MS/ASHLY ALUMINIUM P. LTD,TRIVANDRUM vs. THE ITO, TRIVANDRUM

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ITA 125/COCH/2021Status: DisposedITAT Cochin29 June 2022AY 2013-144 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 Section 200A of the Income Tax Act, prior to its amendment effective June 1, 2015, did not enable the levy of fees under Section 234E. Therefore, the levy for periods before this amendment was invalid.

What were the facts?

The assessee filed TDS statements for certain quarters belatedly. The Assessing Officer levied a late fee under Section 234E for the delay. The assessee appealed this levy, arguing it was unsustainable prior to the amendment of Section 200A.

What were the issues?

Whether the levy of late fee under Section 234E is sustainable for belated TDS filings prior to the amendment of Section 200A effective June 1, 2015.

Which sections of the Income-tax Act were involved?

Section 200A,Section 234E

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(5)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: 29.06.2022Pronounced: 25.07.2022

This is an appeal filed by the assessee against the DIN & order No. ITBA/NFAC/S/250/2021-22/1034557244(1) dated 31.07.2021 of the learned CIT(A), NFAC, Delhi for AY 2013-14 on the following grounds of appeal: - “1. CIT (A) erred in upholding the order of CPC .

2. CIT (A) erred in holding that the demand raised by CPC levying late fee u/s 234E prior to the amendment to section 200A wef 01-06- 2015 is sustainable.

3. CIT(A) erred in holding that the levy is to compensate the department for the additional interest and expenses on processing due to the delay in filing the TDS return when the appellant has filed it before the end of the previous year itself and there is no loss of revenue to the department by way of 2 M/s. Ashly Aluminium P. Ltd.

interest or processing fees since the department pays interest on refunds due only from the start of the asst. year and processing takes place only after the due date for filing the TDS returns for Q4. The appellant having paid the tax before the end of the previous year, there is no loss of revenue to the department.

4. The CIT(A) erred in placing reliance on the decision of the Gujarat High Court in the case of Rajesh Kourani Vs. UOI reported in 83 taxman.com 137 (2017), Rashmikant Kundalia Vs. UOI reported in 54 taxman.com 200 (Bombay) and Biswajit Das Vs. UOI [2019] 103 taxman.com 290/264 taxman 41/413 ITR 9 Delhi. In these cases, it was a challenge to the levy. The appellant did not challenge the levy or its constitutional validity. According to the appellant, the levy prior to the amendment to section200A wef 1-6-2015 is not sustainable.

5. For and other grounds that may be urged at the time of hearing, it is humbly prayed that the order of CIT be quashed, the order of CPC raising the demand be cancelled and justice be rendered to the appellant.”

2.

The brief facts of the case are that the assessee, a private company, filed the TDS statement for the 4th quarter for FY 2012-13 belatedly. The Assessing Officer processed the same on and levied a late fee 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 following decisions: -

i. Rashmikant Kundalia vs. Union of India 54 taxmann.com 200 (Bombay) ii. Biswajit Das v. Uniono of India (2019) 103 taxmann.com 290 (Delhi) iii. Rajesh Kourani vs Union of India (2017) 83 taxmann.com 137 (Gujarat) 3. The assessee moved an application dated 28.06.2022 stating that the authorized representative of the assessee is out of station and unable to appear for hearing due to prior commitments on the said date.

3 M/s. Ashly Aluminium P. 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 2013-4 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

4 M/s. Ashly Aluminium P. 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 appeal filed by the assessee is allowed. Dictated and pronounced in the open Court on 25th July, 2022.

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