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Income Tax Appellate Tribunal, HYDERABAD BENCH “A”, HYDERABAD
Before: SMT. P. MADHAVI DEVI & SHRI S. RIFAUR RAHMAN
PER S. RIFAUR RAHMAN, A.M.:
This appeal filed by assessee is directed against order of CIT(A) – 8, Hyderabad, dated, 01/09/2017 for AY 2015-16.
Brief facts of the case are, the assessee company filed its statement in Forms 24Q for Q4 for FY 2014-15 relevant to AY 2015- 16. On verification of this statement, the AO noticed that the assessee filed the statement, belatedly and hence, raised a demand on account of late filing levy u/s 234E by issuing intimations u/s 200A.
Against the said action of AO, assessee preferred appeal before the CIT(A) raising a ground that the provisions to include late fee u/s 234E in ‘Intimation u/s 200A is not permissible under law and consequently such levy is unsustainable in law and hence the levy is liable to be deleted.
2 ITA No. 2279/Hyd/17 Agra’s Khara Pvt. Ltd., Hyd.
Before the CIT(A), the AR of the assessee contended that the provisions to include late fee u/s 234E in the intimation u/s 200A of the Act came into effect only through the Finance Act, 2015 w.e.f. 01/06/2015 and, hence, prior to 01/06/2015 such inclusion of late fee u/s 234E in the intimation u/s 200A is not permissible under the law. In this contention, he relied on various case law, which were extracted by the CIT(A) at page 2 of his order.
After considering the submissions of the assessee, the CIT(A) relying on the judgement of Hon’ble Gujarat High Court in the case of Rajesh Kourani Vs. UOI, [2017] 83 Taxmann.com 137 confirmed the late filing levy u/s 234E by the ACIT CPOC TDS.
Aggrieved by the orders of CIT(A), the assessee preferred appeals before us raising the following grounds of appeal:
“1. The learned Commissioner of Income Tax (Appeals) has erred in Facts and Law while passing Appeal order. 2. The learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assistant Commissioner of Income Tax, Centralized Processing Cell- TDS, Ghaziabad, Uttar Pradesh in passing an order u/s.200A of the Income Tax Act, 1961 vide Communication Ref. TDS/1415/240/0/ 100016506873 in respect of Form No.24Q, filed by the Appellant for quarter - 4 of Financial Year 2014-15 which is illegal and bad in law. Hence the same should be cancelled. 3. The learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assistant Commissioner of Income Tax, Centralized Processing Cell - TOS, Ghaziabad, Uttar Pradesh in passing an intimation order u/s.200A of the IT. Act, 1961 without giving show cause notice to the appellant. Hence the order so passed without giving an opportunity of being heard to the appellant being against the principles of natural justice is illegal and bad in law.
3 ITA No. 2279/Hyd/17 Agra’s Khara Pvt. Ltd., Hyd. 4. The demand of late fee cannot be raised 9Y way processing of TOS Statement, because provisions of Section 200A of the Act does not cover default in payment of late fee under Section 234E. 5. The provisions of Section 204 of the Act clearly specifies the "persons responsible for making the payment", but Sec.234E is not covered u/s 204A hence, it is clear that for the purpose of Section 234E none of the person has been made responsible, therefore if any late fee is due and not deposited along with the TOS Statement none can be responsible to deposit it. 6. The provisions of Sec.234E(3) clearly states that "Amount of late fee shall be paid before delivering or causing to be delivered a Statement". It means that any late fee should have been deposited just at the time of delivering TOS statement and not later than this. The authorized TIN-NSOL centre which accepted the TOS statement also accepted these without late fee, as well as the software utility of the TOS department itself accepted these without late fee. Once the TOS statement has been accepted without late fee, then such late fee cannot be recovered later on. 7. Since the levy of late fee is punitive in nature, a reasonable opportunity of being heard should be given to the deductor before imposing such late fee. 8. The levy of late fee of Rs.200 per day for each day of default is very stringent on deductors at large considering the nature of default being procedural in nature without any loss of revenue to the Government exchequer. 9. The learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assistant Commissioner. of Income Tax, Centralized Processing Cell - TDS, Ghaziabad. Uttar Pradesh in Charging 30,000/- for the alleged late filing fees u/S.234E of the IT. Act, 1961. 10. For these and other grounds which may be raised during or before the appeal is heard.”
Considered the rival submissions and perused the material on record. We find that similar issue came up for consideration before the coordinate bench of this Tribunal in the case of M/s Terra Infra Development Ltd., Hyderabad in ITA Nos. 1876 & 1875/Hyd/2017 for
4 ITA No. 2279/Hyd/17 Agra’s Khara Pvt. Ltd., Hyd. AYs 2013-14 and 2014-15, order dated 03/10/2018 (wherein both the Members are party), wherein the coordinate bench has held as under:
We find that though the provisions for levy of fee in certain cases has been brought into the Statute book w.e.f. 1.7.2012, it has been brought under the purview of section 200A only w.e.f. 1.6.2015. Therefore, as rightly held by the Coordinate Bench in the case of M/s. Sonalac Paintings & Coatings Ltd (cited Supra) we hold that the interest u/s 234E cannot be levied in respect of TDS returns filed prior to 1.6.2015. For the sake of ready reference, the relevant para is reproduced hereunder:
"10. Now coming to the merits of the case, we find force in the argument of the learned Counsel for the assessee that prior to 01.06.2015, there was no mandate, as per the Statute, to make any adjustment on account of levy of fees u/s 234E while processing TDS returns u/s 200A. We have taken note of the order of the Hon'ble Gujarat High Court holding the amendment made to section 200A w.e.f. 01.06.2015, giving power to make adjustment on account of fees u/s 234E while processing returns u/s 200A to be retrospective in nature, stating that this power given to the AO is a machinery provision while the substantive provision of the power to levy fees u/s 234E was always there on the Statute from 01.06.2012. But at the same time, we note that the Hon'ble Karnataka High Court held that levy of fees u/s 234E while processing returns, TDS u/s 200A prior to 01.06.2015 was without any authority of law. With two divergent view of the Hon'ble High Courts on the issue and in the absence of any decision by the jurisdictional High Court, we concur with the learned Counsel for the assessee that as per the well accepted rule of construction, if two reasonable constructions of a statute are possible the construction which favours the assessee must be adopted. In view of the same, respectfully following the decision of the Karnataka High Court in the case of Fatheraj Singhvi (Supra), we hold that the fees levied in all the present cases u/s 234E prior to 01.06.2015 in the intimations made u/s 200A was without authority of law and the same is therefore, directed to be deleted. In view of the above, all the appeals of the assessee stand allowed". 5. Respectfully following the same, assessee's appeals for both the A.Ys are allowed.”
5 ITA No. 2279/Hyd/17 Agra’s Khara Pvt. Ltd., Hyd. 7.1 In the case under consideration, on perusal of record, we find that the TDS returns filed by the assessee for the relevant period i.e., FY 2014-15 Quarter - 4 was prior to 01/06/2015. Therefore, respectfully following the said decision of the coordinate bench, we set aside the order of CIT(A) and direct the AO to delete the fees levied u/s 234E.
In the result, the appeal filed by the assessee is allowed. Pronounced in the open Court on 12th June, 2019.
Sd/- Sd/- (P. MADHAVI DEVI) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, Dated: 12th June, 2019 kv
Copy to:- 1) Agra’s Khara Pvt. Ltd., C/o S/Shri K. Vasantkumar, AV Raghuram, P. Vinod & M. Neelima Devi, Advocates, 610, Babukhan Estate, Basheerbagh, Hyderabad – 500 001. 2) ACIT, Centralized Processing Cell - TDS, Ghaziabad. 3) CIT(A) – 8, Hyderabad. 4) CIT (TDS), Hyd. 5) The Departmental Representative, I.T.A.T., Hyderabad. 6) Guard File