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Income Tax Appellate Tribunal, DELHI
Before: SH. G.S.PANNU, HON’BLE & SH. ANUBHAV SHARMASmt. Lajwanti Bherwani
Appellant who is an assessee in default and has filed the appeal against order dated 11.05.2018 in appeal no. 141/17-18/CIT(A)-41 for the assessment year 2017-18 passed by Commissioner of Income Tax (Appeals)-41, New Delhi (hereinafter referred to as the First Appellate Authority in short ‘Ld. F.A.A.’) in regard to assessment order dated 24.07.2016 passed by Assessing Officer, ACIT, CPC, TDS, Vaishali, Ghaziabad whereby u/s 200A of the Income Tax Act, 1961 a demand of Rs. 2,66,510/- was made.
The facts in brief are that the appellant had purchased property from non resident on 28.04.2016 and as TDS was required to be deducted from payments being made from non-resident as per section 195 of the Act. The assessee had applied for getting Tax Deduction Account Number (TAN) issued for which an application was made on 27.04.2016. As per appellant reminder was sent for non-issuance of the TAN on 06.05.2016 as the payment was required to be made on 07.05.2016. TAN was allotted to appellant on 14.05.2016 and the payment was made on 16.05.2016. Based on the details of default given in the justification report a demand of Rs. 2,66,510/- u/s 200/206CB of the Act on account of interest on late payment was raised. The same was challenged by the assessee in default. Ld. CIT(A) has dismissed the appeal. Therefore the assessee in default has raised following grounds of appeal :-
“1. Learned AO as well as CIT (Appeals) have erred in charging interest u/s 200A even though making payment before the time was impossibility as shown in the facts before the CIT(A) and also as stated in written arguments dated 22.04.2018. 2. Learned CIT(A)’s order is bad in law, it failing to apply mind to the facts and written arguments and not in deliberating two supreme Court judgments holding that interest cannot be charged where it is impossible to make the payment.
Heard and perused the record. On behalf of appellant it was submitted that the assessee in default, has made the payment after getting the TAN and the assessee had applied for TAN. in time but there was delay in issuing of TAN. It was submitted that the seven days period was found to be less for payment which has now been extended to one month. Relying judgment of Hon’ble Supreme Court of India in Gyani Chand vs. State of A.P. , 2016(7) Supreme 1, was submitted that person cannot be expected to perform an impossible task. It was submitted that assessee could not have make payment without TAN and when the TAN itself was allotted late, there was no fault of assessee. The ld. DR however, defended the order of Ld. Tax Authorities below.
It can be appreciated from the matter on record that then sale deed was executed on 28.04.2016 while on 27.04.2016 application in Form 49B for allotment of tax deduction account no. (TAN) was moved by the assessee and the TAN was allotted to the assessee on 14.05.2016. It appears that in electronic generated justification report interest on late payment u/s 201(1)(A) of the Act was assessed and the same was considered by the Ld. AO while passing the impugned order. It appears that the grounds which have been submitted before this Bench were submitted before Ld. CIT(A) who has failed to appreciate the same in a reasonable manner while passing following order :- “5. I have considered the facts and circumstances of the case, submission of the appellant and perused the order of the AO. I find that from the period from 01.06.2015, the AO is empowered to charge fee u/s 234E of the Act, hence, the AO was justified in charging fee u/s 234E of the I.T.Act in the intimation issued by him u/s 200A of the Act. The intimation issued by the Assessing Officer in the present case, was after the period started from 01.06.2015, which is as per law and under the scope of adjustment provided u/s 200A of the Act. Thus, the appeal of the assessee is dismissed.”
There is apparent error in the findings of Ld. CIT(A) as he has justified the charging of fee u/s 234E of the Act while otherwise from record it appears the demand was raised in the form of an interest on late payment which is levied u/s 201(1A) of the Act.
Further the impugned order of Ld. CIT(A) does not give any findings for not sustaining the ground of impossibility of performance raised before it. The impugned order of Ld. CIT(A) thus, cannot be sustained. The same is set aside and the issue is restored to the files of Ld. CIT(A) for afresh adjudication in terms of observations above. Appeal is allowed for statistical purposes.