AARYAVART INFRASTRUCTURE PVT. LTD.,,AHMEDABAD vs. THE DY. CIT., CPC TDS,, GAZIABAD

In ITA No.2372/Ahd/2016, the assessee has raised following grounds:-

The learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Dy. Comm. of Income Tax, Centralized Processing Cell - TDS, Ghaziabad, U.P. in passing an intimation order u/s.200A of the IT. Act, 1961 without giving show cause notice to the appellant. Hence the order so passed without giving an opportunity of being heard to the appellant being against the principles of natural justice is illegal and bad in law.

The learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Dy. Comm. of Income Tax, Centralized Processing Cell - TDS, Ghaziabad, U.P. in charging interest of Rs.34,570/- on alleged late Payment of TDS.

The learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Dy. Comm. of Income Tax, Centralized Processing Cell - TDS, Ghaziabad. U.P. in Charging Rs.65,400/- for the alleged late filing fees U/S.234E of the IT. Act, 1961. 3. At the time of hearing before us, at the outset, learned Counsel for the assessee submitted that the appeals filed before the ld. CIT(A) were summarily dismissed by him without dealing with the merits of the case as there was delay in filing the appeals before him. The learned Counsel further contended that there was a reasonable cause for such delay in filing the appeals before him as the communication, i.e. intimation u/s 200A of the Act, was sent through electronic media and the assessee came to know about the order only on 28.09.2015 and, therefore, the same date has been shown by him as date of service of order.

Having perused the reasoning put forward by the assessee as also bearing in mind entirety of the case, we are convinced that the assessee was prohibited by reasonable cause from filing the appeal within the ITA Nos. 2372 to 2374/Ahd/2016 AY : 2013-14 & 2014-15 - 3 –

On merits of the case, learned Counsel for the assessee pointed out that similar issue arose before the Tribunal in the case of Wonder Waves Entertainment Pvt Ltd vs. DCIT in ITA Nos.2143 to 2146/Ahd/2015 for AY 2014-15, wherein the Tribunal, following the decision of ITAT, Amritsar Bench rendered in ITA No.90/Asr/2015 in the case of Sibia Healthcare Private Ltd vs. DCIT, has decided the similar issue in favour of the assessee, by observing as under:-

We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. In addition to his argument on the merits, learned counsel has also invited our attention to the reports about the decisions of various Hon'ble High Courts, including Hon'ble Kerala High Court, in the case of Narath Mapila LP School Vs Union of India [WP (C) 31498/2013(J)], Hon'ble Karanataka High Court in the case of Adithya Bizor P Solutions Vs Union of India [WP No. 6918-6938/2014(T-IT), Hon'ble Rajasthan High Court in the case of Om Prakash Dhoot Vs Union of India [WP No. 1981 of 2014] and of Hon'ble Bombay High Court in the case of Rashmikant Kundalia Vs Union of India [WP No. 771 of 2014], granting stay on the demands raised in respect of fees under section 234E. The full text of these decisions were not produced before us. However, as admittedly there are no orders from the Hon'ble Courts above retraining us from our adjudication on merits in respect of the issues in this appeal, and as, in our humble understanding, this appeal requires adjudication on a very short legal issue, within a narrow compass of material facts, we are proceeding to dispose of this appeal on merits.

We may produce, for ready reference, section 234E of the Act, which was inserted by theFinance Act 2012 and was brought into effect from 1st July 2012. This statutory provision is as follows:

By way of Finance Act 2015, and with effect from 1st June 2015, there is an amendment inSection 200A and this amendment, as stated in the Finance Act 2015, is as follows: In section 200A of the Income-tax Act, in sub-section (1), for clauses (c) to (e), the following clauses shall be substituted with effect from the 1st day of June, 2015, namely:-- "(c) the fee, if any, shall be computed in accordance with the provisions of section 234E; (d) the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of the amount computed under clause (b) and clause (c) against any amount paid under section 200 or section 201 or section 234E and any amount paid otherwise by way of tax or interest or fee; (e) an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, him under clause (d); and (f) the amount of refund due to the deductor in pursuance of the determination under clause (d) shall be granted to the deductor.

In effect thus, post 1st June 2015, in the course of processing of a TDS statement and issuance of intimation under section 200A in respect thereof, an adjustment could also be made in respect of the "fee, if any, shall be computed in accordance with the provisions of section 234E". There is no dispute that what is impugned in appeal before us is the intimation under section 200A of the Act, as stated in so many words in the impugned intimation itself, and, as the law stood, prior to 1st June

No other adjustments in the amount refundable to, or recoverable from, the tax deductor, were permissible in accordance with the law as it existed at that point of time.

In view of the above discussions, in our considered view, the adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A. This intimation is an appealable order under section 246A(a), and, therefore, the CIT(A) ought to have examined legality of the adjustment made under this intimation in the light of the scope of the section 200A. Learned CIT(A) has not done so. He has justified the levy of fees on the basis of the provisions of Section 234E. That is not the issue here. The issue is whether such a levy could be effected in the course of intimation under section 200A. The answer is clearly in negative. No other provision enabling a demand in respect of this levy has been pointed out to us and it is thus an admitted position that in the absence of the enabling provision under section 200A, no such levy could be effected. As intimation under section 200A, raising a demand or directing a refund to the tax deductor, can only be passed within one year from the end of the financial year within which the related TDS statement is filed, and as the related TDS statement was filed on 19th February 2014, such a levy could only have been made at best within 31st March 2015. That time has already elapsed and the defect is thus not curable even at this stage. In view of these discussions, as also bearing in mind entirety of the case, the impugned levy of fees under section 234 E is unsustainable in law. We, therefore, uphold the grievance of the assessee and delete the impugned levy of fee under section 234E of the Act. The assessee gets the relief accordingly."

There is no disparity on facts, respectfully following the order of ITAT, Amritsar. We allow these all appeals and delete the late fee charged from the assessee u/s. 234E of the Act.”

Nothing contrary was brought to our knowledge on behalf of the Revenue. Facts being similar, so following the same reasoning and respectfully following the decisions of Co-ordinate Bench in the case of Wonder Waves Entertainment Pvt Ltd & Sibia Healthcare Private Limited (supra), we allow this ground raised by the assessee in all these appeals and delete the late fee charged from the assessee u/s 234E of the Act.

Regarding the ground raised by the assessee in respect of charging of interest, the learned Counsel for the assessee submitted that he is not pressing this ground; hence the same is dismissed as not pressed.

In the result, all appeals filed by the assessee are partly allowed.

( ) / The CIT(A)- िवभागीय िवभागीय "ितिनिध िवभागीय िवभागीय "ितिनिध "ितिनिध "ितिनिध अिधकरण अिधकरण अिधकरण अिधकरण अपीलीय अपीलीय अपीलीय अपीलीय आयकर आयकर आयकर आयकर राजोकट राजोकट/DR,ITAT, Ahmedabad, राजोकट राजोकट 5. , , गाड" गाड" फाईल गाड" गाड" फाईल फाईल /Guard file. फाईल 6. आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार आदेशानुसारसहायक पंजीकार सहायक पंजीकार (Asstt.