Anthem GXP Solutions Private Limited, Ahmedabad V. DCIT, CPC-TDS, Ghaziabad,

ITA 887/AHD/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8214 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 09-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 154

Judgement Text

ITA NOS. 869 TO 890/AHD/2018 ANTHEM GXP SOLUTIONS PVT LTD VS. DCIT ASSESSMENT YEAR : 2013-14, 2014-15 & 2015-16 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR, AM AND MS. MADHUMITA ROY, JM] ITA NO. 869 TO 890/AHD/2018 ASSESSMENT YEAR: 2013-14, 2014-15 & 2015-16 ANTHEM GXP SOLUTIONS PRIVATE LIMITED ............ ......APPELLANT A-502, HARI VILLA APPT., NR. SARTHI RESTAURANT, VASTRAPUR, AHMEDABAD 380 015 [PAN : AAICA 1720 G] VS. DCIT, CPC-TDS ...........................RESPONDENT GHAZIABAD APPEARANCES BY: NONE FOR THE APPLICANT VK SINGH FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 08.06.2018 DATE OF PRONOUNCING THE ORDER : 08.06.2018 O R D E R PER PRAMOD KUMAR, AM: 1. ALL THESE 22 APPEALS ARE DIRECTED AGAINST A COMM ON ORDER DATED 9 TH FEBRUARY, 2018 PASSED BY THE CIT(A) IN RESPECT OF VARIOUS QUA RTERS FOR THE ASSESSMENT YEARS 2013-14, 2014-15 AND 2015-16, UPHOLDING THE LEVY OF FEES UNDER SECTION 234E OF THE INCOME-TAX ACT ON ACCOUNT OF DELAY IN FURNISHING TH E STATEMENT OF TAX DEDUCTION AT SOURCE. WE WILL TAKE UP ALL THESE APPEALS TOGETHER . 2. THE COMMON GRIEVANCES IN ALL THESE APPEALS ARE A S FOLLOWS:- 1.1 THE ORDER PASSED U/S 250 ON 09-02-2018 FOR F.Y.2012-13 TO 2014-15 RELEVANT A.Y. 2013-14 TO 2015-16 BY LD.CIT(A)-8, AH MEDABAD UPHOLDING THE VALIDITY OF ORDER U/S 200A AND LEVY OF FEES OF RS.X XXXX/- U/S 234E OF THE ACT IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW A ND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS AND EVIDENCES PRODUCED BY THE APPELLANT WITH REGARD TO THE IMPUGNED FEES OF R S.XXXXX/- LEVIED U/S 234E. 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THAT LEVY OF FEES OF RS.XXXXX/- U/S 234E FOR A.Y. 2 013-14 TO 2015-16 WAS VALID AND LAWFUL. ITA NOS. 869 TO 890/AHD/2018 ANTHEM GXP SOLUTIONS PVT LTD VS. DCIT ASSESSMENT YEAR : 2013-14, 2014-15 & 2015-16 PAGE 2 OF 5 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE AS WELL AS IN LAW, THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 234E DID NOT PROVIDE FOR LEVY OF FEES PRIOR TO 01-06-2015. 3.1 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THAT (I) SECTION 234E WAS AN ENABLING PROVISION FOR COMPUTATION OF F EES WHILE PROCESSING THE STATEMENT U/S 200A (II) THE FEES SO LEVIED IS NOT T HE NATURE OF PENALTY BUT 'FEES' (III) THE AMENDED PROVISIONS OF SECTION 234E WERE APPLICABLE FROM 01- 07-2012 AND NOT 01-06-2015. 3. NONE APPEARED FOR THE ASSESSEE; BUT, WE HAVE HEA RD THE LEARNED DEPARTMENTAL REPRESENTATIVE, PERUSED THE MATERIAL O N RECORD AND DULY CONSIDERED THE FACTS OF THE CASE IN THE LIGHT OF APPLICABLE LE GAL POSITION. 4. AS LEARNED DEPARTMENTAL REPRESENTATIVE RIGHTLY P OINTS OUT, THERE IS NO DISPUTE THAT THE ISSUE IN APPEAL IS COVERED AGAINST THE ASS ESSEE BY HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT IN THE CASE OF RAJESH KOURANI VS. UNION OF INDIA, REPORTED IN [2017] 83 TAXMANN.COM 137 (GUJARAT), WHEREIN THEIR LORDSHIPS HAVE, INTER ALIA, OBSERVED AS FOLLOWS:- 16. WE NOW COME TO THE PETITIONER'S CENTRAL CHALLE NGE VIZ. OF NON PERMISSIBILITY TO LEVY FEE UNDER SECTION 234E OF TH E ACT TILL SECTION 200A OF THE ACT WAS AMENDED WITH EFFECT FROM 01.06.2015. WE HAV E NOTICED THE RELEVANT STATUTORY PROVISIONS. THE PICTURE THAT EMERGES IS T HAT PRIOR TO 01.07.2012, THE ACT CONTAINED A SINGLE PROVISION IN SECTION 272A PR OVIDING FOR PENALTY IN CASE OF DEFAULT IN FILING THE STATEMENTS IN TERMS OF SEC TION 200 OR PROVISO TO SECTION 206C. SUCH PENALTY WAS PRESCRIBED AT THE RATE OF RS .100 FOR EVERY DAY DURING WHICH THE FAILURE CONTINUED. WITH EFFECT FROM 01.06 .2012, THREE MAJOR CHANGES WERE INTRODUCED IN THE ACT. SECTION 234E AS INTRODU CED FOR THE FIRST TIME TO PROVIDE FOR CHARGING OF FEE FOR LATE FILING OF THE STATEMENTS. SUCH FEE WOULD BE LEVIED AT THE RATE OF RS.200/- FOR EVERY DAY OF FAI LURE SUBJECT TO THE MAXIMUM AMOUNT OF TAX DEDUCTIBLE OR COLLECTIBLE AS THE CASE MAY BE. SECTION 271H WAS ALSO INTRODUCED FOR THE FIRST TIME FOR LEVYING PENA LTY FOR FAILURE TO FURNISH THE STATEMENTS. SUCH PENALTY WOULD BE IN THE RANGE OF R S.10,000/- AND RS.1 LAKH. NO PENALTY WOULD BE IMPOSED IF THE TAX IS DEPOSITED WITH FEE AND INTEREST AND THE STATEMENT IS FILED WITHIN ONE YEAR OF THE DUE D ATE. WITH ADDITION TO THESE TWO PROVISIONS PRESCRIBING FEE AND PENALTY RESPECTI VELY, CLAUSE (K) OF SUB- SECTION (2) OF SECTION 272A BECAME REDUNDANT AND BY ADDING A PROVISO TO THE SAID SECTION, THIS EFFECT WAS THEREFORE LIMITED UPT O 01.07.2012. 17. IN ESSENCE, SECTION 234E THUS PRESCRIBED FOR TH E FIRST TIME CHARGING OF A FEE FOR EVERY DAY OF DEFAULT IN FILING OF STATEMENT UNDER SUB-SECTION (3) OF SECTION 200 OR ANY PROVISO TO SUB-SECTION (3) OF SE CTION 206C. THIS PROVISION WAS APPARENTLY ADDED FOR MAKING THE COMPLIANCE OF D EDUCTION AND COLLECTION OF TAX AT SOURCE, DEPOSITING IT WITH GOVERNMENT REV ENUE AND FILING OF THE STATEMENTS MORE STRINGENT. ITA NOS. 869 TO 890/AHD/2018 ANTHEM GXP SOLUTIONS PVT LTD VS. DCIT ASSESSMENT YEAR : 2013-14, 2014-15 & 2015-16 PAGE 3 OF 5 18. IN THIS CONTEXT, WE MAY NOTICE THAT SECTION 200 A WHICH PERTAINS TO PROCESSING OF STATEMENTS OF TAX DEDUCTED AT SOURCE PROVIDES FOR THE PROCEDURE ONCE A STATEMENT OF DEDUCTION OF TAX AT SOURCE IS F ILED BY THE PERSON RESPONSIBLE TO DO SO AND AUTHORIZES THE ASSESSING O FFICER TO MAKE CERTAIN ADJUSTMENTS WHICH ARE PRIMA-FACIE OR ARITHMETICAL I N NATURE. THE OFFICER WOULD THEN SEND AN INTIMATION OF A STATEMENT TO THE ASSES SEE. PRIOR TO 01.06.2015, THIS PROVISION DID NOT INCLUDE ANY REFERENCE TO THE FEE PAYABLE UNDER SECTION 234E OF THE ACT. BY RECASTING SUB-SECTION (1), THE NEW CLAUSE-C PERMITS THE AUTHORITY TO COMPUTE THE FEE, IF ANY, PAYABLE BY TH E ASSESSEE UNDER SECTION 234E OF THE ACT AND BY VIRTUE OF CLAUSE-D, ADJUST T HE SAID SUM AGAINST THE AMOUNT PAID UNDER THE VARIOUS PROVISIONS OF THE ACT . 19. IN PLAIN TERMS, SECTION 200A OF THE ACT IS A MA CHINERY PROVISION PROVIDING MECHANISM FOR PROCESSING A STATEMENT OF DEDUCTION O F TAX AT SOURCE AND FOR MAKING ADJUSTMENTS, WHICH ARE, AS NOTED EARLIER, AR ITHMETICAL OR PRIMA-FACIE IN NATURE. WITH EFFECT FROM 01.06.2015, THIS PROVISION SPECIFICALLY PROVIDES FOR COMPUTING THE FEE PAYABLE UNDER SECTION 234E OF THE ACT. ON THE OTHER HAND, SECTION 234E IS A CHARGING PROVISION CREATING A CHA RGE FOR LEVYING FEE FOR CERTAIN DEFAULTS IN FILING THE STATEMENTS. UNDER NO CIRCUMSTANCES A MACHINERY PROVISION CAN OVERRIDE OR OVERRULE A CHARGING PROVI SION. WE ARE UNABLE TO SEE THAT SECTION 200A OF THE ACT CREATES ANY CHARGE IN ANY MANNER. IT ONLY PROVIDES A MECHANISM FOR PROCESSING A STATEMENT FOR TAX DEDUCTION AND THE METHOD IN WHICH THE SAME WOULD BE DONE. WHEN SECTIO N 234E HAS ALREADY CREATED A CHARGE FOR LEVYING FEE THAT WOULD THEREAF TER NOT BEEN NECESSARY TO HAVE YET ANOTHER PROVISION CREATING THE SAME CHARGE . VIEWING SECTION 200A AS CREATING A NEW CHARGE WOULD BRING ABOUT A DICHOT OMY. IN PLAIN TERMS, THE PROVISION IN OUR UNDERSTANDING IS A MACHINERY PROVI SION AND AT BEST PROVIDES FOR A MECHANISM FOR PROCESSING AND COMPUTING BESIDE S OTHER, FEE PAYABLE UNDER SECTION 234E FOR LATE FILING OF THE STATEMENT S. 20. EVEN IN ABSENCE OF SECTION 200A OF THE ACT WITH INTRODUCTION OF SECTION 234E, IT WAS ALWAYS OPEN FOR THE REVENUE TO DEMAND AND COLLECT THE FEE FOR LATE FILING OF THE STATEMENTS. SECTION 200A WOULD M ERELY REGULATE THE MANNER IN WHICH THE COMPUTATION OF SUCH FEE WOULD BE MADE AND DEMAND RAISED. IN OTHER WORDS, WE CANNOT SUBSCRIBE TO THE VIEW THAT W ITHOUT A REGULATORY PROVISION BEING FOUND FOR SECTION 200A FOR COMPUTAT ION OF FEE, THE FEE PRESCRIBED UNDER SECTION 234E CANNOT BE LEVIED. ANY SUCH VIEW WOULD AMOUNT TO A CHARGING SECTION YIELDING TO THE MACHINERY PRO VISION. IF AT ALL, THE RECASTED CLAUSE (C) OF SUB-SECTION (1) OF SECTION 200A WOULD BE IN NATURE OF CLARIFICATORY AMENDMENT. EVEN IN ABSENCE OF SUCH PROVISION, AS NO TED, IT WAS ALWAYS OPEN FOR THE REVENUE TO CHARGE THE FEE IN TERMS OF SECTI ON 234E OF THE ACT. BY AMENDMENT, THIS ADJUSTMENT WAS BROUGHT WITHIN THE F OLD OF SECTION 200A OF THE ACT. THIS WOULD HAVE ONE DIRECT EFFECT. AN ORDE R PASSED UNDER SECTION 200A OF THE ACT IS RECTIFIABLE UNDER SECTION 154 OF THE ACT AND IS ALSO APPEALABLE UNDER SECTION 246A. IN ABSENCE OF THE PO WER OF AUTHORITY TO MAKE SUCH ADJUSTMENT UNDER SECTION 200A OF THE ACT, ANY CALCULATION OF THE FEE WOULD NOT PARTAKE THE CHARACTER OF THE INTIMATION U NDER SAID PROVISION AND IT COULD BE ARGUED THAT SUCH AN ORDER WOULD NOT BE OPE N TO ANY RECTIFICATION OR APPEAL. UPON INTRODUCTION OF THE RECASTED CLAUSE (C ), THIS SITUATION ALSO WOULD ITA NOS. 869 TO 890/AHD/2018 ANTHEM GXP SOLUTIONS PVT LTD VS. DCIT ASSESSMENT YEAR : 2013-14, 2014-15 & 2015-16 PAGE 4 OF 5 BE OBVIATED. EVEN PRIOR TO 01.06.2015, IT WAS ALWAY S OPEN FOR THE REVENUE TO CALCULATE FEE IN TERMS OF SECTION 234E OF THE ACT. THE KARNATAKA HIGH COURT IN CASE OF FATHERAJ SINGHVI (SUPRA) HELD THAT SECTION 200A WAS NOT MERELY A REGULATORY PROVISION, BUT WAS CONFERRING SUBSTANTIV E POWER ON THE AUTHORITY. THE COURT WAS ALSO OF THE OPINION THAT SECTION 234E OF THE ACT WAS IN THE NATURE OF PRIVILEGE TO THE DEFAULTER IF HE FAILS TO PAY FEES THEN HE WOULD BE RID OF RIGOR OF THE PENAL PROVISION OF SECTION 271H OF THE ACT. WITH BOTH THESE PROPOSITIONS, WITH RESPECT, WE ARE UNABLE TO CONCUR . SECTION 200A IS NOT A SOURCE OF SUBSTANTIVE POWER. SUBSTANTIVE POWER TO L EVY FEE CAN BE TRACED TO SECTION 234E OF THE ACT. FURTHER THE FEE UNDER SECT ION 234E OF THE ACT IS NOT IN LIEU OF THE PENALTY OF SECTION 271H OF THE ACT. BOT H ARE INDEPENDENT LEVIES. SECTION 271H ONLY PROVIDES THAT SUCH PENALTY WOULD NOT BE LEVY IF CERTAIN CONDITIONS ARE FULFILLED. ONE OF THE CONDITIONS IS THAT THE TAX WITH FEE AND INTEREST IS PAID. THE ADDITIONAL CONDITION BEING TH AT THE STATEMENT IS FILED LATEST WITHIN ONE YEAR FROM THE DUE DATE. 21. COUNSEL FOR THE PETITIONER HOWEVER, REFERRED TO THE DECISION OF SUPREME COURT IN CASE OF CIT V. B.C. SRINIVASA SETTY [1981] 128 ITR 294/5 TAXMAN 1 (SC), TO CONTEND THAT WHEN A MACHINERY PROVISION IS NOT PROVIDED, THE LEVY ITSELF WOULD FAIL. THE DECISION OF SUPREME COURT IN CASE OF B C SRINIVASA SETTY (SUPRA) WAS RENDERED IN ENTIRELY DIFFERENT BA CKGROUND. ISSUE INVOLVED WAS OF CHARGING CAPITAL GAIN ON TRANSFER OF A CAPIT AL ASSET. IN CASE ON HAND, THE ASSET WAS IN THE NATURE OF GOODWILL. THE SUPREM E COURT REFERRING TO VARIOUS PROVISIONS CONCERNING CHARGING AND COMPUTIN G CAPITAL GAIN OBSERVED THAT NONE OF THESE PROVISIONS SUGGEST THAT THEY INC LUDE AN ASSET IN THE ACQUISITION OF WHICH NO COST CAN BE CONCEIVED. IN S UCH A CASE, THE ASSET IS SOLD AND THE CONSIDERATION IS BROUGHT TO TAX, WHAT IS CHARGED IS A CAPITAL VALUE OF THE ASSET AND NOT ANY PROFIT OR GAIN. THIS DECIS ION THEREFORE WOULD NOT APPLY IN THE PRESENT CASE. 5. AS A MATTER OF FACT, IN THE STATEMENT OF FACTS F ILED BY THE ASSESSEE, IT HAS BEEN CLEARLY STATED THAT THE ASSESSEE ON ITS OWN ALSO AC CEPTS THE FACT THAT THE MATTER IS COVERED AGAINST THE ASSESSEE BY HONBLE JURISDICTIO NAL HIGH COURTS JUDGMENT AND THAT THE LIMITED PRAYER OF THE ASSESSEE IS TO KEEP THE MATTER PENDING TILL HONBLE GUJARAT HIGH COURT JUDGMENT (SUPRA) IS REVERSED EIT HER BY LARGER BENCH OR THE SUPREME COURT. THIS IS CLEAR FROM THE FOLLOWING STATEMENT MADE BY THE ASSESSEE IN THE STATEMENT OF FACTS, WHICH READS AS UNDER:- 5. THE APPELLANT HAS ALSO CONTENDED THAT THE LEVY OF LATE FILING FEES IS WITHOUT ANY POWER U/S 200A AND LATE FILING FEES U/S 234E SH OULD NOT BE LEVIED IN VIEW OF THE KARNATAKA HIGH COURT JUDGMENT IN THE CASE OF FATHERAJ SINGHVI V/S UNION OF INDIA [2016] 73 TAXMANN.COM 252. HOWEVER, IN VIEW OF GUJARAT HIGH COURTS JUDGMENT, THE LEVY OF LATE FILING FEES U/S 234E IS TENABLE IN LAW AND PROVISIONS OF SECTION 200A ARE MACHINERY PROVISIONS AND NOT CHARGING SECTION. HOWEVER, THE APPELLANT HAS CONTENDED BEFORE CIT(A) THAT IT KEEPS THE ISSUE OF LATE FILING FEES OPEN IF THE GUJARAT HIGH COURT JUD GMENT (SUPRA) IS REVERSED EITHER BY LARGER BENCH OR THE SUPREME COURT. ITA NOS. 869 TO 890/AHD/2018 ANTHEM GXP SOLUTIONS PVT LTD VS. DCIT ASSESSMENT YEAR : 2013-14, 2014-15 & 2015-16 PAGE 5 OF 5 6. HOWEVER, IN OUR CONSIDERED VIEW, THE MATTER IS C LEARLY COVERED BY THE HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT. THERE IS NO G OOD REASON TO KEEP THE MATTER PENDING AT THIS LEVEL. IN CASE THE ASSESSEE IS AGG RIEVED, IT IS INDEED OPEN TO HIM TO TAKE THE MATTER TO THE HIGHER JUDICIAL FORUM; BUT, MERELY BECAUSE SOME OTHER APPEAL ON SIMILAR GROUND COULD BE PENDING BEFORE THE HONB LE COURTS ABOVE AND THE ASSESSEE HAS A CHANCE TO GET A FAVOURABLE VERDICT I N FUTURE, WE CANNOT KEEP THESE APPEALS PENDING FOREVER. THE ISSUE BEING SQUARELY COVERED AGAINST THE ASSESSEE BY THE HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT IN THE CASE OF RAJESH KOURANI (SUPRA), WE FIND THE APPEALS ARE DEVOID OF ANY MERI T AND WE ACCORDINGLY REJECT THE SAME. 7. IN THE RESULT, APPEALS ARE DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON 8 TH DAY OF JUNE, 2018. SD/- SD/- MS. MADHUMITA ROY PRA MOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 8 TH DAY OF JUNE, 2018 *BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF DICTATION: .08.06.2018................ 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: .....08.06.2018...... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S.: . 08.06.2018. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT:... 08.06.2018.. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : .... 11.06.2018.................. 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 8. DATE OF DESPATCH OF THE ORDER: ......