ATNK&K AREA ARMED FORCE S VETERANS CANTEEN (GOLDAN PALM CATEEN),PALAKKAD vs. THE ITO, PALAKKAD

Per: L.P. Sahu, A.M.

This is an appeal filed by the assessee against the order of the learned CIT(A), NFAC, Delhi dated 06.12.2021 for AY 2018-19 on the following grounds: -

“1. The appellate order passed by the Commissioner of Income Tax(Appeals),National Faceless Appeal Centre in respect of the appeal filed against the order of Assistant Commissioner of Income, Centralised Processing Cell-TDS for the Q2 of the financial year 2017=18, is opposed to law, facts and circumstances of your appellant's case. 2. The Commissioner of Income Tax(Appeals),erred in concluding that, in lieu of the judgments of Karnataka High Court in Fatheraj Singhvivs Union of India(2016) reported in 289 CTR 602 & Kerala High Court in WP( C ) No;30229 of 2013 ( c ) of Sree Narayana Guru Smaraka Sangam vs Union of India, levy of late fee u/s 234E is in order. It is not the case of the appellant about the applicability of the provisions during the relevant period. The appellant had filed returns in time and

ITA No. 98/Coch/2022 2 ATNK & K Area Armed Forces Veterans Canteen subsequently got it revised to cure the technical mistake. Hence, the dismissal of the appeal against the levy of late fee is against all canons of natural justice. 3. The Commissioner of Income Tax (Appeals),has omitted to consider the levy of interest for late payment of tax. The appellant follows cash system of accounting and has remitted the tax deducted at source within the time specified. Therefore, levy of interest on late payment is not justified and the same is to be cancelled and quashed, 4. For the above grounds and such other grounds that may be adduced at the time of hearing, your appellant's prays that the order of the assessing officer be cancelled.” 2. The brief facts of the case are that that the DCIT, CPC-TDS, Ghaziabad imposed a fee of Rs.47,567/- under Section 234E of the Income Tax Act, 1961 (hereinafter "the Act") for late filing of TDS return. The total demand was raised for interest late filing fee under Section 234E of the Act of Rs.44,000/- and interest on late payment fee of Rs. 567/- as pre order dated 30.06.2018. The assessee filed quarterly TDS return in Form Q2 on 23.06.2018. Aggrieved by the order of the CPC-TDS the assessee filed appeal before the learned CIT(A). The learned CIT(A) after considering the submissions of the assessee dismissed the appeal of the assessee. Aggrieved assessee is in appeal before the Tribunal.

“The appellant, a military canteen under the Indian Army, had filed E- TDS return for the quarter-2 of the financial year 2017-'18 on 20.10.'17.A copy of the provisional receipt in evidence of the filing is attached herewith. In the said E- TDS return filed on 20.10.'17,by inadvertence Form No;24Q was selected instead of Form No;26Q.Realising the anomaly, a revised E-TDS return was

ITA No. 98/Coch/2022 3 ATNK & K Area Armed Forces Veterans Canteen filed on 23.06.'18,rectifying the mistake. While passing the order u/ s 200A,a late fee of Rs.47,000/, was levied on your appellant adopting the date of filing revised return as the date of filing the original return. The first appeal filed before the Commissioner of Income Tax(Appeals),National Faceless Appeal Centre was dismissed citing two judgments, which are not relevant in the appellant's case. It is not the case of the appellant about the applicability of the provisions during the relevant period. The fact that, the appellant had filed original returns within the due date and this alone should be considered as date of filing. The appellant follows cash systems of accounting and has remitted all taxes deducted within the time specified, i.e. on or before the 7th of next month of the month of deduction. But while filing E-TDS returns, the appellant is forced to put the date of deduction as the last day of the month in spite of maintaining cash system of accounting. Hence, the levy of the interest, which is not sustained by law. Therefore, while considering the above facts and actual position of the law, it is prayed the Honourable Tribunal may be pleased to allow the above appeal by granting appropriate relief to the appellant as follows, i.drop the proposal for levy of late fee to the tune of Rs.47,000/- and interest to the tune of Rs.567/-.” 4. On the other hand, the learned D.R. relied on the orders of the lower authorities and she submitted that the assessee should have filed the return in proper form and furnishing written statement under the wrong section is not legal compliance and treated it as non-submission. The learned CIT(A) is rightly decided the issue against the assessee after relying of judgement of the jurisdictional High Court.

ITA No. 98/Coch/2022 4 ATNK & K Area Armed Forces Veterans Canteen authorities had not considered the original quarterly TDS return filed in Form 24Q and it has been considered from the date of revised return and imposed interest and late fee for delayed filing and payment. The learned A.R. of the assessee was unable to produce before us the other particulars regarding filing of Form 20Q & 24Q and what was the data contained in Form 24Q and 26Q. He only submitted that the assessee is maintaining cash system of accounting. Therefore we think it fit to remit the matter to the AO for verification of the exact nature of the payment and which form is applicable, i.e. 24Q or 26Q in the case of the assessee.

Dictated and pronounced in the open Court on 1st July, 2022.

Sd/- Sd/- (George George K.) (Laxmi Prasad Sahu) Judicial Member Accountant Member

Cochin, Dated: 1st July, 2022

Copy to:

//True Copy// Assistant Registrar ITAT, Cochin n.p.