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Income Tax Appellate Tribunal, DELHI BENCHES “E” : DELHI
Before: SHRI R.K. PANDA & SHRI SANJAY GARG
M/s. Neelam Texprints Pvt. Ltd., Ghaziabad. PAN AABCN9818R The ACIT, CPC-TDS C/o. Garg R. Kumar And Associates, C.As., (Vaishali) vs. 7, Advocate Chambers, Ghaziabad. Raj Nagar District Centre, Above Dominos Pizza, Ghaziabad. (Appellant) (Respondent) For Assessee : Shri Rakesh Kumar Garg, C.A. For Revenue : Shri Gaurav Pundir, Sr. DR Date of Hearing : 30.09.2021 Date of Pronouncement : 07.10.2021 ORDER PER R.K. PANDA, A.M. The above two appeals filed by the Assessee are directed against the separate orders dated 26.03.2018 of the Ld. CIT(A), Ghaziabad, relating to the A.Ys. 2013-14 & 2014-15 respectively. Since common issues are involved in 2 ITA.No.3836/Del./2018 M/s. Neelam Texprint Pvt. Ltd., Ghaziabad. both the appeals, therefore, these appeals were heard together and are being disposed of by this consolidated for sake of brevity and convenience.
2. First, we take-up ITA.No.3836/Del./2018 for the A.Y. 2013-2014.
Facts of the case, in brief, are that a fine fee of Rs.10,722/- was levied under section 234E of the I.T. Act, 1961 by the A.O. on the ground that there was a delay in filing 26Q TDS return of Quarter-IV of F.Y. 2012-13.
3.1. The assessee filed an appeal before the Ld. CIT(A) and the date was fixed for hearing on 20.03.2018. Since the assessee did not appear before the Ld. CIT(A) on the date of hearing, the Ld. CIT(A) in the ex-parte order passed by her dismissed the appeal of assessee by observing as under:
“3.1. Grounds of appeal : The assessing officer was not justified in 1. imposing late fifing fee on the assessee under section 234E of the IT Act, 1961 of 3 ITA.No.3836/Del./2018 M/s. Neelam Texprint Pvt. Ltd., Ghaziabad. Rs.10722/- for IV the quarter ending on 31.03.2013 for late filing of Form-26Q as it is not legal and not as per the provisions of the Act.
4. The appellant has challenged the imposition of late filing of fee u/s 234E. During the course of appellate proceedings appellant submitted that it is engaged in business of dyeing and printing of fabrics and could not filed TDS return within time. Examination of facts reveals that late filing fee u/s 234E is not a penalty and is in accordance with law no interference is required as this stage.”
Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds :
1. The learned CIT(A) has erred in law and on merits of case was not justified in sustaining penalty under section 234E of the Income Tax Act, 1961 of Rs.10722/- for IVth Qtr (26Q) of F.Y. 2012-2013 4 ITA.No.3836/Del./2018 M/s. Neelam Texprint Pvt. Ltd., Ghaziabad. even the notice for fixing the date of appeal is received later than the date of hearing. In fact date of hearing was 20.03.2018 whereas such notice was received by the assessee on 22.03.2018. Hence the assessee was prevented by reasonable cause for not attending the date so fixed.
2. That the learned assessing officer has erred in levying the fee under section 234E of the Income Tax Act 1961 while processing TDS return. As per judicial pronouncement such fees can not be imposed before 01.06.2015. It was held therein "that the assessing officer has exceeded his jurisdiction in levying fee under Section 234E while processing the statement and make adjustment under section 200A 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 5 ITA.No.3836/Del./2018 M/s. Neelam Texprint Pvt. Ltd., Ghaziabad. Act levying fee, provided the limitation for such a levy has not expired”. 3. The appellant craves to add amend or withdraw any of the ground of appeal on or before the date of hearing.”
5. Learned Counsel for the Assessee submitted that since the assessee received notice of hearing of appeal on 22.08.2018 i.e., after the date on which the appeal was fixed for hearing, therefore, the assessee could not appear before the Ld. CIT(A). Since the assessee was prevented by sufficient causes, therefore, the order of the Ld. CIT(A) without giving opportunity to the assessee which is not being in accordance with Law should be set aside.
5.1. So far as merit of the case is concerned, the Learned Counsel for the Assessee relying on various decisions submitted that since the intimation issued by the A.O. in the present case is for the period prior to 01.06.2015, therefore, the same is beyond the scope of adjustment provided under section 200A of the I.T. Act,
6 ITA.No.3836/Del./2018 M/s. Neelam Texprint Pvt. Ltd., Ghaziabad. 1961 and, therefore, the demand raised by the A.O. charging fee under section 234E is not valid. For the above proposition he relied on the following decisions :
Order of ITAT Delhi Bench in the case of Dharam Deep Public School vs., DCIT in ITA.Nos. 2317 to 2319/Del./2016 dated 05.01.2018.
Gajanan Construction vs., DCIT CPC reported in [2016] 73 Taxmann.com 350. 3. Order of ITAT, Delhi Bench in the case of Samika Learnings Pvt. Ltd., vide ITA.No.4050 to 4054/Del./2016.
The Ld. D.R. on the other hand strongly supported the order of the Ld. CIT(A). He submitted that the fee payable under section 234E is a charging provision and the A.O. has no discretion at all, whereas Section 200A is a machinery provision enabling for processing of TDS statements, computation of adjustments, fees and generation of intimation etc. The Ld. D.R. drew the attention of the Bench to the Memorandum to the Finance Bill 2015
7 ITA.No.3836/Del./2018 M/s. Neelam Texprint Pvt. Ltd., Ghaziabad. which elaborates the rationale for insertion of clause (c) in Section 200A(1) in the statute and submitted that it is absolutely clear that this is merely an enabling Section to compute/process the TDS statement. Section 234E is a charging section imposing liability of payment of fees by the defaulting deductors as per sub-section (3) as even in the absence of section 200A of the Act with introduction of Section 234E, it was always open for the Revenue to charge the fees in terms of Section 234E of the Act from the date of its introduction in the statute i.e., 01.07.2012.
6.1. He submitted that In the case of Rajesh Kourani vs. Union of India [2017] 83 taxmann.com 137 (Gujarat), the Hon'ble Gujarat High Court has considered the chargeability of fee under section 234E before 01.06.2015 when clause (c) was inserted to section 200A(1) by the Finance Act, 2015. The issue has been discussed in great detail in paras 16 to 21 and the Hon'ble High Court has upheld the levy of fee under section 234E since the day the provisions of section 234E was brought to statute even prior to 01.06.2015 when section 200A(1) was amended to 8 ITA.No.3836/Del./2018 M/s. Neelam Texprint Pvt. Ltd., Ghaziabad. include clause (c). The Hon'ble High Court has held that section 200A of the Act is a machinery provision providing mechanism for processing a statement of TDS and for making adjustments whereas section 234E is a charging provision creating a charge for levying fee for certain defaults in filing the statements. The Ld. D.R. further submitted that w.e.f 01.06.2015 the provision of section 200A specifically provides for computing the fee payable under section 234E. The Ld. D.R. further submitted that various High courts have upheld the constitutional validity of provisions of section 234E. In several other cases, the Courts have upheld the levy of fee under section 234E where the period under consideration before Hon'ble High Courts were even the periods prior to 01.06.2015 i.e. the date when clause (c) was inserted to section 200A(1) by the Finance Act, 2015. He accordingly submitted that the order of the Ld. CIT(A) being in accordance with Law should be upheld and the grounds raised by the assessee should be dismissed.
9 ITA.No.3836/Del./2018 M/s. Neelam Texprint Pvt. Ltd., Ghaziabad.
We have considered the rival arguments made by both the sides and perused the record. It is an admitted fact that the Ld. CIT(A) has issued a notice of hearing on 20.03.2018 and decided the appeal on 26.03.2018 in the exparte order passed by her due to non-appearance of the assessee. It is the submission of the Learned Counsel for the Assessee that notice of hearing was received by the assessee on 22.03.2018. It appears from the order of the Ld. CIT(A) that she has given only one opportunity to the assessee. Therefore, we find merit in the arguments of the Learned Counsel for the Assessee that no proper opportunity has been granted. Considering the totality of the facts and circumstances of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. CIT(A) with a direction to grant one more opportunity to the assessee to substantiate its case and decide the issue as per fact and Law. The assessee is also hereby directed to appear before the Ld. CIT(A) and substantiate its case without seeking any adjournment under any pretext, failing which, the Ld. CIT(A) is at liberty
10 ITA.No.3836/Del./2018 M/s. Neelam Texprint Pvt. Ltd., Ghaziabad. to pass appropriate order as per Law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, ITA.No.3836/Del./2018 of the Assessee is allowed for statistical purposes.
ITA.No.3835/Del./2018 – A.Y. 2014-2015 :
In this appeal, the assessee has raised the following grounds :
1. “The learned CIT(A) has erred in law and on merits of case was not justified in sustaining fine under section 234E of the Income Tax Act, 1961 of Rs.18430/- for IVth Qtr (26Q) of F.Y. 2013-2014 even the notice for fixing the date of appeal is received on a later date than the date of hearing. Intact date of hearing was 20.03.2018 whereas such notice was received by the assessee on 22.03.2018. Hence the assessee was prevented by reasonable cause for not attending the date so fixed.
11 ITA.No.3836/Del./2018 M/s. Neelam Texprint Pvt. Ltd., Ghaziabad.
2. The learned CIT(A) has erred in law and on merits of case was not justified in dismissing the appeal on the contention that appeal is filed u/s 200(A)(1) whereas order attached is u/s 154 of the Income Tax Act 1961. Intact the assessee has never received any order u/s 200A(1) and received order u/s 154 only against which the appeal has filed appeal but inadvertently in form no 35 section 200A(1) is written in place of 154. This mistake was caused under a bonafide mistake as on the same date the other appeal was also filed under section 200A(1).
3. That the learned assessing officer has erred in levying the fee under section 234E of the Income Tax Act 1961 while processing TDS return. As per judicial pronouncement such fees can not be imposed before 01.06.2015. It was held therein " that the assessing officer has exceeded his jurisdiction in levying fee under Section 234E while processing the statement and make adjustment under section 200A of the Act. Therefore the impugned intimation of the lower
12 ITA.No.3836/Del./2018 M/s. Neelam Texprint Pvt. Ltd., Ghaziabad. 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." 4. The appellant craves to add amend or withdraw any of the ground of appeal on or before the date of hearing.”
10. After hearing both the sides, we find the grounds raised in the instant appeal are identical to the grounds raised in ITA.No.3836/Del./2018. We have already decided the issue and the grounds raised by the assessee have been allowed for statistical purposes. Following similar reasonings, the matter is restored to the file of the Ld. CIT(A) for fresh adjudication in the light of our above directions. The appeal filed by the assessee is accordingly allowed.
In the result, both the appeals of the Assessee are allowed for statistical purposes.
13 ITA.No.3836/Del./2018 M/s. Neelam Texprint Pvt. Ltd., Ghaziabad. Order pronounced in the open Court on 07.10.2021.