Income Tax Appellate Tribunal - Ahmedabad
Nimaben Rameshbhai Thakkar,, ... vs Dy.Commissioner Of Income ... on 4 January, 2018
ITA No. 3111/Ahd/2015
Nim aben Rameshbhai Thakkar Vs. DCIT
Assessment Year : 2014-15
Page 1 of 8
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "B" BENCH, AHMEDABAD
[Coram: Pramod Kumar AM and S S Godara JM]
ITA No. 3111/Ahd/2015
Assessment Year: 2014-15
Nimaben Rameshbhai Thakkar .........................Appellant
B-201, Poojan Apartment,
Opp. Seema Hall, 100 Ft Ring Road,
Satellite, Ahmedabad-380015
[PAN : ACHPT 7031 K]
Vs.
The Dy. Commissioner of Income-tax .......................Respondent
TDS, Ghaziabad (UP)
Appearances by:
Rupesh R Shah for the Appellant
Mudit Nagpal for the Respondent
Date of concluding the hearing : 01.01.2018
Date of pronouncing the order : 04.01.2018
O R D E R
Per Pramod Kumar, AM:
1. By way of this appeal, the assessee-appellant has challenged correctness of the order dated 4th September 2015 passed by the by the CIT(A)-8, Ahmedabad, in the matter of levy of late filing fees under section 234E, in the course of processing under section 200A of the Income-tax Act, 1961, for the assessment year 2014-15.
2. The grievances raised by the assessee are as follows:-
"1. The ld. CIT(A)-8, Ahmedabad has erred in law and on the facts of the case in confirming the action of DCIT, TDS, CPC, Ghaziabad for levy of late filing fee u/s 234E through the order of intimation u/s 200A of IT Act, 1961 before 01.06.2015 without jurisdiction and not permissible either in law or on fact. The present proceedings, therefore, are required to be quashed.
2. The ld. CIT(A)-8, Ahmedabad has erred in law and on the facts of the case in confirming the action of ld. DCIT, TDS, CPC, Ghaziabad while passing the orders without properly appreciating the fact and that she further erred in grossly ignoring various submissions, explanations and ITA No. 3111/Ahd/2015 Nim aben Rameshbhai Thakkar Vs. DCIT Assessment Year : 2014-15 Page 2 of 8 information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of both the authorities is in clear breach of law and principles of natural justice and therefore deserves to be quashed."
2. There is no dispute that the issue in appeal is covered, in favour of the assessee, by a series of decisions of the Tribunal, including lead order in the case of Sibia Healthcare Private Limited Vs. DCIT, [2015] 46 ITR (Trib) 453], wherein it is held that prior to 1st June 2015, the levy of late filing fees under section 234E could not have been effected in the course of intimation under Section 200A of the Act. Learned CIT(A) has duly noted this fact, but then she has gone on an elaborate analysis of the legal position and has come to a different conclusion. Learned CIT(A) has held that the amendment to section 200A with effect from 1st June 2015 is retrospective in effect. She has thus justified levy of late filing fees under section 234E in the course of processing under section 200A of the Act, even before the amendment of section 200A with effect from 1st June 2015. The stand of the Assessing Officer was thus upheld and the grievance of the assessee thus rejected. The assessee is not satisfied and is in appeal before us.
3. 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.
4. We find that the issue in appeal is covered by larger number of decisions, including several decisions of Ahmedabad benches of this tribunal in favour of the assessee. These decisions categorically hold that the amendment brought about in section 200A with effect from 1st June 2015 and by virtue of Finance Act, 2015 is prospective in effect and it cannot apply to the period prior to 1st June 2015. While holding so, one of the coordinate benches, in the case of Sibia Healthcare Private Limited (supra), has held as follows:-
"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 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.ITA No. 3111/Ahd/2015
Nim aben Rameshbhai Thakkar Vs. DCIT Assessment Year : 2014-15 Page 3 of 8
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
(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 200and section 201, and any amount paid otherwise by way of tax or interest;ITA No. 3111/Ahd/2015
Nim aben Rameshbhai Thakkar Vs. DCIT Assessment Year : 2014-15 Page 4 of 8
(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 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 subsection.
7. By way of Finance Act 2015, and with effect from 1st June 2015, there is an amendment inSection 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.ITA No. 3111/Ahd/2015
Nim aben Rameshbhai Thakkar Vs. DCIT Assessment Year : 2014-15 Page 5 of 8
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 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 the 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)
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 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."
ITA No. 3111/Ahd/2015Nim aben Rameshbhai Thakkar Vs. DCIT Assessment Year : 2014-15 Page 6 of 8
5. We find that, rather than respectfully following the binding judicial precedent, the CIT(A) has embarked upon a detailed analysis to write antithesis of the binding judicial precedent. These heroics are completely out of place; once a higher tier of the judicial hierarchy expressed the views on a particular subject and unless the views so expressed are specifically reversed or overruled by an even higher judicial forum, the lower tier of the judicial hierarchy must follow the same. Learned CIT(A)'s action in seeking to distinguish the binding judicial precedent, on the basis of what she perceives as "proper analysis of legal position", is an act of judicial indiscipline. We cannot approve and endorse the same. As laid down by the apex Court in the case of Ambika Prasad Mishra vs. State of UP, AIR 1980 SC 1762 : (1980) 3 SCC 719 [p. 1764 of AIR 1980 (SC)], "Every new discovery nor argumentative novelty cannot undo or compel reconsideration of a binding precedent......A decision does not lose its authority 'merely because it was badly argued, indequately considered or fallaciously reasoned...." Similarly in the case of Kesho Ram & Co. vs. Union of India (1989) 3 SCC 151, it was stated by the Supreme Court thus :'The binding effect of a decision of this Court does not depend upon whether a particular argument was considered or not, provided the point with reference to which the argument is advanced subsequently was actually decided in the earlier decisions.....'. When such are the views of highest court, the exercise resorted to by the CIT(A) was clearly unwarranted. We are also reminded of Hon'ble Supreme Court's observations in the case of Asstt. Collector of Central Excise vs. Dunlop India Ltd,. (1985) 154 ITR 172 (SC), where the Hon'ble Supreme Court itself has quoted from the decision of House of Lords as under:
"We desire to add and as was said in Cassell & Co. Ltd. v. Broome (1972) AC 1027 (HL), we hope it will never be necessary for us to say so again that "in the hierarchical system of Courts" which exists in our country, "it is necessary for each lower tier", including the High Court, "to accept loyally the decision of the higher tiers". "It is inevitable in hierarchical system of Courts that there are decisions of the Supreme appellate Tribunal which do not attract the unanimous approval of all members of the judiciary... But the judicial system only works if someone is allowed to have the last word, and that last word, once spoken, is loyally accepted. "...The better wisdom of the Court below must yield to the higher wisdom of the Court above. That is the strength of the hierarchical judicial system."
6. We wish and hope that learned CIT(A) takes note of these observations of Hon'ble Supreme Court and permits her better wisdom to yield the higher wisdom of the Income Tax Appellate Tribunal, which is placed higher in the judicial hierarchy vis-a-vis the CIT(A).
7. Having said that, we may also add that the reasoning of the learned CIT(A) is based on the proposition that the amendment brought about by the Finance Act, 2015 is a curative amendment and therefore, it is retrospective in effect. In coming to this conclusion, she has been guided by the decision in the case of Rajeev Kumar ITA No. 3111/Ahd/2015 Nim aben Rameshbhai Thakkar Vs. DCIT Assessment Year : 2014-15 Page 7 of 8 Agarwal Vs. Addl. CIT, [(2014) 34 ITR (Trib) 479], which is now approved by Hon'ble Delhi High Court in the case of CIT vs. Ansal Land Mark Township (P) Ltd, (2015) 377 ITR 635 (Del), wherein insertion of second proviso to section 40(a)(ia) was held to be retrospective in effect but what she missed out in the process was that it is only elementary that when a legislation confers a benefit on the taxpayer by relaxing the rigour of pre-amendment law, and when such a benefit appears to have been the objective pursued by the legislature, it would a purposive interpretation giving it a retrospective effect but when a tax legislation imposes a liability or a burden, the effect of such a legislative provision can only be prospective. In Hon'ble Supreme Court's five-Judge Constitution Bench's landmark judgment, in the case of CIT vs. Vatika Townships (P) Ltd. (2014) 271 CTR (SC) 1 : (2014) 109 DTR (SC) 33 : 2014 TIOL 78 SC, the legal position in this regard has been very succinctly summed up by observing that "if a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, and where to confer such benefit appears to have been the legislators object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect". Hon'ble Supreme Court has observed that "This (the foregoing analysis) exactly is the justification to treat procedural provisions as retrospective". Their Lordships then further observed that, "In Government of India & Ors. vs. Indian Tobacco Association (2005) 7 SCC 396 the doctrine of fairness was held to be relevant factor to construe a statute conferring a benefit, in the context of it to be given a retrospective operation" and that "The same doctrine of fairness, to hold that a statute was retrospective in nature, was applied in the case of Vijay vs. State of Maharashtra & Ors. (2006) 6 SCC 286. It was held that where a law is enacted for the benefit of community as a whole, even in the absence of a provision the statute may be held to be retrospective in nature." Their Lordships also noted that this retrospectivity being attached to benefit the persons, is in sharp contrast with the provision imposing some burden or liability where the presumption attaches towards prospectivity. Given this unambiguous legal position, settled by an authority no less than Hon'ble Supreme Court, the amendment in section 200A w.e.f. 1st June 2015, in our humble understanding cannot be retrospective in effect. We reject the stand of the CIT(A) on merits as well.
8. In view of these discussions, as also bearing in mind entirety of the case, we uphold the grievance of the assessee and delete the impugned levy of late filing fee u/s 234E of Rs.39,200/-.
9. In the result, appeal of the assessee is allowed Pronounced in the open court today on the 04th day of January, 2018.
Sd/- Sd/- S S Godara Pramod Kumar (Judicial Member) (Accountant Member) Ahmedabad, the 4th day of January, 2018 *bt ITA No. 3111/Ahd/2015 Nim aben Rameshbhai Thakkar Vs. DCIT Assessment Year : 2014-15 Page 8 of 8 Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad
1. Date of dictation: ......4 pages dictation pad, as dictated by Hon'ble AM, is attached ... 02.01.2018
2. Date on which the typed draft is placed before the Dictating Member: 02.01.2018......
3. Date on which the approved draft comes to the Sr. P.S./P.S.: ..04.01.2018......
4. Date on which the fair order is placed before the Dictating Member for Pronouncement: ... 04.01.2018.
5. Date on which the file goes to the Bench Clerk : ... 05.01.2018...................
6. Date on which the file goes to the Head Clerk : ..................................
7. The date on which the file goes to the Assistant Registrar for signature on the order: ..........................
8. Date of Despatch of the Order: ........................