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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI ARUN KUMAR GARODIA & SHRI PAVAN KUMAR GADALE
O R D E R Per Shri A.K. Garodia, Accountant Member Both these appeals are filed by the assessee and these are directed against a combined order of ld. CIT(A)-9, Bangalore dated 20.08.2018 for Assessment Years 2013-14 and 2014-15. Both these appeals were heard together and are being disposed of by way of this common order for the sake of convenience. 2. The grounds raised by the assessee for Assessment Year 2013-14 in are as under. “1. The learned commissioner (appeals) order is entirely contradictory to law and facts of the case to the extent he allowed the appeals based on the Hon'ble Karnataka High court decision in the case of Fatheraj Singvi and others v union of India reported in 2016(86) Kar.L.J 563 (HC)(DB) and reversing the benefit by holding the TDS returns are non-est under the I T Act.
2. The learned commissioner (appeals) was wrong in holding that the appellant should have paid the late fee u/s 234E before filing the TDS returns without observing the fact that the enabling section 200A to levy late fee was amended w.e.f 1.6.2015 which is prospective in nature and not applicable for Assessment periods prior to 1.6.2015. The appellant craves leave to add, alter, amend or withdraw any ground or grounds of appeal before or at the time of hearing of this appeal.”
3. Similarly the grounds raised
by the assessee for Assessment Year 2014-15 in are as under. “1. The learned commissioner (appeals) order is entirely contradictory to law and facts of the case to the extent he allowed the appeals based on the Hon'ble Karnataka High court decision in the case of Fatheraj Singvi and others v union of India reported in 2016(86) Kar.L.J 563 (HC)(DB) and reversing the benefit by holding the TDS returns are non-est under the I T Act.
2. The learned commissioner (appeals) was wrong in holding that the appellant should have paid the late fee u/s 234E before filing the TDS returns without observing the fact that the enabling section 200A to levy late fee was amended w.e.f 1.6.2015 which is prospective in nature and not applicable for Assessment periods prior to 1.6.2015. The appellant craves leave to add, alter, amend or withdraw any ground or grounds of appeal before or at the time of hearing of this appeal.”
4. In course of hearing, it was submitted by ld. AR of assessee that the issue in dispute in the present two appeals is regarding decision of ld. CIT(A) that TDS returns filed by assessee are non-est under IT Act because the assessee has not made payment of fees u/s. 234E of IT Act. He submitted that this issue is covered in favour of the assessee by the Tribunal order rendered in the case of Manoj Kumar Jaiswal Vs. ACIT as reported in [2019] 104 taxmann.com 372 (Bangalore-Trib.). He submitted copy of this Tribunal order and pointed out that para nos. 13 to 15 of this Tribunal order are relevant. The ld. DR of revenue supported the order of CIT(A).
5. We have considered the rival submissions. First of all, we reproduce paras 13 to 15 of the Tribunal order cited by ld. AR of the assessee. The same read as under. “13. We have given a very careful consideration to the rival submissions. The first aspect is as to, whether the TDS return filed u/s. 200(3) of the Act can be declared as non est. We have already extracted the provisions of section 200(3) of the Act. There is no such power conferred, either under those provisions or under any other provisions of the Act, to declare the return of TDS filed u/s. 200(3) as non est. As rightly contended by the learned counsel for the Assessee, the Act contains provision for declaring a return of income filed as invalid u/Sec.139(9) of the Act. There is no such provision for declaring a return of TDS as invalid. This is a clear indication in the Act that return of TDS cannot be declared as non est. A return of TDS only evidences payment of taxes which are withheld by a payee who, under the provisions of the Act, is bound to deduct tax at source. Declaring a & 2888/Bang/2018 Page 3 of 4 return of TDS as non est, cannot have the effect of treating the payee as an Assessee in default and expose him to other consequences under the Act as an Assessee in default. Section 234E (3) lays down that the fee to be paid u/s. 234E of the Act shall be paid before the return of TDS is filed u/s. 200(3) of the Act. This provision, in our view, does not confer power on the CIT(A) to declare the return of TDS as non est in law in a case where the return of TDS is filed without payment of fee u/s.234E of the Act. Besides the above, in the present case, the levy of fee u/s. 234E of the Act has already been deleted by the CIT(A) and therefore these provisions cannot be of any help to the conclusions of the CIT(Appeals) that the return filed without payment of fee u/s. 234E of the Act is invalid and can be declared as non est in law.
14. As far as the power of enhancement under Explanation to section 251(1) which was relied on by the ld. DR is concerned, the Explanation is only with regard to clauses (a), (aa) and (b) of section 251(1) of the Act and is not applicable to clause (c). The provisions of Sec.251 of the Act reads thus:- “Powers of the Commissioner (Appeals). 251. (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; (aa) in an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 245HA, he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the 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. (2) The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Explanation.-In disposing of an appeal, the Commissioner (Appeals) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the Commissioner (Appeals) by the appellant.”
15. It is not in dispute before us that clause (c) of section 251 is the clause applicable in the present case. A reading of this clause shows that the CIT(Appeals) in the cases to which the said clause applies can pass such orders as he thinks fit, but that power is circumscribed by the words “in the appeal”. Therefore, the CIT(Appeals) cannot travel beyond the subject matter of the appeal, which in the present case is as to, whether fee u/s. 234E of the Act can be levied or not; and not the question, whether the return of TDS filed by the assessee is non est in law? We are, therefore, of the view that the CIT(Appeals) had no power in the appeal in the present case to declare the return of TDS filed by the assessee as non est in law. In that view of the matter, we are of the view that the conclusion of the CIT(Appeals) holding that return of TDS filed by the assessee is non est in law is not valid in the eyes of law and the said direction is directed to be deleted and the order of the CIT(A) to this extent is held to be bad in law. Consequently, the appeal by the assessee in is allowed.” 6. The ld. DR of revenue could not point out any difference in facts in present case and in that case and therefore, respectfully following this Tribunal order, we hold that the conclusion of CIT(A) holding that return of TDS filed by the assessee is non-est in law is not valid in the eyes of law and to this extent, his direction is deleted and the order of CIT(A) to this extent is held to be bad in law. 7. In the result, both the appeals filed by the assessee are allowed. Order pronounced in the open court on the date mentioned on the caption page.