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Shri Pranay N. Parikh, Prop: M/s. Shreenath Enterprises Versus DCIT, CPS, TDS, Ghaziabad

2016 (2) TMI 890 - 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. 2356/Ahd/2015 - Dated:- 18-2-2016 - Shri George George K., Judicial Member For the Petitioner : Shri M.K. Patel, 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)-4, Ahmedabad dated 28.5.2015 passed for the assessm .....

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and therefore, revenue authorities are not justified in imposing levy penalty of ₹ 200/- per day or equal to TDS paid amounting to ₹ 81,280/-. It is further submitted that the assessee has made all timely payments to the Department and discharged his financial liability and only small mistake on the part of the assessee was a mere late intimation to the government about timely payment of tax being paid. The ld.counsel for the assessee further brought to my notice orders of the ITAT, .....

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e 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 Healthcare Pvt.Ltd. Vs. DCIT, ITA No.90/Asr/2015 order dated 9.6.2015 has held that while processing under section 200A, the AO was not empower to charge fee under section 234E. This order of the .....

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rder 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 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 .....

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mittedly 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 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. .....

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ot 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 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 d .....

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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 statement; (b) the interest, if any, shall be computed on the basis of the sums deductible as computed in the statement; (c) the sum paya .....

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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, 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 s .....

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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 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 .....

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st 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 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 en .....

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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 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 sc .....

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der 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, 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 r .....

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