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Bhagwati Construction Versus DCIT, CPS, TDS, Ghaziabad

2016 (2) TMI 627 - ITAT AHMEDABAD

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 contemplated under section 200A.

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e 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. 2443/Ahd/2015 - Dated:- 19-2-2016 - Shri George George K., Judicial Member For the Petitioner : Shri Parth J. Contractor, AR For the Respondent : Shri Kamlesh Makwana, DR ORDER The assessee is in appeal before the Tribunal against the order of the ld.CIT(A)-8, Ahmedabad dated 02.6.2015 passed for th .....

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y way of processing of TDS statement, because provision of section 200A of the Act does not cover default in payment of late fees, except any arithmetical error etc. and therefore, revenue authorities were not right in imposing levy penalty of ₹ 200/- per day subject to the maximum of TDS deductible. It is further submitted that the assessee has substantially complied with the TDS provision and made payments to the Department and discharged his financial liability and only small mistake on .....

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e penalty. Copies of these two orders of the Tribunal have been placed on record by the ld.counsel for the assessee. 4. On the other hand, the ld.DR, relied upon the orders of the Revenue authorities. 5. I have heard rival submissions and gone through the facts on record and also the orders of the Tribunal relied on by the ld. counsel for the assessee. The assessee has submitted TDS return late. There is no dispute to that extent. However, the ITAT, Amristar Branch in the case of Sibia Healthcar .....

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ese 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 - ITA No.90/Asr/2015, vide order dated 9th June, 2015, wherein the Division Bench has inter alia observed as under :- 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 .....

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ion 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 admittedly there are no orders from the Hon ble Courts above retraining us 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 disp .....

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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) 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 provis .....

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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 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 incor .....

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r 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 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 infor .....

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itiously 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, 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 com .....

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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 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 appe .....

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payable to, the tax deductor after making the following adjustments: (a). after making adjustment on account of arithmetical errors and incorrect claims apparent from any information in the 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 la .....

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s 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 could be effected in the course of intimation under section 200A. The answer is clearly in negative. No other provision enabling a demand in respect 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, raisi .....

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er 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. The assessee gets the relief accordingly. 5. When the above judicial precedent was brought to the notice of the ld. Departmental Representative, he did not have much to say except to place his reliance on the orders of the authorities below. He fairly did not dispute that the provisions accepting levy of late filing fees under section 23 .....

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