Income Tax Appellate Tribunal - Amritsar
Field Ordence Depot, Bathinda vs Dy. Commissioner Of Income Tax, Uttar ... on 18 May, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR
BEFORE SH. T.S. KAPOOR, ACCOUNTANT MEMBER AND
SH.N.K.CHOUDHRY, JUDICIAL MEMBER
I. T. A. Nos. 420 to 422/(Asr)/2015
Asst. Year: 2014-15
Field Ordenace Depot Vs. The Deputy Commissioner of
C/o 56-APO, Bathinda Income Tax, CPC, TDS Cell,
Cantt. Vaishali, Ghaziabad (U.P.)
Bathinda Cantt.
(Appellant) (Respondent)
Appellant by : None
Respondent by: Rahul Dhawan (Ld. D.R.)
Date of hearing:25.04.2017
Date of pronouncement:18.05.2017
ORDER
PER N. K. CHOUDHRY (JM):
These are three appeals filed by Assessee raised the common issue for consideration therefore; all the three appeals have been taken for consideration conjointly. For the sake of brevity and convenience, the grounds and facts of appeal no. 420/(Asr)2015 have been taken under consideration.
2. The assessee has raised the following grounds of appeal.
"1. That the Learned Commissioner of Income Tax (Appeals), Bathinda, has grossly erred in law and on the facts in confirming the order of the Assessing Officer thereby Charging late filing fees at Rs. 23,800/- u/s 234E of the IT Act, 1961. The worthy CIT(A) has further grossly erred in rejecting the explanation of the assessee without appreciating the facts of the case and without assigning any reason.
2. That the authorities below did not appreciate that intimation u/s 200A of the IT Act, 1961, is not legal and is nonest in the eyes of law as the law stood prior to 1st June 2015, there was no enabling provision therein for raising a demand in respect of levy of fees u/s 234E. The 2 ITA Nos. 420 to 422 (Asr)/2015 Asst. Year: 2014-15 Ld. CIT(A) did not appreciate that on the basis of provisions of section 234E, such a levy could not be effected in the course of intimation u/s 200A prior to 01/06/2015. As such, the order itself passed by the Assessing Officer is illegal, invalid, void abinitio and the same is liable to be cancelled. Similarly, the worthy CIT(A) has grossly erred in confirming the order of the Assessing Officer.
3. Any other ground of appeal which may be urged at the time of hearing of the appeal".
3. It is apparent from the record that there is a delay of 63 days in filing instant appeals and at the time of filing of appeal, no applications have been filed by the assessee. At this stage, one application for condonation of delay has been filed in the name of Ld. Counsel signed by Ld. Counsel and in the application it is submitted that admittedly there is delay of 63 days in filing of the appeals. However, there are genuine circumstances and reasonable cause for filing the appeals as a matter of fact the appeal papers were received in our office (Advocate office) and due to the negligence mistake of our staff members (Advocate staff), these appeals were not filed in time, therefore, there was a reasonable and sufficient cause in filing belated appeals.
4. In the application, it is also written that every day delay cannot be stretched by a pedantic approach if every days has to be explained why not every hours delay, every second delay. In the application, it is written the assessee also relied upon the case of Collector Land Acquisition Vs. MST Kaligi reported 161 ITR 47.
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ITA Nos. 420 to 422 (Asr)/2015 Asst. Year: 2014-15
5. On the other hand, the Ld. DR strongly objected on consideration of request for condonation of delay.
6. We have gone through with the facts and circumstances and before proceeding with the case, we feel it appropriate to deal with the condonation of delay as if reflects that at the time of filing appeal, no such application/prayer have been filed/made at the time of filing appeal by the Assessee of its counsel, even otherwise the assessee failed to file an application for condonation of delay with supporting affidavit from the application is also does not reflect that due to whose negligence the appeals were not filed in time and when the papers have been received in (Advocate office). From the contents of the application, we are unable to understand that what prevented the assessee from filing of an appeal for condonation of delay at the time of filing appeal in October, 2015. The Apex Court reminded that sufficient cause in this context should be interpreted in legal and reasonable manner so as to advance the cause of justice, however, considering the facts and circumstances of the instant case, we do not find any sufficient cause because the assessee has failed to substantiate their claim or condonation of delay. It is universal law that latches cannot be allowed to sub-serve the defaulter, however, considering the peculiar facts and circumstances of the case as it appears to be sound on merit, therefore, in the interest of justice and 4 ITA Nos. 420 to 422 (Asr)/2015 Asst. Year: 2014-15 to sub-serve the principle of natural justice, we are inclined condone the delay of appeals.
7. Now let us proceed with the merits of the case from the application filed by the Ld. Counsel, it engaged that the assessee is relied upon the order of Co-ordination Bench of ITAT, Amritsar passed in 'Sibia Health Care Private Ltd.' In ITA No. 90/(Asr) 2015, which has been further followed by Amritsar Bench in various case.
8. On the other hand, the Ld. DR heavily relied upon the order passed by the authorities below.
9. We have gone through with the facts and circumstances and also rival submissions of the parties, we feel it appropriate to reproduce the operative part of the order passed by the Co-ordination Bench in the aforesaid case of Sibia Health Care Private Ltd.(supra).
"4. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. In addition to his argument on the merits, learned counsel has also invited our attention to the reports about the decisions of various Hon'ble High Courts, including Hon'ble Kerala High Court, in the case of Narath Mapila LP School Vs Union of India [WP (C) 31498/2013(J)], Hon'ble Karanataka High Court in the case of Adithya Bizor P Solutions Vs Union of India [WP No. 6918-
6938/2014(T-IT), Hon'ble Rajasthan High Court in the case of Om Prakash Dhoot Vs Union of India [WP No. 1981 of 2014] and of Hon'ble Bombay High Court in the case of Rashmikant Kundalia Vs Union of India [WP No. 771 of 2014], granting stay on the demands raised in respect of fees under section 234E. The full text of these decisions were not produced before us. However, as admittedly there are no orders from the Hon'ble Courts above retraining us from our 5 ITA Nos. 420 to 422 (Asr)/2015 Asst. Year: 2014-15 adjudication on merits in respect of the issues in this appeal, and as, in our humble understanding, this appeal requires adjudication on a very short legal issue, within a narrow compass of material facts, we are proceeding to dispose of this appeal on merits.
5. We may produce, for ready reference, section 234E of the Act, which was inserted by the Finance Act 2012 and was brought into effect from 1st July 2012. This statutory provision is as follows:
234E. Fee for defaults in furnishing statements (1) Without prejudice to the provisions of the Act, where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to subsection (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 sub-section (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.
6. We may also reproduce the Section 200A which was inserted by the Finance Act 2009 with effect from 1st April 2010. This statutory provision, as it stood at the relevant point of time, was as follows:
200A: Processing of statements of tax deducted at source (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 this section as deductor) under section 200, such statement shall be processed in the following manner, namely:--
(a) the sums deductible under this Chapter shall be computed after making the following adjustments, namely:--
(i) any arithmetical error in the statement; or 6 ITA Nos. 420 to 422 (Asr)/2015 Asst. Year: 2014-15
(ii) an incorrect claim, apparent from any information in the statement;
(b) the interest, if any, shall be computed on the basis of the sums deductible as computed in the statement;
(c) the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of amount computed under clause
(b) against any amount paid under section 200 and section 201, and any amount paid otherwise by way of tax or interest;
(d) an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, him under clause (c); and
(e) the amount of refund due to the deductor in pursuance of the determination under clause (c) shall be granted to the deductor:
Provided that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the statement is filed.
Explanation : For the purposes of this sub-section, "an incorrect claim apparent from any information 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 centralized 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 subsection.7
ITA Nos. 420 to 422 (Asr)/2015 Asst. Year: 2014-15
7. By way of Finance Act 2015, and with effect from 1st June 2015, there is an amendment in Section 200A and this amendment, as stated in the Finance Act 2015, is as follows:
In section 200A of the Income-tax Act, in sub-section (1), for clauses (c) to (e), the following clauses shall be substituted with effect from the 1st day of June, 2015, namely:--
"(c) the fee, if any, shall be computed in accordance with the provisions of section 234E;
(d) the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of the amount computed under clause (b) and clause (c) against any amount paid under section 200 or section 201 or section 234E and any amount paid otherwise by way of tax or interest or fee;
(e) an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, him under clause (d); and
(f) the amount of refund due to the deductor in pursuance of the determination under clause (d) shall be granted to the deductor.
8. In effect thus, post 1st June 2015, in the course of processing of a TDS statement and issuance of intimation under section 200A in respect thereof, an adjustment could also be made in respect of the "fee, if any, shall be computed in accordance with the provisions of section 234E". There is no dispute that what is impugned in appeal before us is the intimation under section 200A of the Act, as stated in so many words in the impugned intimation itself, and, as the law stood, prior to 1st June 2015, there was no enabling provision therein for raising a demand in respect of levy of fees under section 234E. While examining the correctness of the intimation under section 200A, we have to be guided by the limited mandate of Section 200A, which, at the relevant point of time, permitted computation of amount I.T.A. No.90 /Asr/2015 Assessment year 2013-14 Page 6 of 7 recoverable from, or payable to, the tax deductor after making the following adjustments:
(a). after making adjustment on account of "arithmetical errors" and "incorrect claims apparent from any information in he statement" -
-Section 200A(1)(a)
(b). after making adjustment for 'interest, if any, computed on the basis of sums deductible as computed in the statement". -
-Section 200A(1)(b) 8 ITA Nos. 420 to 422 (Asr)/2015 Asst. Year: 2014-15
9. No other adjustments in the amount refundable to, or recoverable from, the tax deductor, were permissible in accordance with the law as it existed at that point of time.
10. In view of the above discussions, in our considered view, the adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A. This intimation is an appealable order under section 246A(a), and, therefore, the CIT(A) ought to have examined legality of the adjustment made under this intimation in the light of the scope of the section 200A. Learned CIT(A) has not done so. He has justified the levy of fees on the basis of the provisions of Section 234E. That is not the issue here. The issue is whether such a levy could be effected in the course of intimation under section 200A. The answer is clearly in negative. No other provision enabling a demand in respect of this levy has been pointed out to us and it is thus an admitted position that in the absence of the enabling provision under section 200A, no such levy could be effected. As intimation under section 200A, raising a demand or directing a refund to the tax deductor, can only be passed within one year from the end of the financial year within which the related TDS statement is filed, and as the related TDS statement was filed on 19th February 2014, such a levy could only have been made at best within 31st March 2015. That time has already elapsed and the defect is thus not curable even at this stage. In view of these discussions, as also I.T.A. No.90 /Asr/2015 Assessment year 2013-14 Page 7 of 7 bearing in mind entirety of the case, the impugned levy of fees under section 234 E is unsustainable in law. We, therefore, uphold the grievance of the assessee and delete the impugned levy of fee under section 234E of the Act. The assessee gets the relief accordingly."
10. On the aforesaid consideration of the order (supra) and factual position of the instant case, it is clear that the instant appeals related to the period before 1st June, 2015, therefore, respectfully following 9 ITA Nos. 420 to 422 (Asr)/2015 Asst. Year: 2014-15 the order of the Co-ordination Bench dated 9th June, 2015 in the case of Sibia Health Care Private Ltd. (supra). We feel it appropriate to allow the appeals filed by the assessee.
11. In the result, the appeals filed by the assessee are allowed.
Order pronounced in the open Court on 18.05.2017.
Sd/- Sd/-
(T. S. KAPOOR) (N. K. CHOUDHRY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated:18.05.2017
/PK/PS.
Copy of the order forwarded to:
(1) The Assessee:
(2) The
(3) The CIT(A),
(4) The CIT,
(5) The SR DR, I.T.A.T.,
True copy
By Order