M/S RADIANT HEALTHCARE PVT LTD ,BANGALORE vs. THE ASSISTANT COMMISSIONER OF INCOME TAX CPC TDS , GHAZIABAD

O R D E R PER BENCH : The assessee has filed appeals against the common order of ITA Commissioner of Income Tax (Appeals)-9, Bangalore No.10083/2017-18, 10084/2017-18, 10085/2017-18, 10086/2017- 18, 10123/2017-18, 10124/2017-18, 10125/2017-18, 10129/2017- 18, 10130/2017-18 Dt.25.07.2018 passed under Sections 154, 2 to 2707/Bang/2018 200(A) and 250 of the Income Tax Act, 1961 (‘the Act’). The assessee's appeals are having common and identical issues therefore they are clubbed together and heard and common order is passed. For the sake of convenience, we shall take up the assessee's appeal in and the facts narrated. The assessee has raised the following grounds of appeal :- “1. The Ld. CIT(A), having accepted the appeal of the appellant and having cancelled the order u/s 200(A) of the Act has erred in holding in the same order that the TDS return filed by the appellant is non-est under IT Act.

2. The facts of the case and the law applicable have to not been properly appreciated by the Ld. CIT(A). The Ld. CIT(A) has erred in not appreciating that: a. There was no requirement or pre condition of payment of fee u/s 234E. b. The TDS Return filed by the appellant is valid. c. There is no specific provision in law to treat the return filed as invalid.

3. In any case and without prejudice, the act of the CIT(A) in holding the TDS Statement/return to be non-est being beyond the power of CIT(A) u/s 251 of the Act makes the order of the CIT(A) bad in law to the extent that it holds the TDS return / statement filed by the appellant is non-est and therefore the order to that extent is liable to be quashed.

4. In any case and without prejudice, the Ld. CIT(A) has erred in stating that the appeal is partly enhanced in terms of Sec. 251(1)(c) of the Act by treating the TDS return as non-est. The action of CIT(A) being wholly erroneous both on facts and the law applicable is to be negated.

5. In any case and without prejudice, if the view of the CIT(A) is that there is no return statement at all, then the order 3 to 2707/Bang/2018 passed by CIT(A) on an intimation processing such so called ‘non-est’ return would also be bad in law and liable to be quashed.

6. In view of the above and on the other grounds of the appeal to be adduced at time of hearing, it is requested the order of CIT(A) to the extent it holds TDS returns to be non-est and the appeal is enhanced be quashed or at least it be held that TDS return/statement filed by appellant is valid return / statement”.

and judicial decisions has granted relief in respect of levy of late filing fees under Section 234E of the Act supporting his view relying on the decision of Hon'ble 4 ITA Nos.2699 to 2707/Bang/2018 jurisdictional High Court in the case of Fatheraj Singhvi Vs. UOI 289 CTR 602 (Kar) and also relied on the other judgment. The learned Authorised Representative emphasized that the CIT(Appeals) cancelled the late fees of levy under Section 234E and felt that the assessee should have paid the prescribed fees and since the assessee has not paid the prescribed fees before filing of return therefore treated the TDS Returns filed by the assessee as non-est. Aggrieved by the order, the assessee has filed an appeal with the Tribunal.

3. At the time of hearing, the learned Authorised Representative argued that the CIT(Appeals) has erred in treating the TDS Return as non-est and there is no provision under the law to treat the Return as non-est as the assessee has complied with the conditions and further the learned Authorised Representative emphasized that the CIT(Appeals) does not have power to treat the Return as non-est and prayed for allowing the appeal of assessee. Contra, the learned Departmental Representative supported the orders of CIT(Appeals) on the disputed issue.

4. We heard the rival contentions and perused the material on record. We find the sole disputed issue envisaged by the learned 5 to 2707/Bang/2018 Authorised Representative that the CIT(Appeals) has treated the TDS Return filed by the assessee as non-est as there is no payment of prescribed fees before filing of TDS Return. The learned Authorised Representative vehemently argued that CIT(Appeals) powers are not exhaustive and there is no failure on the part of assessee in respect of disputed issue of filing of TDS Return before the lower authorities and TDS Returns were accepted. We consider it appropriate to refer to the provisions of Section 251 which provides power of CIT(Appeals) as under : “(1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers - (a) In an appeal against an order of assessment he may confirm, reduce, enhance or annul the assessment, or he may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment in accordance with the directions given by the Commissioner (Appeals) and after making such further inquiry as may be necessary, and the Assessing Officer shall thereupon proceed to make such fresh assessment and determine, where necessary, the amount of tax payable on the basis of such fresh assessment; (b) In an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) In any other case, he may pass such orders in the appeal as he thinks fit.”

We find the identical issue is decided by the co-ordinate Bench of the Tribunal in the case of Shri Pooja Daga Vs. ACIT 6 to 2707/Bang/2018 Dt.19.3.2019 (ITA Nos.2661 to 2665/Bang/2018) and held in paras 4 & 5 are as under : “ 4. We are of the opinion that the present TDS return intimation orders passed by the CIT(A) falls under proviso to Sec. 251(1)(c) of the Act, and further the TDS returns filed by the assessee have been processed and accepted by the revenue and late fee for delay in filing the TDS statement under 234E of the Act was levied. We found the The Revenue has not treated the TDS returns filed as defective and processed the returns. We perused the provisions of Sec. 200(A) of the of the Act processing of statements of tax deduction 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; (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."