RASHTRIYA MILITARY SCHOOL, JAIPUR V. INCOME TAX OFFICER (TDS), AJMER

ITA 988/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7812 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 25-07-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: DEVANG GARGIEYA ITP
• Keywords: TDS
• Section: 234E; 200A; 201; 15

Judgement Text

1 VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S B JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 988-995/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 (2 ND QTR), 2013-14 (3 RD QTR), 2013-14 (4 TH QTR), 2014-15 (1 ST QTR), 2014-15 (2 ND QTR), 2014-15 (3 RD QTR), 2014-15 (4 TH QTR), 2015-16 (4 TH QTR) RASHTRIYA MILITARY SCHOOL, CANTONMENT AREA, PALTAN BAZAR, AJMER CUKE VS. ITO (TDS), AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: JDHR05594B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. MAHENDRA GARGIEYA (ADV) & SH. DEVANG GARGIEYA (ITP) JKTLO DH VKSJ LS @ REVENUE BY : SMT. RUNI PAL LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 20/01/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 22/01/2020 VKNS'K@ ORDER PER BENCH: THESE ARE EIGHT APPEALS FILED BY THE ASSESSEE AGAI NST THE ORDERS OF LD. CIT(A), AJMER DATED 09.05.2019 FOR A. Y 2013-14 (2 ND QTR), 2013-14 (3 RD QTR), 2013-14 (4 TH QTR), 2014-15 (1 ST QTR), 2014- 15 (2 ND QTR), 2014-15 (3 RD QTR), 2014-15 (4 TH QTR), 2015-16 (4 TH QTR) RESPECTIVELY. SINCE THE COMMON ISSUES ARE INVOLVED, ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. ITA NO. 988-995/J P/2019 RASHTRIYA MILITARY SCH OOL, AJMER VS. ITO (TDS), AJMER 2 2. WITH THE CONSENT OF BOTH THE PARTIES, APPEAL IN ITA NO. 988/JP/2019 WAS TAKEN AS THE LEAD CASE FOR THE PURP OSES OF PRESENT DISCUSSION WHEREIN THE ASSESSEE HAS TAKEN THE FOLLO WING GROUNDS OF APPEAL:- 1. THE IMPUGNED ORDER U/S 200A DATED 09.05.2019 IS BAD IN LAW AND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND VARIOUS OTHER REASONS AND HENCE THE SAME KINDLY BE QUASHED. 2. RS. 72,470/-: THE LD. CIT(A) ERRED IN LAW AS WEL L AS ON THE FACTS OF THE CASE IN CONFIRMING THE DEMAND RAISED B Y THE ACIT, CPC (TDS), GHAZIABAD/ ITO (TDS), ON ACCOUNT OF THE IMPU GNED LATE FILING LEVY U/S 234E OF RS. 72,470/- FOR 2 ND QUARTER. THE DEMAND SO RAISED IS TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FA CTS HENCE, KINDLY BE QUASHED IN FULL. 3. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE ASSESSEE FILLED ITS TDS RETURN (FORM 24Q) FOR QUARTER ENDED 30TH JUNE 2012 I.E. 2ND QUARTER. THE LD. ACIT - TDS ISSU ED AN INTIMATION LETTER DATED 4TH DECEMBER 2017 U/S 200A OF THE INCO ME TAX ACT, 1961 IMPOSING A FEE OF RS. 72,470/- U/S 234E OF THE ACT FOR THE ALLEGED DELAYED IN FILLING OF TDS RETURN. BEING AGG RIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) AND THE LD. CIT(A) AFTER CONSIDERING ALL THE REPLY AND PRECEDENTS PASS ED THE IMPUGNED ORDER DATED 09.05.2019 AND HIS FINDINGS RE AD AS UNDER: 'I HAVE GONE THROUGH THE ORDER, STATEMENT OF FACTS, GROUNDS OF APPEAL AND WRITTEN SUBMISSIONS CAREFULLY. IT IS SEEN THAT FROM THE INTIMATION ISSUED U/S 200A THAT THE TDS ST ATEMENT FOR THE 2ND QUARTER OF THE F.Y. 2012-13 WAS PROCESS ED ON 04.12.2017. WITH EFFECT FROM 01.06.2015, ADJUSTMENT S IN ITA NO. 988-995/J P/2019 RASHTRIYA MILITARY SCH OOL, AJMER VS. ITO (TDS), AJMER 3 RESPECT OF THE FEE PAID U/S 234E CAN BE MADE UNDER CLAUSE (C) OF SUB-SECTION 1 OF SECTION 200A. AS THE TDS RE TURN OF THE APPELLANT HAS BEEN PROCESSED ON 04.12.2017, THE REFORE I AM OF THE CONSIDERED VIEW THAT ADJUSTMENT MADE UN DER SECTION 200(A)(1)(C) IN RESPECT OF THE FEE LEVIED U /S 234E IS VALID AND IN ACCORDANCE WITH THE PROVISIONS OF LAW. HENCE THIS GROUND OF APPEAL IS DISMISSED.' 4. IT WAS SUBMITTED BY THE LD AR THAT THE ONLY ISS UE INVOLVED IN THE PRESENT CASE IS OF CHARGING OF FEE U/S 234E OF THE ACT W.R.T. THE PERIOD FALLING PRIOR TO AMENDMENT MADE TO S. 20 0A(1) OF THE ACT VIDE FINANCE ACT, 2015 W.E.F. 01.06.2015., WHIL E PROCESSING THE TDS RETURN. FIRSTLY, SECTION 200A OF THE ACT WH ICH WAS INSERTED BY FINANCE ACT, 2009 W.E.F. 1-4-2010. THER EAFTER, S. 234E OF THE ACT, WAS INTRODUCED BY FINANCE ACT, 201 2 W.E.F. 1-7- 2012. THEREAFTER, THE AFORESAID AMENDMENT WAS MADE BY INSERTING CLAUSE (C) IN S. 200A(1) W.E.F. 01.06.201 5. SINCE THE PERIOD INVOLVED IN ALL THE ABOVE APPEALS, RELATING TO WHICH, THE IMPUGNED FEE IS UNDER CHALLENGE, FALL PRIOR TO 01.0 6.2015 HENCE THE VALIDITY OF ASSUMPTION OF JURISDICTION BY THE C ONCERNED OFFICER IS UNDER CHALLENGE. 5. IT WAS SUBMITTED BY THE LD AR THAT FROM A PERUSA L OF SECTION 200A AND THE OTHERS, IT CAN BE CLEARLY SEEN FROM THE PROVISIONS THAT THOUGH A FEE SHOULD BE CHARGED FOR DEFAULT IN FILLING STATEMENT AS PER SECTION 200 OF THE ACT BUT THE MACHINERY AND COMPETENCE TO CHARGE SUCH FEE U/S 234E WAS NOT CONFERRED UNTIL AMENDMENT WAS BROUGHT BY FINANCE ACT, 2015 IN SECTION 200A OF THE ACT (MADE EFFECTIVE FROM 1.6.2015). THI S CLEARLY MEANS THAT THERE WAS NO MECHANISM OF CHARGING OF FE ES PRIOR TO ITA NO. 988-995/J P/2019 RASHTRIYA MILITARY SCH OOL, AJMER VS. ITO (TDS), AJMER 4 1.06.2015 W.R.T. THE PERIOD FALLING BEFORE 01.06.20 15. THUS, PRIOR TO THE AMENDMENT IN SECTION 200A OF THE ACT W.E.F. 1.06.2015, THE ASSESSING OFFICER HAD NO AUTHORITY AT ALL TO LEVY F EES PERTAINING TO THE PERIOD PRIOR TO 01.06.2015. THIS CAN BE CLEARLY UNDERSTOOD FROM THE FACT THAT THE AMENDMENT WAS MADE ONLY FROM FINA NCE ACT, 2015. HENCE WHERE THE AO DID NOT HAVE POWER TO CHAR GE FEES, SUCH AN INTIMATION FOR DEMAND OF FEES DOES NOT HOLD ANY AUTHORITY. TO INTERPRET OTHERWISE, SHALL HAVE THE EFFECT OF APPLY ING A PROSPECTIVE ENACTMENT RETROSPECTIVELY, WHICH IS NOT PERMISSIBLE IN LAW. 6. IN SUPPORT, THE LD AR HAS PLACED RELIANCE ON THE DECISIONS IN CASE OF FATHERAJ SINGHVI VS. UOI [2016] 289 CTR 602 , PUNE V. DCIT [2016] 182 TTJ 129 (PUNE-TRIB.), SHRI BHAVESH SHANT ILAL SHETH VS. ACIT TDS, CPC (ITA NO. 6507/MUM/2017 DATED 08.01.2019), M/S SANDEEP JHANWAR ADVISORY SERVICES PVT. LTD. (ITA NO. 722 & 723/JPR/2016 DATED 18.10.2016), MENTOR INDIA VS. DCIT (ITA NO. 738/JP/2016 DATED 09.12.2016), GEETA STAR HOTELS & RESORTS P. LTD. VS. DCIT (ITA NO. 14/JPR/2017 DATED 22.10.2018), TR IMURTY BUILDCON (P) LTD. VS. DCIT 174 ITD 252 (JP) (2019) AND STATION HEADQUARTERS (ARMY) & ORS. VS. ACIT 200 TTJ (JD) 1 (2019). 7. THE LD. DR IS HEARD WHO HAS SUBMITTED THAT THE A SSESSEE HAS FILED THE QUARTERLY TDS RETURN SOMETIME IN YEAR 201 7 WHICH IS WELL AFTER AMENDMENT TO THE PROVISIONS IN SECTION 200A W .E.F 01.06.2015 AND THEREAFTER AN INTIMATION HAS BEEN ISSUED BY ACI T-TDS ON 4 TH DECEMBER, 2017 U/S 200A OF THE ACT IMPOSING THE LAT E FILING FEES U/S 234E OF THE ACT. IT WAS ACCORDINGLY SUBMITTED THAT THE ACIT-TDS WAS WELL WITHIN JURISDICTION TO LEVY LATE FILING FE ES AND THERE IS NO ITA NO. 988-995/J P/2019 RASHTRIYA MILITARY SCH OOL, AJMER VS. ITO (TDS), AJMER 5 INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN CONFIRM ING THE SAID LEVY AND ACCORDINGLY, THE ORDER OF THE LD. CIT(A) SHOULD BE CONFIRMED. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOW A SETTLED LEGAL PROP OSITION THAT THE AMENDMENT TO SECTION 200A IS PROSPECTIVE IN NATURE AND PRIOR TO 1.6.2015, THE ASSESSING OFFICER DOESNT HAVE POWER TO CHARGE FEES UNDER SECTION 234E OF THE ACT. IN OTHER WORDS, WHE RE THE TDS STATEMENTS HAVE BEEN FILED AFTER 1.6.2015 AND PROCE SSING THEREOF HAPPENS AND INTIMATION ISSUED THEREAFTER, THE ASSES SING OFFICER IS WELL WITHIN HIS JURISDICTION TO LEVY FEES UNDER SEC TION 234E OF THE ACT. IN THE PRESENT CASE AS WELL, THE FILING OF TDS STAT EMENT HAS HAPPENED IN YEAR 2017 AND THEREAFTER, THE SAME HAS BEEN PROCESSED AND INTIMATION ISSUED ON 4.12.2017 UNDER SECTION 200A BY ACIT-TDS LEVYING LATE FILING FEES UNDER SECTION 234E OF THE ACT. THE ASSESSING OFFICER WAS THUS WELL WITHIN HIS JURI SDICTION TO LEVY FEES UNDER SECTION 234E OF THE ACT. THE CONTENTION OF THE LD AR IS THAT SINCE THE TDS STATEMENT PERTAINS TO THE PERIOD I.E FOR THE FINANCIAL YEAR 2012-13(QUARTER 2) EVEN THOUGH THE S AME HAS BEEN FILED IN THE YEAR 2017, THE ASSESSING OFFICER IS NO T EMPOWERED TO LEVY LATE FILING FEES UNDER SECTION 234E OF THE ACT . WE ARE HOWEVER UNABLE TO ACCEPT THE AFORESAID CONTENTION SO RAISED BY THE LD AR AS WE FIND THAT AT THE TIME OF PROCESSING OF THE TDS S TATEMENT I.E, ON 4.12.2017, THE ASSESSING OFFICER WAS EMPOWERED TO L EVY SUCH LATE FILING FEES, THERE IS NO PROVISION TO MAKE A DISTIN CTION BETWEEN THE TDS STATEMENTS PERTAINING TO PERIOD PRIOR TO 1.6.20 15 AND POST SUCH PERIOD AND MORE, IMPORTANTLY, IT WILL RESULT IN CRE ATING TWO CLASSES OF ASSESSEES WHO FOR THE SAME DEFAULT WILL SUFFER DIFF ERENT PENAL CONSEQUENCES LEADING TO UNINTENDED CLASS DISCRIMINA TION WHICH ITA NO. 988-995/J P/2019 RASHTRIYA MILITARY SCH OOL, AJMER VS. ITO (TDS), AJMER 6 CANNOT BE THE INTENTION OF THE LEGISLATURE IN ABSEN CE OF ANYTHING CONTRARY PROVIDED UNDER THE STATUTE. THE CO-ORDINA TE BENCH (SPEAKING THROUGH ONE OF US) HAD AN OCCASION TO EXA MINE SIMILAR ISSUE IN CASE OF SHRI UTTAM CHAND GANGWAL, AJMER VS. ACIT, GHAZIABAD (ITA NO. 764/JP/2017 DATED 23/01/2019) WHEREIN IT WAS HELD AS UNDER: 8. IN THE INSTANT CASE, THE ASSESSEE FILED ITS TDS RETURN IN FORM NO. 26Q FOR THE QUARTER ENDED 31 ST MARCH, 2015 ON 22 ND JULY, 2015 AND THE SAME WAS PROCESSED AND AN INTIMA TION DATED 30 JULY, 2015 WAS ISSUED BY THE AO U/S 200A O F THE ACT. THUS, BOTH THE FILING OF THE RETURN OF INCOME BY TH E ASSESSEE AND PROCESSING THEREOF HAS HAPPENED MUCH AFTER 1.6. 2015 I.E, THE DATE OF ASSUMPTION OF JURISDICTION BY THE AO U/ S 200A(1)(C) TO LEVY FEES UNDER SECTION 234E OF THE A CT. EVEN THOUGH THE QUARTERLY RETURN PERTAINS TO QUARTER END ED 31.3.2015, THE FACT REMAINS THAT THERE IS A CONTINU ING DEFAULT EVEN AFTER 1.6.2015 AND THE RETURN WAS ACTUALLY FIL ED ON 22.07.2015. THE SAID PROVISIONS CANNOT BE READ TO S AY THAT WHERE 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 WILL SUFFER THE LEVY OF FEES , HOWEVER, AN ASSESSEE WHO HAS DELAYED THE FILING OF THE RETURN O F INCOME EVEN PERTAINING TO THE PERIOD PRIOR TO 1.06.2015, H E CAN BE ABSOLVED FROM SUCH LEVY EVEN THOUGH THERE IS A CONT INUOUS DEFAULT ON HIS PART EVEN AFTER 1.6.2015. IN OUR VI EW, THE AO HAS ACQUIRED THE JURISDICTION TO LEVY THE FEES AS O N 1.06.2015 AND THEREFORE, ANY RETURN FILED AND PROCESSED AFTER 1.6.2015 WILL FALL WITHIN HIS JURISDICTION WHERE ON OCCURREN CE OF ANY DEFAULT ON PART OF THE ASSESSEE, HE CAN LEVY FEE SO MANDATED ITA NO. 988-995/J P/2019 RASHTRIYA MILITARY SCH OOL, AJMER VS. ITO (TDS), AJMER 7 U/S 234E OF THE ACT. THEREFORE, IRRESPECTIVE OF THE PERIOD TO WHICH THE QUARTERLY RETURN PERTAINS, WHERE THE RETU RN IS FILED AFTER 1.6.2015, THE AO CAN LEVY FEE UNDER SECTION 2 34E 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 C OULD NOT BE ANY LEVY OF FEES AS THE ASSUMPTION OF JURISDICTION 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 UND ER SECTION 234E FOR THE PERIOD STARTING 1.06.2015 TO THE DATE OF ACTUAL FILING 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 TH E TDS RETURN WHICH IS 22.07.2015 AND THE BALANCE FEE SO LEVIED I S HEREBY DELETED. IN THE RESULT, THE GROUND OF APPEAL IS PA RTLY ALLOWED. IN THE INSTANT CASE, AS WELL, THERE IS A CONTINUED DEFAULT BEYOND 1.06.2015, THEREFORE, FOLLOWING THE AFORESAID DECIS ION, THE LEVY OF FEES UNDER SECTION 234E, WHICH IS LEVIED FOR EACH D AY DURING WHICH THE DEFAULT CONTINUES, IS UPHELD FOR THE PERIOD 1.0 6.2015 TO THE DATE OF ACTUAL FILING OF THE TDS STATEMENT AND THE BALAN CE LATE FILING FEES SO LEVIED IS HEREBY DELETED. IN THE RESULT, THE APP EAL OF THE ASSESSEE IS PARTLY ALLOWED. 9. SIMILAR FACT PATTERN EXIST IN RESPECT OF ALL OT HER CASES WHERE UNDISPUTEDLY, THE TDS STATEMENTS PERTAINING TO THE FINANCIAL YEAR 2012-13, 2013-14 AND 2014-15 HAVE BEEN FILED IN YEA R 2017 AND INTIMATION ISSUED BY THE ACIT-TDS IN DECEMBER 2017. OUR ITA NO. 988-995/J P/2019 RASHTRIYA MILITARY SCH OOL, AJMER VS. ITO (TDS), AJMER 8 DISCUSSIONS AND FINDINGS IN ITA NO. 988/JP/2019 SHA LL APPLY MUTATIS MUTANDIS TO THESE APPEALS. IN THE RESULT, ALL THE EIGHT APPEALS FILED BY THE A SSESSEE ARE PARTLY ALLOWED IN LIGHT OF AFORESAID DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 22/01/2020. SD/- SD/- LANHI XKSLKBZ FOE FLAG ;KNO ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 22/01/2020. *GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- RASHTRIYA MILITARY SCHOOL, AJMER 2. IZR;FKHZ@ THE RESPONDENT- ITO (TDS), AJMER 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA. NO. 988-995/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR 9