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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
Date of Hearing: 11.07.2019 Date of Pronouncement: 26.07.2019 आदेश / O R D E R PER BENCH: The above captioned bunch of 11 appeals at the instance of respective assessees are directed against the respective orders of Ld. Commissioner of Income Tax(Appeals), Indore, (in short ‘CIT(A)’) dated 02.11.2017, 24.09.2018, 03.01.2019, 18.01.2019 & 23.05.2018.
As the issue raised in all these appeals are similar, these were heard together and are being disposed of by ITANos. 457 of 2019 and others Executive Engineer & others this common order for the sake of convenience and brevity.
From perusal of the grounds filed in the respective appeals which have been argued by various counsels, only one issue needs to be adjudicated as to whether the Revenue authorities were justified in levying the late fees u/s 234E of the Act in the statement processed u/s 200A of the Act.
Following chart shows the details of TDS Quarter, Financial year, date of filing the TDS return, date of order of Central Processing Cell and the amount of fees levied u/s 234E of the Act.
Name of Assessee & ITANo. F.Y Quarter Date of filing Date of Amount of fee TDS Return CPC order Executive Engineer Div 2013-14 Q-3 31.10.2015 06.11.2015 Rs.60548/- No.12, Barwani ITANo.457 to 459/Ind/2019 2013-14 Q-4 31.10.2015 06.11.2015 Rs.51,337/-
2014-15 Q-1 31.10.2015 06.11.2015 Rs.42,871/- Anand Township Indore P. 2015-16 Q-2 01.09.2016 06.09.2016 Rs.64,400/- Ltd. 2015-16 Q-3 01.09.2016 05.09.2016 Rs.46000/- ITANo.930 to 931/Ind/2018 2015-16 Q-4 01.09.2016 05.09.2016 Rs.21600/- District Organizer Tribal 2013-14 Q-4 16.09.2016 23.09.2016 Rs.1,71,000/- Welfare ITANo.675 & 676/Ind/2018 2014-15 Q-4 16.09.2016 23.09.2016 Rs.98,000/- Rohit Singh Indore 2013-14 Q-4 02.02.2015 09.01.2017 Rs. 36,759/- ITANo.422 & 423/Ind/2019 2014-15 Q-4 21.09.2016 24.09.2016 Rs.99,000/- Assistant Director 2014-15 Q-1 04.09.2015 08.09.2015 Rs.59,117/- Horticulture Indore 2014-15 Q-4 04.09.2015 20.09.2015 Rs.23,000/- ITANo. 30/Ind/2018 ITANos. 457 of 2019 and others Executive Engineer & others 5. Brief facts as culled out from the records and as discernable from the above stated chart are that respective assessees are aggrieved with the finding of the ld. CIT(A) confirming the levy of fee u/s 234E of the Act except in the case of the assessee Shri Rohit Singh in ITANo.422/Ind/2019 wherein date of filing TDS return is 02.02.2015. In rest of all the other cases date of filing the TDS return as well as the date of CPC order are posted on 01.06.2015. Against the respective levy of fee u/s 234E, assessee fails to get any relief by the ld. CIT(A) who have relied the judgment of Hon'ble Gujarat High Court in the case of Rajesh Kaurani vs. UOI(2017) 83 Taxmann.com 137 (Guj) dated 28.06.2018, thereby holding that u/s 234E of the Act is a charging provision whereas u/s 200A of the Act is a mechanical section and irrespective of the fact that an amendment was brought in the Finance Act, 2015 w.e.f. 01.06.2015 in section 200A(c) of the Act, thereby empowering the revenue authorities to charge fee u/s 234E of the Act still the assessee was liable to pay the fee computed u/s 234E of the Act.
Aggrieved assessee(s) are in appeal before the Tribunal. Ld. counsel for the assessee representing 4 ITANos. 457 of 2019 and others Executive Engineer & others the captioned assessees in the instant bunch of appeals referred and relied by various judgments in the respective paper book filed in each of the cases. In nutshell following contentions are made; (i) Before the amendment brought in by finance Act 2015 w.e.f 01.06.2015, revenue authorities have no power to levy the fee u/s 234E of the Act in the statement processed u/s 200A of the Act. (ii) No specific powers have been delegated to the Central Processing Cell by the Board u/s 200A(2) of the Act for charging fee u/s 234E of the Act. (ii) In the cases where the quarter for filing TDS return falls before the date on 01.06.2015 and the due tax deducted has also been deposited before 01.06.2015 fee should not be levied u/s 234E of the Act.
Per contra Ld. Department Representative (Ld. DR) vehemently argued supporting the orders of the lower authorities as well as the judgments referred and relied by the Ld. CIT(A) in their appellate order.
We have heard the rival contentions and perused the record placed before us and also carefully gone through the judgments referred and relied by both assessee and revenue. The common issue raised in all these appeals is 5 ITANos. 457 of 2019 and others Executive Engineer & others that the Ld. CIT(A) erred in confirming the levy of fee u/s 234E of the Act. For adjudication of the issue before us, two sections are relevance namely; 200A and 234E of the Act. For the sake of convenience both the sections are reproduced below: Section 200A (1) Where a statement of tax deduction at source 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 fee, if any, shall be computed in accordance with the provisions of section 234E; 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 6 ITANos. 457 of 2019 and others Executive Engineer & others (f) the amount of refund due to the deductor in pursuance of the determination under clause (d) shall be granted to the deductor.".
Section 234E 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.
In section 200A of the Act an amendment was brought by Finance Act 2015 w.e.f 01.06.2015 by virtue of which clause (c) to (f) were substituted for clause (c) to (e). With this amendment revenue authorities got sufficient power to levy fee u/s 234E of the Act while processing the statement of tax deducted at source as provided u/s 200A(1) of the ITANos. 457 of 2019 and others Executive Engineer & others Act, in the cases where the order of CPC are passed on date falling before date of amendment i.e. 01.06.2015. We have taken a consistent view that revenue authorities had no jurisdiction to levy fee u/s 234E of the Act in the statement processed u/s 200A of the Act, before the date of amendment since the amendment is not clarificatory but prospective in nature. This view was taken by us by referring to various judgments of Hon'ble High Court including the judgment of Hon'ble Karnataka High Court in the case of Fatehraj Singhvi Vs UOI (2016) 289 CTR 0602 and applying the same to decide the cases of Bhupesh Kumar J. Sanghvi and others in ITANos.15 to 21/Ind/2018 & others vide order dated 22.01.2019 and in the case of State Bank of India, Genda Chowk and others vs. DCIT(TDS), in ITANos. 727 & 737/Ind/2017 and others dated 13.11.2018.
Now we first take in ITANo. 422/Ind/2019 in the case of Rohit Singh for which return of Q-4 for F.Y.2014-15, date of filing TDS return is 02.02.2015, CPC passed the order on 09.01.2017 wherein fee u/s 234E was levied at Rs.36,759/-. Proviso to section 200A(1) of the Act, contemplates that ‘no intimation’ ITANos. 457 of 2019 and others Executive Engineer & others under this sub-section shall be sent after the expiry of one year from the end of the financial year in the statement is filed.
Now, applying this proviso on the facts of the case, we find that the assessee filed TDS return during F.Y. 2014-15. Last date by which the intimation could have been sent by the CPC was 31.03.2016 whereas the date of CPC order for Q-4 for F.Y. 2013-14 is 09.01.2017. It clearly shows that the order of CPC is barred by limitation and the same is liable to be quashed. We accordingly quash the order of CPC and deleted the levy of fee of Rs.36,759/- and allow the appeal of the assessee in ITANo.422/Ind/2019.
As far as all the remaining cases are concerned the date of filing the TDS return as well as the date of CPC order are falling beyond 01.06.2015 i.e. post amendment brought by the Finance Act 2015. In these cases one of the common contentions was that in the case of TDS quarter which related to F.Y. 2014-15 and the earlier years tax deducted at source has been deposited before the date of amendment i.e. 01.06.2015, fee u/s 234E cannot be levied. From going ITANos. 457 of 2019 and others Executive Engineer & others through the provisions of sections 234E and 200A of the Act we find that the provision for levying fee for default in furnishing statement was inserted w.e.f 01.07.2012. The power to process the statement of tax deducted at source are provided in section 200A of the Act. The date of CPC order is the yardstick to examine the applicability of the amendment brought by the Finance Act 2015 w.e.f 01.06.2015. In our considered view if the default is committed by a person in delivering the TDS statement within the time prescribed in sub-section (3) of section 200 of the Act or proviso to sub-section (3) of section 206C of the Act, from 01.07.2012 provision of section 234E of the Act comes into operation and if the default continues and the CPC order is passed on and after 01.06.2015 then even if the CPC order relates to quarters for F.Y. 2014-15 and earlier years, and the tax has been deposited before 01.06.2015 will have no relevance. This contentions of the Ld. counsel for the assessee has no merits.
As regards the second contention by Ld. counsel for the assessees that CPC do not have specific power for board to levy fee u/s 234E of the Act. We find no merit in this contention also because in the “Centralised ITANos. 457 of 2019 and others Executive Engineer & others Processing Cell statements of tax deducted at source Scheme of 2013” brought notification dated 15.01.2013 section 5(1) of this notification reads that the Cell shall process the statement of tax deducted at source furnished by a deductor in the manner specified under sub-section (1) of section 200A of the Act after taking into account the information contained in the correction statement of tax deducted at source, if any, furnished by the deductor before the date of processing. Thus there is a clear provision in the scheme giving powers to the CPC to process the TDS return any the manner as specified u/s 200A(1) of the Act which provides that the statement shall be processed with regard to the tax deducted, arithmetical error incorrect claim, interest as well as the fee u/s 234E of the Act and other adjustment as provided in sub-section (1) of section 200A of the Act. So in our considered view CPC have sufficient power to levy fee u/s 234E of the Act for late filing of TDS return.
Now coming to the last contention as well as main issue that whether in all the remaining cases except that of Rohit Singh in ITANo.422/Ind/2019 whether the Ld. CIT(A) was justified in levying the fee u/s 234E of ITANos. 457 of 2019 and others Executive Engineer & others 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 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 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 within his jurisdiction ITANos. 457 of 2019 and others Executive Engineer & others 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.
15. From perusal of the above decision we find that the issue before us is similar to the issue adjudicated by the Coordinate Bench and we accordingly hold that the Ld. CIT(A) has rightly confirmed the levy of fee u/s 234E of the Act by the CPC,however we direct the revenue authorities to make necessary verification in each of the case so as to look into the fact that in case if any fee u/s 234E is levied for the delay in filing return for the period before 01.06.2015, the same is directed to be deleted and the remaining fee levied for the ITANos. 457 of 2019 and others Executive Engineer & others default committed from 01.06.2015 onwards needs to be confirmed.
In the result, appeal of assessee i.e. Rohit Singh in ITANo.422/Ind/2019 is allowed, ITANo.930 to 932/Ind/2018 in the case of Anand Township Indore P. Ltd. are dismissed and remaining all 7 appeals at the instance of assessee(s) are partly allowed.
Order was pronounced in the open court on 26 .07.2019.