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2016 (2) TMI 403 - ITAT AHMEDABAD

2016 (2) TMI 403 - ITAT AHMEDABAD - TMI - Levy of fees under section 234E - intimation issued under section 200A in respect of processing of TDS - Held that:- We find that the issue in all these appeals is now squarely covered in favour of the assessee by the decision of ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT [2015 (6) TMI 437 - ITAT AMRITSAR] adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments cont .....

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ns, as also bearing in mind entirety of the case, the impugned levy of fees under section 234E is unsustainable in law. We, therefore, delete the impugned levy of fee under section 234E of the Act. - Decided in favour of assessee. - ITA. No. 2726 and 2727/Ahd/2015 - Dated:- 1-2-2016 - Rajpal Yadav, JM For the Appellant : Shri Himanshu Shah For the Respondent : Shri Alok Kumar, DR ORDER The present two appeals are directed at the instance of the assessee against common order of the ld. CIT(A) dat .....

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377; 10,530/- has been raised upon the assessee. The facts in ITA No.2727/Ahd/2015 are that interest on late payment of TDS for ₹ 351/- appearing in default summary for Form No.26Q-Q4 of F.Y.2012-13, relevant to the Asstt. Year 2013-14 has been charged. A late fee of ₹ 9,000/- has been charged under section 234E of the Income Tax Act. Accordingly, an amount of ₹ 9,350/- has been raised. 3. Before us, the assessee has challenged levy of fee amounting to ₹ 9,000/- with resp .....

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205. The ld.DR unable to controvert the submissions of the ld. counsel for the assessee. 5. We find that the Tribunal has followed the order of the ITAT, Amristar Bench in the case of Sibia Healthcare P. Ltd. Vs. DCIT, ITA No.90/Asr/2015. The order of the Tribunal reads as under: "4. We find that the issue in appeal is now squarely covered in favour of the assessee by the decision of ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT - ITA No.90/Asr/2015, vide orde .....

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[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 under section 234E. The full text of these decisions were not produced before us. However, as .....

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2. 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 during which the failure continues. (2) The amount of fee referred to in sub-section (1) shal .....

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e 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 statement of tax deduction at source, or a correction statement, has been made by a person deducting a .....

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ayable 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 under clause (c); and (e) the amount of refund due to the deductor in pursuance of the determinat .....

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n 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 subsection (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 under the said subsection. 7. By way of Finance Act 2015, and with effect from 1st June 2015, the .....

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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 pursuance of the determination under clause (d) shall be granted to the deductor. 8. In effect .....

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015, 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 adjustment on account of "arithmetical errors" and "incorrect c .....

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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 the issue here. The issue is whether such a levy .....

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