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TMI Blog2018 (1) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 200A of the Act in respect of defaults before 01.06.2015 - Decided in favour of assessee - ITA No. 3112/Del/2016, ITA No. 3113/Del/2016, ITA No. 3114/Del/2016, ITA No. 3115/Del/2016 And ITA No. 3116/Del/2016, ITA No. 2317/Del/2016, ITA No. 2318/Del/2016 And ITA No. 2319/Del/2016 - - - Dated:- 5-1-2018 - Sh. N. K. Saini, AM And Smt. Beena A. Pillai, JM For The Assessee : Sh. Nipun Mittal, CA For The Revenue : Sh. Kaushlendra Tiwari, Sr. DR ORDER Per N. K. Saini, AM: These appeals by the assessees are directed against the separate orders dated 23.03.2016 in the case of Dharam Deep Public School and dated 25.01.2016 in the case of Kam Air Co. Ltd. passed by the ld. CIT(A)-41, New Delhi. 2. Common issue is involved in all these appeals which were heard together so these are being disposed off by this consolidated order for the sake of convenience and brevity. 3. The common grievance of the assessees in these appeals relates to the confirmation of charging of late filing fees levied by the AO u/s 234E of the Income Tax Act, 1961 (hereinafter referred to as the Act) by passing the order u/s 200A of the Act. 4. Facts of the case in brief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat late fee was not leviable. It was further submitted that this issue is squarely covered in favour of the assessee by the decision of this Bench of the ITAT in the case of M/s Samikaran Learning Pvt. Ltd. Vs TDS, Officer in ITA Nos. 4050 to 4054/Del/2016 for the assessment years 2014-15 2015-16 (copy of the said order was furnished which is placed on record). 9. We have considered the submissions of both the parties and perused the material available on the record. It is noticed that an identical issue has been adjudicated by this Bench of the ITAT in the case of M/s Samikaran Learning Pvt. Ltd. Vs TDS Officer, Laxmi Nagar, Delhi in ITA Nos. 4050 to 4054/Del/2016 for the assessment years 2014-15 and 2015-16 vide order dated 09.11.2017 wherein the relevant findings have been given in paras 2.1 to 2.3 which read as under: 2.1. We have considered the rival submissions and perused the material available on record. Before adverting further, we are reproducing hereunder section 200A of the Act for ready reference:- 200A. (1) Where a statement of tax deduction at source or a correction statement has been made by a person deducting any sum (hereafter referred to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues. (2) The amount of fee referred to in sub-section (1) shall not exceed the amount of tax deductible or collectible, as the case may be. (3) The amount of fee referred to in sub-section (1) shall be paid before delivering or causing to be delivered a statement in accordance with sub-section (3) of section 200 or the proviso to subsection (3) of section 206C. (4) The provisions of this section shall apply to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012. 2.2. A conjoint reading for aforesaid sections, if analyzed, section 200A of the Act deals with processing of statement of tax deducted at source, whereas, section 234E of the Act deals with fee for default in furnishing statements. Now, we shall examine the decision of the Pun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returns are mandated to be filed within stipulated period. Admittedly, in the present set of appeals, TDS returns were filed belatedly. The Assessing Officer while processing the TDS returns issued intimation to the respective assessee under section 200A of the Act and levied late filing fees under section 234E of the Act. Aggrieved by the said intimation, in some of the cases, the assessee in some cases filed an application under section 154 of the Act also. However, the same were dismissed by the respective Assessing Officers. 6. In appeal, the CIT(A) held that the appeal of assessee was not maintainable, in view of the ratio laid down by the Hon'ble Bombay High Court in Rashmikant Kundalia v. Union of India [2015] 54 taxmann.com 200/229 Taxman 596/373 ITR 268. Further, even on merits, the contention of assessee that the Assessing Officer was not empowered to raise the demand under section 234E of the Act by passing order under section 200A of the Act was held to be not legally tenable. 7. The assessee is in appeal against the orders of authorities below. 8. Shri Sanket Joshi, learned Counsel pointed out that the issue which arises in the present appeal is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 200A of the Act for charging fees under section 234E of the Act, then the Legislature should provide the machinery for charging the said fees under section 234E of the Act, which was provided w.e.f. 01.06.2015. He further stressed that where the assessee had denied his liability to be assessed, then the right to appeal is provided under section 246A(1)(a) of the Act and where the assessee says that he denies his liability, then the same has to be interpreted liberally. Referring to the decision of Hon'ble Bombay High Court in Rashmikant Kundalia's case (supra), relied upon by the CIT(A), the learned Authorized Representative for the assessee pointed out that it only settled the constitutional validity of section 234E of the Act and hence, the said ratio had to be applied accordingly and it cannot be said that charging of late fees under section 234E of the Act by the Assessing Officer while issuing intimation under section 200A of the Act can be charged prior to 01.06.2015. The learned Authorized Representative for the assessee further pointed out that the issue of charging of fees under section 234E of the Act and raising of demand under section 200A of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.06.2015 was prospective in nature and hence, had to be applied from 01.06.2015 itself. He relied on the Memo explaining Finance Bill, 2015 while introducing clause (c) to section 200A(1) of the Act. He further supported the arguments of earlier Counsel that prior to 01.06.2015, where there was no power given under section 200A of the Act to the Assessing Officer to charge the said fees, the present bunch of appeals being filed by different assessee related to the period prior to 01.06.2015 and hence, no fees could be charged under section 234E of the Act. He further pointed out that in CIT v. Vatika Township (P.) Ltd. [2014] 367 ITR 466/227 Taxman 121/49 taxmann.com 249 (SC), the Hon'ble Supreme Court held that any amendment can be considered retrospective in order to remove the hardship of assessee but not of the Department. The ld. Counsel for the assessee referred to the amendment brought in by the Finance Act and further placed reliance on the ratio laid down by Chennai Bench of Tribunal in G. Indirani v. Dy. CIT [2015] 43 CCH 511 and Ahmedabad Bench of Tribunal in Dhanlaxmi Developers v. Dy. CIT [2016] 46 CCH 1. 11. The learned DR pointed out that the issue arisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f penalty under section 272A(2)(k) of the Act. This amendment was w.e.f. 01.04.2005, hence where the statement was not filed by the deductor, penal provisions were attracted and the same was with respect to quarterly returns to be filed. The learned DR further pointed out that the provisions of section 200(3) of the Act and penalty under section 272A(2)(k) of the Act were simultaneously introduced. He further referred to the provisions of section 200A of the Act which were introduced w.e.f. 01.04.2010 by the Finance (No.2) Act, 2009 for furnishing of TDS returns. Further, reference was made to sub-clauses under section 200A(1) of the Act, wherein clause (a) refers to the sum deducted and clause (b) refers to the interest, if any; and w.e.f. 01.07.2012, new section was introduced i.e. 234E of the Act, under which it was provided that person shall be liable to deposit the tax deducted at source, hence the provisions were mandatory i.e. the liability was on the deductor to furnish the statement and in case of any default in furnishing statement, fees was provided under the said section. He further referred to the second proviso, which was inserted w.e.f. 01.07.2012, wherein it is prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o section 200A(1) of the Act, the Assessing Officer is empowered to charge. He further relied on Chennai Bench of Tribunal, wherein it is provided that the Assessing Officer can charge fees under section 234E of the Act. He further contended that by way of an amendment in 2015, the Act has not provided any new levy; the provisions of section 234E of the Act were already there and amendment is only clarificatory. Section 234E of the Act was charging section w.e.f. 01.04.2012 and in case of violation of provisions of the Act, fees was to be levied. Referring to the reliance placed upon by the learned Authorized Representative for the assessee on Vatika Township (P.) Ltd's. case (supra), he pointed out that the issue before the Hon'ble Supreme Court was charging of surcharge which was new levy and it was held to be prospective. He further stated that if there is an obligation by way of new statute, then such amendment is prospective. It was further pointed out by him that before the Hon'ble Delhi High Court in CIT v. Naresh Kumar [2013] 39 taxmann.com 182/[2014] 221 Taxman 59/362 ITR 256 the amendment by way of Finance Act, 2010 in section 40(a)(ia) of the Act was the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board directs. ( 2) Any person being an employer, referred to in subsection (1A) of section 192 shall pay, within the prescribed time, the tax to the credit of the Central Government or as the Board directs. ( 2A) In case of an office of the Government, where the sum deducted in accordance with the foregoing provisions of this Chapter or tax referred to in subsection (1A) of section 192 has been paid to the credit of the Central Government without the production of a challan, the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person, by whatever name called, who is responsible for crediting such sum or tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed. ( 3) Any person deducting any sum on or after the 1st day of April, 2005 in accordance with the foregoing provisions of this Chapter or, as the case may be, any person being an employer referred to in sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such particulars and within such time as may be provided. The duty is upon a person deducting any sum in accordance with various provisions under the Chapter and also upon an employer who is making deduction out of the payments made to the employees, then sub-section (3) requires that the deductor is to prepare a statement for such period as may be prescribed, which is to be delivered to the prescribed authority, in such form and verified and setting forth such particulars as may be prescribed. The said statement is to be delivered within such time as may be prescribed. 18. Rule 31A of the Income Tax Rules, 1962 (in short 'the Rules') provides that every person who is responsible for deduction of tax under Chapter XVIIB shall in accordance with the provisions of section 200(3) of the Act, deliver or cause to be delivered, the quarterly statements to the Director General of Income Tax (Systems) or the persons authorized by them i.e. in respect of deductions under various provisions of the Chapter XVIIB. The Rule further provides that the statements referred to in sub-rule (1) are to be delivered quarterly and the stipulated period of due date of filing the said stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the statement 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 source, where such rate is not in accordance with the provisions of this Act. ( 2) For the purposes of processing of statements under sub-section (1), the Board may make a scheme for centralised processing of statements of tax deducted at source to expeditiously determine the tax payable by, or the refund due to, the deductor as required under the said sub-section. 19. Section 200A of the Act lays down the manner in which the statements of tax deducted at source are to be processed for issuing the intimation. First of all, the sums deductible under the Chapter are to be computed and interest, if any, shall be computed on the basis of such sums deductible as computed in the statements as per clause (a) and (b) under section 200A(1) of the Act. Clauses (c) to (f) reproduced above were substituted for clauses (c) to (e) by the Finance Act, 2015 w.e.f. 01.06.2015. Prior to the substitution, clauses (c) to (e) read as under: - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for tax deduction at source on quarterly basis. Section 234E of the Act levies fees for default in furnishing the statements of tax deducted at source. Such fees is to be paid before delivering or causing to be delivered a statement in accordance with section 200(3) of the Act or proviso to section 206C(3) of the Act. In other words, in case the assessee has defaulted in not delivering the statement or causing to deliver the statement within time prescribed, then he is liable to pay the fees which is so prescribed under the Act and such fees shall not exceed the amount of tax deductible or collectable at source but the same has to be paid along with statement which is to be delivered under the provisions of section 200(3) of the Act. Though the statement of tax deducted at source has to be furnished by the deductor, no doubt, under section 200 of the Act, but the same has to be processed by the prescribed authority as per provisions of section 200A of the Act. In case there is any variation in the tax, sum deductible under the Chapter and/or their payment, the Assessing Officer is empowered to make adjustments in this regard and also reject incorrect claim made by the deductor whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to section 206C(3) of the Act. However, various regulations and the statutory provisions in this regard point out that undoubtedly, the responsibility of the deductor was to deposit the tax deducted at source in time and if not so, then with interest and consequently, where the tax was not paid in time and interest was not paid in time and then, where the statement of tax deducted at source could not be filed before the prescribed authority within stipulated time, the assessee was liable to levy of fees under section 234E of the Act. However, in case any default occurs due to the non-payment of fees by the assessee in this regard, then the provisions which has to be considered is section 200A(1)(c) of the Act. The power to charge/collect fees as per provisions of section 234E of the Act was vested with the prescribed authority under the Act only on substitution of earlier clause (c) to section 200A of the Act by the Finance Act, 2015 w.e.f. 01.06.2015. Once any provision of the Act has been made applicable from a respective date, then the requirement of the statute is to apply the said provisions from the said date. 24. In respect of the issue raised before us, it is clear t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of levy of fees under section 234E of the Act was indeed beyond the scope of permissible adjustments contemplated under section 200A of the Act. Such a levy could not be effected in the course of intimation under section 200A of the Act and in the absence of any other provisions enabling the demand in respect of this levy having been pointed out, no such levy could be effected. The said proposition has been applied in various decisions of different Benches of Tribunal. Reference was made to the decisions of Chennai Bench of Tribunal in G. Indirani' case (supra), Ahmedabad Bench of Tribunal in Globe Ecologistics Ltd. v. Dy. CIT in ITA Nos.2689- 2691/Ahd/2015, ITA No. 2692/Ahd/2015, relating to assessment year 2014-15, ITA No. 2693/Ahd/2015, relating to assessment year 2013-14 and ITA Nos.2694- 2695/Ahd/2014, relating to assessment year 2013-14, vide consolidated order dated 26.11.2015 and Chandigarh Bench of Tribunal in Khanna Watches Ltd. v. Dy. CIT in ITA Nos.731 to 735/CHD/2015, relating to assessment years 2013-14 2014-15, order dated 29.10.2015. 26. While deciding the present bunch of appeals, the Revenue had placed reliance on the ratio laid down by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the court in extraordinary equitable jurisdiction under Article 226/227 of the Constitution as the case may be. The Hon'ble High Court therefore, observed that simply because no remedy of appeal was provided for the provisions of section 234E of the Act, the same cannot be said to be onerous and section 234E of the Act was held to be constitutionally valid. The constitutional validity of provisions of section 234E of the Act has also been upheld by the Hon'ble Rajasthan High Court in Dundlod Shikshan Sansthan' case (supra). 27. In view of the abovesaid ratio laid down by the Hon'ble Bombay High Court, the case of the learned DR before us was that there is no merit in the present set of appeals filed by the assessee as the Hon'ble High court has laid down that no appeal is provided from an order passed under section 234E of the Act and the same merits to be dismissed at the outset. In this regard, he has raised two issues that (a) the appeal filed by the assessee is not maintainable and also (b) there is no merit in the claim of the assessee that the Assessing Officer is not empowered to charge fees under section 234E of the Act before insertion of claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 156 of the Act. The Finance Bill further provided that intimation generated after the proposed processing of TCS statement shall be at par with the intimation generated after processing of TDS statement and also provided that failure to pay tax specified in the intimation shall attract levy of interest as per provisions of section 220(2) of the Act. Further, amendments were also made in respect of the scheme of payment of TDS/TCS by the Government, deductor/collector which are not relevant for deciding the issue in the present appeal and hence, the same are not being referred to. The Finance Bill further provided that the amendment would take effect from 01.06.2015. 28. The perusal of Memo explaining the provision relating to insertion of clause (c) to section 200A of the Act clarifies the intention of Legislature in inserting the said provision. The provisions of section 234E of the Act were inserted by the Finance Act, 2012, under which the provision was made for levy of fees for late furnishing TDS/TCS statements. Before insertion of section 234E of the Act, the Finance (No. 2) Act, 2009 had inserted section 200A in the Act, under the said section, mechanism was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act is chargeable in the case of present set of appeals, where the Assessing Officer had issued the intimation under section 200A of the Act prior to 01.06.2015. 30. Another aspect of the issue is whether the amendment brought in by the Finance Act, 2015 w.e.f. 01.06.2015 by way of insertion of clause (c) to section 200A(1) of the Act is clarificatory or is prospective in nature and is not applicable to the pending assessments. Undoubtedly, the provisions of section 234E of the Act were inserted by the Finance Act, 2012, under which the liability was imposed upon the deductor in such cases where TDS statements/returns were filed belatedly to pay the fees as per said section. However, in cases, where the assessee has failed to deposit the said fees, then in order to enable the Assessing Officer to collect the said fees chargeable under section 234E of the Act, it is incumbent upon the Legislature to provide mechanism for the Assessing Officer to charge and collect such fees. In the absence of enabling provisions, the Assessing Officer while processing the TDS statements, even if the said statements are belated, is not empowered to charge the fees under section 234E of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided for the Assessing Officer to process the TDS statements filed by the assessee. The insertion categorically being made w.e.f. 01.06.2015 lays down that the said amendment is prospective in nature and cannot be applied to processing of TDS returns/statements prior to 01.06.2015. 32. We further find that in recent judgment dated 26.08.2016, the Hon'ble Karnataka High Court in Writ Appeal Nos. 2663-2674/2015(T-IT) in Fatheraj Singhvi v. Union of India [2016] 73 taxmann.com 252 has quashed the intimation issued under section 200A of the Act levying the fees for delayed filing the TDS statements under section 234E of the Act. The Hon'ble High Court notes that the Finance Act, 2015 had made amendments to section 200A of the Act enabling the Assessing Officer to make adjustments while levying fees under section 234E of the Act was applicable w.e.f. 01.06.2015 and has held that it has prospective effect. Accordingly, the Hon'ble High Court held that intimation raising demand prior to 01.06.2015 under section 200A of the Act levying section 234E of the Act late fees is not valid . However, the Hon'ble High Court kept open the issue on constitutional validity of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returns w.e.f. 01.06.2015, such provision cannot have retrospective effect as it would be detrimental to the case of taxpayer. The Hon'ble Delhi High Court was considering the application of amendment to section 40(a)(ia) of the Act by the Finance Act, 2010, under which certain relaxations were given to the application of said section and it was held that the same applies retrospectively to earlier years. However, in the present set of appeals, the issue is against the provision under which a new enabling power is being given to charge fees under section 234E of the Act while processing TDS returns/statements and such power is to be applied prospectively. In any case, the Parliament itself has recognized its operation to be prospective in nature while introducing clause (c) to section 200A(1) of the Act and hence, cannot be applied retrospectively. Similarly, reliance placed upon by the learned DR on the ratio laid down by the Hon'ble Supreme Court in Govinddas's case (supra) is misplaced because of the distinguishable facts and issues. 36. Now, coming to the connected issue raised by the learned Authorized Representative for the assessee by way of ground in some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cided the issue on merits and the assessee is in appeal before us on both these grounds. Vis - vis the first issue of maintainability of appeal against the intimation issued under section 200A of the Act, we hold that such intimation issued by the Assessing Officer after processing the TDS returns is appealable. The demand raised by way of charging of fees under section 234E of the Act is under section 156 of the Act and any demand raised under section 156 of the Act is appealable under section 246A(1)(a) and (c) of the Act. Accordingly, we reverse the findings of CIT(A) in this regard. We find support from the similar proposition being laid down by Mumbai Bench of Tribunal in bunch of cases with lead order in Kash Realtors (P.) Ltd. v. ITO in ITA No. 4199/M/2015, relating to assessment year 2013-14, consolidated order dated 27.07.2016, which had also decided the issue of charging of fees under section 234E of the Act in favour of the assessee following the decisions of other Benches of Tribunal. Once intimation issued under section 200A(1) of the Act is appealable order before the CIT(A) under section 246A(1)(a) of the Act, then such appealable order passed by the CIT(A) under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7/2016(para-36). Even if two views are possible/available, as per the decision from Hon ble Apex Court in the case of Vegetable Products (88 ITR 192)(SC), the view, which favors the assessee has to be followed. The issue before the Hon ble Bombay High Court in the case of Rashmikant Kundalia (supra) was with respect to constitution validity of the section introduced by Finance Act, 2015 w.e.f. 01/06/2015 but was not abreast of the applicability of section 234E of the Act by the AO while processing TDS statement. So far as, the Hon ble Karnataka High Court is concerned, it was held that intimation raising demand prior to 01/06/2015, u/s 200A of the Act, levying fee u/s 234E, is not valid . Considering the aforesaid decision of the coordinate Bench, we hold that amendment in section 200A(1) of the Act is procedural in nature, therefore, the AO while processing the TDS statements, returns in the present set of appeals of the period prior to 01/06/2015, was not empowered to charge fee u/s 234E of the Act, hence, the intimation issued by the Assessing Officer u/s 200A of the Act, in the appeals before us, does not stand, therefore, the demand raised by way of char ..... X X X X Extracts X X X X X X X X Extracts X X X X
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