SHREE KALYAANEE KRRSNA BUILDERS,MUMBAI vs. TDS-CPC , UTTER PRADESH

आदेश / O R D E R Per N K Choudhry, Judicial Member: The Assessee/Appellant herein has preferred these appeals against the orders dated 01-12-2022 and 13-12-2022, impugned herein passed by Ld. Commissioner of Income Tax {in short „Ld. Commissioner‟} u/s 250 of the Income Tax Act 1961 (in short „the Act‟) for AY 2013-14.

2 I.T.A. No. 361 to 364/Mum/2023 Shree Kalyaanee Krrsna Builders 2. The factual details relevant for adjudication of appeals under consideration are as under:

ITA Intimation For the Amount Date of Days of Impugned Result of no. u/s 200A period of late fee appeal Delay order impugned order of the Act levied in filed occurred in dated Rs. before filling of Ld. appeals CIT(A) before ld. CIT(A) 361 04.09.2013 4th 8400/- 28.05.2022 3034 01.12.2012 Appeal dismissed quarter on merit and levy (26Q) of late fee u/s 234E of the Act affirmed 362 04.09.2013 3rd 41340/- 28.05.2022 3034 13.12.2022 Appeal dismissed quarter( in limine being 26Q) barred by limitation 363 04.09.2013 2nd 50800/- 28.05.2022 3034 13.12.2022 Appeal dismissed quarter( in limine being 26Q) barred by limitation 364 28.10.2013 4th 8400/- 28.05.2022 2980 01.12.2022 Appeal dismissed quarter on merit and levy (24Q) of late fee u/s 234E of the Act affirmed

For brevity we are inclined to decide ITA nos. 361 and 364/Mum/2023 first in which the issue involved is common, therefore we are taking into consideration the facts and issue involved in ITA nos. 361/Mum/2023 as a lead case and result of the

3 I.T.A. No. 361 to 364/Mum/2023 Shree Kalyaanee Krrsna Builders same shall mutatis mutandis apply to ITA no. 364/Mum/2023 as well.

4 I.T.A. No. 361 to 364/Mum/2023 Shree Kalyaanee Krrsna Builders amendment brought about w.e.f. 01-06-2015. It is a matter of fact, as brought out in detail supra, the levy of fee u/s 234E of the IT. Act, 1961 is automatic, compulsory, and mandatory, which comes in to play in case of default in furnishing the statements under sub section 3 of section 200 of the Act. This provision basically acts as facilitator to comply with the terms of section 200(3) of IT Act, 1961.

7.1 The Ld. Commissioner affirmed the said levy of late fees, by mainly relying upon the judgment passed by the Hon‟ble Gujarat High Court in the case of Rajesh Kourani Vs. UOI (supra) wherein levy of late fee qua delay in filling of TDS return pertaining to the period prior to 01-06-2015 was upheld.

5 I.T.A. No. 361 to 364/Mum/2023 Shree Kalyaanee Krrsna Builders 7.2 The Hon'ble Karnataka High Court in the case of Fatheraj Singhvi & Ors. vs. Union of India (supra) while dealing with the same issue analyzed the amendment dated 1st June, 2015 and construed that substitution made by Clause (c) to (f) of sub-section (1) of Sec. 200A can be read as having prospective effect and not having retroactive character or effect-Resultantly, the demand u/s 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 Asst. Year prior to 1st June, 2015.

7.3 We observe that the Amritsar Bench of the Tribunal in the case of M/s M.G.N. Khalsa High School, Jalandhar vs. ACIT, CPV Cell-TDS, Ghaziabad in ITA Nos.16,17 & 18/Asr/2019 decided on 25.07.2019 also analyzed the relevant provisions of law and also taken into consideration the judgment of the Gujarat High Court in Rajesh Kourani (supra) which is relied upon by the Ld. Commissioner in this case and other judgments of High Courts on the identical issue and held that the provisions of charging fee under section 234E only comes in operation if the Assessee make any default in furnishing TDS Return after 1st June, 2015 when the enabling provisions in the Act have been provided, but prior to that, if there was any delay in furnishing of TDS returns, then no late fee could be levied.

7.4 We observe that admittedly there is a plethora of judgments in favour of the Assessee and of the Revenue. The controversy with regard to divergent views of different High Courts, has been settled by the Hon‟ble Apex Court in the case of CIT VS. M/s. Vegetables

6 I.T.A. No. 361 to 364/Mum/2023 Shree Kalyaanee Krrsna Builders Products Ltd. (88 ITR 192) by laying the dictum “that if two reasonable constructions of a taxing provision are possible that construction which favours the Assessee must be adopted.” Meaning thereby when two different views of Court are available on an issue, then the view which favors the Assessee or the judgment which favours the Assessee should be followed.

7.5 The Hon'ble Bombay High Court in Rashmikant Kundalia v. Union of India [2015] 54 taxmann.com 200 has decided the constitutional validity of provisions of section 234E of the Act but not the controversy as to whether late fee could be levied for period prior to 01.06.2015.

7.6 Admittedly there is no contrary judgment of the jurisdictional High Court against the Assessee on the issue under consideration hence, by following the judgment of the Hon'ble Karnataka High Court in the case of Fatheraj Singhvi & Ors. vs. Union of India (2016) 289 CTR (KAR) 602, we are of the considered view that late fee can not be levied u/s 234E of the Act for late filling of TDS Return which pertains to the period prior to 01-06-2015 and consequently inclined to delete the late fees of Rs. 8400/- levied by the AO and affirmed by the ld. CIT(A). Consequently both the Assessee‟s appeals i.e. ITA nos. 361 and 364/Mum/2023 are allowed.

7 I.T.A. No. 361 to 364/Mum/2023 Shree Kalyaanee Krrsna Builders of delay by filling affidavit dated 12.04.2023 claimed that assessee‟s firm has been discontinued in 2014 i.e. with effect from 1st April 2014 and there has been no business activity carried out by the firm since then. The assessee‟s firm does not have any full time accountant. There was only part time accountant and he was not well versed with tax laws. The Assessee came to know about the demand, when in the process of final distribution of assets and closing as there were some pending VAT matters and FD with bank and 26AS was downloaded and the TDS defaults appearing there in were noticed. The Assessee immediately approached the Tax consultant and thereafter, downloaded the intimation of TDS from the TDS-CPC portal and after analysis of intimation, it was found that late fees u/s. 234E has been charged and demand is raised. The Assessee further claimed that the management of the firm was neither aware about the effects of TDS defaults nor that an appeal has to be filed for getting relief from late fees u/s. 234E. Consequently the filling of Appeal before the Ld. Commissioner has therefore been delayed. The Assessee therefore request to kindly condone the delay in filling the appeal as the Assessee was not aware about the provisions of law and therefore was prevented from filling the same in time. The Assessee further claimed that the appeal of the Assessee may be considered of merits and justice be administered.

8.1 On the contrary, the ld. DR vehemently refuted the claim of the Assessee and submitted that the impugned order passed by the Ld. Commissioner does not suffer from any perversity or illegality.

8 I.T.A. No. 361 to 364/Mum/2023 Shree Kalyaanee Krrsna Builders

8.2 We observe that before the Ld. Commissioner, the Assessee to substantiate the condonation of delay of 3034 days in filing of the appeal against intimation dated u/s. 200A of the Act, raised the same contentions on as raised before u.

8.3 The Ld. Commissioner also taken into account the claim of the Assessee that the accountant and the management were not aware of the facts and law that there is penalty for delayed filling of the TDS return and accordingly was not aware about the requirement of filling of Appeal before the Ld. CIT(A). We have given thoughtful consideration to this aspect, it is settled that ignorance of law is not an excuse to escape the liability as enshrined in the legal maxim “Ignorantia juris non excusat”. This is one of the most basic and cardinal principles of jurisprudence and law. The phrase “ignorance of law is no excuse” is self explanatory. It means that no person can commit a wrong/offence and later on claim the defence of not being aware about the same. Basically, after committing an act, the concerned person cannot say that they did not know the nature and gravity of the consequences for the sole purpose of escaping liability. Hence the contention of the Assessee that the accountant and the management were not aware of the facts and law that there is penalty for delayed filling of the TDS return and accordingly was not aware about the requirement of filling of Appeal before the Ld. CIT(A), is untenable.

9 I.T.A. No. 361 to 364/Mum/2023 Shree Kalyaanee Krrsna Builders

8.4 We observe that, the Ld. Commissioner not only considered the factual expects but also analyzed the provisions of law and the judgments passed by the Hon‟ble Apex Court and the Hon‟ble High Court and finding that the Assessee failed to demonstrate the sufficient cause which prevented the Assessee from exercising its legal remedy of filing appeal within the prescribed period of 30 days, consequently rejected the application for condonation of delay. The Assessee before us except filling affidavit, failed to demonstrate by way of filling any supportive document or reasonable and sufficient explanation for condonation of inordinate delay. Hence, we are not convinced to accept the contention of the Assessee.

8.5 However, considering the peculiar facts in circumstances, as there was also delay in filling of Appeals before the Ld. Commissioner which are under challenge in ITA. No. 361 & 364 Mumbai 2023 as it clearly appears and mentioned by the Assessee in column nos. 14 and 15 of From no. 35, however Ld. Commissioner decided those Appeals on merits without going into the delay in filling of the said Appeals. For clarity we are mentioning that, in ITA No. 361/M/2023 the intimation/order u/s. 200A of the Act, was passed by the DCIT on dated 04.09.2013, against which the Assessee preferred first Appeal before the Ld. Commissioner on 28.05.2022 and therefore delay of 3034 days has been occurred, however the ld. Commissioner instead going into the limitation point, decided the Appeal on merit, which

10 I.T.A. No. 361 to 364/Mum/2023 Shree Kalyaanee Krrsna Builders goes to show that the ld. Commissioner impliedly condoned the delay of 3034 days in filling of the said appeal.

8.6 In our considered view, once the Appellate Authority decided the appeal on merits, then the inference can be drawn that delay if any, in filling of appeal is condoned and the appeal is admitted, vice versa once the Appellate Authority declined to condone the delay in filling of the appeal being barred by limitation, then there is no need to go into merits of the case.

8.7 Considering the peculiar facts and circumstances as involved in these particular cases, as the Ld. Commissioner on the identical facts and circumstances decided the appeals i.e. ITA nos. 361 & 364/Mum/2023 on merit without touching the point of limitation/prayer for condonation of delay and therefore impliedly condoned the delay of 3034 days, we are of the considered opinion that the Ld. Commissioner on the exact issues, facts and circumstances should have decided all the Appeals under consideration on the „Rule of parity‟ or ‟Consistency‟. Consequently, in view of the result of ITA no. 361/M/2023 as late fees levied by the DCIT and affirmed by the Ld. Commissioner as involved in the Appeals under consideration, pertains to the period/AY prior to 01.06.2015, we are inclined to accept the Appeals under consideration on merit and to delete the late fees involved. Hence both the Assessee‟s appeals i.e. ITA nos. 362 and 363/Mum/2023 filed by the Assessee are allowed.

11 I.T.A. No. 361 to 364/Mum/2023 Shree Kalyaanee Krrsna Builders

Sr.PS. Dhananjay आदेशकीप्रतितितिअग्रेतिि/Copy of the Order forwarded to : 1. अपीलधथी/ The Appellant प्रत्यथी/ The Respondent 2. 3. आयकरआयुक्त/ CIT- concerned 4. नवभधगीयप्रनतनननध, आयकरअपीलीयअनधकरण, मुंबई/ DR, ITAT, Mumbai 5. गधर्ाफधईल / Guard File आदेशानुसार/ BY ORDER,

.उि/सहायकिंजीकार (Dy./Asstt.Registrar) आयकरअिीिीयअतिकरण, मुंबई/ ITAT, Mumbai