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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI S RIFAUR RAHMAN & SHRI RAVISH SOOD
आदेश / O R D E R PER S. RIFAUR RAHMAN (ACCOUNTANT MEMBER): Both these appeals are filed by the assessee against the separate orders of the Ld. CIT(A)-60, Mumbai dated 04.05.2015 and 04.06.2018 for the A.Ys 2014-15 & 2013- 14.
& 4756//Mum/2018. M/s Sun Pharma Laboratories Ltd., Mumbai. - 2 -
Brief facts of the case are that the assessee company filed its statements in Forms 24Q for Q1 to Q4 for F.Y 2014- 15 relevant to A.Y 2015-16. On verification of this statement, the AO noticed that the assessee filed the statement, belatedly and hence, raised a demand on account of late filing levy u/s 234E by issuing intimations u/s 200A.
Against the said action of AO, assessee preferred appeal before the CIT(A) raising a ground that the provisions to include late fee u/s 234E in ‘Intimation u/s 200A is not permissible under law and consequently such levy is unsustainable in law and hence the levy is liable to be deleted. 4. Before the CIT(A), the AR of the assessee contended that the provisions to include late fee u/s 234E in the intimation u/s 200A of the Act came into effect only through the Finance Act, 2015 w.e.f. 01/06/2015 and, hence, prior to 01/06/2015 such inclusion of late fee u/s 234E in the intimation u/s 200A is not permissible under the law. In & 4756//Mum/2018. M/s Sun Pharma Laboratories Ltd., Mumbai. - 3 - this contention, he relied on various case law, which were extracted by the CIT(A).
5. After considering the submissions of the assessee, the CIT(A) confirmed the late filing levy u/s 234E of the Act.
Aggrieved by the orders of CIT(A), the assessee preferred appeals before us raising the following grounds of appeal:
“1. On the facts and in the circumstances of the case and in law, the order passed by the Ld. CIT(A) erroneously affirming the finding of the A.O is unsustainable.
2. Re-Wrong levy of interest u/s 201(1A) for a period of 3 months as against the delay of 2 months. 2.1 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has grossly erred in confirming the actions of Ld. AO in calculating interest u/s 201(1A) for a period of 3 months on professional fees as against the delay of 2 months by considering month referred to in Sec. 201(1A) as a British calendar month instead of a period of 30 days. The Ld. CIT(A) ought to have appreciated that the Rule 119A prescribing procedure for calculating interest states that delay in number of days should be converted into months and thereafter interest rate should be applied to number of months delay. 2.2 The Ld. CIT(A) ought to have appreciated that the interest charged u/s 201(1A) is compensatory in nature, hence, the month should be considered as a period of 30 days and not British calendar month. The Ld. CIT(A) also ought to have appreciated that if two interpretations / view are possible, then interpretation / view which is beneficial to the assessee should be considered”.
ITA No. 4755 & 4756//Mum/2018. M/s Sun Pharma Laboratories Ltd., Mumbai. - 4 - 7. Considered the rival submissions and perused the material on record. We find that similar issue came up for consideration before the coordinate bench of Hyderabad Tribunal in the case of M/s Terra Infra Development Ltd., Hyderabad in & 1875/Hyd/2017 for AYs 2013-14 and 2014-15, order dated 03/10/2018 wherein the coordinate bench has held as under:
We find that though the provisions for levy of fee in certain cases has been brought into the Statute book w.e.f. 1.7.2012, it has been brought under the purview of section 200A only w.e.f. 1.6.2015. Therefore, as rightly held by the Coordinate Bench in the case of M/s. Sonalac Paintings & Coatings Ltd (cited Supra) we hold that the interest u/s 234E cannot be levied in respect of TDS returns filed prior to 1.6.2015. For the sake of ready reference, the relevant para is reproduced hereunder: "10. Now coming to the merits of the case, we find force in the argument of the learned Counsel for the assessee that prior to 01.06.2015, there was no mandate, as per the Statute, to make any adjustment on account of levy of fees u/s 234E while processing TDS returns u/s 200A. We have taken note of the order of the Hon'ble Gujarat High Court holding the amendment made to section 200A w.e.f. 01.06.2015, giving power to make adjustment on account of fees u/s 234E while processing returns u/s 200A to be retrospective in & 4756//Mum/2018. M/s Sun Pharma Laboratories Ltd., Mumbai. - 5 - nature, stating that this power given to the AO is a machinery provision while the substantive provision of the power to levy fees u/s 234E was always there on the Statute from 01.06.2012. But at the same time, we note that the Hon'ble Karnataka High Court held that levy of fees u/s 234E while processing returns, TDS u/s 200A prior to 01.06.2015 was without any authority of law. With two divergent view of the Hon'ble High Courts on the issue and in the absence of any decision by the jurisdictional High Court, we concur with the learned Counsel for the assessee that as per the well accepted rule of construction, if two reasonable constructions of a statute are possible the construction which favours the assessee must be adopted. In view of the same, respectfully following the decision of the Karnataka High Court in the case of Fatheraj Singhvi (Supra), we hold that the fees levied in all the present cases u/s 234E prior to 01.06.2015 in the intimations made u/s 200A was without authority of law and the same is therefore, directed to be deleted. In view of the above, all the appeals of the assessee stand allowed".
Respectfully following the same, assessee's appeals for both the A.Ys are allowed.” 7.1 Ld. Counsel for the assessee submitted various case laws and he relied upon the decision of Coordinate Bench of Hyderabad in the case of Navayuga Quazigund Expressway (P) Ltd., Vs. DCIT in ITA No. 1651/Hyd/2014, order dated ITA No. 4755 & 4756//Mum/2018. M/s Sun Pharma Laboratories Ltd., Mumbai. - 6 - 33/03/2015, wherein the coordinate bench has held as under:
“We have heard the arguments of both the sides and also perused the relevant material on record. This issue involved in this appeal relates to the computation of interest payable by the assessee under S. 201(1A), the provisions of which read as under: “(1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest,— (i) at one per cent. for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and (ii) at one and one-half per cent. for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid, and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of S. 200 7.1 In the case under consideration, on perusal of record, we find that the TDS returns filed by the assessee for the relevant period i.e., FY 2014-15 Quarter - 4 was prior to 01/06/2015. Therefore, respectfully following the said decision of the coordinate bench, we set aside the order of CIT(A) and direct the AO to delete the fees levied u/s 234E.
ITA No. 4755 & 4756//Mum/2018. M/s Sun Pharma Laboratories Ltd., Mumbai. - 7 - A.Y: 2013-14: 8. The issues involved in this appeal are exactly identical to A.Y 2014-15 except variants in figures. Hence, the decision rendered by us for the A.Y 2014-15 (supra) would apply mutatis-mutandis for A.Y 2013-14 also. 9. In the result, both the appeals filed by the assessee are allowed.
This Order pronounced in Open Court on 10/12/2019 Sd/- Sd/- (S RIFAUR RAHMAN ) (RAVISH SOOD) (JUDICIAL MEMBER) ACCOUNTANT MEMBER Mumbai, Dated 10/12/2019 KRK, PS आदेश की प्रनिलिपि अग्रेपर्ि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant प्रत्यथी / The Respondent. 2. संबंधित आयकर आयुक्त / The CIT(A) 3. 4. आयकर आयुक्त(अपील) / Concerned CIT ववभागीय प्रतततनधि, आयकर अपीलीय अधिकरण, अहमदाबाद / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशधिुसधर/ BY ORDER, सत्यावपत प्रतत //True Copy// 1. & 4756//Mum/2018. M/s Sun Pharma Laboratories Ltd., Mumbai. - 8 - उि/सहधयक िंजीकधर ( Asst. Registrar) आयकर अिीिीय अधर्करण, अहमदधबधद / ITAT, Mumbai