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Income Tax Appellate Tribunal, “D”, BENCH MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI G. MANJUNATHA
IN THE INCOME TAX APPELLATE TRIBUNAL “D”, BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA No.6657 & 6658/Mum/2018 (Assessment Yeas: 2013-14) Recon Dies & Tools Pvt.Ltd. Vs. DCIT, CPS-TDS 20/35, Sarvodaya Indl. Estate Ghaziabad Off. Mahakali Caves Road Uttar Pradesh Andheri(East) Mumbai-400 093 PAN/GIR No.AAACR2009P Appellant) .. Respondent)
Assessee by Shri G.C.Lalka, AR Revenue by Shri Kamal Mangal, JCIT- DR
Date of Hearing 14/01/2020 Date of Pronouncement 22/01/2020 आदेश आदेश / O R D E R आदेश आदेश PER G.MANJUNATHA (A.M): These two appeals filed by the assesee are directed against common order of the Commissioner of Income tax (Appeals)- 59, Mumbai, dated 09/08/2018 for the AY 2013-14. Since, the facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are disposed-off by this consolidated order.
The assessee, has more or less raised common grounds of appeal in both appeals. Therefore, for the sake of brevity grounds of appeal raised in ITA.No.6657/Mum/2018 are reproduced as under:-
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The Ld.CIT(A) has erred in upholding the order of Assessing Officer (TDSCPC) in levying the late fees u/s 234E of the Income Tax Act, 1961 without considering the facts in total. He has ignored the provisions of the section 234E, which specifies that the TDS return has to be accepted with the payment of the fees. The Learned assessing Officer imposed the under mentioned late fees u/s 234E for A.Y. 2013-14. 2. The Ld. CIT has also erred in levying late payment interest in Q2 and thereby making the addition as under: He has ignored our submission and the decisions relied upon. 3. The appellant craves leave to add, alter or withdraw any of the grounds of appeal on or before the date of filing hearing.
The brief facts of the case are that the assessee has filed quarterly TDS returns in Form 24Q beyond the due date specified under the Act, for two quarters of Financial Year 2012-13. The Ld. AO has processed TDS returns filed by the assessee in form 24Q and levied late filing fee u/s 234E of the I.T.Act, 1961, for late filing of TDS returns. The assessee has challenged levy of late filing fee u/s 234E of the Act and contended before the ld.CIT(A) that the amendment to section 200A of the Act, came into effect only from 01/06/2015 and therefore, late filing fee is not applicable for TDS returns filed prior to 01/06/2015. In this regard, the assesee has relied upon the decision of Hon’ble Karnataka High court, in the case of Fatheraj Singhvi vs Union Of India (2016) reported in 73 taxmann.com 252 and also, Ayappa Educational Charitable Trust vs DCIT(supra). The Ld.CIT(A) after considering relevant facts of the case and also, taken note of amended provisions of section 200A and by following the decision of Hon’ble Gujarat High court, in the case of Rajesh Kourani vs Union Of India (2017) reported 83 taxmann.com 137 held that the arguments of the assessee that late filing fee is not applicable to TDS returns filed and processed on or before 01/06/2015 is untenable. The statutory levy is mandatorily attracted, when the default of filing the TDS statement late occurs. Rather, section 234E(3) casts an obligations on the deductor to pay
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voluntarily the late fee. It does not speak of preventing a levy thereof. In any event, the mere fact that an automated system accepts a TDS returns will not defeat the legislative intent. Therefore, he opined that there is no merit in arguments of the assessee and accordingly, dismissed appeal filed by the assesee.
The Ld. AR for the assesee, at the time of hearing submitted that this issue is squarely covered, in favour of the assesee by the decision of Hon’ble Karnataka High Court, in the case of Fatheraj Singhvi vs Union Of India (supra) and also, the decision of ITAT, Mumbai in the case of Marudhar Foods Pvt.Ltd. Vs DCIT ITA No. 7581/Mum/2016, where the issue has been considered, in light of amended provisions of section 200A by the Finance, Act, 2015 with effect from 01/06/2015 and held that amendment to section 200A providing for levy of fee u/s. 234E of the Act, would apply prospectively to a period following after 01/06/2015
The Ld. DR, on the other hand, strongly supporting order of the Ld.CIT(A) submitted that Hon’ble Gujarat High court had considered this very matter in Rajesh Kourani vs Union Of India (supra), where it has been held that when section 234E has already created a charge for a levying fee that would, thereafter not been necessary to have yet another provision creating the same charge. The Ld.CIT(A), while deciding the issue has followed the decision of Hon’ble Gujarat High Court, which is exactly on similar issue and hence, there is no reason to interfere with the findings of the Ld.CIT(A).
We have heard both the parties, perused the material available on record and gone through orders of the authorities below. It is an
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admitted fact that there are divergent decisions, on the very same issue, one by the Hon’ble Karnataka High Court, which is in favour of the assessee and another by Hon’ble Gujarat High Court, which is in favor of the revenue. Further, ITAT, Mumbai, Third Member decision, in the case of Emsons Exim Pvt.Ltd. vs ITO (TDS) has decided the issue in favor of the assessee and held that levy of fee u/s 200A(1)(c) would apply prospectively to any period following after 01/06/2015. Further, the ITAT, Mumbai, in the case of Marudhar Foods Pvt.Ltd. vs DCIT in ITA No. 7581/Mum/2016 had held that prior to the amendment to section 200A by the Finance Act, 2015 with effect from 01/06/2015. The Ld. AO had no authority in law to levy fee u/s 234E, while processing the statements of TDS u/s 200A. A similar view has been expressed by the Tribunal, in the case of Bathija International . Vs DCIT in ITA No. 652/Mum/2016 and held that prior to 01/06/2015. The Ld. AO is not empowered to levy late fee prescribed u/s 234E of the Act. The ITAT, Vishakhapatnam Bench, in the case of Naveen Kumar Hanjarimal in ITA No. 7 & 8 /Vizag/2016 had considered an identical issue and held that before insertion of sub-clause (c) in to section 200A of the Act, by the Finance Act, 2015 w.e.f. 01/06/2015, the late fee prescribed u/s 234E cannot be levied for belated filing of TDS statements u/s 200(3) of the Act, while issuing intimation u/s 200A of the Act for processing TDS statements, filed and processed prior to 01/06/2015. The sum and substance of the ratios laid down by above judgments is that although, the provision of section 234E of the Act, providing for levy of fee, in case of delayed filing of statement of TDS was there in the statute book w.e.f. 01/07/2002, but, since no corresponding amendment was made to provision of section 200A of the I.T.Act, 1961, before insertion of sub-clause (c)
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to section 200A by the finance Act, 2015 w.e.f. 01/06/2015, the late fee prescribed u/s 234E cannot be levied, while processing TDS statements filed and processed before 01/06/2015. In this case, on perusal of facts, we find that the Ld. AO has levied late fee u/s 234E, in respect of TDS statements filed in form 24Q for the quarter ending 15/10/2002 and 30/03/2013, which is prior to 01/06/2015. Therefore, we are of the considered view that the Ld. AO has erred in levying late fee u/s 234E of the Act, The Ld.CIT(A) without appreciating the facts has simply affirmed the findings of the Ld. AO. Hence, we direct the Ld. AO to delete late fee levied u/s 234E of the Act, for belated filing of TDS statements.
In the result, both appeals filed by the assessee are allowed.
Order pronounced in the open court on this 22/01/2020
Sd/- Sd/- (SAKTIJIT DEY) (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 22 /01/2020 Thirumalesh Sr.PS Copy of the Order forwarded to : The Appellant 1. The Respondent. 2. The CIT(A), Mumbai. 3. CIT 4. DR, ITAT, Mumbai 5. BY ORDER, 6. Guard file. स�यािपत �ित //True Copy// (Asstt. Registrar) ITAT, Mumbai