INDIAN OVERSEAS BANK LTD,KOZHIKODE vs. COMMISSIONER OF INCOME TAX (APPEALS), NFAC, KOZHIKODE

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ITA 191/COCH/2021Status: DisposedITAT Cochin01 July 2022AY 2013-20144 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that prior to June 1, 2015, Section 200A of the Income Tax Act did not have an enabling provision to levy fees under Section 234E. Therefore, the levy of late fees for the period before this date was invalid.

What were the facts?

The assessee, Indian Overseas Bank, filed TDS statements belatedly for certain quarters of AY 2013-14 and AY 2014-15. The Assessing Officer levied late fees under Section 234E, which was upheld by the CIT(A).

What were the issues?

Whether late fees under Section 234E could be levied for belated TDS filings prior to the amendment of Section 200A effective from June 1, 2015.

Which sections of the Income-tax Act were involved?

Section 234E,Section 200A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: Shri George George K. & Shri Laxmi Prasad Sahu

For Respondent: Smt. J.M. Jamuna Devi, Sr. DR
Hearing: 28.06.2022Pronounced: 01.07.2022

These are appeals filed by the assessee against the DIN &order No. ITBA/NFAC/S/250/2021-22/1036050379(1), ITBA/NFAC/S/250/2021- 22/1036050451(1) & ITBA/NFAC/S/250/2021-22/1036050484(1)dated 30.09.2021 of the learned CIT(A), NFAC, Delhi for AY 2013-14 & 2014-15 respectively on the following identical grounds of appeal: -

“1) The order of the National Faceless Appeal Center is unsustainable in law and on the facts of the case. 2) The Appeal related to late fee imposed u/ s 234E of the Income Tax Act for belated filing of TDS returns for the AY 2013-14 and the fine imposed at Rs.8,560/-(Q2) & Rs. 4,600/- for Q4 (Rs. 17,800/- for AY 2014-15). The order was passed without considering the reply filed to efilingwebmanager@incometax.gov.in dated 15/09/2021 and Grievance Acknowledgement Number: 1399569, 1399345. to 193/Coch/2021 2 Indian Overseas Bank Ltd.

The delay of filing the original appeal was not condoned. The fact that the notices were issued by different address by Income Tax Office was not considered. The decentralization of the TDS matters by the Public Sector Bank was not considered as sufficient reason for Condonation of delay. The notice was not properly served on the assessee. The fact that the assessee is a Nationalised Bank and the notices were sent to a different address was not considered while rejecting the Condonation application. 3) The NFAC has not considered the jurisdictional Kerala High Court decision in WP.C No.30229 of 2013 in the case of Sree Narayana Guru Samraka Sangam Upper Primary School and various other decisions of High Courts which stated that the charging section 234E can be invoked only from 01/06/2Q15. Hence the penalty imposed for the AY 2013-14 is legally not correct as is against the verdict of the Honorable High Court of Kerala as well as various other High Courts. The Order of the NFAC has stated that 'We are unable to concur" with the court decision is prima facie going against verdict of the court which can even be considered as contempt of Court. 4) On the above grounds and further grounds which may be preferred at the time of hearing with the permission of the Hon Tribunal. The appeal in question is filed.”

2.

The brief facts of the case are that the assessee, a branch of office of Nationalised Bank, Indian Overseas Bank filed the TDS statement for the 2nd & 4th quarter for AY 2013-14 and first quarter for AY 2014-15 belatedly. The Assessing Officer processed the same on and levied a late fee of Rs.6,200/- for Q2 and Rs.4,600/- for Q4 of 2014-15 and Rs.17,800/- for Q1 of AY 2014-15 for the delay in filing of the TDS statements. Aggrieved by the order of the AO the assessee filed appeal before the learned CIT(A). The learned CIT(A) confirmed the order of the AO relying on the decision of the Hon'ble jurisdictional High Court in the case of Sree Narayana Guru Smaraka Sangam Upper Primary School v. Union of India and Others reported in (2017) 392 ITR 457 (Ker.). Aggrieved, assessee is in appeal before the Tribunal.

3.

None appeared on behalf of the assessee. Therefore, we proceeded to dispose off the appeal ex-parte qua the assessee. to 193/Coch/2021 3 Indian Overseas Bank Ltd.

4.

The learned D.R. strongly supported the orders of the lower authorities.

5.

We have heard the learned D.R. and perused the material on record. The assessee has filed TDS statements for second and fourth quarters of AY 2013-14 and for the first quarter of AY 2014-15 belatedly. The Assessing Officer cannot make any adjustment other than one prescribed in section 200A of the Income Tax Act, 1961 (hereinafter “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 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 u/s 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 financial years 2012-13 and 2013-2014 cannot be sustained in order passed u/s 200A of the Act, prior to 01.06.2015.

6.

As regards the CIT(A) placing reliance on the judgment of the Hon’ble Gujarat High Court in the case of Rajesh Kourani v. 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 to 193/Coch/2021 4 Indian Overseas Bank Ltd.

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 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 01.06.2015. Therefore, it was concluded by the Hon’ble Kerala High Court that the amendment relating to section 200A of the I.T.Act is prospective with effect from 01.06.2015. 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.

7.

In the result, the appeals filed by the assessee are allowed. Dictated and pronounced in the open Court on 1st July, 2022.

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