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Income Tax Appellate Tribunal, “A” BENCH, CHENNAI
Before: SHRI GEORGE MATHAN & SHRI S. JAYARAMAN
आदेश/ O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER :
The assessee filed these appeals against the consolidated orders passed by the Commissioner of Income Tax (Appeals)-17, Chennai in to 317/17-18 dated 28.05.2018 against the :-2-: ITA Nos.2100 to 2110/Chny/2018 orders passed u/s. 200A for various quarters in assessment years 2013-14 to 2015-16, respectively.
Shri. Anil Bohra, the assessee, carrying on the business of renting of hire cars from own cars cum drivers and renting them to established companies such as TCS etc. The assessee filed TDS statements for the quarters 2,3,4 for assessment year 2013-14, quarters 1,2,3,4 for assessment year 2014-15 & quarters 1,2,3,4 for assessment year 2015-16, all belatedly, but prior to 01.06.2015.
Hence, the Assessing Officer imposed late fees u/s. 234E in the orders passed for the respective quarters. Aggrieved, the assessee filed appeals before the CIT(A) against all those orders. Before the CIT(A), the assessee contended that the provisions of section 234E were made applicable for the purposes of section 200A w.e.f.
01.06.2015 only and therefore, not applicable for the assessment years under consideration. The assessee relied on the decision of this tribunal in the case of Indhirani vs DCIT 41 ITR(T) 439 (Chennai) in 1020, 1021, 1089, 1090, 1091 & 1092/Mds/2015.
Relying on the Hon’ble High Court of Gujarat decision in the case of Rajesh Kourani [2017] 83 taxmann 137 (Guj), the Ld. CIT(A) upheld the late fees levied by the AO u/s. 234E for the various quarters.
:-3-: to 2110/Chny/2018
Aggrieved against those orders of the Ld. CIT(A), the assessee filed all these appeals with the following common grounds of appeal:
“1. The Order of the Ld. CIT (A) - 17, Chennai is contrary to the law and facts of the case.
2. The Ld. CIT (A) - 17, Chennai erred in not deleting the fees levied under Section 234E of the Act, while processing the TDS return under Section 200A of the Act.
3. The Ld. CIT (A) - 17 erred in not following the position of law that fees under Section 234E of the Act cannot be levied for the period prior to 01.06.2015.
4. The Ld. CIT (A) erred in ignoring the decision of the Hon’ble Jurisdictional Bench of the ITAT in the case of Smt. G. Indhirani vs. DCIT, CPC, Uttar Pradesh [2015] 60 taxmann.com 312 (Chennai - Trib.) wherein it was held that fees under Section 234E of the Act cannot be levied for period prior to 01.06.2015.
5. The Ld. CIT (A) erred in following the decision of the Hon’ble Gujarat High Court which was held against assessee ignoring the decision of the Hon’ble Karnataka High Court which was ruled in favor of the assessee in Fatheraj Singhvi vs. Union of India [2016] 73 taxmann.com 252 (Karnataka). Respectfully following the decision of the Apex Court in the case of CIT vs. Vegetable Products Ltd. [1973] 88 ITR 192 (SC), when there are conflicting decision of various High Courts and if there is no decision of Jurisdiction High Court, then the decision of the High Court which is in favor of the assessee needs to be followed.
6. The Ld. CIT (A) erred in not following the decision of the Hon’ble Vishakhapatnam Bench of the ITAT in the case of Cargo Handling (P.) Workers Pool, Visakhapatnam vs. DCIT [2012] 18 taxmann.com 101 (Visakhapatnam), wherein it was held that the ITAT is a national Tribunal and its functioning affects the entire country and all its Benches. Hence, the decisions of all the coordinate Benches of the ITAT are binding on the other benches of ITAT. Therefore, the decision rendered by various benches of the ITAT in the following :-4-: to 2110/Chny/2018
cases that fees under Section 234E of the Act cannot be levied while processing the return under Section 200A of the Act for the period prior to 01.06.2015, are binding: a. Gajanan Constructions vs. DCIT [2016] 73 taxmann.com 380 (Pune - Trib.) b. Maharashtra Cricket Association vs. DCIT [3f 16] 74 taxmann.com 6 (Pune - Trib.) c. Kaur Chand Jam vs. DCIT [2016] 75 taxmann.com 114 (Amritsar - Trib.) d. Sibia Healthcare (P.) Ltd. vs. DCIT [2015] 63 taxmann.com 333 (Amritsar - Trib.) 7. Relief claimed in Appeal: The order of the Commissioner of Income-tax (Appeals)— 17, Chennai, in respect of the above matters maybe set aside and pass such orders as the Hon’ble Members of the Bench, may deem fit on proper appreciation of the facts and circumstances of the case.”
The Ld. AR canvassed the cases on the lines of grounds of appeal and relied on the orders of the Jurisdictional ITAT decision in the case of Indhirani vs DCIT, supra, and Agra Tribunal decisions in dated 31.05.2018. Per contra, the Ld. DR relied on the decision of the Ld. CIT(A) and the Gujarat High Court judgement, to which the Ld. AR invited out attention to the decisions of the Agra bench of the tribunal, supra, and submitted that after considering the Gujarat High Court decision, the Hon’ble ITAT has allowed all those appeals and hence the impugned appeals may be allowed.
:-5-: to 2110/Chny/2018
We heard the rival submissions and gone through the relevant material. The relevant portion of the order of the Agra bench, supra, is extracted as under:
“6. The counsel for the assessee has submitted a statement of TDS returns (APB, Pge. 5-9) contending that all the TDS returns statements has been filed are in respect of the period prior to the date 01.06.2015 i.e. the date from which clause (c) to sub Section (1) of Section 200A was inserted and incorporating Section 234E of the Act, 1961. He further submitted 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 expressely 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. For this purpose, the appellant rely on the following decisions: i) ‘CIT vs. Vatika Township Pvt. Ltd. (2014) 367 ITR 466 (SC). ii) ‘Sudarshan Goyal vs DCIT (TDS)’ ITA No.442/Agr/2017. iii) Fatehraj Singhvi Vs. UOI (2016) 289 CTR 0602 (Karn) (HC) iv) ‘Sibia Healthcare Pvt. Ltd. Vs. DCIT (TDS) ITA No.90/Asr/2015. v) ‘Shri Kaur Chand Jain vs. DCIT’, ITA No.378/ASR/2015. vi) ‘Gajanan Constructions vs. DCIT’ (2016) 161 ITD 313 (Pune).
Per contra, the Ld. DR supported the impugned order with the support of a brief synopsis of case laws.
Heard the rival contention and perused the material relevant. We find that while deciding the issue against the appellant assessee the ld. CIT(A) has placed reliance on ‘Rajesh Kaurani vs. Union of India’, 83 Taxmann.com 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 :-6-: to 2110/Chny/2018 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 Group of SBI and Ors. and 07/Ag/2018 and Ors 10 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.M.). The relevant part of the order is reproduced as follows: “3. Heard. The ld. 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 machinery provision providing the mechanism for processing a statement of deduction of tax at source and for making adjustments. The ld. 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 ld. CIT(A) to be correct in law. As against ‘Rajesh Kaurani’ (supra), ‘Shri Group of SBI and Ors. ITA Nos.03,06 and 07/Ag/2018 and Ors 11 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 ld. CIT(A) is that this decision and others to the same effect have been taken into consideration by the Hon’ble Gujarat High Court while passing ‘Rajesh Kaurani’ (supra). However, while observing so, the ld.
:-7-: to 2110/Chny/2018 CIT(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.
5. In ‘Shri Fatehraj Singhvi 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 of fee 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 Group of SBI and Ors. and 07/Ag/2018 and Ors 12 deductor to reopen the said question unless he has made payment under protest.”
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 ITA No.90/ASR/2015, for A.Y.2013-14, by the Amritsar Bench of the Tribunal, and ‘Shri Kaur Chand Jain vs. DCIT, CPC (TDS) Ghaziabad’, order dated 15.09.2016, in ITA No.378/ASR/2015, 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’ (Supra), ‘Sibia Healthcare Pvt. Ltd. Vs. DCIT (Supra), ‘Shri Kaur Chand Jain vs. DCIT’, (Supra), and our own finding in the case of ‘Sudershan Goyal’ (Supra), we accept the grievance of the assessees as genuine.
:-8-: to 2110/Chny/2018 Accordingly, the orders of the CIT(A) are reversed and the fee so levied under section 234E of the Act is cancelled. “ Since, the DR 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 result, the assessee’s appeals are allowed. 6.
Orders pronounced in the open court on 28th November, 2018 at Chennai.