity. The Ld. AO has not considered the fact and its submission whil e passing the assessment order an d therefore it is l iabl e to be quashed.” 3. Brief facts pertaining to the ITA No. 70/Viz/2023, AY 2013- 14 are that the assessee viz., Siva Ram Yarns Pvt Ltd., filed its Quarterly TDS [Q4] returns for the FY 2012-13 relevant to the AY 2013-14 after the due date. The TDS return was processed by 3 the DCIT, CPC, TDS U/s. 200A of the Act and intimation was issued. In the intimation, the Ld. DCIT had levied late filing fee U/s. 234E of the Income Tax Act, 1961 and raised the demand. Aggrieved by the order of the Ld. DCIT, TDS-CPC, the assessee preferred an appeal before the Ld. CIT(A)-NFAC with a delay of 2182 days. 4. On appeal, the Ld. CIT(A)-NFAC observed that since the appeal is filed belatedly with a huge delay of 2182 days and in the absence of any credible explanation to meet the criteria of unforeseen circumstances beyond the control of the assessee to justify the delay of 2182 days, the condonation is denied and dismissed the appeal of the assessee. Aggrieved by the order of the Ld. CIT(A)-NFAC, the assessee is in appeal before the Tribunal. 5. Before me, at the time of hearing none appeared on behalf of the assessee to represent its case. From the material available on record, it is noted that the assessee’s main contention is that the enabling provision for computation of fee while processing the statements was inserted in section 200A only w.e.f 1/6/2015 and therefore, the charging section i.e., section 234E cannot be enforced prior to 1/6/2015. Further, it is also contended that the 4 amended provision applies for all the returns pertaining to the period after 1/6/2015 and not for the returns pertaining to the period prior to 01/06/2015 notwithstanding the fact that the returns pertaining to the period prior to 01/06/2015 were filed after 01/06/2015 or processed after 01/06/2015. Further, it is also the contention of the assessee that in the present case, the due date for filing the TDS return is 15/05/2013 (For Q4 of FY 2012-13) and therefore section 234E cannot be enforced since it is prior to 1/6/2015 and the Ld. Revenue Authorities erred in levying the levy of late fee U/s. 234E of the Act while processing the TDS return U/s. 200A of the Act for the relevant period under consideration. Therefore, it was pleaded that the decision of the Ld. Revenue Authorities may be set-aside and the assessee may be granted relief by deleting the late fee levied U/s. 234E of the Act. 6. At the time of hearing, the Ld. Departmental Representative heavily relied on the decision of the Ld. DCIT, TDS-CPC. It is the submission of the Ld. DR that since the assessee filed its TDS statement beyond the stipulated time as per the TDS provisions, the late fee levied on account of default in furnishing the statements beyond the prescribed time limit is as per the 5 provisions of the IT Act, 1961. The Ld. DR further submitted that the fee charged U/s. 234E is not in lieu of penalty as the fee charged under section 234E is not in the nature of penalty and is a fee which the deductor shall be liable to pay in the event of delay in filing the TDS statements as prescribed. The Ld. DR further submitted that the Fee charged U/s. 234E is a fixed fee charged, in case the statements are rendered beyond the stipulated time which is happened in the instant case. The Ld. DR also submitted that it is rightly observed by the Hon’ble Bombay High Court in the case of Rashmikant Kundalia vs. Union of India (supra) “because of late filing of TDS state ments Department is overburdened with ex tra work which is o therwise no t required if the TDS state ments are furnished within the prescribed time limit.” The Ld. DR also heavily relied on the decision of the Hon’ble Gujarat High Court in the case of Rajesh Kourani vs. Union of India (supra) for the proposition that “a machinery provision (sec tion 200A) cannot override the substantive provision of law”. The Ld. DR further referring to the Ld. CIT(A)’s order submitted that the onus is on the assessee to explain the huge delay involved in the instant case with sufficient and reasonable cause. In the absence of any cogent explanation which forms sufficient and reasonable cause for condonation of 6 delay, the Ld. CIT(A)-NFAC dismissed the appeal of the assessee. Therefore, the Ld. DR pleaded that since the action taken by the Ld. Revenue Authorities is in accordance the provisions of the Act and also in accordance with law, as discussed above, and hence the orders of the Ld. Revenue Authorities need not be disturbed / interfered with. 7. I have heard the Ld. DR, perused the material available on record as well as the orders of the Ld. Revenue Authorities. The main question that arises in this appeal is whether TDS returns pertaining to the period prior to 01/06/2015, if filed after 01/06/2015 and processed after 01/06/2015, whether they attract the amended provisions of Finance Act, 2012 and the specific provision for levy of “fee” under section 234E of the Act which was inserted w.e.f 1/6/2015. In the present case the due date for filing the TDS return [Q4 – FY 2012-13] is 15/05/2013. The Ld. AO treating this filing / furnishing of TDS statement as a default since it is not filed within the stipulated time as per the TDS provisions and imposed late fees u/s. 234E of the Act. On appeal, the Ld. CIT(A)-NFAC confirmed the action of the Ld. AO and dismissed the assessee’s appeal. 7 8. Considering the facts of the present case, I am of the considered view since the enabling provision for computation of fee while processing the statements was inserted in section 200A only w.e.f 1/6/2015 and therefore, the charging section i.e., section 234E cannot be enforced to the cases prior to 1/6/2015. Further, I am of the view that the amended provision applies for all the returns pertaining to the period after 1/6/2015 and not for the returns pertaining to the period prior to 01/06/2015 notwithstanding the fact that the returns pertaining to the period prior to 01/06/2015 were filed after 01/06/2015 or processed after 01/06/2015. 9. The Hon’ble Karnataka High Court in the case of Fatheraj Singhvi vs. Union of India [2016] 73 taxmann.com 252 (Karnataka) observed that “one may at the first blush say that, since the section 234E is a charging section for fee, the liability was generated or had accrued, if there was failure to deliver or cause to be delivered the state ment/s of TDS within the prescribed time. But section 234E canno t be read in isolation and is required to be read with the mechanism and the mode provided for its enforce ment......”. The observations and relevant held portions in 8 the judgment of the Hon’ble Karnataka High Court (supra) are extracted herein below for reference: "21. However, if Section 234E providing for fee was brought on the state book, keeping in view the aforesaid purpose and the intention then, the other mechanism provided for computation of fee and failure for payment of fee under Section 200A which has been brought about with effect from 1.6.2015 cannot be said as only by way of a regulatory mode or a regulatory mechanism but it can rather be termed as conferring substantive power upon the authority. It is true that, a regulatory mechanism by insertion of any provision made in the statute book, may have a retroactive character but, whether such provision provides for a mere regulatory mechanism or confers substantive power upon the authority would also be a aspect which may be required to be considered before such provisions is held to be retroactive in nature. Further, when any provision is inserted for liability to pay any tax or the fee by way of compensatory in nature or fee independently simultaneously mode and the manner of its enforceability is also required to be considered and examined. Not only that, but, if the mode and the manner is not expressly prescribed, the provisions may also be vulnerable. All such aspects will be required to be considered before one considers regulatory mechanism or provision for regulating the mode and the manner of recovery and its enforceability as retroactive. If at the time when the fee was provided under Section 234E, the Parliament also provided for its utility for giving privilege under Section 271H(3) that too by expressly put bar for penalty under Section 272A by insertion of proviso to Section 272A(2), it can be said that a particular set up for imposition and the payment of fee under Section 234E was provided but, it did not provide for making of demand of such fee under Section 200A payable under Section 234E. Hence, considering the aforesaid peculiar facts and circumstances, we are unable to accept the contention of the learned counsel for respondent-Revenue that insertion of clause (c) to (f) under Section 200A(1) should be treated as retroactive 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 is expressly provided or impliedly 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 200A for computation and intimation for the payment of fee under Section 234E could not be made in purported exercise of power under Section 200A by the respondent for the period of the respective assessment year prior to 1.6.2015. However, we make it clear that, if any deductor has already paid the fee after intimation received under Section 200A, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest." 9 10. Further, the Hon’ble Kerala High Court in the case of United Metals vs. ITO (TDS) reported in [2022] 137 taxmann.com 115 (Kerala) observed as under: “Amendment in section 200A by way of incorporating sub-cl ause (c) to cl ause (f) which referre d to co mputation of fee payabl e under section 234E was b rought into effect from 1/6/2015, therefore, deman d raised for l evying l ate fee under section 234E for period prior to 1/6/2016 woul d not be sustain abl e.” 11. The Pune Bench of the Tribunal vide its order dated 25/10/2018 in the case of Medical Superintendent Rural Hospital, Nashik vs. DCIT, CPC (TDS) (supra), has observed as under: “16.............. the Assessing Officer whil e processing TDS re turns / statements for the period prior to 01/06/2015 was not empo we red to ch arge l ate fil ing fees under section 234E of the Act, even in the cases where such TDS returns we re fil ed bel atedl y after June, 2015 and even in cases where the Assessing Officer processed the said TDS re turns after June, 2015. Accordingl y...............the deman d raised b y ch arging l ate fil ing fee u/s 234E of the Act is not v al id and the s ame is del eted.” 12. Thus, in the instant case since the period of default was before the said date ie., 01/06/2015, there is no merit in charging late filing fee U/s. 234E of the Act. Accordingly the Ld. AO is directed to delete the fee levied U/s. 234E of the Act in the order passed U/s. 200A of the Act. Since I hold that the no late 10 filing fee is to be charged, the consequential interest charged U/s. 220(2) of the also does not survive. Thus, the grounds raised by the assessee are allowed. 13. In the result, appeal filed by the assessee is allowed. ITA Nos. 71, 72 & 73/Viz/2023 AY: 2016-17 14. These appeals are filed by the assessee for the AY 2016-17. The grounds of appeal raised in the appeals as well as the facts and circumstances involved in all these appeals are identical. 15. The common facts involved in these appeals are that the assessee filed its TDS returns for the FY 2015-16 relevant to the AY 2016-17 belatedly and the returns were processed U/s. 200A of the Act and accordingly the Ld. DCIT, TDS-CPC passed intimations levying fees U/s. 234E of the Act. Against the levy of levy of late fees U/s. 234E, the assessee filed appeals before the Ld. CIT(A)-NFAC with a huge delay of 2244 days in all the three appeals. On appeals, the Ld. CIT(A)-NFAC, in the absence of any reasonable and sufficient cause for filing the appeals beyond the prescribed time limit, did not condone the delay and dismissed 11 the appeals. Aggrieved by the orders of the Ld. CIT(A)-NFAC the assessee filed the present appeals before the Tribunal. 16. The crux of the issue involved in these appeals is whether the returns pertaining to the period after 01/06/2015 and processed after 01/06/2015 attract the amended provisions of section 200A read with section 234E inserted w.e.f 01/06/2015 which is a specific provision for levy of fee for default in furnishing the TDS statements belatedly. 17. In the present cases, the assessee filed its TDS statements belatedly and the due dates for filing the returns fall after 01/06/2015. The details of due dates for filing the TDS returns in the present appeals are as under: Sl no ITA No. & FY Due date for filing the return 1. 71/Viz/2023 (FY-2015-16) (Q2) 31/10/2015 2. 72/Viz/2023 (FY-2015-16) (Q3) 31/01/2016 3. 73/Viz/2023 (FY-2015-16) (Q4) 31/05/2016 Since the due dates for filing the TDS Quarterly returns fall after 01/06/2015, these cases attract the amended provisions of section 200A read with section 234E inserted w.e.f 01/06/2015 12 which is a specific provision for levy of fee for default in furnishing the TDS statements belatedly. Accordingly, I uphold the orders of the Ld. DCIT, CPC-TDS in levying the late fee levied U/s. 234E of the Act and dismiss the grounds raised by the assessee in all the three appeals. 18. In the result, three appeals of the assessee are dismissed. Pronounced in the open Court on 01 st June, 2023. Sd/- (दुåवूǽ आर.एल रेɬडी) (DUVVURU RL REDDY) ÛयाǓयकसदèय/JUDICIAL MEMBER Dated :01/06/2023 OKK - SPS आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the order forwarded to:- 1. Ǔनधा[ǐरती/ The Assessee– Siva Ram Yarns Private Limited, D.No.74-14- 49, Yanamalakuduru, Vijayawada – 520007, Andhra Pradesh. 2. राजèव/The Revenue – DCIT, Circle-1(1), Vijayawada. 3. The Principal Commissioner of Income Tax, 4.आयकर आयुÈत (अपील)/ The Commissioner of Income Tax (Appeals), 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, ͪवशाखापटणम/ DR, ITAT, Visakhapatnam 6.गाड[ फ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam