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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI SANDEEP GOSAIN & SHRI ARUN KHODPIA
IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR
BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER
ITAno.9/Nag./2022 ITAno.10/Nag./2022 (Assessment Year : 2013–14) (Assessment Year : 2014–15)
Hasanate Burhaniah Fidayyiah Trust Flat no.183, Sheikh Colony ……………. Appellant Katol Road, Nagpur 440 013 PAN – AAATH0687A v/s Income Tax Officer (TDS) ……………. Respondent Ward–1, Nagpur Assessee by : Shri K.P. Dewani, Advocate Revenue by : Shri Piyush Kolhe, CIT–DR
Date of Hearing – 26.04.2022 Date of Order – 28/04/2022
O R D E R PER ARUN KHODPIA, A.M.
The captioned appeals have been filed by the assessee trust challenging the orders of even date 29th September 2021, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, New Delhi, for the assessment year 2013–14 and 2014–15 respectively.
Grounds no.1 and 2, relates to the issue of limitation.
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During the course of hearing, the Registry has pointed out that there is a delay of 39 days in filing the present appeals before the Tribunal. In this regard, the learned Counsel for the assessee filed application stating as under:–
“The assessee respectfully begs to submit as under: 1. It is respectfully submitted that assessee has filed an appeal before Hon'ble ITAT on 07/01/2022 for Asstt. Year 2013-14 bearing ITA No.9/Nag/2022 against order of Hon'ble CIT(A) u/s 250 of IT. Act 1961 dated 29/09/2021. 2. The assessee has received letter on 02/03/2022 communicating defects in the aforesaid appeal filed by assessee. In letter it has been observed that appeal is time barred by 39 days. 3. It is respectfully submitted that Hon'ble Supreme Court in Miscellaneous Application No.21 of 2022, in Miscellaneous Application No.665 of 2021 and in Suo Motto Writ Petition(C) No.3 of 2020 "In Re-Cognizance for extension of limitation" has held that in case where the limitation would have expired during the period between 15/03/2020 till 28/02/2022 notwithstanding the actual balance period of limitation remaining all persons shall have a limitation period of 90 days from 01/03/2022. The copy of judgement is enclosed. In the case of assessee statutory limitation for filing of appeal expired on 29/11/2021. In terms of decision of Hon'ble Apex Court assessee can file an appeal upto 29/05/2022. The assessee has filed an appeal on 07/01/2022. On above facts and in the light of judgement of Hon'ble Apex Court there is no delay in filing an appeal. In any case it is humbly submitted that appeal be held to have been validly filed within limitation, alternatively nominal delay of 39 days be condoned considering covid pandemic. In view of above assessee has made compliance of above referred letter.”
In view of the pandemic situation and the explanation given by the learned Counsel for the assessee in lieu thereof as aforesaid, we
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condone the delay in filing the present appeals and proceed to dispose off the appeals on merits.
Since both the aforesaid appeals relate to the same assessee involving only common issue, except variation in figures, which arose out of identical set of facts and circumstances, therefore, as a matter of convenience, these appeals were heard together and are being disposed off by way of this consolidated order.
Insofar as grounds no.3, 4 and 5, raised by the assessee in the assessment years under consideration are concerned, the only issue raised by the assessee is, whether or not the learned CIT(A) was justified in imposing late filing fee payable under section 234E of the Act at ` 1,34,576, for the assessment year 2013–14 and ` 36,400, for the assessment year 2014–15 respectively.
Brief facts are, in the present case, the assessee is a trust. The assessee belatedly filed its quarterly e–TDS statements in Form–26Q for the assessment year 2013–14 and 2015–15. Since there was delay in filing the statements, the Centralized Processing Centre (TDS) while processing them under section 200A of the Act charged late filing fee under section 234E of the Act for different quarters aggregating to ` 1,34,576 for the assessment year 2013–14 and ` 36,400, for the assessment year 2014–15 respectively. The learned CIT(A) passed 3
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appellate order observing that since the substantive provisions of section 234E of the Act was in statute w.e.f. 1st July 2012, the Assessing Officer was free to pass order for levying the fee under section 234E of the Act provided the limitation for doing so exists. Subsequently, the Assessing Officer passed order giving effect to the order passed by the learned CIT(A) wherein the late filing fee under section 234E of the Act was charged for ` 1,34,576 for the assessment year 2013–14 and 36,400, for the assessment year 2014–15. The assessee being aggrieved, filed appeals for both the assessment years i.e., 2013–14 and 2014–15 before the first appellate authority. The assessee being aggrieved filed appeals before the learned CIT(A).
The learned CIT(A) confirmed the order of the Assessing Officer by observing as under:–
“A.Y. 2013–14 5.0 The above submissions of the appellant have been duly considered. The decision on the appeal is as follows. Firstly, it has to be pinpointed that the appellant wrongly understood that the order passed by the AO was under section 200A and to that extent wrongly stated order appealed against as order under section 200A in Form-35. The AO had passed a separate order levying fee u/s 234E for the delay in filing quarterly statements of TDS as per the directions of the CIT(A). Since this was not the intimation under section 200A, the time limitation mentioned in the proviso to sec 200A does not apply. Therefore, the argument that the order was time barred is not correct. Secondly, it is noted that the amendment through Finance Act, 2015 was in 200A, enabling the levy of late filing fees u/s 234E in an intimation under section 200A issued after processing the TDS statement. As mentioned above, the order above, the order appealed against is not intimation u/s 200A. Earlier dispute was 4
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whether this fee can be levied while processing the TDS statement and on this issue various Courts/Tribunals held that it cannot be levied prior to 01-06-2015. However in the appellant's case, the facts are different. The AO had passed a separate order imposing this fee. So the second argument that the fee u/s 234E could not have been levied for the period prior to 01-06-2015 is also not acceptable. Section 234E, being a charging section and introduced with effect from 01-07-2012, the AO was well within his jurisdiction in passing a separate order to levy fees u/s 234E. The Hon'ble High Court of Gujarat in the case of Rajesh Kourani vs Union of India 83 taxmann. Com 137 (2017), after distinguishing the decision in the case of Fatheraj Singhvi Vs. Union of India 73 taxmann. Com 252 (Karnataka) (2016) observed that the Sec. 234E was introduced to make TDS provisions stringent which is a charging section and Sec. 200A on the other hand is a machinery provision for making prima facie adjustment. The Hon'ble Court in the case of Rajesh Kourani vs Union of India (supra) held that:- 16, We now come to the petitioner's central challenge viz. of non permissibility to levy fee under section 234E of the Act till section 200A of the Act was amended with effect from 01.06.2015. We have noticed the relevant statutory provisions. The picture that emerges is that prior to 01.07.2012, the Act contained a single provision in section 272A providing for penalty in case of default in filing the statements in terms of section 200 or proviso to section 206C. Such penalty w is prescribed at the rate of Rs.100 for every day during which the failure continued. With effect from 01.06.2012, three major changes were introduced in the Act. Section 234E as introduced for the first time to provide for charging of fee for late filing of the statements. Such fee would be levied at the rate ofRs.200/- for every day of failure subject to the maximum amount of tax deductible or collectible as the case may be. Section 271H was also introduced for the first time for levying penalty for failure to furnish the statements. Such penalty would be in the range of Rs.10,000/- and Rs.1 lakh. No penalty would be imposed if the tax is deposited with fjtjjjand interest and the statement is filed within one year of the due dates With addition Ifo these two provisions prescribing fee and penalty respectively, "'^lause (k) of sub-section (2) of section 272A became redundant and by adding a proviso to the said section, this effect was therefore limited upto 01.07.2011. 17. In essence, section 234E thus prescribed for the first time charging of a fee for every day of default in filing of statement under sub–section (3) of section 200 or any proviso to sub–section (3) of section 206C. This provision was apparently added for making the compliance of deduction and collection of tax at source, depositing it with Government revenue and filing of the statements more stringent. 5
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In this context, we may notice that section 200A which pertains to processing of statements of tax deducted at source provides for the procedure once a statement of deduction of tax at source is filed by the person responsible to do so and authorizes the Assessing Officer to make certain adjustments which are prima-facie or arithmetical in nature. The officer would then send an intimation of a statement to the assessee. Prior to 01.06.2015, this provision did not include any reference to the fee payable under section 234E of the Act. By recasting sub-section (1), the new clause-c permits the authority to compute the fee, if any, payable by the assessee under section 234E of the Act and by virtue of clause-d, adjust the said sum against the amount paid under the various provisions of the Act. 19. In plain terms, section 200A of the Act is a machinery provision providing mechanism for processing a statement of deduction of tax at source and for making adjustments, which are, as noted earlier, arithmetical or prima-facie in nature. With effect from 01.06.2015, this provision specifically provides for computing the fee payable under section 234E of the Act. On the other hand, section 234E is a charging provision creating a charge for levying fee for certain defaults in filing the statements. Under no circumstances a machinery provision can override or overrule a charging provision. We are unable to see that section 200A of the Act creates any charge in any manner. It only provides a mechanism for processing a statement for tax deduction and the method in which the same would be done. When section 234E has already created a charge for levying fee that would thereafter not been necessary to have yet another provision creating the same charge. Viewing section 200A as creating a new charge would bring about a dichotomy. In plain terms, the provision in our understanding is a machinery provision and at best provides for a mechanism for processing and computing besides other, fee payable under section 234E for late filing of the statements. 20. Even in absence of section 200A of the Act with introduction of section 234E, it was always open for the Revenue to demand and collect the fee for late filing of the statements. Section 200A would merely regulate the manner in which the computation of such fee would be made and demand raised. In other words, we cannot subscribe to the view that without a regulatory provision being found for section 200A for computation of fee, the fee prescribed under section 234E cannot be levied. Any such view would amount to a charging section yielding to the machinery provision. If at all, the recasted clause (c) of sub-section (1) of section 200A would be in nature of clarificatory amendment. Even in absence of such provision, as noted, it was always open for the Revenue to charge the fee in terms of section 234E of the Act. By amendment, this adjustment was brought within the fold of section 200A of the Act. This would have one direct effect. An order passed under section 6
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200A of the Act rectifiable under section 154 of the Act and is also appealable under section 246A. In absence of the power of authority to make such adjustment under section 200A of the Act, any calculation of the fee would not partake the character of the intimation under said provision and it could be argued that such an order would not be open to any rectification or appeal. Upon introduction of the recasted clause (c), this situation also would be obviated. Even prior to 01.06.2015, it was always open for the Revenue to calculate fee in terms of section 234E of the Act. The Karnataka High Court in case of Fatheraj Singhvi (supra) held that section 200A was not merely a regulatory provision, but was conferring substantive power on the authority. The Court was also of the opinion that section 234E of the Act was in the nature of privilege to the defaulter if he fails to pay fees then he would be rid of rigor of the penal provision of section 271H of the Act With both these propositions, with respect, we are unable to concur. Section 200A is not a source of substantive power. Substantive power to levy fee can be traced to section 234E of the Act Further the fee under section 234E of the Act is not in lieu of the penalty of section 271H of the Act. Both are independent levies. Section 271H only provides that such penalty would not be levy if certain conditions are fulfilled. One of the conditions is that the tax with fee and interest is paid. The additional condition being that the statement is filed latest within one year from the due date." 5.1 In the light of the above discussion, the appellant’s plea to delete the late filing fee u/s 234E in the order passed by the A.O. on 26.02.2020 is rejected and the grounds of appeal are dismissed.”
The assessee being aggrieved by the order passed by the learned CIT(A), once again filed appeals before the Tribunal.
Before us, the learned Counsel for the assessee submitted written submissions the contents of which are reproduced below:–
“1. Ground No.3 to 5 : Levy of fee u/s 234E. A) In the case of assessee for Financial Year 2012-13 and 2013-14 assessee has submitted statement of IDS in the Financial Year 2013-14. In respect to Financial Year 2012-13 it has been submitted on 13/09/2013 and in respect to Financial 7
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Year 2013-14 it has been submitted on 29/11/2013. Facts on record make it evident that financial year as well as filing of statement of IDS is before 01/06/2015. B) Hon'ble CIT(A) in his order dated 16/07/2019 has deleted the levy of fee u/s 234E by following judgment of Hon'ble Karnataka High Court in the case of Fatehraj Singhavi vs UOI reported at 289 CTR 602 (Kar). Such order was not challenged by revenue. C) A.O. has again levied fee u/s 234E while giving effect to order of CIT(A) dated 16/07/2019 by passing an order on 25/02/2020. D) National Faceless Appeal Centre has upheld levy of fee levied u/s 234E by A.O. in his order dated 25/02/2020 by following judgment of Hon'ble Gujarat High Court in the case of Rajesh Kourani vs UOI. E) Issue covered in favour of assessee that no levy u/s 234E of IT. Act 1961 can be made prior to 01/06/2015 in respect to statement of TDS filed for Financial Year 2012-13 and 2013-14. Reliance on the following decisions: i) 137 taxmann.com 63 (Kerala) Eurotech Maritime Academy (P.) Ltd. vs ITO (TDS). ii) 137 taxmann.com 115 (Kerala) United Metals vs ITO (TDS) iii) 134 taxmann.com 111 (Kerala) Olari Little Flower Kuries (P.) Ltd. vs UOI. iv) ITA No.3681/Del./2017 (A.Y. 2015-16) Shri Raj Veer Singh vs ACIT, CPC-TDS v) 83 taxmann.com 137 (Gujarat) Rajesh Kourani vs UOI vi) 88ITR192(SC) Vegetable Products Ltd. F) Hon'ble Kerala High Court has in its judgment dated 28/10/2021 judicially noticed at para 11 that judgment of Hon'ble Gujarat High Court has not considered Circular No. 19/2015. G) It is settled position of law that when there are conflicting decisions, the view taken in favour of the assessee should be 8
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followed. Reliance on the judgment of Hon'ble ITAT Delhi Bench in the case of Shri Raj Veer Singh vs ACIT vide order dated 09/07/2021. H) Levy of Fee u/s 234E be cancelled.”
Insofar as grounds no.1 and 2, are concerned, the learned Counsel for the assessee submitted that –
“2. Ground No.1 &2 : Order passed by A.O. is barred by limitation. A) In the case of assesses IDS statements were submitted for Financial Year 2012-13 on 21/09/2013 and in respect to Financial Year 2013-14 on 29/11/2013. A.O. had levied fee u/s 234E in the intimation passed u/s 200A of IT. Act 1961 on 31/01/2014. B) Appeal filed by assessee in respect to order u/s 200A was decided on 16/07/2019 wherein fees levied u/s 234E was cancelled by following judgment of Hon'ble Karnataka High Court in the case of Fatehraj Singhavi vs UOI reported at 289 CTR 602(Kar). C) In the appeal order at para 5.5 it was observed that A.O. is free to pass order levying fee u/s 234E of IT. Act 1961 provided limitation for doing so exist. D) A.O. on 25/02/2020 passed order giving effect to order of CIT(A)-2 u/s 250 and repeated levy as originally levied in order u/s 200A of IT. Act 1961. E) Appeal was filed in respect to order passed by A.O. on 25/02/2020. It was dismissed by National Faceless Appeal Centre vide order dated 29/09/2021 relying on the judgment of Hon'ble Gujarat High Court in the case of Rajesh Kourani vs UOI reported 83 taxmann.com 137. F) Proviso to section 200A(1) of IT. Act 1961 provides that no intimation under this sub-section shall be sent after the expiry of one year from the Financial Year for which statement is filed.”
The learned Departmental Representative relied upon the order of the authorities below. 9
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We have carefully considered the rival contentions, perused the orders of the authorities below and the material placed on record. Before us, this is the second round of litigation. From the record available before us we find that during the first round of litigation on the same issue i.e., charge of late fee under section 234E of the Act, the learned CIT(A) vide order dated 16th July 2019, has directed the Assessing Officer to delete the late filing fee by following the judgment of the Hon’ble Karnataka High Court in Fatehraj Singhavi (supra) and this order was not challenged by the Revenue. The Assessing Officer, while giving effect to the order of the learned CIT(A), again levied fee under section 234E of the Act while giving effect to the order of the learned CIT(A) dated 16th July 2019, by passing an order on 25th February 2020. On appeal before the first appellate proceedings, the levy of fee imposed under section 234E by the Assessing Officer was upheld following the judgment of the Hon’ble Gujarat High Court in Rajesh Kaurani (supra) and hence, the assessee is against before us. While going through the facts of the present case and in view of the submissions of the learned Counsel for the assessee and on a careful perusal of the case laws relied upon by him, we find that the issue is covered in favour of the assessee and in all the following decisions which are listed below wherein it has been held that no levy under section 234E of the Act can be made prior to 1st June 2015 in respect 10
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to the statement of TDS filed for the financial year 2013–13 and 2013– 14.
i) Eurotech Maritime Academy (P.) Ltd. vs ITO (TDS), 137 taxmann.com 63 (Kerala); ii) United Metals vs ITO (TDS), 137 taxmann.com 115 (Kerala); iii) Olari Little Flower Kuries (P.) Ltd. vs UOI, 134 taxmann.com 111 (Kerala); iv) Shri Raj Veer Singh vs ACIT, CPC-TDS, ITA No.3681/Del./2017 (A.Y. 2015-16); v) Rajesh Kourani vs UOI, 83 taxmann.com 137 (Gujarat); vi) Vegetable Products Ltd., 88 ITR192(SC).
We also find from the record that for the financial year 2012–13 and 2013–14, the assessee has submitted statement of TDS in the financial year 2013–14. In respect of financial year 2012–13, it has been submitted on 13th September 2013 and for the financial year 2013–14, the same has been submitted on 29th Novmeber 2013, which is well before 1st June 2015. It is thus seen that in assessee’s case, the statement of TDS have been filed well before 1st June 2015. In terms of ratio laid down by the judicial precedents as discussed herein above, in our considered opinion, late fee cannot be imposed for the statements of TDS filed before 1st June 2015. Therefore, respectfully following the decision of the Hon’ble Karnataka High Court in Fatehraj Singhavi (supra) and the decision of the Hon’ble Kerala
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High Court in Eurotech Maritime Academy (P.) Ltd. (supra), no late fee can be levied under section 234E of the Act and hence the same cannot be sustained. We also find substance in the arguments of the learned Counsel for the assessee that in assessee’s case statements have been filed during the financial year 2013–14 relevant to the assessment year 2014–15 in terms of the provisions of section 200A(1) of the Act and intimation can be passed only within one year from the end of the financial year of filing of statement of TDS. The aforesaid period of the assessee has expired on 31st March 2015. In the order of the learned CIT(A), levy of fee under section 234E was directed to be deleted. It was also directed that if there is limitation, the Assessing Officer is free to levy fee under section 234E of the Act. Since the limitaition to pass intimation had already expired on 31st March 2015, hence no order levying fee can be passed by the Assessing Officer. In view of the foregoing discussions and in view of the case laws cited by the learned Counsel for the assessee, we hold that the levy of fee under section 234E of the Act by the Assessing Officer while giving effect to the order of the learned CIT(A) is unjustified which is liable to be deleted. We also hold that the fee charged by the Assessing Officer and confirmed by the learned CIT(A) was not in accordance with law. Since the issue is covered by the judicial pronouncements cited supra, therefore, we set aside the impugned orders passed for the assessment year 2013–14 and 2014– 12
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15, and allow the grounds of appeal raised by the assessee in both the years under consideration.
In the result, assessee’s appeals for A.Y. 2013–14 and 2014–15 are allowed. Order pronounced in the open court on 28/04/2022
Sd/- Sd/- SANDEEP GOSAIN ARUN KHODPIA JUDICIAL MEMBER ACCOUNTANT MEMBER NAGPUR, DATED: 28/04/2022 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Nagpur City concerned; (5) The DR, ITAT, Nagpur; (6) Guard file. True Copy By Order
Assistant Registrar ITAT, Mumbai