Income Tax Appellate Tribunal - Amritsar
M/S Mgn Khalsa High School , Jalandhar vs Assistant Commissioner Of Income Tax ... on 25 July, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH, AMRITSAR
BEFORE SH. VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND
SH. N.K.CHOUDHRY, JUDICIAL MEMBER
ITA No.16, 17 & 18/Asr/2019
Assessment Year: 2013-14 & 2014-15
M/s M.G.N Khalsa High School, Vs. ACIT CPC CELL- TDS
Kapurthala Road, Basti Bawa Aaykar Bhawan, Sector-3,
khel, Jalandhar. Distt. Jalandhar 144001, Vaishali, Ghaziabad,
[PAN:AABAM5691H] U.P. 201010
(Appellant) (Respondent)
Appellant by: Sh. P. N. Arora (Adv.)
Respondent by: Sh. M. P. Singh (CIT DR)
Date of hearing: 14.06.2019
Date of pronouncement: 25.07.2019
ORDER
PER: VIKRAM SINGH YADAV, A.M. These are three appeals filed by the assessee against the individual orders of ld. CIT(A)-1, Jalandhar dated 22.11.2018 for the Assessment Year 2013-14 & 2014-15. Since the common issue is involved, all these appeals were heard together and are disposed off by this consolidated order.
2. During the course of hearing, the ld. AR submitted that in all the three appeals, the only issue involved is whether the fee as prescribed u/s 234E could be levied in intimation u/s 200A for the default in furnishing e-TDS statement for the period prior to 1st June, 2015.
2.1 It was submitted that Amritsar Bench of the ITAT has decided this issue in the case of Sibia Healthcare Private Limited Vs. DCIT(TDS) in ITA No.90/Asr/2015 vide order dated June 09, 2015 & according to the findings 2 ITA No. 16, 17 & 18 /Asr/2019 M/s MGN Khalsa High School, Jalandhar vs. ACIT, CPC Cell-TDS, Ghaziabad of the ITAT, prior to 1st June, 2015, there was no enabling provisions therein for raising a demand in respect of levy of fees u/s 234E & levy of fees u/s 234E was beyond the scope of permissible adjustments contemplated u/s 200A.
2.2 It was further fairly submitted by the ld AR that there is no Judgment of Hon'ble Punjab & Haryana High Court on this issue. However, Hon'ble Karnataka High Court in the case of Fatheraj Singhvi vs. Union of India (2016) 73 taxmann.com 252 had laid down a clear proposition that the amendment to section 200A w.e.f. 1-6-2015 has prospective effect and is not applicable for the period of respective assessment years prior to 1-6- 2015. The Hon'ble High Court has held that where the impugned notices given by Revenue department u/s 200A were for the period prior to 1-6- 2015, then the same were illegal and invalid. It was also brought to the notice of the Bench that the Hon'ble Gujarat High Court in the case of Rajesh Kourani v. Union of India (2017) 83 taxmann.com 137/249 Taxman 402 had differed from the view taken by the High Court of Karnataka in the case of Fatheraj Singhvi v. UOI (2016) 73 taxmann.com 252 and held that it was always open for the Revenue to charge fees in terms of section 234E of the Act since, the returns of TDS were filed after 2016 and were processed after 2016 when there was enabling provision in section 200A of the Act for levying late fees u/s 234E of the Act, late filing fees levied by AO was upheld by CIT (A).
2.3 It was further submitted that the Pune Bench of the Tribunal in its order dated 25.10.2018 in the case of Medical Superintendent Rural Hospital, DOBI BK vs. DCIT, CPC (TDS), Gaziabad [2018] 100 taxmann.com 78 (Pune-Trib.) has held that since amendment to section 200A with effect from 1-6-2015 is prospective in nature, Assessing Officer while processing TDS returns for period prior to 1-6-2015 was not empowered to charge fees 3 ITA No. 16, 17 & 18 /Asr/2019 M/s MGN Khalsa High School, Jalandhar vs. ACIT, CPC Cell-TDS, Ghaziabad under section 234E by way of intimation issued under section 200A in respect of defaults before 1-6-2015. It has been further held in the above said Judgement of the Pune bench that where there is difference of opinion between different High Courts on an issue, then the one in favour of assessee needs to be followed as held by the Hon'ble Supreme Court in Vegetable Products Ltd. (supra), in the absence of any decision rendered by the jurisdictional High Court. Para No.17 of this judgment is reproduced below for the sake of quick reference:-
"Before parting, we may also refer to the order of CIT(A) in relying on the decision of Hon'ble High Court of Gujarat in Rajesh Kourani (supra). On the other hand, the learned Authorized Representative for the assessee has pointed out that the issue is settled in favour of assessee by the Hon'ble High Court of Karnataka in the case of Fatheraj Singhvi (supra). Since we have already relied on the said ratio laid down by the Hon'ble High Court of Karnataka, the CIT(A) has mis-referred to both decisions of Hon'ble High Court of Karnataka and Hon'ble High Court of Gujarat; but the CIT(A) has failed to take into consideration the settled law that where there is difference of opinion between different High Courts on an issue, then the one in favour of assessee needs to be followed as held by the Hon'ble Supreme Court in Vegetable Products Ltd.(supra), in the absence of any decision by the jurisdictional High Court. The Hon'ble Bombay High Court in Rashmikant Kundalia v. Union of India [2015] 54 taxmann.com 200 had decided the constitutional validity of provisions of section 234E of the Act and had held them to be ultra vices but had not decided the second issue of amendment brought to section 200A of the Act w.e.f.
01.06.2015. In view thereof, respectfully following the ratio laid down by the Hon'ble High Court of Karnataka and Pune Bench of Tribunal in series of cases, we delete the late filing fees charged under section 4 ITA No. 16, 17 & 18 /Asr/2019 M/s MGN Khalsa High School, Jalandhar vs. ACIT, CPC Cell-TDS, Ghaziabad 234E of the Act for the TDS returns for the period prior to 01.06.2015."
2.4 It was further submitted that the issue is covered by the orders of the Pune bench in the case of ITAT Maharashtra Cricket Association v. Dy. CIT [2016] 74 taxmann.com 6 (Pune-Trib.) & Vidya Vardhani Education & Research Foundation v. Dy. CIT [2017] 88 taxmann.com 894 (Pune-Trib.) 2.5 It was accordingly submitted that in view of the above stated facts & law since there is no judgment of Hon'ble Punjab & Haryana High Court on this issue but the Hon'ble Karnataka High Court and Pune Bench of the ITAT & Jurisdictional Bench have decided this issue in favour of the assessee, the case of the assessee is covered by the Judgment of Hon'ble Supreme Court in the case of Vegetable Products Ltd. [1973] 88 ITR 192 (SC) in which it has held that when there is difference of opinion between different courts on an issue, then the one in favour of the assessee needs to be followed. This principle of law has also been followed by the Hon'ble Supreme Court in the case of Petron Engg. Construction (P.) Ltd. & Anr. v. CBDT & Ors. [1988] 75 CTR (SC): [1989] 175 ITR 523 (SC).
2.6 It is further submitted that the levy of fee u/s 234E is illegal and is not called for and is supported by the following decisions of ITAT, Amritsar Bench, Amritsar:-
• G S S S Hari Ke Kalan ICT Society vs. DCIT (tds) Ghaziabad in ITA No. 103/Asr/2015, order dated 09/06/2015 relating to Assessment Year 2013-14.
• Dabra vs. DCIT (tds) Ghaziabad in ITA No. 100 & 101/Asr/2015, order dated 09/06/2015 relating to Assessment Year 2014-15.5 ITA No. 16, 17 & 18 /Asr/2019
M/s MGN Khalsa High School, Jalandhar vs. ACIT, CPC Cell-TDS, Ghaziabad
3. The ld DR is heard who has relied on the order of the Hon'ble Gujarat High Court in case of Rajesh Kourani (Supra). Further, he supported the findings of the lower authorities.
4. We have heard the rival contentions and purused the material available on record.
5. In case of Gita Star Hotels & Resorts Private Ltd., Jaipur vs. DCIT, CPC, TDS, Ghaziabad (in ITA No. 14/JP/2017 dated 29.10.2018) where, one of us was a member of the Bench, it was held as under:
"8. We have heard the rival contentions and perused the material available on record. In the present case, the undisputed facts are that the assessee filed its TDS return (Form 26Q) for the fourth quarter of financial year 2012-13 on 26.12.2012 and the same was processed and intimation under section 200A was issued vide order dated 15.12.2013 much prior to the amendment to section 200A of the Act w.e.f. 1.6.2015 empowering the Assessing officer levying the fees under section 234E of the Act. It is therefore not a case of continuing default where the assessee has defaulted in furnishing the TDS statement even after 1.6.2015 and thereafter, the demand for payment of fees under section 234E has been raised by the Assessing officer. In case of Fatheraj Singhvi (supra), the Hon'ble Karnataka High Court has held that the provisions of amended section 200A are prospective in nature. Further, the decision of the Hon'ble Rajasthan High Court in case of M/s. Dundlod Shikshan Sansthan and Others (supra) as relied by ld. CIT (A) is in the context of validity of section 234E, but not in the context of power of AO for levy of fee under section 234E prior to 1.6.2015. In view of the above, the Assessing Officer 6 ITA No. 16, 17 & 18 /Asr/2019 M/s MGN Khalsa High School, Jalandhar vs. ACIT, CPC Cell-TDS, Ghaziabad while processing the TDS statements for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted."
6. In the aforesaid decision, the TDS return (Form 26Q) for the fourth quarter of financial year 2012-13 was filed by the assessee on 26.12.2012 and the same was processed and intimation under section 200A was issued on 15.12.2013 much prior to the amendment to section 200A of the Act w.e.f. 1.6.2015 empowering the Assessing officer levying the fees under section 234E of the Act. In that factual background, it was held that it was not a case of continuing default where the assessee has defaulted in furnishing the TDS statement even after 1.6.2015 and therefore, the demand for payment of fees under section 234E was deleted.
7. Subsequently, in another case in case of M/s Ajmer Thermotech Pvt. Ltd. vs ACIT, CPC, TDS, Ghaziabad (in ITA No. 763/JP/2017 dated 23.01.2019 where, one of us was a member of the Bench, it was held as under:
"8. In the instant case, the assessee filed its TDS return in Form No. 24Q for the quarter ended 31st March, 2015 on 12th September, 2015 and the same was processed and an intimation dated 18th September, 2015 was issued by the AO u/s 200A of the Act. Thus, both the filing of the return of income by the 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 Act. Even though the quarterly return pertains to quarter ended 31.3.2015, the fact remains that there is a continuing default even after 1.6.2015 and the return was actually filed on 12.09.2015. The said provisions cannot be read to say 7 ITA No. 16, 17 & 18 /Asr/2019 M/s MGN Khalsa High School, Jalandhar vs. ACIT, CPC Cell-TDS, Ghaziabad 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 of income even pertaining to the period prior to 1.06.2015, he can be absolved from such levy even though there is a continuous default on his part even after 1.6.2015. In our view, 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 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 under 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 the TDS return which is 12.09.2015 and the balance fee so levied is hereby deleted. In the result, the ground of appeal is partly allowed."
8. In light of aforesaid two decisions, what need to be examined in the instant case is the time of the filing of the TDS returns and whether it is a case of continued default even after the period starting 1.6.2015 empowering the Assessing officer to levy the fees under section 234E of the Act. The undisputed 8 ITA No. 16, 17 & 18 /Asr/2019 M/s MGN Khalsa High School, Jalandhar vs. ACIT, CPC Cell-TDS, Ghaziabad facts which are emerging from the records is that the TDS return (Form 24Q) for the 4th quarter of financial year 2012-13 was filed by the assessee on 31.05.2013 and the same was processed and intimation under section 200A was issued on 18.08.2013 much prior to the amendment to section 200A of the Act w.e.f. 1.6.2015. Similarly, in respect of appeal no. 17/ASR/19, the TDS return (Form 24Q) for the 2nd quarter of financial year 2013-14 was filed by the assessee on 07.03.2014 and the same was processed and intimation under section 200A was issued on 15.03.2014. Similarly, in respect of appeal no. 18/ASR/19, the TDS return (Form 24Q) for the 3rd quarter of financial year 2013-14 was filed by the assessee on 07.03.2014 and the same was processed and intimation under section 200A was issued on 15.03.2014. We therefore find that though there has been a delay in filing of TDS returns, however, in all these cases, the TDS return has been filed and processed much before 1.6.2015 and none of the three cases involved a case of continuing default where the assessee has defaulted in furnishing the TDS statement even after 01.06.2015.
9. Further, in view of the settled law that where there is difference of opinion between different High Courts on an issue, then the one in favour of assessee needs to be followed as held by the Hon'ble Supreme Court in Vegetable Products Ltd.(supra). In the absence of any decision by the jurisdictional High Court, the decision of the Hon'ble Karnataka High Court supports the case of the assessee.
10. In light of above discussion and in the entirety of facts and circumstances of the case, there is no basis for levy of fees under section 234E and the same is hereby directed to be deleted in all three cases.
In the result, all the three appeals filed by the assessee are allowed.
9 ITA No. 16, 17 & 18 /Asr/2019M/s MGN Khalsa High School, Jalandhar vs. ACIT, CPC Cell-TDS, Ghaziabad Order pronounced in the open Court on 25.07.2019.
Sd/- Sd/-
(N.K.CHOUDHRY) (VIKRAM SINGH YADAV)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 25.07.2019
Ganesh Kr. PS
Copy of the order forwarded to:
(1) M.G.N Khalsa High School, Jalandhar, Punjab
(2) The ACIT CPC Cell-TDS, Ghaziabad, U. P
(3) The CIT(A)-1, Jalandhar
(4) The CIT concerned
(5) The SR DR, I.T.A.T., Amritsar
True copy
By order
10 ITA No. 16, 17 & 18 /Asr/2019
M/s MGN Khalsa High School, Jalandhar vs. ACIT, CPC Cell-TDS, Ghaziabad Date Initial Draft dictated on PS/Sr. PS
1.
Draft placed before author PS/Sr. PS
2.
3. Draft proposed & placed before the JM/AM
second member
4. Draft discussed/approved by Second JM/AM
Member.
5. Approved Draft comes to the Sr. PS/Sr. PS
PS/PS
6. Kept for pronouncement on PS/Sr. PS
7. File sent to the Bench Clerk PS/Sr. PS
Date on which file goes to the Head
8.
Clerk.
9. Date on which file goes to the AR
10. Date of dispatch of Order