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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI N. V. VASUDEVAN & SHRI.LAXMI PRASAD SAHU
IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND SHRI.LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA Nos.462 to483/Bang/2022 Assessment Years : 2013-14, 2015-16 M/s. Mindlogicx Infratec Limited, Vs. ACIT, Unit-1, 10/1-B Techllano, CPC, TDS, Graphite India Road, Hoodi Village Ghaziabad. K R Puram Hobli, Bengaluru – 560 048. PAN : AADCT5561H APPELLANT RESPONDENT Assessee by : Shri. Hemanth, CA Revenue by : Shri. Narayana. K. R, Addl. DIT(DR)(ITAT), Bengaluru. Date of hearing : 18.07.2022 Date of Pronouncement : 19.07.2022 O R D E R Per Bench These are a batch of 22 appeals filed by assessee against 22 orders all dated 24.9.2021 of National Faceless Appeal Centre (NFAC), Delhi, relating to assessment years 2013-14 to 2015-16.
The assessee filed statement of tax deducted at source (TDS) for various quarters in Form No.24Q for FY 2012-13 to 2014-15 (AY 2013-14 to 2015-16). The statement was processed by the respondent. There was a delay in filing the above TDS statement and therefore the Centralized Processing Centre (CPC) by intimation u/s. 200A of the Income-Tax Act, 1961 [“the Act”] levied late fee u/s. 234E of the Income-Tax Act, 1961 [“the Act”] for the various quarters to which the return of TDS was filed by the assessee . Under Sec.234E of the Act, if there is a delay in filing statement
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of TDS within the prescribed time then the person responsible for making payment and filing return of TDS is liable to pay by way of fee a sum of Rs.200/- per day during which the failure continues. Section 234E of the Act inserted by the Finance Act, 2012 w.e.f. 1.7.2012. reads as follows:- “Fee for default in furnishing statements.
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 sub-section (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.” 3. Aggrieved by the aforesaid orders, the assessee filed application u/s.154 of the Act before the AO pointing out that the provisions of section 234E of the Act was inserted by the Finance Act, 2012 w.e.f. 1.7.2012. Section 200A of the Act is a provision which deals with how a return of TDS filed u/s.200(3) of the Act has to be processed and it reads as follows:- Processing of statements of tax deducted at source.
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 to in this section as deductor) under section 200, such statement shall be processed in the following manner, namely:—
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(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; (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 of refund due to the deductor in pursuance of the determination under clause (d) shall be granted to the deductor: Provided that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the statement is filed. Explanation.— For the purposes of this sub-section, "an incorrect claim apparent from any information in the statement" shall mean a claim, on the basis of an entry, in the statement— (i) of an item, which is inconsistent with another entry of the same or some other item in such statement; (ii) in respect of rate of deduction of tax at source, where such rate is not in accordance with the provisions of this Act. (2) For the purposes of processing of statements under sub-section (1), the Board may make a scheme for centralised processing of statements of tax deducted at source to expeditiously determine the tax payable by, or the refund due to, the deductor as required under the said sub-section.”
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Clause (c) to (f) of section 200A(1) was substituted by the Finance Act, 2015 w.e.f. 1.6.2015. The assessee contended that AO could levy fee u/s.234E of the Act while processing a return of TDS filed u/s.200(3) of the Act only by virtue of the provisions of Sec.200A(1)(c), (d) & (f) of the Act and those provisions came into force only from 1.6.2015 and therefore the authority issuing intimation u/s. 200A of the Act while processing return of TDS filed u/s.200(3) of the Act, could not levy fee u/s. 234E of the Act in respect of statement of TDS filed prior to 1.6.2015. The assessee, thus, challenged the validity of charging of fee u/s. 234E of the Act. The assessee relied on the decision of the Hon’ble High Court of Karnataka in the case of Fatehraj Singhvi v. UOI [2016] 73 taxmann.com 252 wherein the Hon’ble Karnataka High Court held that amendment made u/s. 200A providing that fee u/s. 234E of the Act could be computed at the time of processing of return and issue of intimation has come into effect only from 1.6.2015 and had only prospective effect and therefore, no computation of fee u/s.234E of the Act for delayed filing of return of TDS while processing a return of TDS u/s.234E of the Act could have been made for tax deducted at source for the assessment years prior to 1.6.2015.
The CPC did not accept the plea of the Assessee as raised in the application u/s.154 of the Act and retained the levy of interest u/s.234-E of the Act. Against the said order of CPC, the Assessee filed appeals before CIT(A).
The CIT(A) found that in Form No.35 filed by the assessee, (in relation to appeal ITA No.462/Bang/2022) it has been mentioned that the appeal has been filed against the order dated 26.09.2019 passed on the application filed by the assesseeunder section 154 of the Act. However, in column 4.1 sub column “section and sub section of the Income Tax Act, 1961 (hereafter called ‘the Act’) under which the order appealed against has been passed”, it has been mentioned as “200A”. The CIT(A) found that the order
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under section 200A of the Act was dated 06.07.2014. The CIT(A) also found that in column 14 of Form 35, it has been mentioned that there is no delay in filing the appeal. According to the CIT(A), the appeal filed by the assessee was one against the order under section 200A of the Act, dated 06.07.2014 and therefore there was a delay in filing the appeal by the assessee before the CIT(A). The CIT(A) therefore issued a show cause notice to the assessee which reads as follows: “Please refer to the appeal filed on 10.10.2019 against order under section 200A dated 26.09.2019. However, it is noticed that you have attached copy of order under section 154 dated 26.09.2019. Clearly, you have not attached/uploaded the copy of the order appealed against. Please file the copy of order under section 200A, alongwith copy of demand notice, failing which the appeal is liable to be treated as defective. In case there is delay in filing appeal w.r.t. order under section 200A, please furnish detailed reasons for such delay. Please also file copy of application filed by you under section 154 before the AO, CPC-TDS, Ghaziabad. Also furnish copy of Justification Report. Any other submission, if any, apart from response already filed by you.”
According to the CIT(A), the assessee despite service of notice through email did not file any response. The CIT(A) therefore proceeded to hold as follows:
(i) According to the CIT(A), an application under section 154 of the Act can be filed only to rectify a mistake apparent from the record which means the mistake must be obvious and patent and debatable issue cannot be a subject matter of rectification. (ii) According to the CIT(A), the appeal has been filed only against the original intimation dated 06.07.2014 and not against the order passed under section 154 of the Act dated 26.09.2019.
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According to the CIT(A), even in the grounds of appeal raised by the assessee there is no specific ground with regard to rectification of mistake apparent on the record and therefore it was clear that the appeal filed by the assessee was one against the intimation under section 200A of the Act and not the order under section 154 of the Act. (iii) Since the appeal has been filed after more than 5 years, reckoned from the date of intimation under section 200A of the Act and since there was no application for condonation in delay in the appeal, the appeal itself is not maintainable. (iv) Since there was an inordinate delay in filing the appeal and no sufficient cause for the delay in filing the appeal has been shown by the assessee, the appeal is liable to be dismissed on the ground of delay in filing the appeal. 8. For the above reasons, the CIT(A) dismissed the appeals of the assessee. The dates of intimation under section 200A of the Act and the date of the order under section 154 of the Act as given above is as per the dates in ITA No.462/Bang/2022. Dates of section 200A intimation and the order under section 154 of the Act are different in some of the appeals and these details are given in the table given below:
ITA No. Date of Date of Order Date of Order intimation under section of under section 154 CIT(A)/NFAC 200A 462/Bang/2022 06.07.2014 26.09.2019 24.09.2021 463/Bang/2022 06.07.2014 26.09.2019 24.09.2021
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464/Bang/2022 20.08.2014 26.09.2019 24.09.2021 465/Bang/2022 20.08.2014 26.09.2019 24.09.2021 466/Bang/2022 06.07.2014 26.09.2019 24.09.2021 467/Bang/2022 20.08.2014 26.09.2019 24.09.2021 468/Bang/2022 21.05.2014 22.09.2014 24.09.2021 469/Bang/2022 18.08.2015 17.09.2014 24.09.2021 470/Bang/2022 12.11.2014 17.09.2014 24.09.2021 471/Bang/2022 12.11.2014 17.09.2014 24.09.2021 472/Bang/2022 18.08.2015 17.09.2014 24.09.2021 473/Bang/2022 10.11.2015 22.09.2014 24.09.2021 474/Bang/2022 13.05.2015 22.09.2014 24.09.2021 475/Bang/2022 15.02.2016 22.09.2014 24.09.2021 476/Bang/2022 07.04.2016 17.09.2014 24.09.2021 477/Bang/2022 07.04.2016 17.09.2014 24.09.2021 478/Bang/2022 07.04.2016 17.09.2014 24.09.2021 479/Bang/2022 15.02.2016 22.09.2014 24.09.2021 480/Bang/2022 15.02.2016 22.09.2014 24.09.2021 481/Bang/2022 15.02.2016 22.09.2014 24.09.2021 482/Bang/2022 15.04.2016 17.09.2019 24.09.2021 483/Bang/2022 10.02.2015 22.09.2014 24.09.2021
The facts and the decision of the CIT(A), however, remains that the same and the common thread of reasoning of the CIT(A) in all these appeals is the same as stated in the earlier paragraph of this order.
Aggrieved by the orders of the CIT(A), the assessee has filed the present appeals before the Tribunal. We may also mention that in ITA
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No.483/Bang/2022 in Form No.35 filed before the CIT(A), the assessee has given the Assessment Year wrongly instead of the correct Assessment Year 2014-15. We have heard the submissions of the learned Counsel for the assessee who submitted as follows: That there is no ambiguity in the non-applicability of the a) provisions of section 200A of the Act for a period prior to 01.06.2015 as per the statute and clarifications issued by CBDT and consequently, non-appreciation of the prevailing position in law is a mistake apparent on record in terms of section 154 of the Act. b) That the binding judgement of the jurisdictional High Court in the case of Fatheraj Singhvi in 289 CTR 602 clearly lays down the law that the provisions of section 200A of the Act are not applicable for a period prior to 01.06.2015 and consequently, non-appreciation of the binding precedents is a mistake apparent on record in terms of section 154 of the Act. Notwithstanding the above, it is submitted that the issue of levy c) of late filing fee can be challenged by assailing the order passed under 154 of the Act in terms of doctrine of merger since the subsequent rectification order which reiterated the levy of late filing fee merges with the original intimation as the subject matter being the same.
The learned DR, on the other hand, relied on the order of the CIT(A) and submitted that the conclusions of the CIT(A) with regard to delay in filing of the appeals are correct and does not call for any interference and there has been no decision rendered on merits of the levy of interest u/s.234E of the Act.
We have carefully considered the rival submissions. It is no doubt true that in Form No.35 filed by the assessee before the CIT(A) in column 4.1 in the sub column with regard to “section and sub section of the Income Tax Act, 1961 under which the order appealed has been passed”, there is a mention as “200A”. But at the same time, if one peruses the other sub column of column 4.1 which talks about the date of such order, the date given by the
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assessee is the date of the order under section 154 of the Act. Besides the above, the order passed u/s.154 of the Act has been filed along with Form No.35 which is the form for filing appeals before CIT(A), making it clear that the order appealed against is the order passed u/s.154 of the Act. Therefore, we are satisfied that the mention of 200A in sub column of column 4.1 of Form 35 cannot be basis to hold that the appeal filed by the assessee is an appeal against the original intimation under section 200A of the Act and not against the order under section 154 of the Act. In the given facts and circumstances of the case, we are of the view that there is no delay in filing appeal by the assessee before CIT(A) and the view taken by the CIT(A) is purely technical and on a wrong reading of Form No.35 filed by the assessee before the CIT(A). The CIT(A) having held that the appeal filed by the assessee is an appeal against the original intimation under section 200A of the Act, dated 06.07.2018 has also observed that the issue sought to be raised by the assessee in the application under section 154 of the Act is a highly debatable issue. By doing so, in our view, the CIT(A) has also construed the appeal of the assessee as one against the order under section 154 of the Act. This inference is supported from the observations made by the CIT(A) on the debatable nature of the issue raised by the assessee in the application u/s.154 of the Act.
It is not in dispute that if the ratio laid down by the Hon’ble Karnataka High Court in the case of Fateeraj Singhvi (supra) if applied then the levy of interest u/s.234-E of the Act would be illegal for returns of TDS in respect of the period prior to 1.6.2015. The present appeals of the assessee relate to TDS returns filed prior to 1.6.2015. The decision of the Hon’ble Karnataka High Court in the case of Fateeraj Singhvi (supra)was rendered on 26.8.2016. As rightly contended by the learned Counsel for the assessee, there is no ambiguity in the non applicability of the provisions of section 200A of the
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Act for the period prior to 01.06.2015 as interpreted by the Hon’ble Karnataka High Court in the case of Fateeraj Singhvi (supra). Therefore the issue before the AO in the application under section 154 of the Act cannot be said to be a debatable issue on which two views are possible. It cannot also be said that the mistake is not obvious and patent. The law is well settled that the decision of the Jurisdictional High Court is binding on the authorities functioning under its jurisdiction. The AO as well as the CIT(A) ought to have allowed the application of the assessee under section 154 of the Act by following law laid down by the Hon’ble Karnataka High Court in the case of Fateeraj Singhvi (supra). We, therefore, allow these appeals filed by the assessee and hold that the levy of interest under section 234E of the Act as detailed below cannot be sustained and the same are directed to be deleted: Return Quarter Late Fees Due date Actual date Si. ITA No. FY Type u/s 234E of TDS of TDS No. Filing Filing 24Q Q2 1,25,000/- 15.10.2012 02.07.2014 1 463/B/22 2012-13 2 466/B/22 2012-13 24Q Q3 1,06,600/- 15.01.2013 02.07.2014 3 462/B/22 2012-13 24Q Q4 82,600/- 15.05.2013 02.07.2014 467/B/22 2012-13 26Q Q2 1,33,600/- 15.10.2012 14.08.2014 4 465/B/22 2012-13 Q3 5 26Q 1,15,200/- 15.01.2013 14.08.2014 6 464/B/22 2012-13 26Q 91,200/- 15.05.2013 14.08.2014 Q4 474/B/22 2013-14 24Q Q1 32,394/- 15.07.2013 07.05.2015 7 8 468/B/22 2013-14 24Q Q2 1,13,800/- 15.10.2013 07.05.2015 2013-14 06.11.2015 483/B/22 24Q 15.01.2014 1,32,000/- 9 Q3 10 473/B/22 2013-14 24Q 1,08,000/- 15.05.2014 06.11.2015 Q4 470/B/22 2013-14 26Q 96,000/- 15.07.2013 12.11.2014 11 Q1 12 471/B/22 2013-14 26Q Q2 77,600/- 15.10.2013 07.11.2014 13 469/B/22 2013-14 26Q Q3 1,15,200/- 15.01.2014 15.08.2015 14 472/B/22 2013-14 26Q 15.08.2015 Q4 91,200/- 15.05.2014 15 475/B/22 2014-15 24Q Q1 15.07.2014 11.02.2016 1,15,200/- 2014-15 16 479/B/22 24Q Q2 96,800/- 15.10.2014 11.02.2016 17 480/B/22 2014-15 24Q 78,400/- 15.01.2015 11.02.2016 Q3 18 481/B/22 2014-15 24Q Q4 54,400/- 15.05.2015 11.02.2016 478/B/22 2014-15 26Q Q1 1,25,800/- 15.07.2014 07.04.2016 19 20 482/B/22 2014-15 26Q Q2 15.10.2014 04.04.2016 1,07,400/- 21 477/B/22 2014-15 26Q Q3 89,000/- 15.01.2015 07.04.2016 15.05.2015 05.04.2016 22 476/B/22 2014-15 26Q 65,000/- Q4
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We also hold that the wrong reference to the Assessment Year in ITA No.483/Bang/2022 before the CIT(A) cannot be fatal and in any event ought to have called upon the assessee to rectify the same and without doing so and without looking into the content of the appeal of the assessee ought not to have rejected the appeal of the assessee on this ground.
In the result, all these appeals by the assessee are allowed.
Pronounced in the open court on the date mentioned on the caption page. Sd/- Sd/- (LAXMI PRASAD SAHU) (N. V. VASUDEVAN) Accountant Member Vice President Bangalore. Dated: 19.07.2022. /NS/*
Copy to: 1. Appellants 2. Respondent 3. CIT 4. CIT(A) 5. DR 6. Guard file By order
Assistant Registrar, ITAT, Bangalore.