HP AGRO INDUSTRIES CORP. LTD.,PARWANOO vs. ACIT, CPC (TDS), VAISHALI

आदेश/Order

Per R.L. Negi, Judicial Member:

The assessee has filed the present appeal against the order dated 15.06.2018 passed by Commissioner of Income Tax (Appeals), Shimla [for short ’the CIT(A)’] for the assessment year 2015-16, whereby the Ld. CIT(A) has allowed the appeal filed by the assessee against the assessment order passed u/s 234E of the Income Tax Act, 1961 [for short ’the Act’].

ITA No. 1072-Chd/2018- M/s H.P. Agro Industries Corporation Ltd, Parwanoo 2 which was due on 15.07.2014. However, the assessee paid the TDS

amount in full along with interest thereon. The Assistant Commissioner

Centralized Processing Cell, TDS passed order dated 04.09.2015 inter

alia imposing late fee of Rs. 50,000/- for late filing of TDS return. The

assessee challenged the said order before the Ld. CIT(A) inter alia on

the grounds that the order u/s 234E is bad in law; that since the TDS

was deposited along with interest no loss was caused to the department;

and that the assessee being a public sector undertaking of the govt. had

no intention for late filing of TDS return. However, the Ld. CIT(A)

rejecting the contention of the assessee upheld the action of the

Assistant Commissioner and dismissed the appeal filed by the assessee.

Against the said findings of the Ld. CIT(A) the assessee is in appeal

before this Tribunal.

CIT(A) on the following grounds: - 1. That authorities below ought to have considered that due date for filing TDS return was 15.07.2014 for the period between 01.04.2014 to 30.06.2014 and amendment of section 200A(1) (c ) of Income Tax Act come into force on 01.06.2015. Therefore law applicable prior to should have applied while deciding case of appellant alternatively. 2. That the authorities below erred in not considering the Judgment passed by Hon'ble IT.AT. Amritsar Bench in the case of Sibia Health Care Pvt. Ltd vs. Dy. Commissioner of Income Tax (TDS), wherein it was held that late fee should not have been imposed. The appellant is also relying on Judgment and order passed by Hon'ble ITAT, Mumbai in ITA no.

ITA No. 1072-Chd/2018- M/s H.P. Agro Industries Corporation Ltd, Parwanoo 3 1999/mum of 2017, titled as "board of control for Cricket board in India Vs.ACIT-TDS-2 Mumbai". 3. The authorities below ought to have considered that the delay in filing of TDS statement was due to inadvertent bona fide mistake, occurred due to frequent changing of officers who was managing the accounts of appellant. 4. The above grounds are independent and without prejudice to one another. The appellants seek leave to add or withdraw any of the aforesaid grounds as and when considered necessary. 5. The above grounds are independent and without prejudice to one another. The appellants seek leave to add or withdraw any of the aforesaid grounds as and when considered necessary.

submitted before us that in the present case the due date for filing

TDS return was 15.07.2014 for the period 01.04.2014 to 30.06.2014.

The amendment of section 200(1)(c) of the Act came into force on

01.06.2015. Therefore, the Ld. CIT(A) ought to have set aside the

order passed by the Assistant Commissioner by applying the law

existing before the amendment. The Ld. Counsel further pointed out

that the issue involved in this case is covered in favour of the

assessee by the decision of the Amritsar Bench of the Tribunal in the

case of Sibia Health Care Pvt. Ltd. vs. Dy. Commissioner of Income

Tax(TDS) ITA No 90/Asr/2014 Ay.2013-14, decision of the Mumbai

Bench of the Tribunal in the case of Board of Control for Cricket in

India vs. ACIT (TDS)-2, ITA No. 1999/Mum/2017, decision of the

Delhi Bench of the Tribunal in the case of Ashok Kumar Ludhiana vs.

ACIT, CPC-TDS Ghaziabad, decisions of the Pune Bench of the

ITA No. 1072-Chd/2018- M/s H.P. Agro Industries Corporation Ltd, Parwanoo 4 Tribunal in the case of Gangamai College and others vs. ACIT, ITA

No.1167/Pun/2018 dated 06.11.2018 and Ganjan Construction

Nashik vs. DCIT CPC (TDS. The Ld. Counsel further submitted that

since the findings of the Ld. CIT(A) are contrary to the decisions of

the Tribunal referred above, the same is liable to be set aside.

supporting the order passed by the Ld. CIT(A) submitted that since

the findings of the Ld. CIT(A) are in accordance with the provisions

of law, there is no infirmity in the said order, therefore no action is

required in this case.

the material on record including the cases relied upon by the

appellant/assessee and the cases relied upon by the authorities below.

The legal issue raised by the appellant/assessee is the Ld. CIT(A) has

wrongly confirmed the order passed by the Assistant Commissioner

by retrospectively applying the amended provisions of section 200A

of the Act, which became applicable w.e.f. 01.06.2015. As pointed

out by the Ld. counsel, the Pune, Mumbai and Delhi Benches of the

tribunal have dealt with the identical issue and held that the

concerned authorities have wrongly applied the amended provisions

of section 200A retrospectively. In the case of Gangamai College vs.

ACIT, (supra) the Pune Bench of the Tribunal has held that the AO

ITA No. 1072-Chd/2018- M/s H.P. Agro Industries Corporation Ltd, Parwanoo

5 had no jurisdiction to issue notices under section 200A of the Act for

computing and charging late filing fees u/s 234E of the Act for the

period of tax deducted prior to first day of June, 2015, by following

the judgment of the Hon’ble High Court in the case of Fatheraj Singhvi

vs. Union of India, wherein in has been held that even in the cases of belated

returns where it is clearly related to the period prior to 01.06.2015.

the AO has no power to issue notice u/s 200A of the Act. The

operative part of the order of the Pune Bench reads as under: -

"11. We have heard the rival contentions and perused the record. The issue arising in the present bunch of appeals is against levy of late filing fees under section 234E of the Act while issuing intimation under section 200A of the Act, in the first bunch of appeals. The second bunch of appeals in the case of Junagade Healthcare Pvt. Ltd. is against order of Assessing Officer passed under section 154 of the Act rejecting rectification application moved by assessee against intimation issued levying late filing fees

ITA No. 1072-Chd/2018- M/s H.P. Agro Industries Corporation Ltd, Parwanoo

6 charged under section 234E of the Act. The case of assessee before us is that the issue is squarely covered by various orders of Tribunal, wherein the issue has been decided in respect of levy of late filing fees under section 234E of the Act, in the absence of empowerment by the Act upon Assessing Officer to levy such fees while issuing intimation under section 200A of the Act. The Tribunal vide order dated 21.09.2016 with lead order in ITA N0s.560/PN/2016 & 561/PN/2016,1018/PN/2016 to 1023/PN/2016 in Maharashtra Cricket Association Vs. DCIT (CPC)-TDS, Ghaziabad, relating to assessment years 2013-14 and 2014-15 for the respective quarters deliberated upon the issue and held as under: -

"34. Accordingly, we hold that the amendment to section 200A(1) of the Act is procedural in nature and in view thereof, the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, the intimation issued by the Assessing Officer under section 200A of the Act in all these appeals does not stand and the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted. The intimation issued by the Assessing Officer was beyond the scope of adjustment provided under section 200A of the Act and such adjustment could not stand in the eye of law."

ITA No. 1072-Chd/2018- M/s H.P. Agro Industries Corporation Ltd, Parwanoo

7 Hospital Vs. ACIT (CPC)-TDS in ITA Nos.2072 & 2073/PUN/2017, order dated 21.12.2017, which has been relied upon by the learned Authorized Representative for the assessee.

"21. However, if Section 234E providing for fee was brought on the state book, keeping in view the aforesaid purpose and the intention then, the other mechanism provided for computation of fee and failure for payment of fee under Section 200A which has been brought about with effect from ITA Nos.1167 to 1171/PUN/2018 Gangamai College of Engineering 1.6.2015 cannot be said as only by way of a regulatory mode or a regulatory mechanism but it can rather be termed as conferring substantive power upon the authority. It is true that, a regulatory mechanism by insertion of any provision made in the statute book, may have a retroactive character but, whether such provision provides for a mere regulatory mechanism or confers substantive power upon the authority would also be an aspect which may be required to be considered before such provisions is held to be retroactive in nature. Further, when any provision is inserted for liability to pay any tax or the fee by way of compensatory in nature or fee independently simultaneously mode and the manner of its enforceability is also required to be considered and examined. Not only that, but, if the mode and the manner is not expressly prescribed, the provisions may also be vulnerable. All such aspects will be required to be considered before one considers regulatory

ITA No. 1072-Chd/2018- M/s H.P. Agro Industries Corporation Ltd, Parwanoo

8 mechanism or provision for regulating the mode and the manner of recovery and its enforceability as retroactive. If at the time when the fee was provided under Section 234E, the Parliament also provided for its utility for giving privilege under Section 271H(3) that too by expressly put bar for penalty under Section 272A by insertion of proviso to Section 272A(2), it can be said that a particular set up for imposition and the payment of fee under Section 234E was provided but, it did not provide for making of demand of such fee under Section 200A payable under Section 234E. Hence, considering the aforesaid peculiar facts and circumstances, we are unable to accept the contention of the learned counsel for respondent-Revenue that insertion of clause (c) to (f) under Section 200A(i) should be treated as retroactive in character and not prospective. 22. It is hardly required to be stated that, as per the well- established principles of interpretation of statute, unless it is expressly provided or impliedly demonstrated, any provision of statute is to be read as having prospective effect and not retrospective effect. Under the circumstances, we find that substitution made by clause (c) to (f) of sub-section (1) of Section 200A can be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand under Section 200A for computation and intimation for the payment of fee under Section 234E could not be made in purported exercise of power under Section 200A by the respondent for the period of the respective assessment year prior to 1.6.2015. However, we make it clear that, if any deductor has already paid the fee after intimation received under Section 200A, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest."

ITA No. 1072-Chd/2018- M/s H.P. Agro Industries Corporation Ltd, Parwanoo

9 14. The Hon'ble High Court thus held that where the impugned notices given by Revenue Department under section 200A of the Act were for the period prior to 01.06.2015, then same were illegal and invalid. Vide para 27, it was further held that the impugned notices under section 200A of the Act were for computation and intimation for payment of fees under section 234E of the Act as they relate for the period of tax deducted at source prior to 01.06.2015 were being set aside.

ITA No. 1072-Chd/2018- M/s H.P. Agro Industries Corporation Ltd, Parwanoo 10 in nature, the Assessing Officer while processing TDS returns / statements for the period prior to 01.06.2015 was not empowered to charge late filing fees under section 234E of the Act, even in cases where such TDS returns were filed belatedly after June, 2015 and even in cases where the Assessing Officer processed the said TDS returns after June, 2015. Accordingly, we hold that intimation issued by Assessing Officer under section 200A of the Act in all the appeals does not stand and the demand raised by charging late filing fees under section 234E of the Act is not valid and the same is deleted.”

legal ground raised by the appellant is covered in favour of the assessee by the order

of the Pune Bench of the Tribunal in the case discussed above. The said decision is

based on the ratio laid down by the Hon’ble High Court of Karnataka in the case of

Fatheraj Singhvi vs. Union of India discussed above. We further notice that the Pune

Bench of the Tribunal has decided the issue in question in the said case following the

ratio laid down by the Hon’ble Supreme Court in the case of CIT vs. Vegetable

Product Ltd., wherein the Hon’ble Court has held that in case of difference of opinion

on an issue, the opinion which is in favour of assessee needs to be followed. Since,

the issue involved in the present case is identical to the issue involved in the case of

Gangamai College vs. ACIT (supra) and the Tribunal has decided the same in favour

of the appellant/ assessee, we find merit in the contention of the Ld. counsel that the

impugned order is contrary to decision of the Pune Bench of the Tribunal discussed

above. Hence, respectfully following the decision of the Pune Bench of the Tribunal

discussed above, we allow the appeal of the assessee and set aside impugned order

ITA No. 1072-Chd/2018- M/s H.P. Agro Industries Corporation Ltd, Parwanoo 11 passed by the Ld. CIT(A). Accordingly, we direct the AO to delete late fee imposed in this case. In the result, the appeal of the assessee is allowed.

Order pronounced on 5 t h July,2021.

Sd/- Sd/- ( N.K. SAINI) (R.L.NEGI) उपा�य� /Vice President �या�यकसद�य/ Judicial Member

Dated : 05.07. 2021 “आर.के.”

आदेशक���त*ल+पअ,े+षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकरआयु-त/ CIT 4. आयकरआयु-त (अपील)/ The CIT(A) 5. +वभागीय��त�न0ध, आयकरअपील#यआ0धकरण, च2डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड�फाईल/ Guard File

आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar