M/S. ELKAY SPIRITS PRIVATE LIMITED,PUNE vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CPC-TDS, GHAZIABAD

आयकरअपीलीयअिधकरण “ए” �ायपीठ पुणे म�। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER ITA No.157/PUN/2020 ; A.Y.2013-14 ; for 27EQ-Q2 ITA No.158/PUN/2020 ; A.Y.2013-14 ; for 27EQ-Q3 ITA No.159/PUN/2020 ; A.Y.2013-14 ; for 27EQ-Q4 ITA No.160/PUN/2020 ; A.Y.2014-15 ; for 27EQ-Q1 ITA No.161/PUN/2020 ; A.Y.2014-15 ; for 27EQ-Q2 ITA No.162/PUN/2020 ; A.Y.2014-15 ; for 27EQ-Q3 ITA No.163/PUN/2020 ; A.Y.2014-15 ; for 27EQ-Q4 ITA No.164/PUN/2020 ; A.Y.2015-16; for 27EQ-Q1 ITA No.165/PUN/2020 ; A.Y.2015-16 ; for 27EQ-Q2 ITA No.166/PUN/2020 ; A.Y.2015-16 ; for 27EQ-Q3 ITA No.167/PUN/2020 ; A.Y.2015-16; for 27EQ-Q4 Elkay Spirits Private Limited, The Assistant Commissioner of Flat No.A-2, Liberty Society, Vs Income Tax, CPC-TDS, North Main Road, Koregaon Park, Ghaziabad. Pune – 411001. PAN: AAACE 4599 D Appellant/ Revenue Respondent/ Assessee Assessee by Shri Pratik Sandbhor – AR Revenue by Shri Arivnd Desai - DR Date of hearing 15/06/2022 Date of pronouncement 16/06/2022 आदेश/ ORDER PER BENCH: This bunch of Eleven(11) Appeals have been filed by the appellant assessee against the separate orders of the ld.Commissioner

Elkay Spirits Pvt. Ltd., vs. ACIT, CPC-TDS 11 Appeals Group

of Income Tax(Appeals)-10, Pune all appeals dated 26.11.2019 for the Assessment Years 2013-14(03 appeals), 2014-15(04 appeals) and 2015-16(04 appeals) respectively, involving proceedings under section 154 r.w.s 200A of the Income Tax Act, 1961 in short “the Act”, all with reference to levy of late fee under section 234E of the Act.

1.1. In this group of Eleven(11) appeals, the assessee has raised certain common grounds of appeal, facts in all cases are almost similar, except variation of additions, therefore, all appeals were clubbed, heard and are decided by consolidated order. For appreciation of facts, the facts in ITA No.157/PUN/2020 for A.Y.2013-14 (27EQ-Q2) is treated as lead case. The assessee has raised the following grounds of appeal: “1. On the facts and in the circumstances of the case the ld.C1T(A) has grossly erred in upholding the order passed u/s 154 r.w.s. 200A and thereby confirming the levy of late fee u/s 234E of Rs.85,120/- in intimation u/s 200A in respect of TDS statement for Quarter 2 of A. Y. 2013-14. 2. On the facts and in the circumstances of the case the ld. CIT(A) has grossly erred in sustaining the levy of late fee u/s 234E for period prior to 01/06/2015, in the light of the fact that the provision for charging such late fee came into effect only from 01/06/2015and therefore no late fee could be levied for such prior period. 3. On the facts and in the circumstances of the case the ld.CIT(A) failed to appreciate that the levy of late fee u/s 234E for period prior to 01/06/2015 was contrary to law as laid down by the Hon’ble ITA T, Pune in the case of Gajanan Construction & others in 161 ITD 313, in as much as the decision of Hon'ble ITAT is binding on the lower authorities as held by the Jurisdictional Bombay High Court in the case of Bank of Baroda V.H C Shrivatsava in 256 ITR 385 and therefore such levy of late fee in contradiction to law laid down by Jurisdictional High Court is a mistake apparent from record.

Elkay Spirits Pvt. Ltd., vs. ACIT, CPC-TDS 11 Appeals Group

Elkay Spirits Pvt. Ltd., vs. ACIT, CPC-TDS 11 Appeals Group

6.1. In this case, Ld.ACIT, CPC-TDS passed an order on 01.12.2018 levying late filing fee under section 234E of Rs.53,200/- for Quarter-2 of F.Y. 2012-13. The assessee has filed the copy of the said order. The ld.Counsel for the assessee submitted that levy of late fee under section 234E is bad in law and needs to be deleted. He relied on various case laws.

Elkay Spirits Pvt. Ltd., vs. ACIT, CPC-TDS 11 Appeals Group

154 r.w.s 200A of the Act, dated 01.12.2018. The assessee filed appeal against the said order passed under section 154 r.w.s 200A of the Act before the ld.CIT(A) on 19.12.2018. Thus, this appeal has been filed within one month of the said order passed under section 154 r.w.s 200A of the Act. Therefore, there was no delay in filing appeal by the assessee before the ld.CIT(A). Therefore, the ld.CIT(A) has given an incorrect finding of fact.

Elkay Spirits Pvt. Ltd., vs. ACIT, CPC-TDS 11 Appeals Group

statements /returns in the present set of appeals for the period prior to01.06.2015, was not empowered to charge fees under section234E 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." 12. The said proposition has been applied in the next bunch of appeals with lead order in Vidya Vardhani Education & Research Foundation v. Dy. CIT [2017] 88 taxmann.com 894 (Pune - Trib.) and also in Swami Vivekanand Vidyalaya (supra) and Medical Superintendant Rural Hospital v. ACIT [IT Appeal Nos.2072 &2073 (PUN) of 2017, order dated 21-12-2017], which has been relied upon by the learned Authorized Representative for the assessee. 13. The Hon'ble High Court of Karnataka in the case of Fatheraj Singhvi (supra) had also laid down similar proposition that the amendment to section 200A of the Act w.e.f. 01.06.2015 has prospective effect and is not applicable for the period of respective assessment years prior to 01.06.2015. The relevant findings of the Hon'ble High Court are in paras 21 and 22, which read as under:— "21. However, if Section 234E providing for fee was brought on the state book, keeping in view the aforesaid purpose and the intention then, the other mechanism provided for computation of fee and failure for payment of fee under Section 200A which has been brought about with effect from1.6.2015 cannot be said as only by way of a regulatory mode or a regulatory mechanism but it can rather be termed as conferring substantive power upon the authority. It is true that, a regulatory mechanism by insertion of any provision made in the statute book, may have a retroactive character but, whether such provision provides for a mere regulatory mechanism or confers substantive power upon the authority would also be a aspect which may be required to be considered before such provisions is held to be retroactive in nature. Further, when any provision is inserted for liability topay any tax or the fee by way of compensatory in nature or fee independently simultaneously mode and the manner of its enforceability is also required to be considered and examined. Not only that, but, if the mode and the manner is not expressly prescribed, the provisions may also be vulnerable. All such aspects will be required to be considered before one considers regulatory mechanism or provision for regulating the mode and the manner of recovery and its enforceability as

Elkay Spirits Pvt. Ltd., vs. ACIT, CPC-TDS 11 Appeals Group

retroactive. If at the time when the fee was provided under Section 234E, the Parliament also provided for its utility for giving privilege under Section 271H(3) that too by expressly put bar for penalty under Section 272A by insertion of proviso to Section 272A(2), it can be said that a particular set up for imposition and the payment of fee under Section 234E was provided but, it did not provide for making of demand of such fee under Section 200A payable under Section 234E. Hence, considering the aforesaid peculiar facts and circumstances, we are unable to accept the contention of the learned counsel for respondent-Revenue that insertion of clause (c) to (f) under Section 200A(1) should be treated as retroactive in character and not prospective. 22. It is hardly required to be stated that, as per the well established principles of interpretation of statute, unless it is expressly provided or impliedly demonstrated, any provision of statute is to be read as having prospective effect and not retrospective effect. Under the circumstances, we find that substitution made by clause (c) to (f) of sub-section (1) of Section 200A can be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand under Section 200A for computation and intimation for the payment of fee under Section 234E could not be made in purported exercise of power under Section 200A by the respondent for the period of the respective assessment year prior to 1.6.2015. However, we make it clear that, if any deductor has already paid the fee after intimation received under Section 200A, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest." 14. The Hon'ble High Court thus held that where the impugned notices given by Revenue Department under section 200A of the Act were for the period prior to 01.06.2015, then same were illegal and invalid. Vide para 27, it was further held that the impugned notices under section 200A of the Act were for computation and intimation for payment of fees under section234E of the Act as they relate for the period of tax deducted at source prior to 01.06.2015 were being set aside. 9. Respectfully following the above decision of ITAT Pune Bench, we hold that the levy of late fee under section 234E of the Act for Quarter-2 of F.Y. 2012-13 is bad in law. Therefore, the Assessing

Elkay Spirits Pvt. Ltd., vs. ACIT, CPC-TDS 11 Appeals Group

Officer is directed to delete the said late fee. Accordingly, the appeal of the assessee is allowed.