ATNK&K AREA ARMED FORCE S VETERANS CANTEEN (Goldan Palm Cateen), Palakkad V. The ITO, Palakkad

ITA 98/COCH/2022

• Counselvise Citation: [NaN] 107 COUNSELVISE.COM (IT) 1655 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Appeal Filed On: 14-03-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJENDRAN
• Keywords: Principle of natural justice; Revised return; TDS
• Section: 234E

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri George George K., Judicial Member and Shri Laxmi Prasad Sahu, Accountant Member ITA No. 98/Coch/2022 (Assessment Year: 2018-19) ATNK & K Area Armed Forces Veterans Canteen 17/727, Vazhakkadavu Road Manapulikkavu Plakkad 678013 Vs. The Income Tax Officer Ward - TDS Palakkad PAN – AAOFA0079R Appellant Respondent Appellant by: Shri Rajendran, CA Respondent by: Smt. J.M. Jamuna Devi, Sr. D.R. Date of Hearing: 27.06.2022 Date of Pronouncement: 01.07.2022 O R D E R Per: L.P. Sahu, A.M. This is an appeal filed by the assessee against the order of the learned CIT(A), NFAC, Delhi dated 06.12.2021 for AY 2018-19 on the following grounds: - “1. The appellate order passed by the Commissioner of Income Tax(Appeals),National Faceless Appeal Centre in respect of the appeal filed against the order of Assistant Commissioner of Income, Centralised Processing Cell-TDS for the Q2 of the financial year 2017=18, is opposed to law, facts and circumstances of your appellant's case. 2. The Commissioner of Income Tax(Appeals),erred in concluding that, in lieu of the judgments of Karnataka High Court in Fatheraj Singhvivs Union of India(2016) reported in 289 CTR 602 & Kerala High Court in WP( C ) No;30229 of 2013 ( c ) of Sree Narayana Guru Smaraka Sangam vs Union of India, levy of late fee u/s 234E is in order. It is not the case of the appellant about the applicability of the provisions during the relevant period. The appellant had filed returns in time and ITA No. 98/Coch/2022 ATNK & K Area Armed Forces Veterans Canteen 2 subsequently got it revised to cure the technical mistake. Hence, the dismissal of the appeal against the levy of late fee is against all canons of natural justice. 3. The Commissioner of Income Tax (Appeals),has omitted to consider the levy of interest for late payment of tax. The appellant follows cash system of accounting and has remitted the tax deducted at source within the time specified. Therefore, levy of interest on late payment is not justified and the same is to be cancelled and quashed, 4. For the above grounds and such other grounds that may be adduced at the time of hearing, your appellant's prays that the order of the assessing officer be cancelled.” 2. The brief facts of the case are that that the DCIT, CPC-TDS, Ghaziabad imposed a fee of Rs.47,567/- under Section 234E of the Income Tax Act, 1961 (hereinafter "the Act") for late filing of TDS return. The total demand was raised for interest late filing fee under Section 234E of the Act of Rs.44,000/- and interest on late payment fee of Rs. 567/- as pre order dated 30.06.2018. The assessee filed quarterly TDS return in Form Q2 on 23.06.2018. Aggrieved by the order of the CPC-TDS the assessee filed appeal before the learned CIT(A). The learned CIT(A) after considering the submissions of the assessee dismissed the appeal of the assessee. Aggrieved assessee is in appeal before the Tribunal. 3. The learned A.R. submitted that the assessee is maintaining cash system of accounting and due to some technical mistake TDS return was filed in Form 24Q2 on 20.10.2017. Later on the mistake was rectified through filing of revised quarterly TDS return and filed the return in Form 26Q which was within the due date. Therefore the levy of fee under Section 234E of the Act does not arise. Since the assessee is following cash system of accounting, interest is also not leviable. In addition to the arguments the learned A.R. submitted a written submission which reads as under: - “The appellant, a military canteen under the Indian Army, had filed E- TDS return for the quarter-2 of the financial year 2017-'18 on 20.10.'17.A copy of the provisional receipt in evidence of the filing is attached herewith. In the said E- TDS return filed on 20.10.'17,by inadvertence Form No;24Q was selected instead of Form No;26Q.Realising the anomaly, a revised E-TDS return was ITA No. 98/Coch/2022 ATNK & K Area Armed Forces Veterans Canteen 3 filed on 23.06.'18,rectifying the mistake. While passing the order u/ s 200A,a late fee of Rs.47,000/, was levied on your appellant adopting the date of filing revised return as the date of filing the original return. The first appeal filed before the Commissioner of Income Tax(Appeals),National Faceless Appeal Centre was dismissed citing two judgments, which are not relevant in the appellant's case. It is not the case of the appellant about the applicability of the provisions during the relevant period. The fact that, the appellant had filed original returns within the due date and this alone should be considered as date of filing. The appellant follows cash systems of accounting and has remitted all taxes deducted within the time specified, i.e. on or before the 7 th of next month of the month of deduction. But while filing E-TDS returns, the appellant is forced to put the date of deduction as the last day of the month in spite of maintaining cash system of accounting. Hence, the levy of the interest, which is not sustained by law. Therefore, while considering the above facts and actual position of the law, it is prayed the Honourable Tribunal may be pleased to allow the above appeal by granting appropriate relief to the appellant as follows, i.drop the proposal for levy of late fee to the tune of Rs.47,000/- and interest to the tune of Rs.567/-.” 4. On the other hand, the learned D.R. relied on the orders of the lower authorities and she submitted that the assessee should have filed the return in proper form and furnishing written statement under the wrong section is not legal compliance and treated it as non-submission. The learned CIT(A) is rightly decided the issue against the assessee after relying of judgement of the jurisdictional High Court. 5. After hearing both the sides and perusing the entire material on record we observe that the assessee filed quarterly TDS return in Form Q24 which has been processed By the CPC on 30.06.2018 and raised demand towards interest of late payment of Rs.567/- and late filing fee under Section 234E of Rs.47,000/-. During the course of hearing the learned A.R. submitted acknowledgement of quarterly statement which is a computer generated Form 24Q and it was filed on 20.10.2017. From the orders of the lower authorities it is clear that the assessee has filed Form 24Q on 20.10.2017 and it was got revised later on but the lower ITA No. 98/Coch/2022 ATNK & K Area Armed Forces Veterans Canteen 4 authorities had not considered the original quarterly TDS return filed in Form 24Q and it has been considered from the date of revised return and imposed interest and late fee for delayed filing and payment. The learned A.R. of the assessee was unable to produce before us the other particulars regarding filing of Form 20Q & 24Q and what was the data contained in Form 24Q and 26Q. He only submitted that the assessee is maintaining cash system of accounting. Therefore we think it fit to remit the matter to the AO for verification of the exact nature of the payment and which form is applicable, i.e. 24Q or 26Q in the case of the assessee. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Dictated and pronounced in the open Court on 1 st July, 2022. Sd/- Sd/- (George George K.) (Laxmi Prasad Sahu) Judicial Member Accountant Member Cochin, Dated: 1 st July, 2022 Copy to: 1. The Appellant 2. The Respondent 3. The CIT(A) -NFAC, Delhi 4. The CIT - 5. The DR, ITAT, Cochin 6. Guard File By Order //True Copy// Assistant Registrar ITAT, Cochin n.p.