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M/s Satyam Pathology Private Ltd. Versus DCIT, Centralised Processing Cell TDS. Ghaziabad

2016 (1) TMI 530 - ITAT LUCKNOW

Levy the fees as per provision of Section 234E while processing the statement u/s 200A - Held that:- The adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A. Assessing Officer cannot levy the fees as per provision of Section 234E of the Act while processing the statement u/s 200A before the amendment made by the Finance Act, 2015 - Decided in favour of assessee - ITA Nos.499 to 501/LKW/2015 - Dated:- 21-1 .....

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-in-after referred to as the Ld. CIT (Appeals)] grossly erred on facts and in law in confirming the levy of fee for an amount of ₹ 31067/- u/s 234E of the I.T. Act, 1961 by holding that the same is not an appealable order u/s 246A of the Act and further that there is no discretion or application of mind involved by the AO (C.P.C.) while levying this fine and is mandatory in nature and thus the finding being against all settled principles of law may kindly be ordered to be quashed. Notwiths .....

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intimation u/s 200A for raising a demand in respect of levy of fees u/s 234E of the Act and thus any levy of such fee prior to the amendment made by the Finance Act 2015 in section 200A is illegal, bad-in-law and void-ab-initio. IV. On the facts and in the peculiar circumstances of the present case the Ld. CIT (Appeals) grossly erred on facts and in law in not applying his mind to the relevant provisions of law and in mechanically conforming the levy of fee which in the present case is not susta .....

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ry compliance of the reasons relied upon by him in passing the present order. 2. Ld. counsel for the assessee further contended that as per provision of Section 200 and 206C statements of TDS are to be delivered during the time prescribed and if the assessee fails to deliver or cause to be delivered the statement, he shall be liable to pay by way of fees a sum of ₹ 200/- for every day during which the failure continues. As per provisions of Section 234E of the Act for levy of fees a specif .....

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submission that it was processed on 08.01.2014 therefore, it was prior to the introduction of clause c in sub Section 5 of Section 200A of the Act. Therefore, if the Assessing Officer wants to levy the fees he is required to pass an order u/s 234E of the Act and not while processing the statement of TDS u/s 200A of the Act. In support of his contention, he invited our attention to the orders of the Tribunal in the case of G. Indhirani Vs. DCIT in ITA No. 1019 to 2021/Mds/2015 dated 10.07.2015 an .....

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ion of Section 234E of the Act while processing the statement u/s 200A before the amendment made by the Finance Act, 2015. The relevant observations of the orders of the Tribunal are extracted hereunder for the sake of reference:- 4. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. In addition to his argument on the merits, learned counsel has also invited our attention to thereports about the .....

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ay on the demands raised in respect of fees under section 234E. The full text of these decisions were not produced before us. However, as admittedly there are no orders from the Hon ble Courts above retrainingus from our adjudication on merits in respect of the issues in this appeal, and as, in our humble understanding, this appeal requires adjudication on a very short legal issue, within a narrow compass of material facts, we are proceeding to dispose of this appeal on merits. 5. We may produce .....

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a sum of two hundred rupees for every day during which the failure continues. (2) The amount of fee referred to in sub-section (1) shall not exceed the amount of tax deductible or collectible, as the case may be. (3) The amount of fee referred to in sub-section (1) shall be paid before delivering or causing to be delivered a statement in accordance with sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C. (4) The provisions of this section shall apply to a statement .....

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x deducted at source (1) Where a statement of tax deduction at source, or a correction statement, has been made by a person deducting any sum (hereafter referred to in this section as deductor) under section 200, such statement shall be processed in the following manner, namely:- (a) the sums deductible under this Chapter shall be computed after making the following adjustments, namely:- (i) any arithmetical error in the statement; or (ii) an incorrect claim, apparent from any information in the .....

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, or the amount of refund due to, him under clause (c); and (e) the amount of refund due to the deductor in pursuance of the determination under clause (c) shall be granted to the deductor: Provided that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the statement is filed. Explanation : For the purposes of this sub-section, "an incorrect claim apparent from any information in the statement" shall mean a claim .....

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efund due to, the deductor as required under the said subsection. 7. By way of Finance Act 2015, and with effect from 1st June 2015, there is an amendment in Section 200A and this amendment, as stated in the Finance Act 2015, is as follows: In section 200A of the Income-tax Act, in sub-section (1), for clauses (c) to (e), the following clauses shall be substituted with effect from the 1st day of June, 2015, namely:- (c) the fee, if any, shall be computed in accordance with the provisions of sect .....

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nt of refund due to the deductor in pursuance of the determination under clause (d) shall be granted to the deductor. 8. In effect thus, post 1st June 2015, in the course of processing of a TDS statement and issuance of intimation under section 200A in respect thereof, an adjustment could also be made in respect of the fee, if any, shall be computed in accordance with the provisions of section 234E . There is no dispute that what is impugned in appeal before us is the intimation under section 20 .....

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following adjustments: (a). after making adjustment on account of arithmetical errors and incorrect claims apparent from any information in he statement - Section 200A(1)(a) (b). after making adjustment for interest, if any, computed on the basis of sums deductible as computed in the statement . - Section 200A(1)(b) 9. No other adjustments in the amount refundable to, or recoverable from, the tax deductor, were permissible in accordance with the law as it existed at that point of time. 10. In vi .....

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