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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI N.V. VASUDEVAN & SHRI B R BASKARAN
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B R BASKARAN, ACCOUNTANT MEMBER
ITA Nos. Assessment year 2117/Bang/2019 2014-15 2118/Bang/2019 2014-15 2119/Bang/2019 2013-14 2120/Bang/2019 2014-15 2121/Bang/2019 2015-16 2122/Bang/2019 2013-14 2123/Bang/2019 2014-15 2124/Bang/2019 2015-16 2125/Bang/2019 2013-14 2126/Bang/2019 2013-14 2127/Bang/2019 2014-15 2128/Bang/2019 2014-15 2129/Bang/2019 2015-16 2130/Bang/2019 2013-14 2131/Bang/2019 2013-14 2132/Bang/2019 2014-15
Ms. Seena Deepak, Vs. The Assistant Commissioner Flat No.A2, No.102, White House, of Income Tax, CPC-TDS, R T Nagar, Ghaziabad. UP. Bangalore – 560 032. PAN: ANJPD 9569K TAN: BLRS 30092 G APPELLANT RESPONDENT
Appellant by : Shri Narendra Sharma, Advocate Respondent by : Smt. Nishi Padma, Jt.CIT(DR)(ITAT), Bengaluru.
Date of hearing : 09.01.2020 Date of Pronouncement : 17.01.2020
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O R D E R Per Bench These are a batch of 16 appeals filed by Assessee against a common order dated 22.4.2019 by CIT(Appeals)-13, Bangalore 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/26Q/27EQ for FY 2012-13 to 2014-15 (AY 2013-14 to 2015-16). The statement was processed by CPC TDS, Bengaluru. There was a delay in filing the above TDS statement and therefore the AO 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”]. 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. 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-
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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 appeals before the CIT(A). 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:— (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;
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(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.” 4. 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
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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) found that the appeals filed by the Assessee were belated and there was no application for condonation of delay in filing the appeals. The CIT(A) in this regard has drawn a chart of dates on which the orders were passed by the AO, the date on which it was served and the date on which the appeals were filed. The said chart is reproduced below for the sake of clarity:- F.Y. Appeal No. Qtr Date of order Date of Delay in Short 234E Total u/s 200A(1) filing of filing Dedun, Fees disputed rws 234E / appeal appeal Int. on Date of short/ late service of payment order etc. 2012-13 10058/2018- 19 24Q-Q2 27/09/2016 28/02/2019 1219 410 48000 48410 10059/2018- 19 24Q-Q3 27/09/2016 28/02/2019 1219 420 29600 30020 11232/2018- 19 24Q-Q4 18/10/2013 02/03/2019 1931 0 5600 5600 11234/2018- 19 26Q-Q3 08/09/2013 02/03/2019 1971 400 30200 30600 11235/2018- 19 26Q-Q4 08/09/2013 02/03/2019 1971 3910 6200 10110 11233/2018- 19 26Q-Q2 08/09/2013 02/03/2019 1971 1040 48600 49640 Total 6180 168200 174380 2013-14 10060/2018- 19 24Q-Q1 06/07/2014 01/03/2019 1669 0 44450 44450 11225/2018- 19 24Q-Q2 06/07/2014 01/03/2019 1669 0 52000 52000 11228/2018-19 24Q-Q3 06/04/2014 01/03/2019 1761 0 33600 33600 11226/2018-19 24Q-Q4 06/07/2014 01/03/2019 1669 0 9600 9600 11204/2018-19 26Q-Q1 21/11/2016 27/02/2019 798 2290 43800 46090 11206/2018-19 26Q-Q2 21/11/2016 28/02/2019 799 58560 25400 83960 11207/2018- 19 26Q-Q3 21/11/2016 28/02/2019 799 47090 7000 54090 Total 107940 215850 323790 2014-15 11231/2018- 19 24Q-Q2 01/11/2014 01/03/2019 1551 0 2400 2400 11214/2018- 19 26Q-02 28/12/2016 28/02/2019 762 440 2400 2840 10061/2018- 19 26Q-03 08/01/2017 28/02/2019 751 3340 1800 5140 Total 3780 6600 10380
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From the aforesaid chart, the CIT(A) noticed that there was delay ranging from 751 days to 1971 days in filing appeals by the Assessee before him.
The Assessee filed application for condonation of delay in filing appeals before CIT(A). The reasons assigned by the Assessee for delay in filing appeal was that the Assessee’s business was small and all affairs had to be looked after by the Assessee as proprietor. Further the TDS compliance are web based and system driven and the Assessee was unable to long into the traces and reply to the notices/orders within stipulated time. It was also stated that the TDS assessment orders which were subject matter of appeal before CIT(A) were not served on the Assessee. The Assessee has also stated that after the decision of the Hon’ble Karnataka High Court in the case of Fateraj Singhvi (supra), he was under the impression that no late fee will be levied u/s.234-E of the Act in respect of the period prior to 1.6.2015 as the enabling provisions u/s.200A of the Act, were introduced only from 1.6.2015. The Assessee however received a demand notice for late fee u/s.234-E of the Act and approached his auditor and they informed that the remedy was to file appeal against the orders u/s.200A of the Act. The Assessee submitted that he was not guilty of negligence and the delay was due to bonafide reasons set out above. The Assessee also placed reliance on decision of Hon’ble Supreme Court in the case of Collector of Land Acquisition Vs. Mst. Katiji & others AIR 1987 1353 (SC) wherein principles regarding condonation of delay have been explained by the Hon’ble Supreme Court.
The CIT(A) however was of the view that there was a difference between marginal delay and inordinate delay and made reference to a decision of ITAT Hyderabad Bench in the case of T. Krishna Vs. ACIT(IT(SS)A.No.23 & 25/Hyd/2011) and held that the Assessee should
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explain the delay as one that occurred due to circumstances beyond his control. He also referred to decision of Hon’ble Supreme Court in the case of Ramalal Vs. Rewa Coalfields Ltd. AIR 1962 SC 361 wherein it was held that delay caused which by due care and attention could have been avoided cannot be said to be reasonable cause. He also referred to decisions where delay was not condoned for the reason that the conduct and negligence of the Assessee existed for the delay in filing appeal. He held that the reasons assigned by the Assessee were routine explanation which cannot be accepted as reasonable or sufficient cause. The CIT(A) accordingly dismissed the appeals as unadmitted with the following observations:- “10.4 The law assists those who are vigilant, not those who sleep over their rights. This principle is embodied in the dictum: vigilantibus non dormientibus jura subsveniunt. The delay cannot be condoned simply because the appellant's case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. It is true that an order condoning the delay in filing the appeal is a discretionary one but it is also pertinent to note that if discretion is exercised on the wrong principles by giving undue liberal approach which is not at all justice oriented, then the purpose of these provisions would be defeated and frustrated. Thus the delay is nothing but negligence and inaction of the appellant which could have been very well avoided by the exercise of due care and attention. There exists no sufficient or good reason for condoning inordinate delay in filing the present appeal. So there is no reason for condoning such delay of 1971 days in this case. Considering above the delay is not condoned.”
Aggrieved by the aforesaid orders of the CIT(A), the Assessee has filed the present appeals before the Tribunal. The learned counsel for the Assessee reiterated stand of the Assessee as put forth before CIT(A).
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The learned DR reiterated the stand of the revenue as reflected in the order of the CIT(A).
We have considered the submissions of the learned DR and also the grounds of appeal filed by the Assessee. The Assessee in the grounds of appeal has pointed out that an intimation u/s.200A of the Act became an appealable order u/s.246A of the Act, only consequent to amendment by the Finance Act, 2015 w.e.f. 1.6.2015. Prior to the said date an intimation u/s.200A was not appealable. At the outset, we observe that the Hon’ble Supreme Court, in the case of Mst. Katiji (supra), has explained the principles that need to be kept in mind while considering an application for condonation of delay. The Hon’ble Apex Court has emphasized that substantial justice should prevail over technical considerations. The Court has also explained that a litigant does not stand to benefit by lodging the appeal late. The Court has also explained that every day’s delay must be explained does not mean that a pedantic approach should be taken. The doctrine must be applied in a rational common sense and pragmatic manner. 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 reasons given by the Assessee for condonation of delay and keeping in mind that technicalities should not stand in the way of rendering substantive justice, we are of the view that the delay in filing the appeals deserves to be condoned. Accordingly the delay is condoned. Since the CIT(A) has not decided the issue on merits, the order of the CIT(A) is set aside and remanded to the CIT(A) with a direction to decide the appeals of the Assessee on merits in accordance with law with due opportunity to the Assessee of being heard.
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In the result, all the appeals by the assessee are treated as allowed for statistical purpose.
Pronounced in the open court on this 17th day of January, 2020.
Sd/- Sd/- ( B R BASKARAN ) ( N V VASUDEVAN ) ACCOUNTANT MEMBER VICE PRESIDENT Bangalore, Dated, the 17th January, 2020. /Desai S Murthy /
Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. 6. Guard file
By order
Assistant Registrar ITAT, Bangalore.