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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI N.V. VASUDEVAN & SHRI CHANDRA POOJARI
Consolidated Appeals (19)
IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER
Sl. ITA / CO No. F.Y. PERIOD AMOUNT No. 1. 316/Bang/2021 2012-13 Q2 Form 24Q 57,600 2. 317/Bang/2021 2012-13 Q4 Form 24Q 15,200 3. 318/Bang/2021 2012-13 Q4 Form 24Q 57,600 4. 319/Bang/2021 2012-13 Q3 Form 26Q 39,200 5. 320/Bang/2021 2012-13 Q4 Form 26Q 15,200 6. 321/Bang/2021 2013-14 Q2 Form 24Q 16,500 7. 322/Bang/2021 2013-14 Q3 Form 24Q 38,800 8. 323/Bang/2021 2013-14 Q4 Form 24Q 14,800 9. 324/Bang/2021 2014-15 Q1 Form 26Q 38,600 10. 325/Bang/2021 2013-14 Q2 Form 26Q 57,200 11. 326/Bang/2021 2013-14 Q3 Form 26Q 38,800 12. 327/Bang/2021 2014-15 Q1 Form 24Q 15,000 13. 328/Bang/2021 2014-15 Q2 Form 24Q 5,000 14. 329/Bang/2021 2014-15 Q3 Form 24Q 17,800 15. 330/Bang/2021 2014-15 Q4 Form 24Q 1,200 16. 331/Bang/2021 2014-15 Q1 Form 26Q 39,400 17. 332/Bang/2021 2014-15 Q2 Form 26Q 21,000 18. 333/Bang/2021 2014-15 Q3 Form 26Q 2,600 19. 334/Bang/2021 2015-16 Q4 Form 26Q 1,200
M/s. Teekays Furniture Solutions Private Limited, Vs. ITO, Building No.22, N.J. Chambers, TDS Ward – 3(3), Opposite Hotel Ramada, Bengaluru. Tasker Town, Chandni Chowk, Road, Sulthangunta, Shivaji Nagar, Bengaluru – 560 051. PAN: AADCT 1547 R TAN: BLRT07179E APPELLANT RESPONDENT
ITA Nos.316 to 334/Bang/2021 M/s.Teekays Furniture Solutions Private Limited
Appellant by : Shri.Pranav Krishna, Advocate Respondent by : Smt.Sowmya Virupakshaiah Addl.CIT Date of hearing : 12-10-2021 Date of Pronouncement : 12-10-2021 O R D E R Per Bench These are a batch of 19 appeals filed by Assessee against different orders all dated 28.04.2021 of Commissioner of Income Tax (Appeals) {‘CIT(Appeals’)} National Faceless Appeal Centre (‘NFAC’), Delhi, relating to various quarterly return of Tax Deduction at Source (TDS) of Assessment years 2013-14 & 2014-15 & 2015- 16.
The assessee filed statement of tax deducted at source (TDS) for various quarters in Form No.24Q/26Q for various Quarters of 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 AO by intimations u/s. 200A of the Income-Tax Act, 1961 [“the Act”] dated 4.10.2016 for AY 13-14, dated 31.7.2014 for AY 2014-15 and order dated 3.2.2015 for AY 2015-16 levied late fee u/s. 234E of the Income-Tax Act, 1961 [“the Act”]. Under Sec.234E of the Act, if there is a delay in filing statement 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.
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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.”
Aggrieved by the aforesaid orders, the assessee filed appeals before the CIT(A).The details of the appeals filed were as follows:
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There were in all 19 appeals filed before CIT(A) 5 relating to AY 2013-14, 6 appeals relating to AY 2014-15 and 8 appeals relating to AY 2015-16 for various quarters in relation to filing of Form No.24Q and 26Q respectively.
The assessee’s contention before CIT(A) was 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:— (a) the sums deductible under this Chapter shall be computed after making the following adjustments, namely:—
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(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 CIT(Appeals)-7, Bangalore found that the appeals had been filed on a letter dated 27.11.2018 from the DCIT(TDS) Circle-3(1), Bngalore in which the Assessee was called upon to pay the outstanding demand in respect of Form 26Q & 24Q for Q1 to Q4. The CIT(A) was of the view that these were default summary and not orders passed u/s.200A of the Act. He therefore held that the appeals filed without the order u/s.200A of the Act are not maintainable and liable to be dismissed as defective. The following were the relevant observations of the CIT(A)-7, Bangalore in his common order dated 29.3.2019.
ITA Nos.316 to 334/Bang/2021 M/s.Teekays Furniture Solutions Private Limited
“4. In response to the hearing notice. the Authorized Representative of the appellant company appeared and presented the case. The date of service of the order in Form 35 was indicated as 03-12-2018, but the copy of the orders uls 200A has neither been uploaded with form 35 by the appellant nor the same could he filed during the appeal proceedings. However during hearing the appellant submitted (order sheet entry dt 28-03-2019) that they do not have the copy of the order u/s 200A and appeals have been tiled only after receiving the letter dated 27-11-2018 from the DC1T (TDS). C- 3(1). Bangalore. The AR stated that he will check and file the copy of order u/s 200A in this office on 28-03-2019 itself However, no such order was filed. It is a fact that the order u/s 200A is passed online and hence it is sent immediately online to the deductor (assessee). In view of this the contention of the assessee about unavailability of order u/s 200A is nothing but negligence at the end of the assessee. The details available on record and submissions made have duly been taken into account. Considering the facts of the case and the submissions made by the appellant, the appeals are decided as follows: 5. In the Form 35 the appellant has indicated that it has challenged order dt 27-11-2018 under Section 200A of the Act. However the documents uploaded by the appellant along with Form 35 are not orders under Section 200A of the Act. instead the same are 'Default Summary for Form 26Q & 24Q for Q I to Q4. informed by the AO to the appellant vide a letter dated 27-11-2018 requesting the appellant to make payment of the outstanding demand. The appellant has not produced any copy of the intimation under Section 200A of the Act against which appeal has been tiled. 5.1 The above referred letter of the AO informing. the outstanding demand and requesting payment of the same is not an order nor appealable order which can be challenged before CIT(A) as per provisions of Section 246A of the Act. Since the appellant has not filed copy of the relevant order under Section 200A of the Act. the appeals are
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found to be inherently defective and not maintainable. Therefore. the appeals are dismissed. The issue of delay becomes academic and the same is not being adjudicated.”
The Assessee thereafter filed appeals before the CIT(A) after obtaining copies of the relevant orders passed u/s.200A of the Act for the various quarters relating to various Assessment years set out in paragraph-2 of this order.
The appeals so filed were beyond the period of limitation for filing appeals before the first appellate authority as provided in Sec.246A(1)(a) of the Act. The Assessee had filed application for condonation of delay in filing appeals. The reasons given for the delay in filing appeals has not been set out in the impugned orders. The CIT(A) referred to the earlier orders of CIT(A)-7, Bangalore dated 29.3.2019 referred to in paragraph-5 of this order and called upon the Assessee to explain as to how the appeals filed before the CIT(A) are maintainable in the light of the order dated 29.3.2019. The Assessee gave the following reply to the said query of the CIT(A):
“The Appeal in the earlier occasion was filed by the earlier counsel on the Default summary instead of orders passed under the provisions of section 200 and 200A of the Income Tax Act. The said appeal was dismissed by the learned Commissioner of Income Tax Appeals owing to initiation of appeal against the wrong order. The Assessee has now filed the appeals against the said correct orders. In this regard since the appeal was not adjudicated on the merits of the case in the earlier order of the learned Commissioner of Income Tax Appeals, the present appeal shall kindly be adjudicated on merits of the case for the advancement of substantial cause of justice and equity and further in view of advancement of principles of natural justice.” 9. The CIT(A) dismissed the appeals of the Assessee holding that in the Assessee had already filed appeal before the CIT(A) and the same was adjudicated by the appellate order dated 29.3.2019. The Assessee cannot file a second appeal against a matter
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which has already been adjudicated by the CIT(A) and that the Assessee ought to have filed appeals agains the order dated 29.3.2019 before the Income Tax Appellate Tribunal (ITAT). The following were the relevant observations of the CIT(A):
“I have gone through the submissions filed by the appellant, in detail. The intimation u/s 200A of the Act which has been agitated in this present appeal has already been appealed against by the appellant in the appeal filed on 1.1.2019 before CIT(A)-7, Bangalore. In both the Form no 35 of the two appeals (ie the appeal filed before CIT(A)-7 Bengaluru and the present appeal), the appeal is against the order u/s 200A of the CPC TDS in respect of the same form, for the same quarter of the same Financial Year. As the issue of the levy of late filing fees in respect of form 24 Q of Quarter 2 of AY 2013-14 has been covered in the appeal adjudicated by the CIT(Appeals)-7 in ITA no 99,100&101/CIT(a)-7/2018- 19 dt 29.3.2019. the present appeal is not maintainable. No appeal can be filed before the same authority, in this case the Commissioner (Appeals), on a matter which has already been adjudicated upon earlier by a Commissioner (Appeals). The correct forum for appeal in this case would be the Income Tax Appellate Tribunal and the appellant should have filed an appeal before the Ld. ITAT if it was aggrieved by the order dated 29.3.2019 of the CIT(A)-7 Bangalore. Therefore, as the jurisdiction of the appeal does not lie with the undersigned, the appeal filed is non maintainable and is thus dismissed. The matter of the delay in filing the appeal therefore becomes academic and is not adjudicated.” 10. Aggrieved by the aforesaid order of the CIT(A), the Assessee is in appeal before the Tribunal. We have heard the rival submission. In our view the impugned orders deserve to be set aside. The order dated 29.3.2019 was an order in which there was no adjudication and the appeals were dismissed because the appeals were not filed against orders u/s.200A of the Act. When the appeals u/s.200A of the Act was filed, the same was the only validly instituted appeal, which ought to have been considered and decided on merits including the request for condonation of delay. In this regard we find that the controversy regarding levy of interest u/s.234-E of the Act was not clear and clarity emerged only after the decision of the Hon’ble High Court of Karnataka in the case of Fatheraj Singhvi (supra). It is not in dispute that if the ratio laid down by
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the Hon’ble Karnataka High Court in the case of Fateeraj Singhvi (supra) is 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. It has been held by the ITAT Hyderabad Bench in the case of MSV IT Solutions Ltd. Vs. ITO, Ward 16(4) ITA Nos. 177 & 178/Hyd/2018 order dated 26.10.2018 wherein on identical facts noticing that there was no legal remedy prior to 1.6.2015 against an intimation u/s.200A of the Act, the Hyderabad Bench condoned delay in filing appeal before CIT(A).
Considering the peculiar facts and circumstances of the case and keeping in mind that technicalities should not stand in the way of rendering substantive justice, we are of the view that interest of justice would be met if the issue with regard to condonation of delay in filing appeals as well as the validity of levy of interest u/s.234- E of the Act be remanded to the CIT(A) for fresh consideration in accordance with the observations made in this order. We hold and direct accordingly.
In the result, all the appeals by the assessees are treated as allowed for statistical purpose.
Pronounced in the open court on the date mentioned on the caption page. Sd/- Sd/- (CHANDRA POOJARI) (N. V. VASUDEVAN) Accountant Member Vice President Bangalore. Dated: 12.10.2021. /NS/*
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Copy to: 1. Appellants 2. Respondent 3. CIT 4. CIT(A) 5. DR 6. Guard file By order Assistant Registrar, ITAT, Bangalore.