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Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
Before: Sh. G. C. Gupta, Hon’ble & Sh. O.P.Kant
ORDER PER BENCH. This batch of seven appeals comprises two appeals of the Revenue and five appeals of the tax deductors. All the appeals 3 ITA No.1930&1931/Del./2014 emanate from the different orders of the learned Commissioner of Income-tax (Appeals) against the intimation issued u/s 200A of the Act by the Income Tax Officer/ Assistant Commissioner of Income Tax (Tax deducted at source)/ Centralised Processing Centre (Tax deducted at source). Since the issues involved in all the appeals are related to the intimation u/s 200A of the Act, all the appeals were heard together and disposed off by a consolidated order for the sake of convenience.
Now, we take up the Appeal of the Revenue in & 1931 /Del/2104. The grounds of the appeal are identical in both the appeals, and therefore, the grounds of appeal
s of ITA No. 1930 are only reproduced as under: “1. The ld. CIT(Appeals), Bareilly has erred in facts and law by accepting new evidence from the deductor without allowing reasonable opportunity to the AO in terms of Rule 46A(3) of the IT Rules, 1962. The deductor submitted before the CIT(A) that he has deducted and paid the due tax and that short deduction/ non-payment is due to mismatch. This fact was not neither produced before the AO nor it was reflected on the ITD System when this order u/s 201(1)/201(1A) was passed. The CIT(A) has enoniously accepted the claim of assessee and directed the AO to verify the claim by calling for necessary documents for required verification and revise the order accordingly and charge interest on late deposit if any.
2. The ld CIT(A) has erred in directing the AO to call for necessary documents for required verification and revise the order accordingly. The processing of TDS statement are fully centralized at CPC (TDS), Vaishali, Ghaziabad and the 4 ITA No.1930&1931/Del./2014 AO has no power to revise the order. The only remedy for the deductor is to file correction statement on-line and get the demand reduced through CPC (TDS).
3. The CIT(A) being a quasi-judicial body has erred further in directing the AO(TDS) to carry out rectifications without understanding the process of rectification/ corrections laid down by CPC (TDS). No proof has been submitted by the deductor before the CIT(A) to show that the necessary correction statement have been filed with CPC(TDS). Being a person from the Department, the CIT(A) is required to understand actual processes laid down by the Department and whether directions issued by him are executable or not.
4. By doing so in 1,2,3 above, the CIT(A) has mechanically disposed off the Appeal, while no implementation of his direction are possible at AO (TDS) end. IN case of mismatch, the remedy lies in filing of correction statement which are automatically processed by the CPC (TDS). Till correction statement is processed, The AO(TDS) order stands, and cannot be cancelled.”
The facts in brief in the appeals are that quarterly returns of tax deducted at source (TDS) for the financial year 2009-10 were filed by the branch of Life Insurance Corporation of India, located at Amroha (Uttar Pradesh), as deductor. These returns were processed by the ITO (TDS), Moradabad and an intimation u/s 200A of the Act was issued on 09/08/2011 raising a sum payable towards short deduction, Short Payment, and late payment and interest thereon. The deductor filed appeals before the learned commissioner of Income-tax (Appeals), Bareilly challenging the 5 ITA No.1930&1931/Del./2014 sum raised on account of short deduction, late payment fee and interest charged etc. Before the learned commissioner of Income-tax (Appeals), the deductor claimed that it has already paid all the taxes in time and there was no short deduction on the part of the deductor. The learned commissioner of Income-tax (Appeals) in both the appeals, directed the ITO (TDS) to carry out necessary verification and pass suitable orders. Against the orders of the learned commissioner of Income-tax (Appeals), the Revenue has preferred these appeals.
At the outset of hearing, the learned Authorised Representative appeared on behalf of one the appellant in batch of cases heard, brought to our notice that no appeal under section 246A of the Income-tax Act was maintainable before the commissioner of Income-tax (Appeals) against the intimation issued u/s 200A of the Act prior to 01.07.2010 as held by the Income-tax Appellate Tribunal, E Bench in the case of ITO Ward 50(4) Vs. Maruti Insurance Agency Network Ltd and others in to 3995, 3997 to 4000, CO No. 426, 4001 &2, 4050 to 4052 /Del/2012 disposed off by a consolidated order dated 23.05.2014 and pleaded for taking similar view. The copy of the decision was provided to the learned senior Department Representative. We have also gone through the decision. In the case of the deductor in hand, the intimation u/s 200A has been 6 ITA No.1930&1931/Del./2014 issued on 09/08/2011, which is prior to 01/07/2012 i.e. the date from when the intimation u/s 200A has been made appealable before the commissioner of Income-tax (Appeals) under 246A of the Act. In view of the facts, the decision is squarely applicable in present appeals before us. In the decision of the ITO Ward 50(4) Vs. Maruti Insurance Agency Network Ltd and others (supra), the Tribunal has followed the findings given by the Tribunal in the case of ACIT Vs. Unitech Wireless (Tamilnadu) Pvt. Ltd and others in & 4053 &4054 & 4057/Del/2012 disposed off by a consolidated order dated 01st October, 2012 reported in 2012(10) TMI 365-ITAT Delhi, which reads as under: “The above appeals are filed by the appellants u/s. 200A of the I.T. Act in the financial year 2011-12 against the computerized processing order of AO (TDS) where tax and interest u/s. 200A have been computed in the computer for short deduction / short payment/ late payment by the appellant. There is no appeal provision u/s. 246A of the I.T. Act for filing appeals against order u/s. 200A of the I.T. Act. The appellants are advised to file necessary corrections statements before the AO (TDS), coordinate and cooperate with the Assessing Officer and rectify the order u/s. 200A/154 of the I.T. Act with the Assessing Officer and after rectification, pay the tax and interest if any, after rectification. The AO (TDS) should give appeal effect to these orders within 2 months of receipt of the order immediately by issuing necessary notices u/s. 154 of the Act to the appellant and rectifying the orders as per law. If the rectification is not possible in computer, the Assessing Officer should manually rectify by passing suitable order in a &1931/Del./2014 format so that a mass rectification can be completed quickly. The AO (TDS) should give opportunity of being heard to the appellant before rectifying these orders and listening to the grievances of the appellant.”
6. If the observation made in the impugned orders are analyzed, there is direction/ advice by the Ld. Commissioner of Income Tax (A) to file correct statement before the Assessing Officer(TDS), after providing due opportunity of being heard to the assessee. In view of the above, we are of the considered opinion that the Revenue should not feel aggrieved, as the ultimate purpose is to do justice. Even otherwise, no person should be condemned unheard and the Ld. Commissioner of Income Tax (A) has merely remanded the issue back to the file of Assessing Officer, therefore, there is no justification to interfere with the order, and the same is upheld. However, the Assessing Officer is directed to decide the issue afresh in accordance with law after providing due opportunity of being heard to the respective assesses. The assesses are at further liberty furnish evidence, if any, to substantiate their claim. Since the assesses have been granted fair opportunity, therefore, the time limit of completion within two months, as directed by the Ld. Commissioner of Income Tax (A), is withdrawn. However, the Assessing Officer is directed to complete within reasonable time/as soon as possible.
7. Finally, subject to the above rider, all the appeals of the Revenue stand dismissed.”
Relying on the above findings, the Tribunal in the case of ITO, Ward 50(4) Vs. Maruti Insurance Agency Network Ltd. and Others (supra) has held has under:-
8 ITA No.1930&1931/Del./2014 “5. Since, the issue involved in these cases is covered by the decision of the Tribunal as reproduced above and otherwise also, the view as expressed by the Bench is found to be just and appropriate, therefore, following the said order, we adopt the same view and dismiss all the appeals of the revenue with the rider indicated in the precedent relied upon. Since appeals of the revenue have been dismissed, therefore, C.O. of one of the assessees becomes infractuous and as such is dismissed.”
The issue involved in the appeals in hand, is squarely covered by the decision of the Tribunal in the case of ITO Ward 50(4) Vs. Maruti Insurance Agency Network Ltd and others( supra), following the above order , we dismiss the appeals of the Revenue and direct the ITO( TDS) to follow the directions contained in the decision of the Tribunal in the case of ITO Ward 50(4) Vs. Maruti Insurance Agency Network Ltd and others (supra).
In the result, both the appeals of the Revenue are dismissed.
Now we take up the Appeal of the deductor in & 2606/Del/2104. The grounds of the appeal are identical in both the appeals, and therefore, the grounds of appeal
s of ITA No. 2605 are only reproduced as under: “Grounds I: Maintainability of Appeal
1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals)- 9 ITA No.1930&1931/Del./2014 42, New Delhi ("the CIT(A)") erred in holding that the appeal filed before CIT (A) against the intimation u/s. 200A is not maintainable u/s. 246A of the Income Tax Act, 1961 ("the Act").
3. The Appellant prays that it is held that the appeal against intimation u/s. 200A of the Act is maintainable under Section 246A of the Act. Ground II: Non Applicability of Section 206AA
1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in not holding that in cases where tax at source is deductible under section 195 of the Act on payments made to the residents of foreign country with which India has entered into a Double Taxation Avoidance Agreement (DTAA) and the rate prescribed under the DTAA is more beneficial than the rate prescribed under the Act, then even in absence of Permanent Account Number of that foreign resident, tax shall be deductible at the beneficial rates prescribed under the DTAA and not at the rates prescribed under section 206AA.
2. The Appellant prays that it be held that in the aforesaid cases, tax is deductible source at the rates prescribed under DTAA and the intimation issued u/s 200A be quashed. Ground Ill: General The Appellant craves leave to add to, alter and/or amend all or any of the foregoing grounds of appeal.
The facts in brief in the appeals are that quarterly returns of tax deducted at source (TDS) filed by the deductor were 10 ITA No.1930&1931/Del./2014 processed by the ITO (International Taxation), Ward-1, New Delhi and an intimation u/s 200A of the Act was issued on 03/11/2011 in case of both the returns raising a sum as payable towards short deduction and interest thereon as under : Quarter Date of filing Form Sum payable Year No. 2605/Del/15 2010-11 Q1 14th July,2010 27Q Rs.5,27,040 2606/Del/15 2010-11 Q2 13th October,2010 27Q Rs.42,07,080
In the intimations issued, the ITO held that the deductor did not quote the permanent account number ( PAN) of the deductee in the return and therefore was liable for deduction of tax at source(TDS) at rate of 20 per cent as per the provisions of section 206AA of the Act. The deductor filed an appeal before the learned commissioner of Income-tax (Appeals)-42, New Delhi, challenging tax deduction at the rate of 20 per cent. prescribed u/s 206AA of the Act on payments to nonresidents due to non availability of Permanent Account number. Before the learned commissioner of Income-tax (Appeals), the deductor claimed that as per section 90(2) of the Act, where a treaty has been entered into with a foreign Country, the provisions of the Income-tax Act shall apply to the extent more beneficial to the non- resident and hence the deductor had correctly deducted tax at the rates prescribed under DTAA with respective countries on such 11 ITA No.1930&1931/Del./2014 payments to non-residents. The learned commissioner of Income-tax (Appeals) dismissed the appeal due to non- maintainability of the appeal u/s 246A of the Act and advised the appellant to file corrected statement /application u/s 154 of the Act before the Assessing Officer and the Assessing officer was directed to dispose the same expeditiously by passing a speaking order after giving adequate opportunity of being heard to the appellant. Against the order of the learned commissioner of Income-tax (Appeals), the Revenue has preferred these appeals.
At the outset of hearing, the learned Authorised Representative appeared on behalf of one the appellant in batch of cases heard, brought to our notice that no appeal under section 246A of the Income-tax Act was maintainable before the commissioner of Income-tax (Appeals) against the intimations issued prior to 01.07.2010 as held by the Income-tax Appellate Tribunal , E Bench in the case of ITO Ward 50(4) Vs. Maruti Insurance Agency Network Ltd and others in to 3995, 3997 to 4000, C.O. No. 426, 4001 &2, 4050 to 4052 /Del/2012 disposed off by a consolidated order dated 23.05.2014 and pleaded for taking similar view. The copy of the decision was provided both to the learned senior Department Representative and learned Authorised Representative of the tax deductor. We have also gone through the decision. In the case of the deductor 12 ITA No.1930&1931/Del./2014 in hand, the intimations u/s 200A have been issued on 03//11/2011, which is prior to 01.07.2012 i.e. the date from when the intimation u/s 200A has been made appealable before the commissioner of Income-tax (Appeals) under 246A of the Act. In view of the facts, the decision is squarely applicable in present appeals before us. The learned commissioner of Income-tax (Appeal) has already relied on the decision of Tribunal in the case of ACIT Vs. Unitech Wireless (Tamilnadu) Pvt. Ltd and others in & 4053-4054 &4057 /Del/2012 disposed of by the consolidated order dated 01st October, 2012 reported in 2012(10)TMI 365-ITAT Delhi, which has been followed in the decision of the ITO Ward 50(4) Vs. Maruti Insurance Agency Network Ltd and others( supra). Hence, we are of opinion that no interference is required in the orders of the learned Commissioner of Income-tax (Appeal). Therefore, we hold that the there is no error in finding of the learned Commissioner of Income-tax (Appeal) that no appeal is maintainable u/s 246A to the Commissioner of Income-tax (Appeal) against the intimation issued u/s 200A of the Act by the ITO on 03/11/2011 in the case of the deductor. Accordingly, the first ground raised
in the appeals is dismissed. As the appeals have already been held as non maintainable, the second ground 13 ITA No.1930&1931/Del./2014 raised is held as infructuous and dismissed. The third ground being general no adjudication is required and hence dismissed.
12. In the result, both the appeals of the deductor are dismissed.
13. Now, we take up the appeals of deductor in ITA No. 709 & 710/Del/15 & ITA No. 5097 /Del/14. The effective ground in all the appeals is whether the late fee for delay in filing return of tax deducted at source (TDS) u/s 234E of the Act can be raised while processing the TDS statement, by way of intimation u/s 200A of the Act.
14. The facts in brief in these cases are that the Assessing Officer (TDS) included the penalty for delay in filing quarterly return of TDS in terms of section 234E of the Act while processing the return and intimated to the deductor in intimation issued u/s 200A of the Act. The learned Commissioner of Income-tax (Appeals) has upheld the action of the AO in including the penalty leviable u/s 234E of the Act in the intimation issued u/s 200A of the Act. Aggrieved the deductors appellants, have filed appeal before us.
15. At the outset of hearing, the learned Authorised Representative of the one of the appellant deductor submitted that the issue involved in the appeals is covered by the decision of the Income-tax Appellate Tribunal, Amritsar Bench in ITA 14 ITA No.1930&1931/Del./2014 No.90/Asr/2015 in the case of Sibia Healthcare (p) Ltd. Vs. Deputy Commissioner of Income-tax reported in (2015) 121 DTR (Asr)(Trib) 81, wherein the Tribunal has held as under: “10. In view of the above discussions, in our considered view, the adjustment in respect of levy of fees under s. 234E was indeed beyond the scope of permissible adjustments contemplated under s.200A.This intimation is an appealable order under s. 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 s. 200A. Learned CIT(A) has not done so. He has justified the levy of fees on the basis of the provisions of s. 234E. That is not the issue here. The issue is whether such a levy could be effected in the course of intimation under s. 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 s. 200A, no such levy could be effected…………………..”
On the issue under consideration before us, the ITAT Chennai ‘A’ Bench in the case of Smt. G. Indhirani and others Vs. DCIT, In 1020 and 1021/Mds/ 2015, ITA No.1089/Mds/2015,ITA No.1090/Mds/2015, ITANo.1091/Mds/ 2015 and ITA No.1092/Mds/2015 reported in 245 ITR (Trib) 439 (Chennai) has held as under:- “In view of the above discussion, this Tribunal is of the considered opinion that the Assessing Officer has exceeded his jurisdiction in levying fee under section 234E while processing the statement and making adjustment under 15 ITA No.1930&1931/Del./2014 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. 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 Commissioner of Income-tax (Appeals) in so far as levy of fee under section 234E is set aside and fee levied is deleted. However, the order adjustment made by the Assessing Officer in the impugned intimation shall stand as such.”