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Income Tax Appellate Tribunal, ‘A’ BENCH : CHENNAI
Before: SHRI GEORGE MATHAN & SHRI A.MOHAN ALANKAMONY
आदेश / O R D E R
PER GEORGE MATHAN, JUDICIAL MEMBER
ITA Nos.2327 to /CHNY/2018 are the appeals filed by the Assessee against the common order of the Commissioner of Income Tax (Appeals)-17, Chennai, in to 21/17-18 dated 28.05.2018 for assessment years 2014-15 to 2016-17 to 2333 /chny/2018 :- 2 -: relating to belatedly filing quarterly returns of TDS, confirming the levy of “Late Filing Fee” u/s.234E of the Act made by ld. Assessing Officer.
As all the appeals are related to the same assessee and inter-connected, all appeals are disposed off by this common order.
None represented on behalf of the Assessee and 3.
Mr.AR.V.Sreenivasan represented on behalf of the Revenue.
It was submitted by ld.D.R that he relied on the decision of the Hon’ble Gujarat High Court in the case of Rajesh Kourani Vs. Union of India dated 20.06.2017 wherein Gujarat High Court held as follows:-
“19. In plain terms, section 200A of the Act is a machinery provision providing mechanism for processing a statement of deduction of tax at source and for making adjustments, which are, as noted earlier, arithmetical or prima-facie in nature. With effect from 01.06.2015, this provision specifically provides for computing the fee payable u/s.234E of the Act. On the other hand, section 234E is a charging provision creating a charge for levying fee for certain defaults in filing the statements. Under no circumstances a machinery provision can override or overrule a charging provision. We are unable to see that section 200A of the Act creates any charge in any manner. It on)y provides a mechanism for processing a statement for tax deduction and the method in which the same would be done. When section 234E.has already created charge for levying fee that would thereafter not been necessary to have yet another provision creating the same charge. Viewing section 200A as creating a new charge would bring about a dichotomy. In plain terms, the provision in our understanding is a machinery provision and at best provides for a mechanism for processing and computing besides other, fee payable under section 234E for late filing of the statements.
Even in absence of section 200A of the Act with introduction of section 234E, it was always open for the Revenue to demand and collect the fee for late filing of the statements. Section 200A would merely regulate the manner in which the computation of such fee would be made and demand raised. In other words, we cannot subscribe to the view that without a regulatory provision being found for section 200A for computation of fee, the fee prescribed under section 234E cannot be levied. Any such view would amount to a charging section yielding to the machinery provision. If at all, recasted to 2333 /chny/2018 :- 3 -:
clause (c) of sub-section (1) of section 200A would be in nature of clarificatory amendment. Even in absence of such provision, as noted, it was always open for the Revenue to charge the fee in terms of section 234E of the Act. By amendment, this adjustment was brought within the fo1d of section 200A of the Act This would have one direct effect. An order passed under section 200A of the Act is rectifiable under section 154 of the Act and is also appealable under section 246A. In absence of the power of authority to make such adjustment under section 200A of the Act, any calculation of the fee would not partake the character of the intimation under said provision and it could be argued that such an order would not be open to any rectification or appeal. Upon introduction of the recasted clause (c), this situation also would be obviated. Even prior to 01.06.2015, it was always open for the Revenue to calculate fee in terms of section 234E of the Act. The Karnataka High Court in case of Fatheraj Singhvi [2016] (73 taxmann.com 252) held that section 200A was not merely a regulatory provision, but was conferring substantive on the authority. The Court was also of the opinion that section 234E of the Act was in the nature of privilege to the defaulter if he fails to pay fees then he wou1d be rid of rigor of the penal provision of section 271H of the Act With both these propositions, with respect, we are unable to concur. Section 200A. is not a source of substantive power. Substantive power to levy fee can be traced to section 234E of the Act. Further the fee under section 234E of the Act is not in lieu of the penalty of section 271H of the Act. Both are independent levies. Section 271H only provides that such penalty would not be levy if certain conditions are fulfilled. One of the conditions is that the tax with fee and interest is paid. The additional condition being that the statement is filed latest within one year from the due date.”
It was a submission that levy of fee u/s.234E was liable to be upheld.
We have considered the rival submissions. A perusal of the grounds of appeal shows that the assessee has relied on the decision of Co-ordinate Bench of this Tribunal in the case of Smt.G.Indhirani in 1020 & 1021/Mds./2015 dated 10.07.2015 for assessment year 2013-14 wherein the Tribunal has held as follows:-
“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 intimation of the lower authorities levying fee under Section 234E of the Act cannot be sustained in to 2333 /chny/2018 :- 4 -: 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 to 2333 /chny/2018 :- 5 -:
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)’ 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 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 to 2333 /chny/2018 :- 6 -:
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.
5. 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 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.”
Following the decision of the Co-ordinate Bench of Agra Bench in the case of State Bank of India, the Co-ordinate Bench of Chennai Tribunal in the case of Shri Anil Bohra in to 2110/Chny/2018 vide to 2333 /chny/2018 :- 7 -: order dated 28.11.2018 has held that “since, the D.R has not brought to our notice any decision rendered by the Jurisdictional High Court, qua the issues, respectfully following the above decisions of the Agra Bench, the assessee’s appeals are allowed.”
In the circumstances, respectfully following the decision of Co-ordinate Bench of this Tribunal in the case of Shri Anil Bohra referred to supra on identical findings, the late fee levied u/s.234E of the Act stands cancelled.
In the result, all the appeals of the assessee for assessment years 2014-15 to 2016-17 are allowed.
Order pronounced in the open court on 12th December, 2018, at Chennai.