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Income Tax Appellate Tribunal, JABALPUR “SMC” BENCH, JABALPUR
Before: SHRI NRS GANESAN
ITA Nos.87-89/JAB/2019 (AYs: 2013-14 & 2014-15) Pooran Lal Vishwakarma & other v. ACIT IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR “SMC” BENCH, JABALPUR
BEFORE SHRI NRS GANESAN, JUDICIAL MEMBER ITA No.87/JAB/2019 Assessment year: 2014-15
Shri Pooran Lal Vishwakarma, vs. Assistant Commissioner of Jalpa Ward, Income Tax, CPC – TDS, Katni (M.P.) Ghaziabad
(PAN –ABOPV 0282C) (Appellant ) (Respondent)
ITA Nos.88& 89/JAB/2019 Assessment Years: 2013-14 & 2014-15
Shri Shankar Lal Vishwakarma, vs. Assistant Commissioner of Jalpa Ward, Income Tax, CPC – TDS, Katni (M.P.) Ghaziabad
(PAN –ABOPV 0281B) (Appellant ) (Respondent)
Appellant by Shri Dhiraj Ghai, CA Respondent by Shri I.B.Khandel, DR Date of hearing 11/11/2020 Date of pronouncement 11/11/2020
ORDER Per NRS Ganesan, JM: All the three appeals are filed by three different assessees against the order of ld. CIT(A)-2, Indore, who is holding concurrent jurisdiction with
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ITA Nos.87-89/JAB/2019 (AYs: 2013-14 & 2014-15) Pooran Lal Vishwakarma & other v. ACIT CIT(A), Jabalpur dated 31.07.2019 confirming the penalty levied u/s. 231E of the Act was delay in filing the return of income. 2. Shri Dhiraj Ghai, ld. Representative of the assessee submitted that admittedly in all the three appeals, the fee was levied while processing the return u/s. 200A on 29.08.2014. The Finance Act, 2015 was made applicable by introducing sub clause-c of 200A w.e.f. 01.06.2015. In other words, the AO was unable to levy fee u/s. 234E while processing the return u/s. 200A only w.e.f. 01.06.2015 and not earlier. In the absence of any enabling provision for levy of fee u/s.234E while processing the return the AO is not justified in levying fee u/s. 234E. Ld. Representative has placed reliance on various judgments of Delhi High Court and Tribunal including Chennai Bench of the Tribunal in ITA No. 1019 of 2015 Smt. G. Indrani Vs. DCIT.
On the contrary, Shri I.B. Khandel ld. Departmental Representative submitted that the Gujarat High Court in the case of ‘Rajesh Kaurani vs. Union of India & 4’ (2017) 99 CCH 98 found that Section 234E is a charging section and Section 200C is a missionary provision, therefore, it is applicable retrospectively. When the adjustment made while processing the return by levy of fee u/s. 234E is very much valid. The ld. Departmental Representative has also placed reliance on the judgment of the Madras High Court in ‘Qatalys Software Technologies Ltd. vs. Union of India’ (2020) 115 Taxman.com 345 and submitted that the constitutional validity of Section 234E was uphold by the Madras High Court. The ld. counsel has also placed his reliance on the judgment of the Apex Court in the case of ‘L. Hazari Mal Kuthiala Vs. ITO’ (1961) 41 ITR 12 and submitted that Section 200A is not prejudicing the general power of the AO to levy penalty. The Ld. DR has also placed reliance on the judgment of the Delhi High Court in the case of ‘Biswajit Das vs. Union of India’ 103 Taxman.com 290 referring to the explanatory note for introducing sub clause-c of 200A more particularly at para 47.3 the Ld. DR submitted that
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ITA Nos.87-89/JAB/2019 (AYs: 2013-14 & 2014-15) Pooran Lal Vishwakarma & other v. ACIT Section 234E was introduced in the year 2012 at that time Section 200A that was not amended. Subsequently the Parliament Finance Act, 2015 introduced sub clause-c 200A. Since the Gujarat High Court found that Section 200A(c) is a missionary provision and is applicable retrospectively. The AO has rightly levied the penalty u/s. 234A of the Act.
I have considered the rival submissions on either side and also perused the material available on record. The issue arises for consideration is whether the AO can levy fee u/s. 234E before 01.06.2015 while processing the TDS return u/s. 200A of the Act. It is not in dispute that Section 200A enable the AO to do certain thing. Admittedly levy of fee is not enabled or otherwise by Parliament before 01.06.2015. Realizing the mistake, the Parliament by Finance Act, 2015 amended the Section 200A by introducing sub clause-c enabling the AO to levy fee u/s. 234E of the Act. This issue was considered by the Division Bench of this Tribunal in ‘Maa Vaishno Devi Benovolent Society vs. ACIT’ in ITA No. 81/Jab/2019. This Tribunal after referring to the decision of another Division Bench of Indore Bench found that fee u/s 234E cannot be levied before 1.6.2015 while processing the return u/s. 200A of the Act. 5. Another Division Bench of Madras of the Tribunal in ‘Smt. G. Indrani vs. DCIT’ in ITA No. 1019/2015 found that fee cannot be levied u/s. 234E before 01.06.2015 while processing the return u/s. 200A. In fact the Chennai Bench of this Tribunal has observed as follows at Para 6, 7 and 11:- “6. We have considered the rival submissions on either side and perused the relevant material on record. Section 200A of the Act provides for processing of the statement of tax deducted at source by making adjustment as provided in that Section. For the purpose of convenience, we are reproducing the provisions of Section 200A of the Act:- “200A. (1) Where a statement of tax deduction at source or a correction statement has been made by a person deducting any sum (hereafter referred †o in †his section as
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ITA Nos.87-89/JAB/2019 (AYs: 2013-14 & 2014-15) Pooran Lal Vishwakarma & other v. ACIT deduc†or) under section 200, such statement shall be processed in the following manner, namely:— (a) †he sums deductible under †his Chapter shall be computed after making the following adjustments, namely :— (i) any arithmetical error in †he statement; or (ii) an incorrect claim, apparent from any information in †he 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 †ax or interest: (d) an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or †he amount of refund due †o, him under clause (c) ; and (e) the amoun† of refund due †o †he deduc†or in pursuance of †he de†ermina†ion under clause (c) shall be granted to the deductor : Provided †ha† no intimation under †his sub-section shall be sent after the expiry of one year from the end of the financial year in which †he statement is filed. Explanation— For †he purposes of †his sub-section, "an incorrect claim apparen† from any information in †he statement†” shall mean a claim, on the basis of an entry, in the statement— (i) of an item, which is inconsistent wi†h another entry of †he same or some other i†em in such statement ;
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ITA Nos.87-89/JAB/2019 (AYs: 2013-14 & 2014-15) Pooran Lal Vishwakarma & other v. ACIT (ii) in respect of r a t e of deduction of †ax a† source, where such rate is no† in accordance wi†h †he provisions of †his Act (2) For the purposes of processing of statements under sub-section (\), the Board may make a scheme for centralized processing of s†atemen†s of †ax deduc†ed a† source †o expeditiously determine the tax payable by, or the refund due to, the deductor as required under the said sub-section. 7. The Assessing Officer cannot make any adjustment other than the one prescribed above in Section 200A of the Act. By Finance Act, 2015, with effect from 01.06.2015, the Parliament amended Section 200A by substituting sub-section (1) of clauses (c) to (e). For the purpose of convenience, we are reproducing the amendment made in Section 200A by .the Finance Act, 2015 as under:-
“In sec6on 200A of †he Income-†ax Ac†, in sub-section (1), for clauses (c) to (e), the following clauses shall be substituted with effect from †he Ist day of June, 2015, namely:- “(c) †he fee, if any, shall be computed in accordance With the provisions of sect6ion 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 in†eres† or fee; (e) an intimation shall be prepared or generated and sent to †he deduc†or specifying †he sum determined †o be payable by, or †he amoun† of refund due †o, 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.”
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ITA Nos.87-89/JAB/2019 (AYs: 2013-14 & 2014-15) Pooran Lal Vishwakarma & other v. ACIT Therefore, it is obvious that prior to 01.06.2015, there was no enabling provision in Section 200A of the Act for making adjustment in respect of the statement filed by the assessee with regard to tax deducted at source by levying fee under Section 234E of the Act. The Parliament for the first time enabled the Assessing Officer to make adjustment by levying fee under Section 234E of the Act with effect from 01.06.2015. Therefore, as rightly submitted by the Ld. counsel for the assessees, while processing statement under Section 200A of the Act, the Assessing Officer cannot make any adjustment by levying fee under Section 234E prior to 01.06.2015. in the case before us, the Assessing Officer levied fee under Section 234E of the Act while processing the statement of tax deducted at source under Section 200A of the Act. Therefore, this Tribunal is of the considered opinion that the fee levied by the Assessing Officer under Section 234E of the Act while processing the statement of tax deducted at source is beyond the scope of adjustment provided under Section 200A of the Act. Therefore, such adjustment cannot stand in the eye of law.
8………………………………… 9………………………………… 10……………………………….. 11. In view of the above discussion, this Tribunal is of the considered opinion that the Assessing Officer has exceeded his jurisdiction in levying fee under Section 234E while processing the statement and make adjustment under Section 20QA of the Act. Therefore, the impugned intimation of the lower authorities levying fee under Section 234E of the Act cannot be sustained in law. However, it is made clear that it is open to the Assessing Officer to pass a separate order under Section 234E of the Act levying fee provided the limitation for such a levy has not expired. Accordingly, the intimation under Section 200A as confirmed by the CIT(Appeals) in so far as levy of fee under Section 234E is set aside and fee levied is deleted. However, the other adjustment made by the Assessing Officer in the impugned intimation shall stand as such.” 6. The Apex Court in the case of CIT vs. M/s Essar Teleholding Ltd. (2018) 3 SCC 253 certain occasion to consider the applicability of missionary provision. In other words, when the Parliament introduced Section 14A for disallowance of expenditure for earning the exempt income the missionary provision was made in Rule 8D(2) of the Income Tax Rules, 1962. The 6 | P a g e
ITA Nos.87-89/JAB/2019 (AYs: 2013-14 & 2014-15) Pooran Lal Vishwakarma & other v. ACIT Revenue contended before the Apex Court in the case of Essar Teleholding Ltd. (Supra) the rule made by the subordinate authority under rule making power is applicable retrospectively since it is only the missionary provision. The Apex Court after considering all the judgments found that the missionary provision in taxing statute tax due effect to its manifest purpose. The applicability of missionary provision whether it is prospective or retrospective depends upon the content and nature of the statutory scheme. This judgment of the Apex Court was not brought to the notice of Gujarat High Court. The Gujarat High Court in a generalized manner found all the missionary provision of the applicable retrospectively. Since the judgment of the Apex Court in Essar Teleholding Ltd.(Supra) was not to brought to the notice of the Gujarat High Court, this Tribunal is of the considered opinion the judgment of the Gujarat High Court is not applicable to the fact of this case. 7. Now coming to the explanatory note for introducing sub clause-c in Section 200A it is clearly stated that in the year 2012 and 234E was introduced in the statute book Section 200A was admittedly not amended. In other words in 2012 and Section 234E was introduced the AO was not unable to levy fee u/s 234E while processing the return u/s 200A. Moreover, it is clearly stated that sub clause-c is applicable w.e.f. 1.6.2015 for the purpose of convenience the relevant explanation note is reproduced as under: “47.3 Finance (No.2) Act, 2009 inserted section 200A in the Income- tax Act which provides for processing of TDS statements for determining the amount payable or refundable to the deductor. However, as section 243E was inserted after the insertion of section 200A in the Income-tax Act, the existing provisions of section 200A of the Income-tax Act did not provide for determination of fee payable under section 234E of the Income-tax Act at the time of processing of TDS statements. Therefore, the provisions of section 200A of the Income-tax Act has been amended so as to enable computation of fee payable under section 234E of the Income-tax Act at the time of processing of TDS statement under section 200A of the Income-tax Act.
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ITA Nos.87-89/JAB/2019 (AYs: 2013-14 & 2014-15) Pooran Lal Vishwakarma & other v. ACIT 47.20 Applicability:- These amendments take effect from 1st June, 2015.”
In view of the above explanatory note, it is obvious that sub clause-c of Section 200A was made applicable only w.e.f. 1.6.2015, therefore, the contention of the Departmental Representative that it is retrospective operation is not correct. This explanatory note was also not brought to the notice of the Gujarat High Court. 9. In view of the above, this Tribunal has no hesitation to hold that the assessing authority cannot levy fee u/s. 234E while processing the return u/s. 200A before 1.6.2015. Accordingly, the orders of both the authorities below are set aside and fee levied u/s. 234E while processing the return u/s. 200A is deleted. 10. In the result, all the three appeals stand allowed.
Order pronounced in the open court on 11/11 /2020.
Sd/- (N.R.S.Ganesan) Judicial Member Dated: 11/11/2020 Aks(P) //True Copy//
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