KRISHI UPAJ MANDI SAMITI,MANWAR DISTRICT DHAR vs. DEPUTY COMMISSIONER OF INCOME TAX-CPC TDS, GHAZIABAD

आयकर अपील�य अ�धकरण, इ�दौर �यायपीठ, इ�दौर

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE

BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING

ITA No.08/Ind/2018 Assessment Year:2015-16 Krishi Upaj Mandi Samiti DCIT-CPC-TDS, Manwar Distt. Dhar Ghaziabad बनाम/ (Appellant) (Respondent ) Vs. P.A. No. BPLK01589A Appellant by Shri Prakash Jain & Ms. Shreya Jain, ARs Revenue by Shri P.K. Singi, Sr. DR Date of Hearing: 28.07.2021 Date of Pronouncement: 05.10.2021 आदेश / O R D E R PER MANISH BORAD, A.M: The above captioned appeal filed at the instance of the Assessee for Assessment Year 2015-16 is directed against the orders of Ld. Commissioner of Income Tax(Appeals)-I (in short ‘Ld. CIT], Indore dated 25.09.2017 which are arising out of the order u/s 200A of the Income Tax Act 1961(In short the ‘Act’) dated

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04.12.2015 framed by DCIT (CPC)-TDS Ghaziabad. The assessee

has raised following grounds of appeal:-

assessee is required to deduct and deposit tax deducted at source

as and where applicable. The due date for filing 4th Qt returns for

F.Y. 2013-14 was 15.05.2014. The assessee filed this return on

10.12.2015 i.e. a delay by 564 days. Central Process Cell (CPC) vide

intimation dated 14.12.2014 imposed late fee u/s 234E of the Act

at Rs.1,14,800/-. Assessee challenged this action for levy of fee u/s

234E of the Act before Ld. CIT(A) but failed to succeed.

the assessee vehemently argued referring to the following written

submissions:

With reference to the hearing of above referred appeal we have to submit that short facts of the case are as under:- 1.The appellant is Krishi Upaj Mandi Samithi, Manawar established under

Krishi Upaj Mandi Samiti

the M.P. Krishi Upaj Mandi Adhiniyam 1972 for providing better regulation of buying and selling of agricultural produce and establishment and proper administration of agriculture produced in the state of Madhya Pradesh. The main purpose of the Act under which the Krishi Upaj Mandi Samiti are established to protect the interest of the farmers and ensure that they are not exploited. 2. For the Financial Year 2013-14 (Qtr.IV) the due date for filing of TDS return in Form 26Q was 15th May, 2014 but the appellant has filed the same on 10.12.2015 i.e. by delay of 574 days thus the CPC vide intimation dated 14.12.2015 imposed late fee U/S 234E at Rs.1,14,800/-. 3. Aggrieved by the intimation of CPC for imposing late fee ofRs.I,14,800/-, the assessee filed an appeal before the Ld. CIT(A)-I, Indore who vide order dated 25.9.2016 by relying on the decision of Hon'ble Gujarat High Court in the case of Rajesh Kourani confirmed the late fee ofRs.l,14,800/- levied by the CPC.

Being dissatisfied by the order of Ld. CIT(A) assessee preferred present appeal before your honours. Now our humble submissions are as under; i) The late fee is related to the Q4 of the financial year 2013-14 that is for the period 01.01.2014 to 31.03.2014 thus it is relevant prior to 01.06.2015 and during that period no authority is empower to levy late fee, therefore it is humbly prayed that late fee ofRs. 1,14,8001- be deleted in view of the decision of Hon'ble Bench in the case of State Bank of India & Others vis Dy. CIT (TDS) (2018) 33ITJ845 (IND). Without prejudice to the above we have to submit as under :- ii) Even after amendment of section 200A the CPC is not empower to levy late fee which will be clear from the barer reading of the newly inserted clauses (C) to (e) in sub-section (1) of section 200A by the Finance Act, 2015 w.e.f 01.06.2015 which will be clear from the barer reading of these sub clauses and sub-section (2) of section 200A the same are reproduced herein under:- 200A(l) (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 f refund due to the deductor in pursuance of the determination under clause (d) shall be granted to the deductor) The sub-section (2) of section 200A empower to CPC to authorized CPC

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only far processing of statement and determine the tax payable or the refund due to the deductor which will be clear from the said sub-section. The same is reproduced herein under:-

"For the purposes of processing of statement under sub-section (1), the Board may make a scheme for centralized processing of statement of tax deducted at source to expeditiously determine he tax payable by, or the refund due to, the deductor as required under the said sub-section, '']; From the above it is clear the CPC is empower to process TDS statement and determine the tax payable and refund due but do not empower to levy late fee because the tax does not include the interest penalty and late fee which is clear from the barer reading of Section 2(43) of the Act which is reproduced as under; 'tax" in relation to the assessment year commencing on the I" day of April, 1965, and any subsequent assessment year means income-tax chargeable under the provisions of this Act, and in relation to any other assessment year incometax and super-tax chargeable under the provisions of this Act prior to the aforesaid date and in relation to the assessment year commencing on the r day of April, 2006, and any subsequent assessment year includes the fringe benefit tax payable under section 115WA". Bombay High Court in the case of CIT vs. Orys Finance and Investment Pvt. Ltd (Income Tax Appeal No. 01 of 2015) (1S1 July, 2017) held that "Tax in arrears would not include the interest" In Dinesh T Tailor v. Tax Recovery Officer (2010) 326ITR 85, the Bombay High Court held that in "Section 179(1), the expression 'tax due' and, for that matter the expression "such tax" mean a tax as defined for the purposes of the Act by Section 2(43); "tax due" does not comprehend within its ambit a penalty. " High Court of Karnataka in he case of H. Embrahim & Ors. Vs. Deputy Commissioner of Income Tax &Anr. (2011) 332 ITR 0122 held that the component 'income tax' does not include payment of penalty as well as interest. " High Court of Delhi in the case of Sanjay Ghai Vs. Assistant Commissioner of Income Tax & Ors. (2013) 352ITR 0468 held that "the Court is of the opinion that the structure and construct of the Act has consciously used different words to create constructive liability on third parties, in the case of default in payment of taxes by an assessee. The treatment of the same subject matter by using different terms - in some instances expansive and in others, restrictive, mean that the Court has to adopt a circumspect approach and limit itself to the words used in the given case (in the present case, "tax due" under Section 179) and not "travel outside them on a voyage of discovery" (Magor & St. Mellons RDS v Newport Corporation 1951 (2) All ER 839). Therefore, it is held that the petitioner cannot be made liable for anything more than the tax (defined under Section 2(43). "

Krishi Upaj Mandi Samiti

From the above decision it is clear that tax does not include late fee u/s 200A(2) and therefore CP'C Ghaziabad is not empower to levy late fee even after the amendment applicable with effect from 1.6.2015. In view of above facts it is prayed that the late fee ofRs.l,14,800/-levied by CPC Ghaziabad be deleted. iii) Lastly it is submitted that if our above submission mentioned in Para (i) & (ii) is not accepted by the Hon'b1e Bench in that case it is submitted that Section 200A(1) is amended w.e.f. 1.6.2015, thus the late fee be levied for the period 1.6.2015 to 10.12.2015 i.e. for 192 days instead of574 days levied by the CPC,

before us. The assessee has challenged the finding of Ld. CIT(A)

confirming the levy of fee u/s 234E of the Act at Rs.1,14,800/-. It is

not in dispute that the assessee did not file the return for quarter

4th for f.Y. 2013-14 on time and it was filed with the delay of 574

days and CPC vide its intimation dated 14.12.2015 levied fee u/s

234E of the Act at Rs.1,14,800/-.

Act before and after the amendment brought in by the Finance Act

2015 w.e.f. 1st June 2015 has come up before this Tribunal and

following view has been consistently taken by this Tribunal.

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justified in levying the fee u/s 234E of the Act. The common fact in all these cases are that the date of filing TDS return as well as date of CPC order is after 01.06.2015. We observe that recently Coordinate Bench of Jaipur in the case of Shri Uttam Chand Gangwal Vs ACIT in ITA No. 764/JP/2017 dated 23/01/2019 adjudicated the similar issue of levy of fee u/s 234E of the Act in the TDS return and the CPC order passed after 01.06.2015. Following decision was rendered by the Coordinate Bench:

In the instant case, the assessee filed its TDS return in Form No. 26Q for the quarter ended 31st March, 2015 on 22nd July, 2015 and the same was processed and an intimation dated 30 July, 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 22.07.2015. The said provisions cannot be read to say 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 ITA No. 764/JP/2017 Shri Uttam Chand Gangwal, Ajmer Vs. ACIT, Ghaziabad 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

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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 undersection 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 22.07.2015 and the balance fee so levied is hereby deleted. In the result, the ground of appeal is partly allowed.

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Sd/- Sd/- (CHANDRA MOHAN GARG) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER

Indore; �दनांक Dated : 05/10/2021 Patel/PS Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order Assistant Registrar, Indore