Neelagiris Textiles, Pallipalayam V. DCIT, Ghaziabad

ITA 797/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90536 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-06-2015
• Assessment Year: 2013-2014
• Appeal Filed On: 13-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRIDHAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.795, 796 & 797/MDS/2015 ' (' / ASSESSMENT YEAR : 2013-14 M/S NEELAGIRIS TEXTILES, 20, IV CROSS, GANDHIPURAM, PALLIPALAYAM 638 006. PAN : AACFN 4173 H V. THE DEPUTY COMMISSIONER OF INCOME TAX, CPC-TDS, TDS CPC, AAYKAR BHAVAN, SECTOR-3, VAISHALI, GHAZIABAD, UTTAR PRADESH 201010. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE ,-*+ . / / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT 0 . 1$ / DATE OF HEARING : 25.06.2015 2!( . 1$ / DATE OF PRONOUNCEMENT : 10.07.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THESE APPEALS OF THE ASSESSEE ARE DIRECTED AG AINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS), SALEM. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN ALL THESE 2 I.T.A. NOS.795 TO 797/MDS/15 APPEALS, WE HEARD THESE APPEALS TOGETHER AND DISPOS ING THE SAME BY THIS COMMON ORDER. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO LEVY OF FEE UNDER SECTION 234E OF THE INCOME-TAX ACT, 19 61 (IN SHORT 'THE ACT') WHILE PROCESSING THE STATEMENT FURNISHED BY T HE ASSESSEE UNDER SECTION 200A OF THE ACT. 3. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT UNDER SECTION 200A OF THE ACT, THE STATEMENT F ILED BY THE ASSESSEE HAS TO BE PROCESSED IN THE MANNER IN WHICH IT WAS LAID DOWN. LEVY OF FEE UNDER SECTION 234E OF THE ACT CA NNOT BE A SUBJECT MATTER OF PROCESS, WHILE PROCESSING THE STA TEMENT UNDER SECTION 200A OF THE ACT. REFERRING TO FINANCE ACT, 2015, THE LD.COUNSEL POINTED OUT THAT WITH EFFECT FROM 01.06. 2015, THE PARLIAMENT BY WAY OF AMENDMENT TO SECTION 200A OF T HE ACT EMPOWERED THE ASSESSING OFFICER TO LEVY FEE UNDER S ECTION 234E OF THE ACT WHILE PROCESSING UNDER SECTION 200A OF THE ACT. THEREFORE, ACCORDING TO THE LD.COUNSEL, PRIOR TO 01.06.2015, T HE ASSESSING OFFICER HAD NO AUTHORITY TO LEVY FEE, IF ANY, UNDER SECTION 234E OF THE ACT. REFERRING TO THE DECISION OF AMRITSAR BEN CH OF THIS TRIBUNAL IN I.T.A. NO.90/ASR/2015 DATED 09.06.2015, THE LD.C OUNSEL POINTED OUT THAT PRIOR TO 01.06.2015, THERE WAS NO ENABLING PROVISION IN 3 I.T.A. NOS.795 TO 797/MDS/15 SECTION 200A FOR RAISING A DEMAND IN RESPECT OF LEV Y OF FEE UNDER SECTION 234E OF THE ACT. THEREFORE, ACCORDING TO T HE LD. COUNSEL, THE FEE LEVIED UNDER SECTION 234E OF THE ACT, WHILE PROCESSING THE STATEMENT FILED UNDER SECTION 200A OF THE ACT IS NO T JUSTIFIED. ACCORDING TO THE LD. COUNSEL, LEVY OF FEE UNDER SEC TION 234E OF THE ACT WHILE PROCESSING THE STATEMENT IS BEYOND THE SC OPE OF SECTION 200A OF THE ACT. 4. THE LD.COUNSEL INVITED OUR ATTENTION TO SECTION 234A OF THE ACT AND SUBMITTED THAT WHEN AN ASSESSEE FAILS TO DE LIVER THE STATEMENT WITHIN THE PRESCRIBED TIME, THE ASSESSEE IS LIABLE TO PAY BY WAY OF FEE A SUM OF ` 200/- FOR EVERY DAY DURING SUCH A PERIOD THE FAILURE CONTINUES. REFERRING TO THE WORD USED IN T HE SECTION 234E HE SHALL BE LIABLE TO PAY, THE LD.COUNSEL POINTED OUT THAT THE ASSESSEE IS LIABLE TO PAY FEE. HOWEVER, IT DOES NO T EMPOWER THE ASSESSING OFFICER TO LEVY THE FEE. SECTION 234E(3) OF THE ACT PROVIDES FOR PAYMENT OF THE FEE BEFORE DELIVERY OF STATEMENT UNDER SECTION 200(3) OF THE ACT. THEREFORE, THE FEE HAS TO BE PAID BY THE ASSESSEE VOLUNTARILY BEFORE FILING THE STATEMENT UN DER SECTION 200(3) OF THE ACT AND THE ASSESSING AUTHORITY HAS N O POWER TO LEVY THE FEE. 4 I.T.A. NOS.795 TO 797/MDS/15 5. ON THE CONTRARY, SH. P. RADHAKRISHNAN, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT SECTION 234E OF THE ACT PROVIDES FOR PAYMENT OF FEE, IF THE ASSESSEE FAILS TO DELIVER TH E STATEMENT AS PRESCRIBED IN SECTION 200(3) OF THE ACT. THEREFORE , THE ASSESSING OFFICER HAS EVERY AUTHORITY TO LEVY FEE EITHER BY A SEPARATE ORDER OR WHILE PROCESSING THE STATEMENT UNDER SECTION 200A O F THE ACT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. SECTION 2 00A OF THE ACT PROVIDES FOR PROCESSING OF THE STATEMENT OF TAX DED UCTED AT SOURCE BY MAKING ADJUSTMENT AS PROVIDED IN THAT SECTION. FOR THE PURPOSE OF CONVENIENCE, WE ARE REPRODUCING THE PROVISIONS O F SECTION 200A OF THE ACT:- 200A. (1) WHERE A STATEMENT OF TAX DEDUCTION AT SOURCE OR A CORRECTION STATEMENT HAS BEEN MADE BY A PERSON DEDU CTING ANY SUM (HEREAFTER REFERRED TO IN THIS SECTION AS DEDUCTOR) UNDER SECTION 200, SUCH STATEMENT SHALL BE PROCESSED IN THE FOLLOWIN G MANNER, NAMELY : (A) THE SUMS DEDUCTIBLE UNDER THIS CHAPTER SHALL B E 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 STATE MENT ; 5 I.T.A. NOS.795 TO 797/MDS/15 (C) THE SUM PAYABLE BY, OR THE AMOUNT OF REFUND DU E TO, THE DEDUCTOR SHALL BE DETERMINED AFTER ADJUSTME NT OF AMOUNT COMPUTED UNDER CLAUSE (B) AGAINST ANY AMOUNT PAID UNDER SECTION 200 AND SECTION 201, AND ANY AMOUNT PAID OTHERWISE BY WAY OF TAX OR INTEREST ; (D) AN INTIMATION SHALL BE PREPARED OR GENERATED AN D SENT TO THE DEDUCTOR SPECIFYING THE SUM DETERMINED TO BE PAYABLE BY, OR THE AMOUNT OF REFUND DUE TO, HIM UNDER CLAUSE (C) ; AND (E) THE AMOUNT OF REFUND DUE TO THE DEDUCTOR IN PURSUANCE OF THE DETERMINATION UNDER CLAUSE (C) SHA LL BE GRANTED TO THE DEDUCTOR : PROVIDED THAT NO INTIMATION UNDER THIS SUB-SECTION SHALL BE SENT AFTER THE EXPIRY OF ONE YEAR FROM THE END OF THE FIN ANCIAL YEAR IN WHICH THE STATEMENT IS FILED. EXPLANATION FOR THE PURPOSES OF THIS SUB-SECTION, AN INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN THE STATEMEN T SHALL MEAN A CLAIM, ON THE BASIS OF AN ENTRY, IN THE STATEMENT (I) OF AN ITEM, WHICH IS INCONSISTENT WITH ANOTHER ENTRY OF THE SAME OR SOME OTHER ITEM IN SUCH STATEMENT ; (II) IN RESPECT OF RATE OF DEDUCTION OF TAX AT SOURC E, WHERE SUCH RATE IS NOT IN ACCORDANCE WITH THE PROVISIONS OF TH IS ACT ; (2) FOR THE PURPOSES OF PROCESSING OF STATEMENTS UND ER SUB-SECTION (1), THE BOARD MAY MAKE A SCHEME FOR CENTRALISED PRO CESSING OF STATEMENTS OF TAX DEDUCTED AT SOURCE TO EXPEDITIOUSLY DETERMINE THE TAX PAYABLE BY, OR THE REFUND DUE TO, THE DEDUCT OR AS REQUIRED UNDER THE SAID SUB-SECTION. 7. THE ASSESSING OFFICER CANNOT MAKE ANY ADJUSTMENT OTHER THAN THE ONE PRESCRIBED ABOVE IN SECTION 200A OF TH E ACT. BY FINANCE ACT, 2015, WITH EFFECT FROM 01.06.2015, THE PARLIAMENT AMENDED SECTION 200A BY SUBSTITUTING SUB-SECTION (1 ) OF CLAUSES (C) TO (E). FOR THE PURPOSE OF CONVENIENCE, WE ARE REP RODUCING THE 6 I.T.A. NOS.795 TO 797/MDS/15 AMENDMENT MADE IN SECTION 200A BY THE FINANCE ACT, 2015 AS UNDER:- IN SECTION 200A OF THE INCOME-TAX ACT, IN SUB-SECTION (1), FOR CLAUSES (C) TO (E), THE FOLLOWING CLAUSES SHALL BE SUBSTITUTED WITH EFFECT FROM THE 1 ST DAY OF JUNE, 2015, NAMELY:- (C) THE FEE, IF ANY, SHALL BE COMPUTED IN ACCORDA NCE WITH THE PROVISIONS OF SECTION 234E; (D) THE SUM PAYABLE BY, OR THE AMOUNT OF REFUND DU E TO, THE DEDUCTOR SHALL BE DETERMINED AFTER ADJUSTMENT OF TH E AMOUNT COMPUTED UNDER CLAUSE (B) AND CLAUSE (C) AGA INST 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; (E) AN INTIMATION SHALL BE PREPARED OR GENERATED A ND SENT TO THE DEDUCTOR SPECIFYING THE SUM DETERMINED TO BE PA YABLE BY, OR THE AMOUNT OF REFUND DUE TO, HIM UNDER CLAUS E (D); AND (F) THE AMOUNT OF REFUND DUE TO THE DEDUCTOR IN PU RSUANCE OF THE DETERMINATION UNDER CLAUSE (D) SHALL BE GRAN TED TO THE DEDUCTOR. THEREFORE, IT IS OBVIOUS THAT PRIOR TO 01.06.2015, THERE WAS NO ENABLING PROVISION IN SECTION 200A OF THE ACT FOR M AKING ADJUSTMENT IN RESPECT OF THE STATEMENT FILED BY THE ASSESSEE W ITH REGARD TO TAX DEDUCTED AT SOURCE BY LEVYING FEE UNDER SECTION 234 E OF THE ACT. THE PARLIAMENT FOR THE FIRST TIME ENABLED THE ASSES SING OFFICER TO MAKE ADJUSTMENT BY LEVYING FEE UNDER SECTION 234E O F THE ACT WITH EFFECT FROM 01.06.2015. THEREFORE, AS RIGHTLY SUBM ITTED BY THE 7 I.T.A. NOS.795 TO 797/MDS/15 LD.COUNSEL FOR THE ASSESSEE, WHILE PROCESSING STATE MENT UNDER SECTION 200A OF THE ACT, THE ASSESSING OFFICER CANN OT MAKE ANY ADJUSTMENT BY LEVYING FEE UNDER SECTION 234E PRIOR TO 01.06.2015. IN THE CASE BEFORE US, THE ASSESSING OFFICER LEVIED FEE UNDER SECTION 234E OF THE ACT WHILE PROCESSING THE STATEM ENT OF TAX DEDUCTED AT SOURCE UNDER SECTION 200A OF THE ACT. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE FEE LEVIED BY THE ASSESSING OFFICER UNDER SECTION 234E OF THE ACT WHI LE PROCESSING THE STATEMENT OF TAX DEDUCTED AT SOURCE IS BEYOND T HE SCOPE OF ADJUSTMENT PROVIDED UNDER SECTION 200A OF THE ACT. THEREFORE, SUCH ADJUSTMENT CANNOT STAND IN THE EYE OF LAW. 8. THE NEXT CONTENTION OF THE ASSESSEE IS THAT SECT ION 234E OF THE ACT SAYS THAT THE ASSESSEE SHALL BE LIABLE TO PAY BY WAY OF FEE, THEREFORE, THE ASSESSEE HAS TO VOLUNTARILY PAY THE FEE AND THE ASSESSING OFFICER HAS NO AUTHORITY TO LEVY FEE. TH E ARGUMENT OF THE LD.COUNSEL FOR THE ASSESSEE IS VERY ATTRACTIVE AND FANCIFUL. HOWEVER, WE DO NOT FIND ANY SUBSTANCE IN THAT ARGUM ENT. WHEN SECTION 234E CLEARLY SAYS THAT THE ASSESSEE IS LIAB LE TO PAY FEE FOR THE DELAY IN DELIVERY OF THE STATEMENT WITH REGARD TO TAX DEDUCTED AT SOURCE, THE ASSESSEE SHALL PAY THE FEE AS PROVIDED UNDER SECTION 234E(1) OF THE ACT BEFORE DELIVERY OF THE STATEMENT UNDER SECTION 8 I.T.A. NOS.795 TO 797/MDS/15 200(3) OF THE ACT. IF THE ASSESSEE FAILS TO PAY TH E FEE FOR THE PERIODS OF DELAY, THEN THE ASSESSING AUTHORITY HAS ALL THE POWERS TO LEVY FEE WHILE PROCESSING THE STATEMENT UNDER SECTION 200A O F THE ACT BY MAKING ADJUSTMENT AFTER 01.06.2015. HOWEVER, PRIOR TO 01.06.2015, THE ASSESSING OFFICER HAD EVERY AUTHORITY TO PASS A N ORDER SEPARATELY LEVYING FEE UNDER SECTION 234E OF THE AC T. WHAT IS NOT PERMISSIBLE IS THAT LEVY OF FEE UNDER SECTION 234E OF THE ACT WHILE PROCESSING THE STATEMENT OF TAX DEDUCTED AT SOURCE AND MAKING ADJUSTMENT BEFORE 01.06.2015. IT DOES NOT MEAN THA T THE ASSESSING OFFICER CANNOT PASS A SEPARATE ORDER UNDER SECTION 234E OF THE ACT LEVYING FEE FOR THE DELAY IN FILING THE STATEMENT A S REQUIRED UNDER SECTION 200(3) OF THE ACT. 9. THE CONTENTION OF THE ASSESSEE CAN ALSO BE EXAMI NED IN THE LIGHT OF THE PROVISIONS OF INDIAN PENAL CODE. SECT ION 396 OF INDIAN PENAL CODE PROVIDES FOR PUNISHMENT FOR DACOITY WITH MURDER. THE PUNISHMENT IS IMPRISONMENT FOR LIFE OR RIGOROUS IMP RISONMENT FOR A TERM WHICH MAY BE EXTENDED TO TEN YEARS AND ALSO LI ABLE TO FINE. FOR THE PURPOSE OF CONVENIENCE, WE ARE REPRODUCING SECTION 396 OF INDIAN PENAL CODE, HEREUNDER:- 396. DACOITY WITH MURDER IF ANY ONE OF FIVE OR MORE PERSONS, WHO ARE CONJOINTLY COMMITTING DACOITY , COMMITS MURDER IN SO COMMITTING DACOITY, EVERY ONE OF 9 I.T.A. NOS.795 TO 797/MDS/15 THOSE PERSONS SHALL BE PUNISHED WITH DEATH, OR IMPRISONMENT FOR LIFE, OR RIGOROUS IMPRISONMENT FOR A TERM WHICH MAY EXTEND TO TEN YEARS, AND SHALL ALSO B E LIABLE TO FINE . SIMILARLY, SECTION 408 OF INDIAN PENAL CODE PROVIDE S FOR CRIMINAL BREACH OF TRUST BY A CLERK OR SERVANT. IN ADDITION TO IMPRISONMENT WHICH MAY EXTEND TO SEVEN YEARS, THE ACCUSED WHO IS FOUND TO BE GUILTY SHALL ALSO BE LIABLE TO FINE. SIMILARLY, TH E OTHER PROVISIONS OF INDIAN PENAL CODE ALSO SAY THAT IN ADDITION TO IMPR ISONMENT, THE ACCUSED SHALL BE LIABLE TO PAY FINE. THE LANGUAGE USED BY THE PARLIAMENT IN INDIAN PENAL CODE IS SHALL ALSO BE L IABLE TO FINE. THIS MEANS THAT THE MAGISTRATE OR SESSIONS JUDGE, WHO TR IES THE ACCUSED FOR AN OFFENCE PUNISHABLE UNDER THE PROVISI ONS OF INDIAN PENAL CODE, IN ADDITION TO PUNISHMENT OF IMPRISONME NT, SHALL ALSO LEVY FINE. IF THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE IS ACCEPTED, THEN THE MAGISTRATE OR SESSIONS JUDGE, AS THE CASE MAY BE, WHO IS TRYING THE ACCUSED FOR THE OFFENCE PUNIS HABLE UNDER INDIAN PENCAL CODE, MAY NOT HAVE AUTHORITY TO LEVY FINE. 10. IT IS WELL KNOWN PRINCIPLE THAT THE FINE PRESCR IBED UNDER THE INDIAN PENAL CODE HAS TO BE LEVIED BY THE CONCERNED MAGISTRATE OR SESSIONS JUDGE WHO IS TRYING THE OFFENCE PUNISHABLE UNDER THE INDIAN PENAL CODE. THEREFORE, THE CONTENTION OF TH E LD.COUNSEL THAT 10 I.T.A. NOS.795 TO 797/MDS/15 MERELY BECAUSE THE PARLIAMENT HAS USED THE LANGUAGE HE SHALL BE LIABLE TO PAY BY WAY OF FEE, THE ASSESSEE HAS TO P AY THE FEE VOLUNTARILY AND THE ASSESSING OFFICER HAS NO AUTHOR ITY TO LEVY FEE COULD NOT BE ACCEPTED. NO ONE WOULD COME FORWARD T O PAY THE FEE VOLUNTARILY UNLESS THERE IS A COMPULSION UNDER THE STATUTORY PROVISION. THE PARLIAMENT WELCOMES THE CITIZENS TO COME FORWARD AND COMPLY WITH THE PROVISIONS OF THE ACT BY PAYING THE PRESCRIBED FEE BEFORE FILING THE STATEMENT UNDER SECTION 200(3 ) OF THE ACT. HOWEVER, IF THE ASSESSEE FAILS TO PAY THE FEE BEFOR E FILING THE STATEMENT UNDER SECTION 200(3) OF THE ACT, THE ASSE SSING AUTHORITY IS WELL WITHIN HIS LIMIT IN PASSING A SEPARATE ORDE R LEVYING SUCH A FEE IN ADDITION TO PROCESSING THE STATEMENT UNDER SECTI ON 200A OF THE ACT. IN OTHER WORDS, BEFORE 01.06.2015, THE ASSESS ING AUTHORITY COULD PASS A SEPARATE ORDER UNDER SECTION 234E LEVY ING FEE FOR DELAY IN FILING THE STATEMENT UNDER SECTION 200(3) OF THE ACT. HOWEVER, AFTER 01.06.2015, THE ASSESSING AUTHORITY IS WELL WITHIN HIS LIMIT TO LEVY FEE UNDER SECTION 234E OF THE ACT EVE N WHILE PROCESSING THE STATEMENT UNDER SECTION 200A AND MAK ING ADJUSTMENT. 11. IN VIEW OF THE ABOVE DISCUSSION, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS E XCEEDED HIS 11 I.T.A. NOS.795 TO 797/MDS/15 JURISDICTION IN LEVYING FEE UNDER SECTION 234E WHIL E PROCESSING THE STATEMENT AND MAKE ADJUSTMENT UNDER SECTION 200A OF THE ACT. THEREFORE, THE IMPUGNED INTIMATION OF THE LOWER AUT HORITIES LEVYING FEE UNDER SECTION 234E OF THE ACT CANNOT BE SUSTAIN ED IN LAW. HOWEVER, IT IS MADE CLEAR THAT IT IS OPEN TO THE AS SESSING OFFICER TO PASS A SEPARATE ORDER UNDER SECTION 234E OF THE ACT LEVYING FEE PROVIDED THE LIMITATION FOR SUCH A LEVY HAS NOT EXP IRED. ACCORDINGLY, THE INTIMATION UNDER SECTION 200A AS CONFIRMED BY T HE CIT(APPEALS) IN SOFAR AS LEVY OF FEE UNDER SECTION 234E IS SET A SIDE AND FEE LEVIED IS DELETED. HOWEVER, THE OTHER ADJUSTMENT M ADE BY THE ASSESSING OFFICER IN THE IMPUGNED INTIMATION SHALL STAND AS SUCH. 12. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED ON 10 TH JULY, 2015 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 10 TH JULY, 2015. KRI. 12 I.T.A. NOS.795 TO 797/MDS/15 . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A), SALEM 4. 0 81 /CIT, TDS, CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.