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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI GEORGE MATHAN & SHRI INTURI RAMA RAO
: Mr.V.S.Jayakumar, Adv. अपीलाथ( क) ओर से/ Appellant by : Mrs.D.Rohini, Addl.CIT +,यथ( क) ओर से /Respondent by : 31.12.2018 सुनवाई क) तार"ख/Date of Hearing : 02.01.2019 घोषणा क) तार"ख /Date of Pronouncement आदेश / O R D E R PER BENCH:
These are appeals filed by the assessee-trust directed against the common Order of the Ld.Commissioner of Income Tax (Appeals)-17, Chennai, dated 28.05.2018 confirming the levy of fees u/s.234E of Income :- 2 -:
Tax Act, 1961 for late filing of the quarterly TDS returns for the Financial Years relevant to the Assessment Years 2013-14 to 2015-16. 2. Since the common issue involved in all the appeals, we dispose of the same by this common order.
The appellant raised the following grounds of appeal:
1. The CIT(A) erred in confirming the intimation passed u/s. 200A by the DCIT, Centralized Processing Cell — TDS, Vishall, Ghaziabad.
2. The CIT(A) should have appreciated that the intimation under Section 200A of the Income Tax Act of the Assessing Officer is bad and erroneous in law and against the principles of natural justice.
3. The levy of fee u/s.234E by the Assessing Officer is without jurisdiction in as much as there is no such power vested in him to do so.
4. Section 200A of the Act provides for processing of the statement of tax deducted at source by making adjustment as provided in that Section. The Assessing Officer cannot make any other adjustment.
5. There is no enabling provisions in Section 200A of the Act for making adjustment in respect of the statement filed by the assessee with regard to tax deducted at source by levying fee under Section 234E of the Act than the one prescribed above in Section 200A of the Act.
6. The CIT(A) failed to note that the Assessing Officer has exceeded his jurisdiction in levying fee under Section 234E while processing the statement and make adjustment under Section 200A of the Act. Therefore, the impugned intimation of the lower authorities levying fee under Section 234E of the Act cannot be sustained in law. 7. The appellant relies on the decision of the Chennai Tribunal in G. Indhirani Vs DCIT to 1021 & 1089 to 1092/Mds/2015 “A” Bench dated 10.07.2015, [2015] 172 TTJ 239 (Chennai), wherein the Hoñ’ble Tribunal has cancelled the levy of fee vide intimation under section 200A of the Income Tax Act. 8. The Appellant craves leave to adduce addition grounds of appeal at the time of hearing.
Briefly, the facts of the case are as under:
The appellant is a registered trust. It filed the TDS statement for the quarters relevant to the AYs 2013-14 to 2015-16 belatedly. The AO :- 3 -: having noticed the delay had levied fees u/s.234E of the Act vide order dated 09.06.2017 passed u/s.200A of the Act.
5. Being aggrieved, appeals were filed before the Ld.CIT(A) who vide impugned order held that though the provisions of Sec.234E are introduced w.e.f 01.06.2015 in the statute, the same can be applied retrospectively placing reliance on the decision of the Hon’ble Gujarat High Court in the case of Rajesh Kourani (2017) 83 taxmann.com 137 (Guj.).
Being aggrieved, the appellant is in appeal before us in the present appeals.
We have considered the rival submissions and perused the materials placed on record.
The only issue involved in the present appeals is whether the fees u/s.234E can be levied even prior to introduction of the said provision in the statute. The Hon’ble Gujarat High Court in the case of Rajesh Kourani (supra) has held that the provisions of Sec.234E can be applied retrospectively even prior to 01.06.2015. The coordinate Bench of this Tribunal in the case of Smt.G.Indhirani in 1020 & 1021/Mds./2015 dated 10.07.2015 for the AY 2013-14, had distinguished the said decision by holding as under:
“11. In view of the above discussion, this Tribunal is of the considered opinion that the A.O has exceeded his jurisdiction in levying fee under Section 234E while processing the statement and make adjustment under Section 200A of the Act. Therefore, the impugned :- 4 -: intimation of the lower authorities levying fee under Section 234E of the Act cannot be sustained in law. However, it is made clear that it is open to the Assessing Officer to pass a separate order under Section 234E of the Act levying fee provided the limitation for such a levy has not expired. Accordingly, the intimation under Section 200A as confirmed by the CIT(Appeals) in sofar as levy of fee under Section 234E is set aside and fee levied is deleted. However, the other adjustment made by the Assessing Officer in the impugned intimation shall stand as such.” Here, we have to mention that the decision of the Hon’ble Gujarat High Court in the case of Rajesh Kourani has not been considered as it was not available at that point of time. The Co-ordinate Bench of Agra Bench in the case of State Bank of India in And 07/Ag./2018 for assessment year 2013-14 dated 31.05.2018 by considering the decision of the Hon’ble Gujarat High Court in the case of Rajesh Kourani has held in paras 8 to 11 as follows:- “ 8. Heard the rival contention and perused the material relevant. We find that while deciding the issue against the appellant assessee the Id. CIT(A) has placed reliance on ‘Rajesh Kaurani vs. Union of India’, 83 Taxmanncom 137 (Guj.) wherein it was held that Section 200A of the Act is a machinery provision providing the mechanism for processing a TDS statement of deduction of tax at source and for making adjustment. The Ld. CIT(A) has further held that this decision was delivered after considering numerous ITAT and High Court decisions and therefore this decision in ‘Rajesh Kaurani’ (Supra), holds the fields.
It is seen that prior 01.06.2015, there was no enabling provision in the Act u/s 200A for raising demand in respect of levy of fee u/s 234E of the Act. The provision of Section 234E of the Act is charging provision i.e. substantive provision which could not be applied retrospectively, unless it is expressly provided in the Act, to levy the late fee for any delay in filing the TDS statement for the period prior to 01.06.2015. The counsel for the assessee has rightly contended that in the absence of enabling provisions u/s 200A of the Act, such levy of late fee is not valid relying on the decisions in the cases of ‘CIT vs. Vatika Township Pvt. Ltd. (2014) 367 ITR 466 (SC), ‘Sudarshan Goyal vs DCIT (TDS)’ ITA No.442/Agr/2017 and Fatehraj Singhvi Vs. UOI (2016) 289 CTR 0602 (Karn) (HC). The decisions relied on by the Ld. DR are distinguishable on facts, as the issue involved in those cases pertains to interest u/s 201(1) and 201(1A) on the amount of TDS whereas in the present cases the issue were pertains to liability of late fee u/s 234E of the Act for delay in filing TDS statement which was inserted from 01.06.2015.
On similar facts, we have decided the same issue in the assessee’s own case ‘Sudershan Goyal vs. DCIT (TDS)’, in ITA No. 442/Agra/2017 dtd. 09.04.2018 authored by one of us (the Ld. J.MJ. The relevant part of the order is reproduced as follows: “3. Heard. The id. CIT(A), while deciding the matter against the assessee, has placed reliance on ‘Rajesh Kaurani vs. UOI’, 83 Taxmann.com 137 (Guj), wherein, it has been held that section 200A of the Act is a machineiy provision providing the mechanism for processing a statement of deduction of tax at source and for making adjustments. The id. CIT(A) has held that this decision was delivered after considering numerous ITAT/High Court decisions and so, this decision in ‘Rajesh Kaurani’ (supra) holds the field.
4. We do not find the view taken by the Id. CIT(A) to be correct in law. As against ‘Rajesh Kaurani’ (supra), ‘Shri Fatehraj Singhvi and Others vs. UOI’, 73 Taxmann.com 252 (Ker), as also admitted by the ld. CIT(A) himself decides the issue in favour of the assessee. The only objection of the Id. CIT(’A) is that this decision and others to the same effect have been taken into consideration by the Hon ‘ble Gujaral High Court while passing ‘Rajesh Kaurani’ (supra). However, while observing so, the Id. IT(’A) has failed to take into consideration the settled law that where there is a cleavage of opinion between different High Courts on an issue, the one in favour of the assessee needs to be followed. It has so been held by the Hon ‘ble Supreme Court in ‘CIT vs. Vegetable Products Ltd.’, 88 ITR 192 (SC). It is also not a case where the decision against the assessee has been rendered by the Jurisdictional High Court qua the assessee.
In ‘Shri Farehraj Sin ghvi and Others’ (supra) it has been held, inter alia, as follows: “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 200A for computation and intimation for the payment offee under Section 234E 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 1 .6.2015. However, we make it clear that, if any deductor has already paid the fee after intimation received under Section 200A, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest.”
6. In view of the above, respectfully following ‘Shri Fatehraj -2355/Chny/2018 :- 5 -:
Singhvi and Others’ (supra), ‘Sibia Healthcare Pvt. Ltd. vs. DCIT (TDS)’, order dated 09.06.2015 passed in JTA No.90/ASR/20]5, for A.Y.20]3-14, by the Amritsar Bench of the Tribunal, and ‘Shri Kaur Chand Jam vs. DGJT, C’PC (TDS.) Ghaziabad’, order dated 15.09.2016, in for A.Y. 2012-13, the grievance of the assessee is accepted as justified. The order under appeal is reversed. The levy of the fee is cancelled.”
In the above view, respectfully following ‘Shri Fatehraj Singhvi And Ors’(289 CTR 602), Sibia Healthcare Pvt Ltd., Vs.DCIT(ITA No.90/Asr/2015), Shri Kaur Chand Jain Vs.DCIT(ITA No.378/ASR/2015) and our own finding in the case of Sudershan Goyal (ITA No.442/Agra/2017 dt.9.4.2018), we accept the grievance of the assessee as genuine. Accordingly, the orders of the CIT(A) are reversed and the fee so levied u/s.234E of the Act is cancelled.”
In our view, the decision of the coordinate Bench of this Tribunal is more reasoned one since it followed the salutary principle of law laid down by the Hon’ble Supreme Court in the case of CIT v. Srinivasa Setty (B.C.)
(1981) 128 ITR 294 that no tax can be levied in the absence of any computation provisions. The relevant extract of the judgment is as under:
…………..This inference flows from the general arrangement of the provisions in the Income-tax Act, where under each head of income the charging provision is accompanied by a set of provisions for computing the income subject to that charge. The character of the computation provisions in each case bears a relationship to the nature of the charge. Thus, the charging section and the computation provisions together constitute an integrated code. When there is a case to which the computation provisions cannot apply at all, it is evident that such a case was not intended to fall within the charging section. Otherwise one would be driven to conclude that while a certain income seems to fall within the charging section, there is no scheme of computation for quantifying it. The legislative pattern discernible in the Act is against such a conclusion. It must be borne in mind that the legislative intent is presumed to run uniformly through the entire conspectus of provisions pertaining to each head of income. No doubt there is a qualitative difference between the charging provision and a computation provision. And ordinarily the operation of the charging provision cannot be affected by the construction of a particular computation provision. But the question here is whether it is possible to apply the computation provision at all if a certain interpretation is pressed on the charging provision. That pertains to the fundamental integrity of the statutory scheme provided for each head
In the present case, the provisions of Sec.234E were introduced w.e.f. 01.06.2015 and the provisions are in the nature of both computation as well as charging. In the absence of these provisions during the period under consideration in the light of the ratio laid down by the Hon’ble Supreme Court in the case of B.C.Srinivasa Setty (Supra), no fees can be levied u/s.234E retrospectively. The decision of the coordinate :- 6 -: bench of this tribunal in the case of G.Indhirani as cited supra is in conformity to the ratio of the decision of the Hon’ble Supreme Court in the case of B.C.Srinivasa Setty. Hence, we prefer to follow the decision of coordinate Bench to the Hon’ble Gujarat High Court decision in the case of 9. In the result, the appeals filed by the appellant are allowed.
Order pronounced in the open court on the 2nd day of January, 2019 in Chennai. (जॉज" माथन) (इंटूर" रामा राव) (GEORGE MATHAN) (INTURI RAMA RAO) "या"यक सद"य/JUDICIAL MEMBER लेखा सद"य/ACCOUNTANT MEMBER चे"नई/Chennai, 3दनांक/Dated: 2nd January, 2019. TLN