SRINIVASAMURTHY KOLIHALLY YALAKAIAH,BANGALORE vs. THE COMMISSIONER INCOME TAX (APPEALS)-10, BANGALORE

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ITA 1964/BANG/2019Status: DisposedITAT Bangalore26 June 2020AY 2015-1610 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that an appeal against an order under Section 154 is permissible under Section 246(1)(c) of the Act. The levy of late fees under Section 234E for periods prior to the effective date of relevant provisions of Section 200A was deemed illegal.

What were the facts?

The assessee filed TDS returns for AY 2014-15, and late filing fees under Section 234E were levied. The assessee filed a rectification petition which was rejected, and an appeal to the CIT(A) was also dismissed.

What were the issues?

Whether an appeal against a Section 154 order is maintainable and whether late fees under Section 234E could be levied for periods prior to the effective date of Section 200A(1)(c), (d), and (f).

Which sections of the Income-tax Act were involved?

Section 234E,Section 200A,Section 154,Section 246

AI-generated summary — verify with the full judgment below

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O R D E R : PER SRI PAVANKUMAR GADALE JM: These are the appeals filed by the assessee against common order of Commissioner of Income Tax (Appeals)-10, Bangalore passed under Section 154 and 250 of the Income Tax Act, 1961 ('the Act'). Since all the appeals have 2 to 1965/Bang/2019 common issues and identical to the facts of the case, accordingly are clubbed and heard together and consolidated order is passed. At the time of hearing, none appeared on behalf of the assessee nor adjournment petition was filed. The tribunal considering the material on record and submissions of the learned Departmental Representative heard the appeal.

2.

For the sake of convenience, we shall take up the ITA No.1963/Bang/2019 and the grounds of appeal raised by the assessee are as under:

3 to 1965/Bang/2019 3. The Brief facts of the case are that the assessee is a proprietor, engaged in the business of Health and Fitness equipment sales and filed the Quarterly TDS Returns for the A.Y. 2014-15 relevant to F.Y. 2013-14 for Q1, Q2 & Q3.The returns were processed and the ACIT, CPC-TDS levied late filing fees under Section 234E of the Act for Q1 Rs.55,000/- Q2 Rs.36,500/- and Q3 Rs.18,100/- aggregating to Rs.1,09,600/-. The contentions of the assessee ,that the levy of late fees under Section 234E of the Act is illegal and relied on the decision of Hon'ble Karnataka High Court in the case of Sri Fatehraj Singh & Others Vs. UOI 289 CTR 602 (Kar), where it was held that the provisions of Section 200A(1) Clauses (c), (d) and (f) of the Act are effective from 1.6.2015 and therefore the intimation under Section 200A of the Act in respect of prior period to 1.6.2015 is without any authority under law and is not sustainable. Whereas the intimation under Section 200A of the Act for the Asst. Year 2014-15 was passed on 9.4.2014 and the assessee has filed rectification petition for the Q1, Q2 & Q3 and the CPC-TDS has passed order under Section154 of the Act dt.13.3.2019. Aggrieved by the order of rectification under Section 154 of the Act, the assessee has filed an appeal before the CIT (Appeals). Whereas the CIT (Appeals) observed that the assessee has filed an appeal against the order under Section 154 of the Act, challenging the levy of late fees under Section 234E of the Act which is not a mistake apparent from record, and also the decision of the Hon'ble Karnataka High Court in Sri Fatehraj 4 to 1965/Bang/2019 Singh & Others Vs. UOI (supra) is applicable prospectively and dismissed the appeal of the assessee. Aggrieved by the order of CIT (Appeals), the assessee has filed an appeal with the Tribunal.

4.

We heard the learned Departmental Representative and perused the material on record. We found that the TDS Returns for the Q1, Q2 & Q3 for the F.Y. 2013-14 relevant to A.Y. 2014-15 were filed by the assessee and after processing the returns, the order under Section 200A of the Act was passed on 19.04.2014. Subsequently, the assessee has filed rectification petition against the said order. Whereas,the CPC TDS has passed order under Section 154 of the Act on 13.03.2019.Aggrieved with the order, the assessee has filed an appeal. Whereas, the CIT (Appeals) has dismissed the appeal observing that the decision of the Hon'ble Karnataka High Court in the case of Sri Fatehraj Singh & Others Vs. UOI (supra) is applicable prospectively and the levy of late fees under Section 234E cannot be challenged under Section 154 of the Act.

5.

On the issue of filing of rectification petition by the assessee, the observations of the CIT (Appeals), that the assessee cannot challenge the levy of late fees under Section 234E under Section 154 of the Act. We found that the assessee received the order on 19.04.2014 for the A.Y. 2014-15 and has filed rectification petition with the CPC-TDS for correction of statements which is not disputed, and the same was processed and order under Section 154 of the Act was 5 ITA Nos.1963 to 1965/Bang/2019 passed by CPC TDS on 13.03.2019. Aggrieved by the order, the Assessee has filed an appeal under Section 246 of the Act with the CIT (Appeals). We found under provisions of Section 246(1)(c) of the Act, an order under Section 154 is appealable which is read as under :

246(1) Subject to the provisions of sub-section (2), any assessee ;aggrieved by any of the following orders of an Assessing Officer (other than the Deputy Commissioner) may appeal to the Deputy Commissioner (Appeals) (before the 1st day of June, 2000) against such order – ….. (a) (b) (c) an order under section 154 or section 155 having the effect of enhancing the assessment or reducing a refund or an order refusing to allow the claim made by the assessee under either of the said sections; Considering the provisions of law and the facts of the case, we found the assessee has challenged the order under Section 154 of the Act, which is permissible under the Law. On the second issue of applicability of decision of Hon'ble Karnataka High Court in the case of Sri Fatehraj Singh & Others Vs. UOI (supra),the provisions of Section 200A(1)(c), (d) and (f) are effective from 1.6.2015 and Hon’ble court has held at Para 23 to 28 of the decision which is read as under Considering the ratio of decision of Hon’ble jurisdictional High Court and the material on record. We Set-aside the order of CIT(Appeals) and direct the Assessing Officer to delete the levy of late fees under Section 234E of the Act and allow the grounds of appeal of the assessee.

6.

Similarly, the assessee has filed appeals in & 1965/Bang/2019 for the A.Y. 2015-16(Q1,Q2,Q3&Q4) and A.Y. 2016-17(Q1), where the issues are similar and identical, and the decision in ITA No.1963/Bang/2019 shall equally apply. Accordingly, we set aside the orders of CIT (Appeals) and direct the Assessing Officer to delete the levy of late fees under Section 234E of the Act and allow the grounds of appeal of the assessee.

Pronounced in the open court on the date mentioned on the caption page.

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