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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri George George K. & Shri Laxmi Prasad Sahu
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN
Before Shri George George K., Judicial Member and Shri Laxmi Prasad Sahu, Accountant Member
ITA Nos. 07 to 09/Coch/2022 (Assessment Years: 2013-14 to 2015-16)
M/s. MATHIIT Learning Pvt. Ltd. ACIT, CPC TDS TC 5/1703-20 Golf Links Road Thiruvananthapuram Vs. Kowdiar Gardens, Kowdia Thiruvananthapuram 695004 PAN – AADCM7794H Appellant Respondent
SP Nos. 01 to 03/Coch/2022 (Arising out of ITA Nos. 07 to 09/Coch/2022) (Assessment Years: 2013-14 to 2015-16)
M/s. MATHIIT Learning Pvt. Ltd. ACIT, CPC TDS TC 5/1703-20 Golf Links Road Thiruvananthapuram Vs. Kowdiar Gardens, Kowdia Thiruvananthapuram 695004 PAN – AADCM7794H Applicant Respondent
Appellant by: Shri Yedhu Krishanan G., CA Respondent by: Smt. J.M. Jammuna Devi, Sr. DR
Date of Hearing: 01.07.2022 Date of Pronouncement: 29.07.2022
O R D E R Per: Bench
These three are appeals filed by the assessee against the DIN & order No. ITBA/NFAC/S/250/2021-22/1036807326(1) of the learned CIT(A), NFAC dated 10.11.2021 for assessment years 2013-14 to 2015-16.
The assessee has raised the following grounds of appeal: - “1. The learned Commissioner of Income Tax (Appeals) NFC Delhi has erred is confirming order of ITO Trivandrum imposing the late fee under Section 234 E of the IT act 61 amounting to Rs. l,52,971 for delay in filing of TDS returns for the period prior to 01.06.2015 not considering decision of the jurisdictional Hon ITAT Cochin Bench in the of Little Servant of Divine
ITA 07-09 & SP 01-03/Coch/2022 2 M/s. MATHIIT Learning Pvt. Ltd. Providence Charitable Trust vs Income-tax Officer TDS in ITA No. 258 and SP 37/C/2016 in a judgment pronounced on 09th September 2016 on a flimsy ground that copy of the order was not filed by your appellant. Detailed written submissions in Annexure A. 2. The learned Appellate authority ought to have also noted that in a situation where favourable decision has been rendered by Hon Karnataka High Court in the case of Fathe Raj Singhvi vs Union of India reported in (2016) 73 taxmann.com 252 (Karnataka) and contrary decision has been given by Hon in the case of Fathe Raj Singhvi vs Union of India reported in (2016) 73 taxmann.com 252 (Karnataka), in terms of Hon Supreme Court decision in the case of Vegetable Products Ltd. reported in 88 ITR 192 (SC), that where there are conflicting views, the view favourable to the assessee should have been followed. In number of Tribunal decisions, detailed in annexure A, this view has been upheld.” Since the issues involved in all the three appeals are challenging the levy of fee under Section 234E of the Income Tax Act, therefore for the sake and brevity of the case we are taking first ITA No. 07/Coch/2022. The decision in this appeal shall apply mutatis mutandis in other appeals also.
The brief facts of the case are that the assessee has filed the TDS returns for AY 2013-14 belatedly. The AO (TDS) levied late fee under Section 234E of the Income Tax Act, 1961 (the Act) amounting to Rs.1,52,971/- for delay in filing of the TDS return. Aggrieved, the assessee filed appeal before the learned CIT(A). The learned CIT(A) dismissed the appeal of the assessee by observing that several High Courts have stated that the demand raised for levy of 234E for the period prior to 01.06.2015 is valid. He also relied on the order of the jurisdictional High Court quoted in para No. 7.7 of his order in the case of Sri Narayana Guru Smaraka Sangham vs. Union of India and he held the same is binding on the assessee. The CPC-TDS was, therefore, fully enabled and competent to raise the statutory fee under consideration where the TDS return was filed belatedly beyond the prescribed date. In this light, the levy of late fee under Section 234E of the Act cannot be assailed. There is no infirmity in the same and is, accordingly, upheld. Aggrieved assessee filed appeal before the ITAT.
The learned A.R. reiterated the submissions made before the lower authorities and he also filed written synopsis before us. He further
ITA 07-09 & SP 01-03/Coch/2022 3 M/s. MATHIIT Learning Pvt. Ltd. submitted that the Learned CIT (A) has held that while Hon Karnataka High Court in the case of Fathe Raj Singhvi vs Union of India reported in (2016) 73 taxmann.com 252 (Karnataka) has passed the order in favour of the assessee (para 7.4 of the order), Hon Gujarat High Court in the case of Rajesh Kourani vs Union of India reported in (2017) 83 taxmann.com 137 (Gujarat) has held the issue against the assessee. And the appellate authority has chosen to follow Hon Gujarat High Court decision against the assessee overlooking the legally established point of law laid down by the Hon Supreme Court of India in the case of Vegetable Products Ltd. reported in 88 ITR 192 (SC) has held, that where there are conflicting views, the view favourable to the assessee has been taken. In number of Tribunal decisions as detailed below, this view has been upheld allowing the appeal in favour of the assessee: - i) Raj Veer Singh vs ACIT (ITAT Delhi) ITA No.381/Del/2017 decided on 09.07.2021 ii) IT AT Delhi in the case of Additional DIGP CRPF Camp, Group Centre, Kadarpur Gurgaon vs DCIT TDS Gurgaon in ITA No.7559/Del/2817 iii) ITA T Mumbai in the case of Popular Catering Services vs DCIT (ITAT Mumbai) in ITA No.1674/Mumb/2019 in a case decided on 17.07.2020 for A.Y.2013-14 iv) ITAT Amritsar Bench in the case of M.G.N. Khalsa High School vs ACIT CPC Cell- TDS in ITA No.16, 17 & 18/ASR/2019 v) ITAT Hyderabad Bench in the case of Elite Engineering (Hyd) Pvt. Ltd. vs ITO Ward- 1-(2) Hyderabad in ITA No.2155 to 2159/H17 - AY 13-14, ITA No.2160 to 2163/H/7 - AY 14-15 and ITA No.2164 to 2167/H/7 - AY 15-16 decided on 29.11.2018 4.1 The Hon Kerala High Court decision cited by the appellate authority in para 7.a to the order in the case of Sri Narayana Guru Smaraka Sangam vs Union of India, the issue was strictly restricted to the constitutional validity of Sec.234E and the applicability of the section before 01.06.2015 has not been dealt with at all and hence this has been quoted out of context and facts are distinguishable though the periods of levy of 234E pertain to the period prior to 01.06.2015. There is a mention in the said order that, as per amendment made effective from 01.06.2015, a provision for appeal has been inserted in Sec.246A against an order under sub Section 1 of Section 200A and the conclusion was that since appellate
ITA 07-09 & SP 01-03/Coch/2022 4 M/s. MATHIIT Learning Pvt. Ltd. remedy has already been provided w.e.f. 01.06.2015, the petitioner cannot content that the impugned provision of the Act is unreasonable and arbitrary. This clearly means that the ratio of the said decision is not applicable for the period prior to 01.06.2015 and this aspect has not been looked into and dealt with by the Hon Kerala High Court. 4.2 In para 7.10 of the order, the Learned CIT (A) has cited a binding decision of Hon ITAT Cochin Bench in ITA No.511/COCH/2018 for assessment year 2016-17 in the case of Directorate of Radiation Safety vs ITO(TDS), Thrissur. However, it may be noted that as per facts of the case the levy under 234E is for the 04th quarter of the F.Y.2015-16 in that case and is therefore, not applicable in respect of the appeal of the appellant, which deals with the levy for the period prior to 01.06.2015. 4.3 From the detailed reasoning given above, it could be noted that the Learned CIT (A) has failed to appreciate the ratio of the legal decisions cited by him in support of his conclusion without verifying and examining the facts of the case and ratio of the legal decisions in the said cases. Consequently the conclusion arrived by overlooking the mandatorily binding decision of the Co-ordinate Bench of This Hon Tribunal in the case of Little Servant of Divine Providence Charitable Trust vs Income-tax Officer TDS in ITA No.258 and SP37/C/2016 in a judgment pronounced on 09th September 2016 has been overlooked on a flimsy argument that the copy of the said order was not filed. It is true that there was an inadvertent omission to attach the same while uploading the submission but the least that CIT (A) should have done to render justice was to call for a copy of the order from the appellant. This was not done making the order null and void and illegal.
The learned D.R. relied on the orders of the lower authorities.
We have heard rival submissions and perused the material on record. The assessee has filed belatedly TDS returns. The Assessing Officer cannot make any adjustment other than one prescribed in section 200A of the Act. Prior to 01.06.2015, there was no enabling provision in section 200A of the Act for making adjustment in respect of statement filed by the assessee with regard to tax deducted at source by levying fees u/s 234E of
ITA 07-09 & SP 01-03/Coch/2022 5 M/s. MATHIIT Learning Pvt. Ltd. the Act. The Parliament for the first time enabled the Assessing Officer to make adjustment by levying fees u/s 234E of the Act with effect from 01.06.2015. The Hon’ble jurisdictional High Court in the case of Olari Little Flower Kuries (P.) Ltd. v. Union of India reported in (2022) 440 ITR 26 (Ker.), has held that since provision of section 200A of the Act was amended to enable computation of fee payable u/s 234E of the Act at the time of processing of return and said amendment came into effect from 01.06.2015 (in view of CBDT Circular No.19 of 2015 dated 17.11.2015) intimations issued under Section 200A of the Act dealing with fee for belated filing of TDS returns for the period prior to 01.06.2015 were invalid and were to be set aside. Therefore, going by the dictum laid down by the Hon’ble jurisdictional High Court judgment in the case of Olari Little Flower Kuries (P.) Ltd. v. Union of India (supra), the levy of late fee for the various quarters for financial years 2013-2014 and 2014-2015 cannot be sustained in order passed u/s 200A of the Act, prior to 01.06.2015.
6.2 The CIT(A) had relied on the judgment of the Hon’ble Kerala High Court in the case of Sree Narayana Guru Smaraka Sangam Upper Primary School v. Union of India and Others (supra). The judgment of the Hon’ble High Court was primarily concerned with the constitutional validity of section 234E of the Act. The Hon’ble Kerala Court was not adjudicating the issue whether the amendment to section 200A of the Act with effect from 01.06.2015 has retrospective effect or not. As mentioned earlier, the amendment to section 200A of the Act whether it applicable from 01.06.2015 has been decided in favour of the assessee by the judgment of the Hon’ble Kerala High Court in the case of Olari Little Flower Kuries (P.) Ltd. v. Union of India (supra).
6.3 As regards the CIT(A) placing reliance on the judgment of the Hon’ble Gujarat High Court in the case of Rajesh Kourani vs. Union of India (supra), we notice that the Hon’ble Kerala High Court in the case of M/s. Sarala Memorial Hospital v. Union of India (supra) has distinguished the Hon’ble Gujarat High Court judgment. The Hon’ble Kerala High Court had disposed of the Writ Petition in favour of the assessee, stating that there is cleavage in judicial opinion and the judgment in the case of Shri
ITA 07-09 & SP 01-03/Coch/2022 6 M/s. MATHIIT Learning Pvt. Ltd. Rajesh Kourani v. Union of India (supra) has not considered CBDT Circular No.19 of 2015, which has clearly emphasized that the amendment would take effect only from 01.06.2016. Therefore, it was concluded by the Hon’ble Kerala High Court that the amendment relating to section 200A of the Act is prospective with effect from 01.06.2016. In view of the aforesaid reasoning and the judgments of the Hon’ble jurisdictional High Court, cited supra, we allow the claim of the assessee. It is ordered accordingly.
6.4 Before concluding, it is to be mentioned that the CIT(A) held that there is no mistake apparent from record, hence, the appeals filed by the assessee as against orders passed u/s 154 of the Act cannot be entertained. The judgment of the Hon’ble jurisdictional High Court in the case of M/s.Sarala Memorial Hospital v. Union of India & The Income Tax Officer (TDS) (supra) was rendered on 18.12.2018. The intimation u/s 200A of the Act and the orders of the CIT(A) were passed much subsequent to 18.12.2018. Non-consideration of judgment of the Hon’ble jurisdictional High Court in itself is a mistake apparent from record as held by the Hon’ble Apex Court in the case of ACIT v. Saurashtra Kutch Stock Exchange Ltd. (supra). Therefore, we hold that the CIT(A) was not legally correct in dismissing the appeals stating that there is no mistake apparent from record. It is ordered accordingly.
Since we have allowed the appeals of the assessee as above, the stay petitions filed by the assessee become infructuous.
In the result, the ITA Nos. 07 to 09/Coch/2022 filed by the assessee are allowed and the stay petitions Nos. 01 to 03/Coch/2022 are dismissed as infructuous.
Order pronounced in the open Court on 29th July, 2022.
Sd/- Sd/- (George George K.) (Laxmi Prasad Sahu) Judicial Member Accountant Member
Cochin, Dated: 29th July, 2022
ITA 07-09 & SP 01-03/Coch/2022 7 M/s. MATHIIT Learning Pvt. Ltd. Copy to:
The Appellant 2. The Respondent 3. The CIT(A) -NFAC 4. The CIT - 5. The DR, ITAT, Cochin 6. Guard File By Order
//True Copy// Assistant Registrar ITAT, Cochin n.p.