M/s. Executive Engineer Rural Engineering Services Division Maheshwar, Khargone V. The ITO (TDS)-1, Indore

ITA 905/Ind/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7158 (ITAT-INDORE)
• Duration Of Justice: 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 07-10-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PUNIT KUMAR
• Assessee Lawyers: S N AGRAWAL
• Keywords: Reasonable cause; TDS
• Section: 234E; 200A; 201

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.904 & 905/IND/2019 M/S EXECUTIVE ENGINEER, RURAL ENGINEERING SERVICES DIVISION, MAHESHWAR, KHARGONE TAN: BPLE01167F ASSESSMENT YEAR 2015-16 (Q-2 & 4) : APPELLANT V/S ITO (TDS)-I, INDORE : RESPONDENT APPELLANT BY SHRI S.N. AGRAWAL , CA RESPONDENT BY SHRI PUNIT KUMAR, SR. DR DATE OF HEARING: 26.08.2020 DATE OF PRONOUNCEMENT: 07.09.2020 / O R D E R PER MANISH BORAD: THE ABOVE CAPTIONED APPEALS ARE AT THE INSTANCE OF ASSESSEE AND IS DIRECTED AGAINST THE ORDERS OF LD. COMMISSIO NER OF INCOME TAX(APPEALS)-I, INDORE (IN SHORT CIT(A))DATED 31. 05.2019. 2. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - ITANOS.904&905/IND/2019 EXECUTIVE ENGINEER, KHARGONE 2 ITA NO.904/IND/2019 ASSESSMENT YEAR 2015-16 (QTR-2) 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE LEVY OF FEES UNDER S ECTION 234E OF THE ACT AT RS.72,600/- FOR QUARTER-2 OF THE FINANCIAL YEAR 201 4-15 WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE. 2. THE APPELLANT RESERVES ITS RIGHT TO ADD, ALTER AND MODIFY THE GROUNDS OF APPEAL AS TAKEN BY IT. ITA NO.905/IND/2019 ASSESSMENT YEAR 2015-16 (QTR-4) 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE LEVY OF FEES UNDER S ECTION 234E OF THE ACT AT RS.33,400/- FOR QUARTER-4 OF THE FINANCIAL YEAR 201 4-15 WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE. 2. THE APPELLANT RESERVES ITS RIGHT TO ADD, ALTER AND MODIFY THE GROUNDS OF APPEAL AS TAKEN BY IT. 3. WE FIND THAT THE INSTANT APPEALS ARE DELAYED BY 49 DAYS. HOWEVER LOOKING TO THE REASONS MENTIONED IN THE APP LICATION FOR SEEKING CONDONATION OF DELAY, WE ARE SATISFIED THAT THE ASSESSEE HAD A REASONABLE CAUSE FOR THIS DELAY OF 49 DAYS. WE T HEREFORE IN THE INTEREST OF JUSTICE AND THE REASONABLE CAUSE MENTIO NED BEFORE US, CONDONE THE DELAY OF 49 DAYS IN FILING THE APPEALS BEFORE THE TRIBUNAL AND ADMIT IT FOR ADJUDICATION. ITANOS.904&905/IND/2019 EXECUTIVE ENGINEER, KHARGONE 3 4. FROM PERUSAL OF THE GROUNDS FILED IN THE APPEALS W HICH HAVE BEEN ARGUED BY THE COUNSEL, ONLY ONE ISSUE NEEDS TO BE ADJUDICATED AS TO WHETHER THE REVENUE AUTHORITIES WERE JUSTIFIE D IN LEVYING THE LATE FEES U/S 234E OF THE ACT IN THE STATEMENT PROC ESSED U/S 200A OF THE ACT. 5. BRIEF FACTS COMMON TO BOTH THE APPEALS ARE THAT TD S RETURN FOR QUARTER-2 AND QUARTER-4 FOR FINANCIAL YEAR 2014 -15 WERE FILED ON 29.10.15 AND 10.11.2015 WERE PROCESSED BY CENTR AL PROCESSING CELL (IN SHORT CPC) AFTER LEVYING FEE U/S 234E OF T HE ACT AT RS.72,600/- AND RS.33,400/-. AGGRIEVED ASSESSEE PR EFERRED APPEAL BEFORE LD. CIT(A) BUT FAILED TO SUCCEED. NOW THE A SSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED REF ERRING TO THE WRITTEN SUBMISSIONS AND THE PROVISIONS OF SECTI ON 200A AND SECTION 234E OF THE ACT AND SUBMITTED AS UNDER; 1.3.5] ON A CONJOINT READING OF SECTION 200A AND SEC TION 234E OF THE INCOME-TAX ACT, 1961 AS REPRODUCED HEREINABOVE, IT CLEARLY TRANSPIRES THAT THERE WAS NO ENABLING PROVISION IN SECTION 200A OF THE INCOME-TAX ACT, 1961 PRIOR TO 1 ST JUNE, 2015 FOR RAISING DEMAND IN RESPECT OF LEVY OF FEES UNDER SEC TION 234E OF THE INCOME-TAX ACT, 1961. IT WAS ONLY AFTER THE SUBSTITUTION OF NEWLY INSERTED CLAUSE (C) W.E.F. 1 ST JUNE, 2015 THAT FEES UNDER ITANOS.904&905/IND/2019 EXECUTIVE ENGINEER, KHARGONE 4 SECTION 234E OF THE INCOME-TAX ACT, 1961 COULD HAVE BEEN LEVIED IN THE INTIMATION ISSUED UNDER SECTION 200A OF THE I NCOME-TAX ACT, 1961 AFTER PROCESSING OF THE TDS RETURN. 1.4.1] IT IS A SETTLED POSITION OF LAW THAT NO COMP UTATION OF FEES UNDER SECTION 234E OF THE INCOME-TAX ACT, 1961 COUL D HAVE BEEN MADE IN RESPECT OF TDS DEDUCTED FOR THE PERIOD ! RESPECTIVE ASSESSMENT YEAR PRIOR TO 1 ST JUNE, 2015 EVEN THOUGH TDS RETURNS FOR SUCH PERIOD ARE FILED BELATE DLY AFTER 1 ST JUNE, 2015 . 1.4.2] IT HAS BEEN CATEGORICALLY HELD IN THE FOLLOW ING JUDICIAL PRECEDENTS THAT AMENDMENT MADE IN SECTION 200A OF T HE INCOME-TAX ACT, 1961 W.E.F. 1 ST JUNE, 2015 IS PROSPECTIVE IN NATURE AND NO COMPUTATION OF FEES UNDER SECTION 234 E OF THE INCOME-TAX ACT, 1961 COULD HAVE BEEN MADE IN RESPEC T OF TDS DEDUCTED FOR THE PERIOD RESPECTIVE ASSESSMENT YEAR PRIOR TO 1 ST JUNE, 2015. 7. LD. COUNSEL FOR THE ASSESSEE HAS ALSO RELIED ON THE FOLLOWING DECISIONS:- L. FATHERAJ SINGHVI V . UNION OF INDIA - 12016J 289 CTR 602 (KARNATAKA) 2. MEDICAL SUPERINTENDENT RURAL HOSPITAL, DOBI BK V. DCIT, CPC (TDS), GHAZIABAD - (2018 1 173 ITD 575 (PUNE - TRIB.) 3. M/S GNA UDYOG LTD. VS. ACIT, CPC (TDS), GHAZIABAD - ITA NOS. 126 TO 133/ ASR./2017 4. M/S VISHWAS POWER ENGINEERING SERVICES PVT. LTD. V S. ACIT, ITANOS.904&905/IND/2019 EXECUTIVE ENGINEER, KHARGONE 5 CPC-TDS, GHAZIABAD - ITA NO. 276 TO 298/NAG/2019 5. TATA RICE MILLS VS. ACIT, CPC-TDS, GHAZIABAD - LT. A. NO. 395/ASR/2016 6. SHRI YESHWANTRAJ RANKA VS. ITO (TDS) , WARD-3(4 ), BENGALURU - ITA NOS. 1842 TO 1844/BANG/2019 7. SH. JASBIR SINGH ANAND VS. ACIT, CPC (TDS), GHAZIA BAD -ITA NOS. 183 TO 185/CHD/2018 8. PRINCIPAL GOP COLLEGE VS. ACIT (CPC-TDS), GHAZIABA D - ITA NOS. 71 TO 82/CTK/2020 9. M/S SAMIKARAN LEARNING PRIVATE LIMITED VS. TDS OFF ICER, DELHI - ITA NOS. 4050 TO 4054/DEL/2016 10. YAMUNA KHADAR SHIKSHA SAMITI VS. ITO (TDS), MUZAFFARNAGAR - LT.A. NOS. 6257, 6258, 6259/DEL/2 018 11. M/ S ZEN CHEMICONSULTECH PRIVATE LIMITED VS ITO (T DS) , HYDERABAD - ITA NO. 1737 TO 1739/HYD/18 12. DIG MEDICAL COMPOSITE HOSPITAL CRPF VS ACIT, CPC-T DS, GHAZIABAD - ITA NOS. 176 TO 181/NAG/2019 13. C & M FARMING LTD. VS ACIT (CPC-TDS), GHAZIABAD - ITA NO. 2008 TO 2017 /PUN/2017 8. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUE D SUPPORTING ORDERS OF BOTH THE LOWER AUTHORITIES. 9. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND ALSO CAREFULLY GONE THROUGH TH E DECISIONS ITANOS.904&905/IND/2019 EXECUTIVE ENGINEER, KHARGONE 6 RELIED AND REFERRED BY LD. COUNSEL FOR THE ASSESSEE . SOLE ISSUE RAISED IN THIS TWO APPEALS IS AGAINST THE LEVY OF F EE U/S 234E OF THE ACT BY CPC FOR DELAY IN FILING THE TDS QUARTERLY RE TURNS AND LD. CIT(A) CONFIRMING SUCH LEVY OF FEE U/S 234E AT RS.7 2,600/- AND RS.33,400/- FOR QUARTER-2 AND QUARTER-4 FOR FINANCI AL YEAR 2014- 15. QUARTERLY RETURNS WERE FILED AFTER THE DUE DAT E OF 29.10.2015. 10. WE OBSERVE THAT THE ISSUE OF LEVY OF FEE U/S 23 4E HAS CAME BEFORE US ON VARIOUS OCCASIONS. AS REGARDS THE FATE OF FEES LEVIED U/S 234E OF THE ACT FOR THE RETURNS FILED AND PROCE SSED BEFORE 1.6.15 WE AFTER CONSIDERING THE JUDICIAL PRONOUNCEM ENTS HAVE TAKEN A CONSISTENT VIEW THAT THE AMENDMENT BROUGHT IN FIN ANCE ACT, 2015 W.E.F. 1.6.2015 UNDER SECTION 200A (CLAUSE (C )] O F THE ACT IS PROSPECTIVE IN NATURE THEREBY EMPOWERING THE REVENU E AUTHORITIES TO CHARGE FEE U/S 234E OF THE ACT ONLY AFTER 1.6.20 15. VARIOUS JUDGMENTS REFERRED AND RELIED BY LD. COUNSEL FOR TH E ASSESSEE ALSO LAYS DOWN COMMON RATIO THAT SINCE THE AMENDMENT BRO UGHT IN BY FINANCE ACT 2015 U/S 200A(C ) OF THE ACT W.E.F. 1.6 .2015 IS PROSPECTIVE IN NATURE, THEREFORE REVENUE AUTHORITI ES ARE NOT EMPOWERED TO LEVY THE FEES U/S 234E IN THE PROCESSI NG COMPLETED BEFORE 1.6.2015. ITANOS.904&905/IND/2019 EXECUTIVE ENGINEER, KHARGONE 7 11. IN THE INSTANT CASE BOTH THE DATE OF FILING THE QUARTERLY RETURN AS WELL AS THE DATE OF PROCESSING BY CPC IS AFTER 1 .6.2015, SO IN THESE GIVEN FACTS WHETHER THE REVENUE AUTHORITIES W ERE JUSTIFIED IN LEVYING FEE U/S 234E OF THE ACT. WE FIND THAT SIMIL AR ISSUE AND SAME FACTS CAME UP FOR ADJUDICATION BEFORE US IN THE CAS E OF EXECUTIVE ENGINEER & OTHERS ITA NO.457 TO 459/IND/2019 ORDER DATED 26.7.2019 WHEREIN WE DECIDED AS FOLLOWS (RELEVANT E XTRACT) :- 14. NOW COMING TO THE LAST CONTENTION AS WELL AS MA IN ISSUE THAT WHETHER IN ALL THE REMAINING CASES EXCEPT THAT OF ROHIT SINGH IN ITANO.422/IND/2019 WHETHER THE LD. CIT(A) WAS JUSTIFIED IN LEVYING THE FEE U/S 234E OF THE ACT. T HE COMMON FACT IN ALL THESE CASES ARE THAT THE DATE OF FILING TDS RETURN AS WELL AS DATE OF CPC ORDER IS AFTER 01.06.2015. W E OBSERVE THAT RECENTLY COORDINATE BENCH OF JAIPUR IN THE CASE OF SHRI UTTAM CHAND GANGWAL VS ACIT IN ITA NO . 764/JP/2017 DATED 23/01/2019 ADJUDICATED THE SIMILA R ISSUE OF LEVY OF FEE U/S 234E OF THE ACT IN THE TDS RETURN A ND THE CPC ORDER PASSED AFTER 01.06.2015. FOLLOWING DECISION WAS REN DERED BY THE COORDINATE BENCH: IN THE INSTANT CASE, THE ASSESSEE FILED ITS TDS RET URN IN FORM NO. 26Q FOR THE QUARTER ENDED 31ST MARCH, 2015 ON 22ND JULY , 2015 AND THE SAME WAS PROCESSED AND AN INTIMATION DATED 30 JULY, 2015 WAS ISSUED BY THE AO U/S 200 A OF THE ACT . THUS, BOTH THE FILING OF THE RETURN OF INCOME BY THE ASSESSEE AND PROCESSING THE REOF HAS HAPPENED MUCH AFTER 1.6.2015 I.E, THE DATE OF ASSUM PTION OF JURISDICTION BY THE AO U/S 200A(1)(C) TO LEVY FEES UNDER SECTION 234E OF THE ACT. EVEN THOUGH THE QUARTERLY RETURN PERTA INS TO QUARTER ENDED 31.3.2015, THE FACT REMAINS THAT THERE IS A C ONTINUING DEFAULT EVEN AFTER 1.6.2015 AND THE RETURN WAS ACTUALLY FIL ED ON 22.07.2015. ITANOS.904&905/IND/2019 EXECUTIVE ENGINEER, KHARGONE 8 THE SAID PROVISIONS CANNOT BE READ TO SAY THAT WHER E AN ASSESSEE FILE HIS RETURN OF INCOME FOR THE PERIOD FALLING AFTER 1 .6.2015 AND THERE IS A DELAY ON HIS PART TO FILE THE RETURN IN TIME, HE WI LL SUFFER THE LEVY OF FEES, HOWEVER, AN ASSESSEE WHO HAS DELAYED THE FILI NG OF THE RETURN OF INCOME EVEN PERTAINING TO THE PERIOD PRIOR TO 1.06. 2015, HE CAN BE ABSOLVED FROM SUCH LEVY EVEN THOUGH THERE IS A CONT INUOUS DEFAULT ITA NO. 764/JP/2017 SHRI UTTAM CHAND GANGWAL, AJMER VS. ACIT, GHAZIABAD ON HIS PART EVEN AFTER 1.6.2015. IN OUR V IEW, THE AO HAS ACQUIRED THE JURISDICTION TO LEVY THE FEES AS ON 1. 06.2015 AND THEREFORE, ANY RETURN FILED AND PROCESSED AFTER 1.6 .2015 WILL FALL WITHIN HIS JURISDICTION WHERE ON OCCURRENCE OF ANY DEFAULT ON PART OF THE ASSESSEE, HE CAN LEVY FEE SO MANDATED U/S 234E OF THE ACT. THEREFORE, IRRESPECTIVE OF THE PERIOD TO WHICH THE QUARTERLY RETURN PERTAINS, WHERE THE RETURN IS FILED AFTER 1.6.2015, THE AO CAN LEVY FEE UNDER SECTION 234E OF THE ACT. AT THE SAME TIME, IN TERMS OF DETERMINING THE PERIOD FOR WHICH FEES CAN BE LEVIED , ONLY SAVING COULD BE THAT FOR THE PERIOD OF DELAY FALLING PRIOR TO 1. 06.2015, THERE COULD NOT BE ANY LEVY OF FEES AS THE ASSUMPTION OF JURISD ICTION TO LEVY SUCH FEES HAVE BEEN HELD BY THE COURTS TO BE PROSPECTIVE IN NATURE. HOWEVER, WHERE THE DELAY CONTINUES BEYOND 1.06.2015 , THE AO IS WELL WITHIN HIS JURISDICTION TO LEVY FEES UNDER SECTION 234E FOR THE PERIOD STARTING 1.06.2015 TO THE DATE OF ACTUAL FIL ING OF THE TDS RETURN. IN LIGHT OF THE SAME, IN THE INSTANT CASE, THE LEVY OF FEES UNDER SECTION 234E IS UPHELD FOR THE PERIOD 1.06.2015 TO THE DATE OF ACTUAL FILING OF THE TDS RETURN WHICH IS 22.07.2015 AND THE BALANCE FEE SO LEVIED IS HEREBY DELETED. IN THE RESULT, THE GROUND OF APPEAL IS PARTLY ALLOWED. 15. FROM PERUSAL OF THE ABOVE DECISION WE FIND THAT THE ISSUE BEFORE US IS SIMILAR TO THE ISSUE ADJUDICATED BY THE COORDINATE BENCH AND WE ACCORDINGLY HOLD THAT THE L D. CIT(A) HAS RIGHTLY CONFIRMED THE LEVY OF FEE U/S 23 4E OF THE ACT BY THE CPC, HOWEVER WE DIRECT THE REVENUE AUTHO RITIES TO MAKE NECESSARY VERIFICATION IN EACH OF THE CASE SO AS TO LOOK INTO THE FACT THAT IN CASE IF ANY FEE U/S 234E IS LEVIED FOR THE DELAY IN FILING RETURN FOR THE PERIOD BEFOR E 01.06.2015, THE SAME IS DIRECTED TO BE DELETED AND THE REMAINING FEE LEVIED FOR THE DEFAULT COMMITTED FROM 01.06.2015 ONWARDS NEEDS TO BE CONFIRMED. ITANOS.904&905/IND/2019 EXECUTIVE ENGINEER, KHARGONE 9 12. IN LIGHT OF THE ABOVE DECISION WHICH SQUARELY A PPLIES ON THE INSTANT APPEALS SINCE THE ISSUE AND FACTS REMAIN TH E SAME. WE ARE THUS OF THE CONSIDERED VIEW THAT THE ASSESSEE IS EL IGIBLE FOR PARTIAL RELIEF TO THE EXTENT OF DELETION OF FEE LEVIED U/S 234E OF THE ACT FOR THE DELAY UP TO 1.6.2015 AND THE REMAINING AMOUNT I .E. THE FEES LEVIED FOR DEFAULT COMMITTED AFTER 1.6.2015 NEEDS T O BE CONFIRMED. NECESSARY CALCULATION TO BE MADE BY THE LD. A.O AND THUS PARTIAL RELIEF IS GRANTED TO THE ASSESSEE. 13. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 07.09.20 20. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 07/09/2020 /DEV COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE