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Income Tax Appellate Tribunal, DELHI BENCHES “E” : DELHI
Before: SHRI BHAVNESH SAINI, J.M. & SHRI O.P. KANT, A.M.
All the appeals by the Assessee are directed against the different Orders of the Ld. CIT(A)-41, New Delhi, Dated 27.06.2016, for the A.Y. 2013-2014 for different quarters under section 154 of the I.T. Act, 1961, challenging the Order of the Ld. CIT(A) in confirming the action of the 2 ITA.Nos.4798, 4799 & 4800/Del./2016 N.K. Associates, Delhi. A.O. in levying fees under section 234E of the I.T. Act, 1961, bye-passing the intimation under section 154 of the I.T. Act, 1961, in the absence of any intimation issued under section 200A of the I.T. Act, 1961, by the Assessing Officer.
Briefly the facts of the case are that in all the three appeals, the A.O. passed the intimation under section 154 of the I.T. Act, levying the late fees under section 234E of the I.T. Act, 1961. The assessee challenged the said Orders before the Ld. CIT(A). The assessee contended before the Ld. CIT(A) that A.O. has erred in making intimation under section 154 without any intimation under sub-section (1) of Section 200A of the I.T. Act, 1961, in respect of TDS return. The assessee filed copy of the justification report and communication details with CPC-TDS and claimed that only Orders under section 154 was sent by CPC-TDS and no Order under section 200A had been passed after processing of the TDS statement. It was contended that creation of demand by passing order under section 154, without processing the return under section 200A, is bad in law and it was submitted that same may be quashed. Copy of the 3 ITA.Nos.4798, 4799 & 4800/Del./2016 N.K. Associates, Delhi. written submission was sent to the DCIT, CPC-TDS. The Assessing Officer stated that the factual position could only be explained by CPC-TDS. The A.O. was requested to send a report in co-ordination with CPC-TDS. The Assessing Officer has again expressed his inability in giving the factual position of the case. No reply has been received so far from the Office to the CPC-TDS and DCIT, CPC-TDS, to whom letters have been written by the Ld. CIT(A). The Ld. CIT(A) decided the appeal on the basis of material available on record. The Ld. CIT(A) noted that there is a delay in filing the TDS statement as per intimation under section 154. The Ld. CIT(A) considering the constitutional validity of Section 234E of the I.T. Act and by referring to certain decisions, dismissed the appeal of assessee.
Learned Counsel for the Assessee reiterated the submissions made before the authorities below and submitted that no order under section 200A(1) have been passed and intimation under section 154 have been issued without giving opportunity of being heard to the assessee. He relied upon the Order of ITAT, Delhi Bench in the case of 4 ITA.Nos.4798, 4799 & 4800/Del./2016 N.K. Associates, Delhi. Dharam Deep Public School & Another vs., DCIT & Another [2018] 52 CCH 16 (Delhi-Trib.), in which it was held as under :
“Held :
Section 234E(1) of the Act provides that where a person fails to deliver or cause to be delivered, a statement within time prescribed in section 200(3) of the Act or the proviso to section 206C(3) of the Act, he shall be liable to pay, by way of fees, sum of Rs.200/- for every day during which the failure continues.
Finance Act, 2015 had made amendments to section 200A of the Act enabling the Assessing Officer to make adjustments while levying fees under section 234E of the Act was applicable w.e.f. 01.06.2015 and has held that it has prospective effect. Accordingly, the Hon’ble High Court held that "intimation raising demand prior to 01.06.2015 under section 200A of the Act
5 ITA.Nos.4798, 4799 & 4800/Del./2016 N.K. Associates, Delhi. levying section 234E of the Act late fees is not valid.”
Amendment to section 200A(1) of the Act is procedural in nature and in view thereof, the Assessing Officer while processing the TD5 statements/returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E of the Act. Hence, the intimation issued by the Assessing Officer under section 200A of the Act in all these appeals does not stand and the demand raised by way of charging the fees under section 234E of the Act is not valid and the same is deleted. The intimation issued by the Assessing Officer was beyond the scope of adjustment provided under section 200A of the Act and such adjustment could not stand in the eye of law.
Since, the facts in the present case are identical to the facts involved in the aforesaid case of M/s
6 ITA.Nos.4798, 4799 & 4800/Del./2016 N.K. Associates, Delhi. Samikaran Learning Pvt. Ltd. I/s TDS Officer, Laxmi Nagar, Delhi. So, respectfully following the aforesaid order dated 09.11.2017 in to 4054/Del/2016 for the assessment years 2014-15 and 2015-16, the impugned penalties are deleted. M/s Samikaran Learning Pvt. Ltd. Vs TDS Officer, Laxmi Nagar, Delhi in ITA Nos. 4050 to 4054/Del/2016, followed.
Conclusion:
AO is not empowered to charge late filing fees u/s 234E while processing TDS statements/returns for period prior to 01.06.2015.”
3.1. He has also relied upon Order of ITAT, Pune Bench in the case of Medical Superintendent Rural Hospital & Anr vs., DCIT CPC (TDS) & Another [2018] 54-CCH-457- Pune-Tribunal, in which it was held as under :
7 ITA.Nos.4798, 4799 & 4800/Del./2016 N.K. Associates, Delhi. “Conclusion :
Since amendment to s. 200A was prospective in nature, AO while processing TDS returns/statements for period prior to 01.06.2015 was not empowered to charge late filing fees u/s 234E.”
3.2. Learned Counsel for the Assessee, therefore, submitted that no fees may be charged in the present case.
On the other hand, Ld. D.R. relied upon the Orders of the authorities below.
We have considered the rival submissions and do not find any justification to sustain the Orders of the authorities below. The ITAT, Delhi and Pune Benches in the above cases have considered the Amendment to Section 200A of the I.T. Act in which sub-clause (c) have been inserted in the Section w.e.f. 01.06.2015 which includes that while processing of the statement of tax deducted at source the fee, if any, shall be computed in accordance with the provisions of Section 234E of the I.T. Act. Therefore, the 8 ITA.Nos.4798, 4799 & 4800/Del./2016 N.K. Associates, Delhi. issue is covered by the above decisions of the ITAT, Delhi and Pune Benches. Further, no order of intimation under section 200A(1) have been brought on record and virtually the A.O. has shown his inability in giving any factual position in this regard. Therefore, contention of assessee is justified that no intimation under section 200A(1) have been issued in the present case. Therefore, there is no question of making any rectification in any of the orders. Since rectification under section 154 could be made in some order already existing, therefore, in the absence of any Order or intimation under section 200A(1) of the I.T. Act, no amendment under section 154 could be done by the authorities below. Further, Section 154(3) of the I.T. Act provides that an amendment which has the effect of enhancing the assessment or reducing refund or otherwise including liability of assessee or the deductor or the collector, shall not be made under this Section unless the authority concerned has given notice to assessee or deductor or collector or of its intimation to do so and he shall allow the assessee or the deductor or the collector a 9 ITA.Nos.4798, 4799 & 4800/Del./2016 N.K. Associates, Delhi. reasonable opportunity of being heard. In the present case, the intimation under section 154 have been issued automatically without giving any opportunity of being heard to the assessee. Therefore, there is violation of principles of natural justice as well as violation of Section 154(3) of the I.T. Act. In this view of the matter, the Order passed in the absence of assessee without giving opportunity shall have to be quashed. Considering the above discussion in the light of decisions of ITAT, Delhi and Pune Benches (supra), we set aside the Orders of the authorities below and quash the impugned orders. All the appeals of the Assessee are allowed.
In the result, all the appeals of the Assessee are allowed.
Order pronounced in the open Court.