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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI N.V. VASUDEVAN & SHRI A.K.GARODIA
Consolidated Appeals (28)
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI A.K.GARODIA, ACCOUNTANT MEMBER
Sl. ITA / CO No. A.Y. No. 1. 1457/Bang/2019 2014-15 2. 1458/Bang/2019 2014-15 3. 1459/Bang/2019 2014-15 4. 1460/Bang/2019 2013-14 5. 1461/Bang/2019 2014-15 6. 1462/Bang/2019 2015-16 7. 1463/Bang/2019 2014-15 8. 1464/Bang/2019 2015-16 9. 1465/Bang/2019 2013-14 10. 1466/Bang/2019 2014-15 11. 1467/Bang/2019 2015-16 12. 1468/Bang/2019 2013-15 13. 1469/Bang/2019 2014-15 14. 1470/Bang/2019 2015-16 15. 1471/Bang/2019 2013-14 16. 1472/Bang/2019 2014-15 17. 1473/Bang/2019 2015-16 18. 1474/Bang/2019 2014-15 19. 1475/Bang/2019 2015-16 20. 1476/Bang/2019 2013-14 21. 1477/Bang/2019 2014-15 22. 1478/Bang/2019 2015-16 23. 1479/Bang/2019 2013-14 24. 1480/Bang/2019 2014-15 25. 1481/Bang/2019 2015-16 26. 1482/Bang/2019 2013-14 27. 1483/Bang/2019 2014-15 28. 1484/Bang/2019 2015-16
ITA Nos. 1457 to 1484/Bang/2019 Page 2 of 12
M/s. Rotary Electronics Pvt. Ltd., Vs. The Assistant Commissioner No.18, 4th Stage, 5th Cross, of Income Tax, Rajajinagar Industrial Town, TDS Circle 3(1), Bengaluru – 560 044. Bengaluru. PAN: AABCR 4423J APPELLANT RESPONDENT Appellant by : None Respondent by : Shri K.R. Narayanan, JCIT(DR)(ITAT), Bengaluru. Date of hearing : 21.11.2019 Date of Pronouncement : 27.11.2019 O R D E R Per Bench These are a batch of 28 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:-
ITA Nos. 1457 to 1484/Bang/2019 Page 3 of 12 “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-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 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
ITA Nos. 1457 to 1484/Bang/2019 Page 4 of 12 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;
ITA Nos. 1457 to 1484/Bang/2019 Page 5 of 12 (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.”
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
ITA Nos. 1457 to 1484/Bang/2019 Page 6 of 12 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) 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 for the sake of clarity.
F.Y. Date of Order Date of filing Date of 234E Appeal No Qtr Service Fees 10/07/2014 10/04/2014 26/06/2018 2013-14 10116/18-19 240 - Q2 53000 2013-14 10117/18-19 24Q - Q1 05/12/2016 05/12/2016 26/06/2018 71400 10118/18-19 27E0- Q1 13/12/2016 13/12/2016 26/06/2018 11303 2013-14 10119/18-19 23/04/2014 26/06/2018 37000 2013-14 26Q - Q3 23/07/2014 9247 2013-14 10120/18-19 27EQ - Q2 13/12/2016 13/12/2016 26/06/2018 13/12/2016 13/12/2016 26/06/2018 7504 2013-14 10121/18-19 27EQ - Q3 27/06/2018 85000 2013-14 10123/18-19 24Q-Q3 20/03/2015 20/03/2015 2013-14 10124/18-19 26Q - Q1 23/07/2017 23/04/2014 27/06/2018 73800 23/07/2014 27/06/2018 55400 10125/18-19 26Q - Q2 23/07/2014 2013-14
ITA Nos. 1457 to 1484/Bang/2019
Page 7 of 12 27E0- Q4 19/03/2015 2013-14 10126/18-19 19/03/2015 27/06/2018 9385 20/03/2015 27/06/2018 61000 24Q - Q4 20/03/2015 2013-14 10127/18-19 2013-14 30/03/2015 30/03/2015 27/06/2018 61000 10127/18-19 26Q - 04 27/06/2018 9558 2014-15 10130/18-19 27EQ-04 14/08/2015 14/08/2015 27/06/2018 26Q-Q4 14/08/2015 14/08/2015 17400 2014-15 10131/18-19 18/06/2015 18/06/2015 27/06/2018 64200 2014-15 10132/18-19 24Q-Q4 2014-15 16/06/2015 16/06/2015 27/06/2018 9873 10133/18-19 27EQ-Q3 16/06/2015 16/06/2015 27/06/2018 29600 2014-15 10134/18-19 26Q-03 24/06/2015 24/06/2014 27/06/2018 66400 2014-15 10135/18-19 260 - 01 16/06/2015 16/06/2015 ' 27/06/2018 12435 10136/18-19 27EQ -Q2 2014-15 24/06/2015 24/06/2015 27/06/2018 48000 2014-15 10137/18-19 260 -Q2 27EQ -Q1 16/06/2015 27/06/2018 13698 10138/18-19 16/06/2015 2014-15 02/10/2016 28/06/2018 13361 27EQ - Q2 02/10/2016 2012-13 10140/18-19 28/06/2018 11713 02/10/2016 02/10/2016 2012-13 10141/18-19 27E0 - Q3 10692 27EQ - 04 02/10/2016 02/10/2016 28/06/2018 2012-13 10142/18-19 11/11/2016 11/11/2016 28/06/2018 38800 2012-13 10143/18-19 24Q - Q4 26Q- Q4 08/09/2013 08/09/2013 28/06/2018 11600 2012-13 10145/18-19 26Q - Q2 16/01/2018 16/01/2018 28/06/2018 54000 2012-13 10167/18-19 16/01/2018 18/07/2018 35600 2012-13 10666/18-19 26Q - Q3 16/01/2018
From the aforesaid chart, the CIT(A) noticed that there was delay ranging from 153 days to 1724 days in filing appeals by the Assessee before him.
The CIT(A) noticed that the Assessee was placing reliance on the decision of the Hon’ble Karnataka High Court in the case of Fatheraj Singhvi (supra). He quoted the following observations of the Hon’ble Court in the aforesaid decision and gave the following conclusions:
“But the appellant seems to have failed to consider the view of the Hon’ble High Court of Karnataka which states as below: 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 (Para-22). It is clarified that the present judgment would not be interpreted to mean that even if the payment of the fees under Section 234E already made as per demand/intimation under Section 200A of the Act for the TDS for the period prior to 01.04.2015 is permitted to be reopened for claiming refund. The judgment will have prospective effect accordingly.
ITA Nos. 1457 to 1484/Bang/2019 Page 8 of 12 From the above judgment it is clear that in order to take benefit of the said judgment the appellant was required to protest the levy of the late filing fee within the stipulated time by filing appeals. The Hon’ble High Court of Karnataka has not permitted to reopen the issue of levying late filing fee which has been settled. No doubt, the Hon’ble Court has mentioned that its judgment cannot be used to reopen the question of applicability of late filing fee before 01/06/2015 for the purpose of claiming refund. But it is clear from the judgment of the Hon’ble High Court that assessees who have accepted the levy of late filing fee by not challenging it in appeal cannot be allowed to raise this question after the said judgment. If it is not so, the taxpayers who have complied with the provision of the Act and have paid the late filing fee raised against them will be discriminated against vis-à-vis those tax payers who have defied the provision of the Act by not paying the demand without filing an appeal. By not filing an appeal against the levy u/s. 234E of the Act the appellant has accepted such a levy. Merely because it has not paid the amount levied on it will not give it the right to raise the issue of levy of late filing fee by filing a belated appeal. The Hon’ble High Court of Karnataka has clearly mentioned that “The judgment will have prospective effect accordingly”. In this case the appellant was served with the intimation u/s. 234E on various dates as mentioned above, so the demand became due within 30 days of service of the intimation. However, the appellant did not pay the same nor did it challenge the levy of the late filing fee. It is clear that the judgment has prospective effect and does not allow the appellant to file appeals belatedly against the orders which were passed by TDS- CPC long ago. By not paying the demand within the stipulated time the appellant has defied the provision of the Act for which it cannot be rewarded with a relief by relying on order of the Hon’ble Court which has a prospective effect. Therefore, in view of the judgment in the case of Fatheraj Singvi v. UOI (supra) the appeal filed by the appellant cannot be admitted.”
The CIT(A) thereafter observed that there was a difference between marginal delay and inordinate delay and made reference to a decision of
ITA Nos. 1457 to 1484/Bang/2019 Page 9 of 12 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 explain the delay as one that occurred due to circumstances beyond his control. The CIT(A) also found that the Assessee has not made any application for condonation of delay and explaining the reasons for the delay in filing the appeals. He therefore dismissed the appeals as unadmitted with the following observations:
“8.4 If the appellant was aggrieved with the order passed by TDS CPC, it should have filed an appeal within thirty days from the service of such order as prescribed under section 249(2) of the Act. However, sub-section 3 of section 249 provides – (3) The Commissioner (Appeals) may admit an appeal after the expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting it within that period. 8.5 In the instant cases the appellant had neither furnished any reason for delay in filing these appeals nor requested for condonation of delay. Therefore, there is no sufficient cause which can be relied upon by the appellant for admitting the appeals. Hence in the light of the facts of case and the aforesaid judgment of the Hon’ble High Court of Karnataka, the appeals filed by the appellant are not admitted.” 8. Aggrieved by the aforesaid order of the CIT(A), the Assessee has filed the present appeals before the Tribunal. At the time of hearing an application seeking adjournment was filed with no name of the authorized representative. The person who was present with the aforesaid letter seeking adjournment claimed to be Articled Clerk working in the office of Chartered Accountant. The Chartered Accountant’s power of attorney was also not on record, nor was it filed at the time of hearing. In these
ITA Nos. 1457 to 1484/Bang/2019 Page 10 of 12 circumstances, the request for adjournment was refused and the learned DR was heard.
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. 14 out of the 28 intimations were passed before 1.6.2015 and 14 intimations have been passed after 1.6.2015. It is not in dispute that if the ratio laid down by 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 filed prior to 1.6.2015. The present appeals of the Assessee relate to TDS returns filed prior to 1.6.2015. Nevertheless, the legal contention can be gone into by the CIT(A) only when the appeal is validly presented before the CIT(A). Since there was delay in filing the appeal before CIT(A), the Assessee ought to have filed an application for condonation of delay in filing appeals. It is not also not clear from the order of the CIT(A) as to whether he called upon the Assessee to explain as to how the appeal would be maintainable in the absence of application for condonation of delay in filing appeal explaining the reasons for the delay in filing appeal being filed. Nevertheless, in ground No.5 filed before the Tribunal, the Assessee has placed reliance on a decision of the ITAT Hyderabad Bench in the case of MSV IT Solutions Ltd. Vs. ITO, Ward 16(4) ITA Nos. 177 &
ITA Nos. 1457 to 1484/Bang/2019 Page 11 of 12 178/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 order of the CIT(A) is set aside and the issue remanded to the CIT(A) with a direction to the Assessee to file application for condonation of delay explaining the reasons as to why the appeal could not be filed within the time prescribed in law. The CIT(A) will consider such request in accordance with law after affording Assessee opportunity of being heard. 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 this 27th day of November, 2019.
Sd/- Sd/- ( A.K.GARODIA ) ( N. V. VASUDEVAN ) ACCOUNTANT MEMBER VICE PRESIDENT Bangalore, Dated, the 27th November, 2019. NS/Desai S Murthy /
ITA Nos. 1457 to 1484/Bang/2019 Page 12 of 12 Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. 6. Guard file
By order Assistant Registrar ITAT, Bangalore.