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M/s. Kash Realtors Pvt. Ltd., M/s. Kapoor Glass (India) Pvt. Ltd., M/s. Medical Engineers (India) Ltd., M/s. Roha Dyechem P. Ltd., M/s. Diamond Shipbrokers Pvt. Ltd., M/s. Bhoja Vittal Shetty, M/s. Hitesh Shankar Shetty, M/s. Bhaskar Krishna Shetty, M/s. Dineshkumar S Gupta, M/s. Arpana Motors Pvt. Ltd. Versus ITO TDS 1 (1) (3) , Mumbai And Others

2016 (8) TMI 63 - ITAT MUMBAI

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. - The imp .....

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anjay Garg, Judicial Member Assessee by : None Revenue by : Shri C.W. Angolkar, D.R. ORDER Per Bench In this bunch of 17 appeals, the sole issue involved is as to whether or not, for the period prior to 01.06.15, fees under section 234E of the Income Tax act, 1961 (hereinafter referred to as the Act) in respect of defaults in furnishing TDS statements, could be levied in intimation under section 200A of the Act. 2. In some of the appeals there is a representation by the Ld. Counsel/authorized re .....

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fter 01.07.12, but prior to 01.06.15. These dates are relevant because 1.7.2012 is the date of insertion of section 234E into the Income Tax Act, 1961 whereas 1.6.2015 is the date of amendment/substitution of clause (c) to section 200A vide which it has been provided that fees payable under section 234E can be adjusted while processing intimation under section 200A w.e.f. 1.6.2015. 4. Now coming to the facts of these cases, in the course of the processing of the TDS returns, the Assessing Office .....

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in the above captioned appeals have come in appeal before us. 5. We have heard the rival contentions and have also perused the material on record. The contention of the Ld. respective Counsels for the assessees has been that this issue has already been considered by the Amritsar Bench of the Tribunal in the case of Sibia Healthcare Pvt. Ltd. vs. DCIT (2015) 171 TTJ (ASR) 0145 wherein the Amritsar Bench of the Tribunal has held that since the intimation under section 200A is an appealable order .....

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abling provision, no such levy could be affected. The provision for making adjustments regarding fees leviable under section 234E has been introduced by way of amendment made vide Finance Act, 2015 w.e.f. 01.06.15 only. The Tribunal therefore held that the action of the AO in making adjustments with regard to the fees leviable under section 234E while processing the TDS statements under section 200A for the period prior to 1.6.2015, was not legally valid. It has therefore been contended on behal .....

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he case of Rashmikant Kundalia vs. Union of India dated 09.02.15 which decision has been relied upon by the Ld. CIT(A) in the impugned order wherein the jurisdictional Hon ble Bombay High Court has upheld the constitutional validity of section 234E. The Ld. D.R. has further submitted that, even otherwise, the section 234E of the Act is an independent section and the AO (TDS) has otherwise jurisdiction to levy penalty for delay in filing TDS statements as provided under section 200(3) of the Act. .....

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concerned, we find that in the said case the constitutional validity of section 234E was challenged. The Hon ble Bombay High Court has upheld the validity of the section 234E. However, the issue whether the fees leviable under section 234E can be adjusted while processing the TDS statements under section 200A of the Act in relation to the period prior to 01.06.15, has neither been raised before the Hon ble Bombay High Court nor has been adjudicated. Hence, the reliance of the Revenue on the dec .....

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ure deems it fit not to provide a remedy of appeal, so be it. The Hon ble Bombay High Court has observed that even in such a scenario, the aggrieved party is not left remediless rather such aggrieved person can always approach the Hon ble High Court in extraordinary equitable jurisdiction under article 226/227 of the Constitution of India, as the case may be. 8. However, in the cases before us, the grievance of the assessees is not against the levy of fees under section 234E of the Act independe .....

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urse adopted by the assessees of invoking the appealable jurisdiction of this Tribunal for redressal of their grievance on this issue. 9. So far as the issue whether for the period prior to 01.06.15, such adjustment can be made while processing the statements under section 200A of the Act is concerned, we find that the Amritsar Bench of the Tribunal in the case of Sibia Healthcare Pvt. Ltd. vs. DCIT (supra) has held that in the absence of enabling provision under section 200A prior to 01.06.15 s .....

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of the Amritsar Bench of the Tribunal in the case of Sibia Healthcare Pvt. Ltd. vs. DCIT (supra) and has arrived at a similar finding that under section 200A, in the absence of enabling provision for the period before 01.06.15, the levy of fee under section 234E while processing the TDS statements was not permissible to the AO (TDS). However, the co-ordinate Chennai Bench of the Tribunal has also examined the other contention of the Revenue that section 234E is an independent section and the fe .....

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ny other provisions of law. The Assessing Authority, however, could not adjust the fees leviable under section 234E while processing the TDS statement under section 200A of the Act. However, after 01.06.15 the Assessing Authority is well within his limit to levy fee under section 234E of the Act even while processing the statement under section 200A and making adjustment. The relevant part of the decision of the Chennai Bench of the Tribunal for the sake of completeness is reproduced as under: 4 .....

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Section 234E(3) of the Act provides for payment of the fee before delivery of statement under Section 200(3) of the Act. Therefore, the fee has to be paid by the assessee voluntarily before filing the statement under Section 200(3) of the Act and the assessing authority has no power to levy the fee. 5. On the contrary, Sh. P. Radhakrishnan, the Ld. Departmental Representative, submitted that Section 234E of the Act provides for payment of fee, if the assessee fails to deliver the statement as pr .....

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isions of Section 200A of the Act:- "200A. (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 incorrect claim, apparent .....

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m 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, "art incorrect claim apparent from any information in the state .....

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he tax payable by, or the refund due to, the deductor as required under the said sub-section. 7. The Assessing Officer cannot make any adjustment other than the one prescribed above in Section 200A of the Act. By Finance Act, 2015, with effect from 01.06.2015, the Parliament amended Section 200A by substituting sub-section (1) of clauses (c) to (e). For the purpose of convenience, we are reproducing the amendment made in Section 200A by the Finance Act, 2015 as under:- "In section 200A of t .....

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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." Therefore, it is obvious that prior to 01.06.2015, there was no enabling provision in Section 200A of the Act for making .....

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Section 234E prior to 01.06.2015. In the case before us, the Assessing Officer levied fee under Section 234E of the Act while processing the statement of tax deducted at source under Section 200A of the Act. Therefore, this Tribunal is of the considered opinion that the fee levied by the Assessing Officer under Section 234E of the Act while processing the statement of tax deducted at source is beyond the scope of adjustment provided under Section 200A of the Act. Therefore, such adjustment canno .....

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ay in delivery of the statement with regard to tax deducted at source, the assessee shall pay the fee as provided under Section 234E(1) of the Act before delivery of the statement under Section 200(3) of the Act. If the assessee fails to pay the fee for the periods of delay, then the assessing authority has all the powers to levy fee while processing the statement under Section 200A of the Act by making adjustment after 01 .06.2015. However, prior to 01 .06.2015, the Assessing Officer had every .....

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amined in the light of the provisions of Indian Penal Code. Section 396 of Indian Penal Code provides for punishment for dacoity with murder. The punishment is imprisonment for life or rigorous imprisonment for a term which may be extended to ten years and also liable to fine. For the purpose of convenience, we are reproducing Section 396 of Indian Penal Code, hereunder:- "396. Dacoity with murder - If any one of five or more persons, who are conjointly committing dacoity, commits murder in .....

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also say that in addition to imprisonment, the accused shall be liable to pay fine. The language used by the Parliament in Indian Penal Code is "shall also be liable to fine". This means that the Magistrate or Sessions Judge, who tries the accused for an offence punishable under the provisions of Indian Penal Code, in addition to punishment of imprisonment, shall also levy fine. If the contention of the Ld.counsel for the assessees is accepted, then the Magistrate or Sessions Judge, a .....

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assessee has to pay the fee voluntarily and the Assessing Officer has no authority to levy fee could not be accepted. No one would come forward to pay the fee voluntarily unless there is a compulsion under the statutory provision. The Parliament welcomes the citizens to come forward and comply with the provisions of the Act by paying the prescribed fee before filing the statement under Section 200(3) of the Act. However, if the assessee fails to pay the fee before filing the statement under Sect .....

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