CATHOLIC SYRIAN BANK LTD(KURIANNOOR BRANCH), KUMBANAD P.O., PATHANAMTHITTA vs. THE ITO (TDS), ALAPPUZHA

Per CHANDRA POOJARI, AM:

These appeals filed by different Branches of the same assessee are directed

against the different orders of the CIT(A), Kottayam relating to late filing of fee

u/s. 234E of the Act and pertain to assessment years 2013-14, 2014-15 and

2015-16.

written submission and requested to consider the same and dispose of the

appeals. Hence, we proceed to decide the issue after hearing the Ld. DR.

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2.1 Primarily, there was a delay in filing these appeals before the CIT(A) which

is enumerated hereinbelow:

Branch ITA IT Appeal Date of Due date of Appeal filed Delay Amount of Nos (FY|Form|Quarter) on penalty receipt of filing in filing involved the order in appeal appeal email (Days)

2013-14|27Q|Q4 23.06.2014 23.07.2014 30.12.2017 1256 6,600.00 2014-15 /24Q|Q2 05.02.2015 07.03.2015 29.12.2017 1028 18,600.00 ITA 283-288/COCH/22019 2014-15 |26Q|Q2 26.01.2015 25.02.2015 30.12.2017 1036 18,800.00 2014-15|27Q|Q1 26.07.2014 25.08.2014 30.12.2017 1223 1,400.00 Alappuzha 2014-15|27Q|Q2 27.01,2015 26.02.2015 30.12.2017 1038 19,200.00 2013-14|24Q|Q3 31.05.2014 30.06.2014 08.01.2018 1288 16,800.00 ITA 289-291/COCH/2019 2013-14|24Q|Q4 31.05.2014 07.02.2018 30.06.2014 1318 1,800.00 Cheriyanad 2014-15|24Q|Q1 24.07.2014 23.08.2014 08.01.2018 1234 1,200.00 2014-15|24Q|Q2 25.10.2014 24.11.2014 09.01.2018 1142 1,000.00 2012-13 |27Q|Q2 02.03.2014 01.04.2014 20.07.2016 25,400.00 841 282/COCH/2019 Kuriannoor 26.01.2014 25.02.2014 20.07.2016 876 21,000.00 2012-13 |27Q| 03 ITA 280- 2012-13 |27Q/Q4 02.03.2014 01.04.2014 20.07.2016 841 4,400.00 TOTAL 1,36,200.00

filing these appeals was that the officer handling TDS issues was transferred

from the Branches and on subsequent notice by the Head Office, the appeals

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were instituted. However, the CIT(A) did not condone the delay by observing

that there was no sufficient cause for filing the appeals belatedly and dismissed

the appeals.

submitted that the Income Tax matters of the bank, except periodic filing of TDS

returns which were done at the Branch level, are being handled at Head office.

The said TDS return was processed at CPC and Intimation u/s 200A was served

to the branch and the Branch officials were not aware about filing of appeals

against such intimation. When the Head Office came to know about default u/s

234E which was found from the consolidated default report of the bank the same

was intimated to the branches. As the appeals had to be filed at head office and

as there was delay in branches intimating the Head Office, the appeals could not

be filed in time.

4.1 Further, it was submitted that there was also an issue at that point of time

on whether appeals could be filed against intimation u/s 200A which also added

to the delay in filing of appeal and also appeals questioning the constitutional

validity of the section was pending before various High Courts at that time.

4.2 It was submitted that the assessee had not derived any benefit whatsoever

by not filing the quarterly TDS statement in time as the amount of TDS was duly

I.T.A. Nos. 280 to 291/Coch/2019

deposited in the Government treasury within the prescribed time and such delay

had not caused any loss to the revenue and imposing the penalty will create a

genuine hardship to staff members of the Bank and also to the assessee. Thus,

it was requested to condone the delay in filing of appeals and dispose the

appeals based on the merits. The Ld. AR relied on the following judgments of the

Supreme Court:

(a) Improvement Trust, Ludhiana vs Ujagar Singh & Others.

(b) Collector Land Acquisition, ... vs Mst. Katiji & Ors on 19 February,

1987, 1987 AIR 1353

(c) New India Insurance Co. Ltd. v. Smt. Shanti Misra, AIR 1976 SC 237.

(d) N. Balakrishnan vs M. Krishnamurthy, Date of Judgment 03/09/1998.

In Improvement Trust, Ludhiana vs Ujagar Singh & Others it was held as

under:

"As a normal rule, delay should be condoned. In the legal arena, an attempt should always be made to allow the matter to be contested on merits rather than to throw it on such technicalities. Justice can be done only when the matter is fought on merits and in accordance with law rather than to dispose it of on such technicalities and that too on threshold".

4.3 It was accordingly submitted that the CIT(A) should have considered the

condonation petitions filed by assessees and condoned the delay rather than

dismissing the appeals on delay.

4.4 On the merits of the issue involved, it was submitted that the officer

handling the TDS issues was transferred from the concerned Branch and

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subsequently, noticed by the Head Office and the appeals were filed. Prior to

01.06.2015, Sec.200A of the Income Tax Act did not permit levying any fees u/s

234E for delay in submission of return and provided only for correction of any

arithmetical error, or incorrect claim, or default in payment of interest and TDS

payable or refundable etc. It was submitted that the amendment made with

effect from 01.06.2015 should apply only from the first quarter of the year ended 31st March 2016, i.e., in respect of returns filed for the quarter ended June 2015

and onwards. The assessee placed reliance for this view on the decision of

Cuttack Bench of ITAT in the case of TB and ID Hospital vs ITO -TDS dated.

27.08.2018 (ITA 323 to 332/CTK/2018), In the said decision in Para 8 it was held

as under:

"Except for the Quarter-1 in the assessment year 2016-2017 (i.e. ITA No.332/CTK/2018), all the quarters i.e. Quarter 4 in the A. Y.2013-2014, for Quarters 1 to 4 in the assessment year 2014-2015 and for Quarters 1 to 4 in the assessment year 2015-2016 are coming under the purview of amendment to Section 200(3) of the Act. Therefore, the fee levied u/s.234E of the Act while processing the statement of tax deducted at source was beyond the scope provided under Section 200A of the Act." Hence fees for late filing of TDS quarterly statement prior to Assessment Year 2016-17 could not be recovered by way of processing under section 200A."

4.5 The assessee also relied on the following judgments:

Hon'ble High Court of Karnataka in case of Fatheraj Singhvi v Union of India [2016] 73 taxmann.com 252 (Karnataka) where it was held that:

I.T.A. Nos. 280 to 291/Coch/2019

"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, it is found that substitution made by clauses (c) to (f) of subsection (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, it is made clear that, if any deductor has already paid the fee after intimation received under section 2QOA, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest. [Para 22]

In view of the aforesaid observation and discussion, since the impugned intimation given by the respondent- department against all the appellants under section 200A are so far as they are for the period prior to 1-6-2015 can be said as without any authority under law. Hence, the same can be said as illegal and invalid. [Para 23]"

4.6 The assessee has also relied on the decision of the ITAT Cochin Bench, in

the case The Headmistress AV High School (ITA No.145/Coch/2017) relying on

the aforementioned case of Fatheraj Singhvi v Union of India [2016] 73

taxmann.com 252 (Karnataka), decided as follows:

"Since the facts of the present case are similar to the facts considered by the Karnataka High Court (supra) and by this Tribunal (supra) wherein it was held that there cannot be levy of late fee u/s. 234E for the period prior to 01/06/2015, we are inclined to delete the levy of late fee u/s. 234E of the Act."

I.T.A. Nos. 280 to 291/Coch/2019

4.7 Further, it was submitted that CBDT has itself mentioned in its Central

Action Plan that only the late filing fee relating to period after 01.06.2015 should

be compulsorily collected.

4.8 In view of the above, assessee submitted that levy of interest u/s 234E in

intimation u/s 200A was not valid and hence the claim of the assessee allowed. The assessee also submitted that ITAT Cochin Bench, vide order dated 8th

October 2018, in 1TA Nos 341 to 345, 346 to 352, 353 to 359, 360 to 367, 368

to 372 and 373 to 380 had not condoned the delay in filing of appeals and

dismissed the same as unadmitted and they have filed appeals against these

orders before the High Court of Kerala and the same is pending for disposal.

by the assessee before the CIT(A) was that the delay was due to transfer of the

officer concerned in the Branch. Further, the assessee has not explained as to

why such a long time was taken in handing over the matter by one person to

another person and in all Branches how the same thing has happened. In fact,

there is even no attempt to explain the same. The person who is handling the

matter would undoubtedly be conscious of the fact that the time to file the

appeals is running against the assessee and there must be proper explanation in

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the condonation petitions that it was taking steps to expedite the filing of the

appeals before the CIT(A). The reason explained by the assessee in these

condonation petitions is too general and it does not explain the delay except

stating that the delay was due to transfer of the concerned officer in the Branch

with whom the papers were pending for preparation of the appeals.

Thus, we are not satisfied with the reasons filed before the CIT(A) so as to

condone the delay in filing the appeals.

6.1 The Apex Court in the case of Office of the Chief Post Master General and

Others vs. Living Media India Ltd, and Another, reported in (2012) 348 ITR 7

(SC) while dealing with the condonation of delay application by the State, has

observed as under :-

"12. It is not in dispute that the person(s) concerned were well aware or conversant with the issues involved including the prescribed period of limitation for taking up the matter by way of filing a special leave petition in this Court. They cannot claim that they have a separate period of limitation when the Department was possessed with competent persons familiar with court proceedings. In the absence of plausible and acceptable explanation, we are posing a question why the delay is to be condoned mechanically merely because the Government or a wing of the Government is a party before us. Though we are conscious of the fact that in a matter of condonation of delay when there was no gross negligence or deliberate inaction or lack of bonafide, a liberal concession has to be adopted to advance substantial justice, we are of the view that in the facts and circumstances, the Department cannot take advantage of various earlier decisions. The claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted in view of the modern technologies being used and available. The law of limitation undoubtedly binds everybody including the Government.

I.T.A. Nos. 280 to 291/Coch/2019

Department for the delay except mentioning of various dates, according to us, the Department has miserably failed to give any acceptable and cogent reasons sufficient to condone such a huge delay."

6.2 In the present case, there were no affidavits from the concerned persons

who are handling the impugned issues and who are required to take proper

steps in filing the appeals before the CIT(A). In the present case, the order of

the Tribunal, cited supra does not give any such blanket direction as submitted

by the Ld. AR to condone the delay as it does not in any way fetter the Tribunal

from exercising its discretion to condone or not to condone the delay in filing the

appeals. The condonation petition will have to be case specific and the order of

the Tribunal cited by the Ld. AR cannot be read so as to ignore the facts and

circumstances of the present cases. Thus, the submission of the assessee

cannot be accepted that the delay in filing the appeals by the assessee has to be

condoned. Therefore, according to us, each case for condonation of delay would

have to be decided on the basis of the explanation offered for the delay, i.e. is it

bonafide or not, concocted or not or does it evidence negligence or not. Further,

I.T.A. Nos. 280 to 291/Coch/2019

in the present case, the assessee is a scheduled bank supported by a large

number of personnel and also assisted by qualified Chartered Accountants and

Advocates. The reason as come out from the condonation petitions filed by the

assessee, as stated earlier, is that there was transfer of the officer who was

handling the issue. We cannot accept such proposition as it cannot be considered

as good and sufficient reason to condone the delay. It was submitted that the

delay is to be condoned since the issue on merit covered in favour of the

assessee. This submission ignores the fact that the object of the law of

limitation is to bring certainty and finality to litigation. This is based on the

Maxim “interest reipublicae sit finis litium i.e. for the general benefit of the

community at large, because the object is every legal remedy must be alive for a

legislatively fixed period of time. The object is to get on with life, if you have

failed to file an appeal within the period provided by the Statute. It is for the

general benefit of the entire community so as to ensure that stale and old

matters are not agitated and the party who is aggrieved by an order can

expeditiously mover higher forum to challenge the same, if he is aggrieved by it.

As observed by the Apex Court in many cases, the law assist those who are

vigilant and not those who sleep over their rights as found in the Maxim

“Vililantibus Non Dormientibus Jura Subveniunt”. In our opinion, merely because

the assessee is not vigilant, it cannot follow that the assessee is bestowed with a

right to the delay being condoned. We are conscious of the fact that the period

of limitation should not come as an hindrance to do substantial justice between

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the parties. However, at the same time, a party cannot sleep over its right

ignoring the statute of limitation and without giving sufficient and reasonable

explanation for the delay, except its appeal to be entertained merely because the

assessee is a Bank. Appeals filed beyond a period of limitation have been

entertained by us where the delay has been sufficiently explained such as in

cases of bonafide mistake. Thus the assessee should be well aware of the

statutory provisions and the period of limitation and should pursue its remedies

diligently. It cannot expect their appeals be entertained because they are after

all the assessee, notwithstanding the fact that delay is not sufficiently explained.

More so, the issue in dispute in these appeals is squarely covered against the

assessee by the earlier order of this Tribunal in assessee’s own case in ITA Nos.

341 to 345/Coch/2018 & Ors. dated 08/10/2018 wherein similar circumstances,

the delay was not condoned and the appeals were dismissed and unadmitted.

Hence, the delay is not condoned and the appeals are unadmitted.

unadmitted. Order pronounced in the open Court on this 25th July, 2019.

sd/- sd/- (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER

Place: Kochi Dated: 25th July, 2019

I.T.A. Nos. 280 to 291/Coch/2019

GJ Copy to: 1. CSB Bank Limited, (Formerly The Catholic Syrian Bank Ltd)., Kurianoor Branch, Puthethu Vadakkethil Building, Kurianoor Post Office Junction, Pathanamthitta-689 550. 2. CSB Bank Limited, (Formerly The Catholic Syrian Bank Ltd)., Gold Merchants Association Building, XVII/1859, PB No. 3818, Mullakkal, Alappuzha-688 011. 3. CSB Bank Limited, (Formerly The Catholic Syrian Bank Ltd)., Cheriyanad, Chenganuur Taluk, Alappuzha-689 511. 4. The Assistant Commissioner of Income-tax(TDS), CPC, Ghaziabad. 5. The Income Tax Officer(TDS), Alappuzha. 6. The Commissioner of Income-tax(Appeals), Kottayam. 7. The Commissioner of Income-tax (TDS), Kochi. 8.. D.R., I.T.A.T., Cochin Bench, Cochin. 9. Guard File. By Order

(ASSISTANT REGISTRAR) I.T.A.T., Cochin