SILA SOLUTIONS PVT. LTD.,MUMBAI vs. ACIT (TDS)-CPC , GHAZIABAD & DCIT ,TDS CIRCLE - 2(2), MUMBAI

PER RAJESH KUMAR, ACCOUNTANT MEMBER

These appeals by the assessee are directed against separate

orders Commissioner of Income Tax (Appeals)-60, Mumbai, all

dated 12/07/2018 for the A.Ys. 2014-15, 2014-15, 2014-15 &

2013-14 respectively. Since the facts and issues are common,

therefore these appeals are clubbed and heard together and

disposed of by way of this consolidated order.

2 ITA Nos. 5685-5688/MUM/2018 (Sila Solutions Private Ltd.)

ITA No.5685/MUM/2018

assessee is against the order of ld.CIT(A) who confirmed the late

fee as imposed by the AO (TDS-CPC) u/s 234E of the Income Tax

Act, 1961 (in short 'the Act') in respect of TDS returns filed after

due date by the assessee but prior to 1.6.2015.

to the A.Y. 2014-15, the assessee has filed its TDS returns in

respect of payments/credits on which assessee has deducted tax

at source in the prescribed format, however, the said returns

were filed after due date of filing of the returns. The said TDS

returns were processed by the Central Processing Cell (CPC),

Gaziabad and intimations u/s 200A of the Act were issued to the

assessee wherein the late fee was imposed u/sec. 234E of the Act.

The details of the said levy are as under:-

Quarter Date of F.Y. A.Y. Late filing intimation fee u/sec. u/sec. 200A 234E (24Q-1) 23/09/2014 2013-14 2014-15 16,000/- (26Q-Q2) 23/09/2014 2013-14 2014-15 67,600/- (27Q-Q2) 31/03/2014 2013-14 2014-15 47,200/- (26Q-Q3) 23/09/2014 2013-14 2014-15 49,200/- (24Q-Q4) 23/09/2014 2013-14 2014-15 25,200/- (26Q-Q4) 29/07/2014 2013-14 2014-15 15,610/- (26Q-Q1) 86,000/- Total 3,06,810/-

3 ITA Nos. 5685-5688/MUM/2018 (Sila Solutions Private Ltd.) 4. Aggrieved, the assessee preferred an appeal before the

ld.CIT(A) challenging the order of the AO (TDS-CPC) dated

23/07/2014 for Quarter-4, 23/09/2014 for Quarter-3, 23/09/2014

for Quarter-2 and 19/12/2016 for Quarter-1. The ld.CIT(A) after

considering the contentions and submissions of the assessee,

dismissed the appeal of the assessee by holding the late fee was

correctly levied even if the return were filed and processed prior to

01.06.2015.

200A of the Act, submitted before the Bench that the penalty /

late fee levied by the AO (TDS-CPC) was wrong and against the

provisions of the Act as the returns were filed and processed prior

to the amendment carried out in section 200A w.e.f. 01/06/2015

by the Finance Act, 2015 by inserting new clauses (c) & (e) to

sub-section (1) to section 200A of the Act . The ld.AR further

submitted that only those returns were filed after the said date

could be subjected to imposition of late fee u/s 234E of the Act

and not to the cases filed prior to the said amendment.

Therefore, the ld counsel of the assessee submitted that

intimations u/s 200A issued by the AO are beyond the scope and

ambit of section 200A of the Act so far as relate to imposition of

late fee u/s 234E of the Act and accordingly and late fee charged

4 ITA Nos. 5685-5688/MUM/2018 (Sila Solutions Private Ltd.) u/s 234E of the Act deserves to be deleted. In support of his

arguments, ld.AR submitted that amendment vide Finance Act,

2015 makes its clear that in absence of enabling the provisions of

Sec. 200A of the Act ,levy of fee u/s 234E of the Act for TDS

statements falling prior to 01/06/2015 is invalid. In support of his

arguments, ld.AR relied on the following orders:-

Ld.AR, therefore, prayed for the Bench that in view of the

ratio laid down by the Hon'ble Karnataka High Court as stated

above, the appeal of the assessee may kindly be allowed.

authorities below and submitted that late fee is mandatory and

the amendment carried out in section 200A w.e.f. 01/06/2015

does not bar imposition of such late fee even for those returns

5 ITA Nos. 5685-5688/MUM/2018 (Sila Solutions Private Ltd.) relating to the period which falls prior to 01/06/2015, therefore

he prayed that the said order of the ld.CIT(A) may kindly be

confirmed.

available on record. It is undisputed fact that returns were filed

for the A.Y. 2014-15 (F.Y. 2013-14) prior to the 01.06.2015 and

were also processed prior to 01/06/2015. In our view, late fee

could not be charged as the enabling the provisions of section

200A of the Act do not provide for the same. It is correct that the

clauses (c) to (e) to sub-section (1) of section 200A brought on

the statute took w.e.f. 01/06/2015 by the Finance Act, 2015.

Accordingly, we are of the view that the late fee as imposed by

the AO (TDS-CPC) is wrong and consequent order upholding the

said imposition by the ld.CIT(A) is also not correct. The case of

the assessee is squarely covered by the series of decision referred

to by the assessee. In the case of Sudarshan Goyal (supra)

wherein the Coordinate Bench of this Tribunal has considered the

decision passed by the Hon'ble Gujarat High Court in the case of

Rajesh Kourani vs. UOI and the decision of Hon'ble Karnataka

High Court in the case of Fatheraj Singhvi & Ors. (supra). The

Coordinate Bench of this Tribunal has came to a conclusion that

the decision of the Hon'ble Karnataka High Court which is in

6 ITA Nos. 5685-5688/MUM/2018 (Sila Solutions Private Ltd.)

favour of the assessee is to be followed in view of the decision of

the Hon'ble Supreme Court in the case of CIT vs. Vegetable

Products Ltd. [88 ITR 192 (SC)]. In the case of Fatheraj Singhvi &

Ors. (supra) the Hon'ble Karnataka High Court has held as under:-

"22. It is hardly required to be stated that, as per the well established principles of interpretation of statute, unless it is expressly provided or impliedly demonstrated, any provision of statute is to be read as having prospective effect and not retrospective effect. Under the circumstances, we find that substitution made by clause (c) to (f) of sub-section (1) of Section 200A can be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand under Section 200Afor computation and intimation for the payment of fee under Section 234£ could not be made in purported exercise of power under Section 200A by the respondent for the period of the respective assessment year prior to 01/06/2015." 9. Another decision of Hon'ble Gujarat High Court in the case of

Rajesh Kourani vs. UOI in Special Civil Application No. 302 of 2014

dated 20/06/2017 has ruled against the assessee by holding that

234E is charging section and section 234E is a constitutionally

valid and there is no need or in absence of such specific mention

in section 200A , late fee can be levied. Thereafter, the Hon'ble

Karnataka High Court in the case of Sree Ayyapa Educational

Charitable Trust (supra) upheld the view taken by the High Court

in the earlier decision in the case of Fatheraj Singhvi & Ors.

(supra). Now, in our opinion, there are conflicting decisions on

the same issue of various High Courts, the decision which are in

7 ITA Nos. 5685-5688/MUM/2018 (Sila Solutions Private Ltd.) favour of the assessee are to be followed in view of the decision of

the Hon'ble Supreme Court in the case of Vegetable Products Ltd.

(supra). In our opinion, the Coordinate Bench of Agra Tribunal in

the case of Sudarshan Goyal (supra) has correctly laid down the

ratio considering the facts of the assessee’s case in the light of the

above decisions. Accordingly, we are inclined to set aside the

order of the ld.CIT(A) and direct the AO (TDS-CPC) to delete the

late fee as levied u/s 234E of the Act.

ITA Nos.5686-5688/MUM/2018

favour of the assessee in ITA No. 5685/MUM/2018 and allowed

the appeal of the assessee by directing the AO (TDS-CPC) to

delete the levy of fee/penalty u/s 234E of the Act. Therefore, our

decision in ITA No. 5685/MUM/2018 shall apply, mutatis

mutandis, to these appeals also and accordingly we allow these

appeals by directing the AO(TDS-CPC) to delete the late fee .

allowed. Order Pronounced in the open Court on 04th December, 2019 Sd/- sd/- (AMARJIT SINGH) (RAJESH KUMAR) Judicial Member Accountant Member

Dated : 04th December, 2019.

8 ITA Nos. 5685-5688/MUM/2018 (Sila Solutions Private Ltd.) vr/- Copy to: 1. The Assessee – Sila Solutions Private Ltd., 2nd Floor, Gordhan Building, Parekh Street, Prathana Samaj, Mumbai. 2. The Revenue - ACIT (TDS) - CPC, Ghaziabad & DCIT, TDS Circle-2(2), Mumbai. 3. The CIT (TDS)-2, Mumbai. 4. The CIT(A)-60, Mumbai. 5. The D.R., Mumbai. 6. Guard file. By order

//True Copy//

Assistant Registrar I.T.A.T., Mumbai