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2016 (1) TMI 866 - ITAT AHMEDABAD

2016 (1) TMI 866 - ITAT AHMEDABAD - TMI - Charging of late fee under section 234E while processing the return under section 200A - Held that:- While processing the return under section 200A of the Act, the ld.AO cannot impose levy of fees under section 234E of the Act. Respectfully following the order in the case of Sibia Healthcare Pvt. Ltd. VS. DCIT [2015 (6) TMI 437 - ITAT AMRITSAR] as well as Indian Overseas Bank Vs. DCIT [2015 (9) TMI 1290 - ITAT AHMEDABAD ] we allow both the appeals and de .....

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vance of the assessee is that the ld.CIT(A) has erred in confirming the levy of fees amounting to ₹ 4,000/- in Quarter No.3 pertaining to Form No.26Q relevant to the F.Y.2012-13. The assessee has submitted TDS statement under section 200(3). These statements were filed by the assessee beyond the prescribed due date. The ld.AO who processed these returns imposed penalty of ₹ 4,000/- each in respect of A.No.331 & 332 which pertained to Quarter No.3. 3. Dissatisfied with charging of .....

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282 and 2283/Ahd/2015. He placed on record copies of the orders of the Tribunal in both the cases. The ld.DR was unable to controvert the contention of the ld. counsel for the assessee. The Tribunal in the case of Shiv Shakti Specific Family Trust Vs. DCIT, CPC, TDS in ITA No.2282 and 2283/Ahd/2015 has discussed this issue as under: "4. Brief facts of the case are that the assessee was supposed to submit TDS return, but, it revealed in F.Y.2012-13 that it has not submitted the return in tim .....

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of the CIT(A), but along with these two appeals, we have heard six more appeals on identical issues. The issue in dispute is squarely covered by the decision of the ITAT, Amristar Bench in the case of Sibia Healthcare Pvt. Ltd. VS. DCIT, ITA No,.90/Asr/2015, which has been followed by the ITAT, Ahmedabad Bench in the case of Indian Overseas Bank Vs. DCIT, Ghaziabad in ITA No.3271/Ahd/2014. The Tribunal has held that while processing the TDS return under section 200A, the AO was not authorized t .....

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d 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 the reports about the decisions of various Hon'ble High Courts, including Hon'ble Kerala High Court, in the case of Narath Mapila LP School Vs Union of India [WP (C) 31498/2013(J)], Hon'ble Karanataka High Court in the case of Adithya Bizor P Solutions Vs Union of India [WP No. 6918-6938/2014(T-IT), Hon'ble .....

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ppeal, 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, for ready reference, section 234E of the Act, which was inserted by the Finance Act 2012 and was brought into effect from 1st July 2012. This statutory provision is as follows: 234E. Fee for defaults in furnishing statements (1) Without prejudice to the provisions of the Act, .....

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id 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 referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012. 6. We may also r .....

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y:- (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 statement; (b) the interest, if any, shall be computed on the basis of the sums deductible as computed in the statement; (c) the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of amount computed under clause (b) against any a .....

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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, on the basis of an entry, in the statement- (i) of an item, which is inconsistent with another entry of the same or some other item in such statement; (ii) in respect of rate of deduction of tax at source, where such rate is not in accordance with the provisions of this Act; .....

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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 section 234E; (d) the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of the amount computed under clause (b) and clause (c) against any amount paid under section 200 or section 201 or section 234E and any amount paid otherwise .....

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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 200A of the Act, as stated in so many words in the impugned intimation itself, and, as the law stood, prior to 1st June 2015, there was no enabling provision therein for raising a demand in respect of levy of fees under section 234E. While examining the correctnes .....

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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 view of the above discussions, in our considered view, the adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A. This intimation is an appealab .....

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espect of this levy has been pointed out to us and it is thus an admitted position that in the absence of the enabling provision under section 200A, no such levy could be effected. As intimation under section 200A, raising a demand or directing a refund to the tax deductor, can only be passed within one year from the end of the financial year within which the related TDS statement is filed, and as the related TDS statement was filed on 19th February 2014, such a levy could only have been made at .....

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