VENUS ELECTRONICS AND CONTROLS PVT. LTD.,MUMBAI vs. ITO (TDS) - 2(3)(3), MUMBAI

PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of ld. CIT(A)-59, Mumbai dated 29.06.2018 for Assessment Year 2013-14, which in turn arises from the order under section 200A passed by Assessing Officer dated 29.12.2013. The assessee has raised the following grounds of appeal:

(for Q-3 in AY 2013-14 the assessee has raised following grounds of appeal)

2. The CIT (A) erred in confirming the order passed by TDS assessing officer [ DCIT( CPC ) TDS ] in determining interest on Late Payment Rs. 1,155/- for 24Q3 FY 2012-13.

1. The TDS assessing officer [DCIT( CPC) TDS ] erred in determining interest on Late Payment Rs. 6,600/- for 24Q4 FY 2012-13.

2. The CIT (A) erred in confirming the order passed by TDS assessing officer [ DCIT( CPC ) TDS ] in determining interest on Late Payment Rs. 3,600/- in respect of 24Q4 FY 2012-13. 3. Brief facts of the case are that the assessee is a company and its course of business made certain payments to various parties and deducted Tax at Source (TDS) and furnished TDS return in respect of section 24Q3 and Q4 for F.Y. 2012-13, there was delay in filing TDS return. Accordingly, the Central Processing Cell (TDS-CPC/ AO) Ghaziabad processed the returns of both the quarters (Q) calculated interest and late fee under section 234E vide intimation dated 29.12.2013. For Q3 the AO/ TDS- CPC determined interest of late payment of Rs. 1155/- and late fee under section 234E of Rs. 30,600/-. Similarly for Q4 of AY 2013-14 a late fee under section 234E of Rs. 6600/- was raised. 2 Mum 2018-Venus Electronics And Controls Pvt. Ltd.

4. Aggrieved by the action of TDS-CPC/ AO the assessee filed appeal before the ld. CIT(A). Before ld CIT(A) the assessee raised a contention that period involved in the appeals are prior to 01.06.2015 that is prior to insertion of section 234E and amendment in substitution of clause (c) to section 200A, vide which it has been provided that fee payable under section 234E can be adjusted while processing intimation under section 234E. Thus, the adjustment made with regard to fee leviable under section 234E while processing TDS statement under section 200A for the period prior to 01.06.2015 is not legally valid. The assessee also relied on the various decisions of the Tribunal, including the decision of Mumbai Tribunal in Kash Realtors Pvt Ltd Vs ITO (ITA No. 4199/Mum/2015 dated 27.07.2016). The assessee urged that the decision in Kash Realtors Pvt Ltd Vs ITO (supra), the Tribunal followed the decision of Karnataka High Court in Fatehraj Singhvi Vs Union of India reported viz (73 taxmann.com 252).

5. The submissions of the assessee on the facts and law was not accepted by the ld CIT(A). The ld CIT(A) confirmed the action of AO/ CPC-TDS for both the quarters(Qs) by making reliance on the decision of Gujarat High Court in Rajesh Kourami Vs Union of India (83 taxmann.com 137) by taking view that the decision of Gujarat High Court is latest one.

Though, the assessee referred and relied on the decision of Hon’ble Apex Court in CIT Vs Vegetable Product (88 ITR 192 SC) on the ratio that if 3 Mum 2018-Venus Electronics And Controls Pvt. Ltd. two reasonable constructions of taxing statue are possible, that construction which favours the assessee must be adopted. The ld CIT(A) not accepted the ratio in CIT Vs Vegetable Product (supra) by taking view that the same given on penalty provision. Thus, further aggrieved by the order of ld. CIT(A), the assessee has filed the present appeal before this Tribunal.

raised by assessee in the present appeal is covered by the various decision of Tribunal including the decision of Tribunal in Permanent Magnets Ltd. vs. DCIT in ITA No. 6436 to 6442/Mum/2018, wherein it was held that provision of section 234E, 200A is liable to be imposed w.e.f. 01.06.2015 and accordingly, no fees/levy is leviable under section 234E. The ld. AR for the assessee also relied on the decision of Karnataka High Court in Fatheraj Singhvi Vs UOI (supra) and Hon’ble Apex Court in CIT Vs Vegetable Product (supra).

7. On the other hand, the ld. Departmental Representative (DR) for the revenue supported the order of lower authorities. Mum 2018-Venus Electronics And Controls Pvt. Ltd.

8. We have considered the submission of both the parties and perused the material available on record carefully. We have also deliberated on the various case laws referred by ld CIT (A) in the impugned order. We have noted that CPC-TDS/AO initiated the demand for Quarter No.3 & 4 for A.Y. 2013-14 vide intimation/order dated 29.12.2013. For Q3 the AO/ TDS-CPC initiated interest of late payment of Rs. 1155/- and late fee under section 234E of Rs. 30,600/-. Similarly for Q4 of AY 2013-14 a late fee under section 234E of Rs. 6600/- was raised. The ld CIT(A) affirmed the action of AO on the basis of decision of Gujarat High Court in Rajesh Kourami Vs Union of India (supra).

9. The ld AR for the assessee vehemently relied on the decision of Karnataka High Court in Fatheraj Singhvi Vs UOI (supra), wherein it was held that the amendment in section 200A has come into effect on 01.06.2015 and has prospective effect, no computation of fee for the demand or the intimation for fee under section 234E can be made for TDS deducted prior to 01.06.2015, hence, the demand of fee under section 234E is without authority of law. The ld CIT(A) affirmed the action of AO/ CPC-TDS by relying on the decision of Gujarat High Court in Rajesh Kourami Vs Union of India (supra). 10. The Hon'ble Gujarat High Court in the case of Rajesh Kourani v. UOI [2017] 83 taxmann.com 137/249 Taxman 402 wherein the Hon'ble High Court took a view that levy of fee u/s. 234E of the Act is possible even 5 Mum 2018-Venus Electronics And Controls Pvt. Ltd. without a regulatory provision u/s. 200A of the Act and therefore the levy of fee u/s. 234E of the Act w.e.f.1.7.2012, when those provisions were introduced, was valid. 11. No decision of jurisdictional high court is brought to our notice, now we are faced with the decision of the Hon'ble High Court of Karnataka in Fatheraj Singhvi Vs UOI (supra), which favoured the assessee and on the contrary the decision of Gujarat High Court in Rajesh Kourani v.

UOI(supra). Therefore, considering the ratio of decision of Hon’ble Apex Court in Vegetable Products (supra), that if two reasonable constructions of taxing statue are possible, that construction which favours the assessee must be adopted. Accordingly we are accepting the view taken by Hon'ble High Court of Karnataka in Fatheraj Singhvi Vs UOI (supra), Considering the aforesaid factual and legal position, we are of the view that no interest and late fees under section 234E is leviable against the assessee as the provision of section 234E has been brought on Statute Book w.e.f. 01.06.2015 and accordingly, no fee is leviable under section 234E.

Order pronounced in the open court on 18/12/2019.

Sd/- Sd/- S. RIFAUR RAHMAN PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Date: 18.12.2019 SK 6 Mum 2018-Venus Electronics And Controls Pvt. Ltd. Copy of the Order forwarded to : 1. Assessee 2. Respondent 3. The concerned CIT(A) 4.The concerned CIT 5. DR “F” Bench, ITAT, Mumbai 6. Guard File