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Tanish Industries Pvt. Ltd. & I rfan Iqbalbhai Ajmerwala Versus The Dy. CIT

2015 (11) TMI 1507 - ITAT AHMEDABAD

Levy of fee u/s 234E in the order 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.

In view of these discussions, as also bearing in mind entirety of the case, the impugned levy of fees under section 234 E is unsustainable in law. We, therefore, uphold the grievance of the assessee and delete the impugned levy of fee under section 234E of the Act. - Decided in favo .....

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t.Ltd.) and dated 03/06/2015 (in the case of Irfan Iqbalbhai Ajmerwala) pertaining to Assessment Year (AY) 2014- 15. Since common issues are involved in both these appeals, these were heard together and are being disposed of by this consolidated order for the sake of convenience. 2. First, we take up ITA No.2296/Ahd/2015 for AY 20014-15 as the lead case, since similar facts are involved in both the cases. 2.1. In Assessee s appeal in ITA No.2296/Ahd/2015 for AY 2014-15 (in the case of Tanish Ind .....

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vision u/s 234E that after filing TDS return, late filing fee can be demanded. (3) There is no provision u/s 204 r.w.s. 234E for making person/ officer responsible for payment of late filing fees of late TDS return. There is no provision u/s 204 for paying TDS from salary and not late return fees. (4) Late fees demand cannot be raised by processing TDS return because section 200A do not provide default for payment of late fees u/s 234E. (5) The assessee craves for liberty to amend, modify and ad .....

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firmed the penalty. Aggrieved by the order of the ld.CIT(A), the assessee is further in appeal before this Tribunal. 4. At the outset, ld.counsel for the assessee submitted that late filing fees of TDS return u/s.234-E of the I.T. Act, 1961 can be levied only after 01/06/2015. He submitted that this issue is squarely covered by the decision of the Coordinate Bench (ITAT B Bench Ahmedabad) in the case of Siddhi Vinayak Developers vs. DCIT in ITA Nos.2321 and 2322/Ahd/2015 for AYs 2013-14 & 20 .....

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oordinate Bench in the case of Siddhi Vinayak Developers vs. DCIT(supra) and held as under:- 5. We have duly considered rival contentions and gone through the record carefully. The ITAT, Amristar Bench has made elaborate discussion on this issue. The finding has been reproduced in the case of Indian Overseas Bank Vs. DCIT, Ghaziabad rendered in ITA No.3271/Ahd/2014. It reads as under: 5. I find that the issue in appeal is now squarely covered in favour of the assessee by the decision of ITAT Amr .....

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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 Rajasthan High Court in the case of Om Prakash Dhoot Vs Union of India [WP No. 1981 of 2014] and of Hon ble Bombay High Court in the case of Rashmikant Kundalia Vs Union of India [WP No. 771 of 2014], granting stay on the demands raised in respect of fees .....

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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, where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to subsection (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day .....

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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 reproduce the Section 200A which was inserted by the Finance Act 2009 with effect from 1st April 2010. This statutory provision, as it stood at the relevant point of time, was as follows: 200A: Processing of statements of tax deducted at source (1) Where a statemen .....

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ll 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 amount paid under section 200 and section 201, and any amount paid otherwise by way of tax or interest; (d) an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, him und .....

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ent- (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; (2) For the purposes of processing of statements under sub-section (1), the Board may make a scheme for centralised processing of statements of tax deducted at source to expeditiously determine the tax payable by, or the refund due to, the deductor as required un .....

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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 by way of tax or interest or fee; (e) an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, him under clause (d); and (f) the amount of refund due to the deductor in pursu .....

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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 correctness of the intimation under section 200A, we have to be guided by the limited mandate of Section 200A, which, at the relevant point of time, permitted computation of amount recoverable from, or payable to, the tax deductor after making the following adjustments: (a). after making .....

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idered 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 appealable order under section 246A(a), and, therefore, the CIT(A) ought to have examined legality of the adjustment made under this intimation in the light of the scope of the section 200A. Learned CIT(A) has not done so. He has justified the levy of fees on the basis of the provisions of Section 234E. That is not .....

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r 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 best within 31st March 2015. That time has already elapsed and the defect is thus not curable even at this stage. In view of these discussions, as also bearing in mind entirety of the case, the impugned levy of fees under section 234 E is unsustainable in law. We, therefore, uphold the grievance of the ass .....

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was passed much before that date. 7. In view of the above discussions and bearing in mind entirety of the case, I hereby delete the levy of late filing fees under section 234E of the Act by way of impugned intimation issued. The assessee gets the relief accordingly. 8. In the result, appeal is allowed. Order pronounced in the open Court on this 3rd day of September, 2015. 6. We do not find any disparity on the facts, therefore, respectfully following the above, we allow the appeals of the assess .....

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adjudication. 7. As a result, the appeal of the Assessee (in the case of Tanish Industries Pvt.Ltd.) in ITA No.2296/Ahd/2015 for AY 2014-15 is allowed. 8. Now, we take up the Assessee s appeal in ITA No.2297/Ahd/2015 for AY 2014-15 (in the case of Infran I. Ajmerwala), wherein following grounds have been raised:- The order of learned Commissioner of Income-tax(Appeals) - 8, Ahmedabad in confirming levy of fees u/s 234E is bad in law on the following grounds; (1) There is no inherent power with .....

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