TMI Blog2016 (10) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... intimation issued under section 200A of the Act. The CIT(A) has rejected the present set of appeals on the surmise that first of all, no appeal is provided against the intimation issued under section 200A of the Act. Further, the CIT(A) has also decided the issue on merits and the assessee is in appeal before us on both these grounds. Vis-à-vis the first issue of maintainability of appeal against the intimation issued under section 200A of the Act, we hold that such intimation issued by the Assessing Officer after processing the TDS returns is appealable. The demand raised by way of charging of fees under section 234E of the Act is under section 156 of the Act and any demand raised under section 156 of the Act is appealable under section 246A(1)(a) and (c) of the Act. Accordingly, we reverse the findings of CIT(A) in this regard. Once intimation issued under section 200A(1) of the Act is appealable order before the CIT(A) under section 246A(1)(a) of the Act, then such appealable order passed by the CIT(A) under section 250 of the Act is further appealable before the Tribunal under section 253 of the Act. Hence, we admit the present appeals filed by the assessee even on this prel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Before adjudicating the issue raised in the present bunch of appeals, it may be pointed out that some of assessee had filed consolidated appeal for default relating to more than one quarter. The Registry had issued defect notice to each such assessee to file separate appeals for each of the quarters. The assessee thereafter, has filed separate appeals for each of the quarters and has also moved an application for condonation of delay with a request that the earlier appeal which was filed for all the quarters together may be treated as infructuous. In the totality of the above facts and circumstances, where the original appeal filed by the assessee was in time and then, merely because each of the appeal for the respective quarters was not filed separately, but the same were filed after defect notice was issued by the Registry; then the delay in filing such appeals for each of the quarters is condoned and the appeals though belated are taken on record as being filed in time, since the original consolidated appeal for all the quarters was filed in time. However, appeals in ITA Nos.560/PN/2016 561/PN/2016, 193/PN/2016, 189/PN/2016, 191/PN/2016, 199/PN/2016, 194/PN/2016 and 196/PN/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of salary, interest, etc. for the respective quarters in the accounting period. The Act required the assessee to file quarterly TDS returns intimating the tax deducted at source from various payments made in each of the quarter. The said TDS returns are mandated to be filed within stipulated period. Admittedly, in the present set of appeals, TDS returns were filed belatedly. The Assessing Officer while processing the TDS returns issued intimation to the respective assessee under section 200A of the Act and levied late filing fees under section 234E of the Act. Aggrieved by the said intimation, in some of the cases, the assessee in some cases filed an application under section 154 of the Act also. However, the same were dismissed by the respective Assessing Officers. 6. In appeal, the CIT(A) held that the appeal of assessee was not maintainable, in view of the ratio laid down by the Hon'ble Bombay High Court in Rashmikant Kundalia v. Union of India [2015] 54 Taxman.com 200 (Bom). Further, even on merits, the contention of assessee that the Assessing Officer was not empowered to raise the demand under section 234E of the Act by passing order under section 200A of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of Assessing Officer was not passed under section 234E of the Act but was passed under section 200A of the Act and also under section 154 r.w.s. 200A of the Act. The CIT(A) had relied on the ratio laid down by the Hon'ble Bombay High Court in Rashmikant Kundalia v. Union of India (supra), which settled the constitutional validity of section 234E of the Act. The arguments before the Hon'ble Bombay High Court were that there was no right to insert the said section. However, no arguments were advanced in respect of applicability of said section for the period prior to 01.06.2015. He further pointed out that firstly, there has to be mechanism to charge fees under section 234E of the Act and prior to insertion of clause (c) to section 200A(1) of the Act w.e.f. 01.06.2015, there was no mechanism to charge fees by the Assessing Officer. He stressed that where an order has to be passed under section 200A of the Act for charging fees under section 234E of the Act, then the Legislature should provide the machinery for charging the said fees under section 234E of the Act, which was provided w.e.f. 01.06.2015. He further stressed that where the assessee had denied his liability t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ratio laid down by the Hon'ble Bombay High Court in CIT v. Thane Electricity Supply Ltd. [1994] 206 ITR 727 (Bom), wherein while explaining the principle of obiter dicta it was pointed out that casual representation in order would not decide the order in one way or the other. The learned Authorized Representative for the assessee in conclusion pointed out that the provisions of section 200A of the Act were inserted earlier. However, section 234E of the Act was inserted later and where section 200A of the Act does not provide for levy of fees by the Assessing Officer till before the amendment w.e.f. 01.06.2015, there was no merit in charging the said levy. He further pointed out that after the amendment w.e.f. 01.06.2015, the Assessing Officer had power to make adjustments in intimation passed under section 200A of the Act itself. 10. Another Counsel Shri Sanket Joshi appearing before us relied on the submissions made by Shri Naniwadekar and further pointed out that insertion made w.e.f. 01.06.2015 was prospective in nature and hence, had to be applied from 01.06.2015 itself. He relied on the Memo explaining Finance Bill, 2015 while introducing clause (c) to section 200A( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o claims it as part of his tax payment. The obligation on the deductor was to collect the said tax deducted at source and deposit the same and the deductee had all the rights to claim the benefit of such tax deducted by the deductor. Earlier, under the Act, the onus was upon the deductor to issue certificate for claiming TDS payments. However, since there were various frauds, because of certificate issued by the deductors, the provisions of sub- section 200(3) of the Act were inserted w.e.f. 01.04.2005. He further explained that any person referred to in section 192(1A) of the Act shall implies that it was obligatory and mandatory that statement of tax deducted had to be filed within prescribed time limit . He referred to the proviso to section 200(3) of the Act, which was inserted w.e.f. 01.10.2014, wherein it is provided that correction statement for rectification can also be issued. 13. The learned CIT-DR further pointed out that before insertion of levy of fees under section 234E of the Act, there was provision of levy of penalty under section 272A(2)(k) of the Act. This amendment was w.e.f. 01.04.2005, hence where the statement was not filed by the deductor, penal provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay the said fees. 14. Referring to the decision of Hon'ble Bombay High Court in Rashmikant Kundalia v. Union of India (supra) wherein the constitutional validity was challenged, the learned CIT-DR referred to paras 13 to 15 and 18 of the said judgment and pointed out that the right to appeal was the creation of statute and the Hon'ble High Court was dealing with constitutional validity but also considered the purpose for which the said section was introduced. Referring to section 200A(1)(c) of the Act, he stated that though the word used is fees, if any, but that means where there is an error or where no fees has been paid, then although the amendment was w.e.f. 01.06.2015, but the amendment was procedural in nature. He stressed that once charging section is there, where the assessee has been asked to pay the fees, then only thing is that the provisions of section 200A of the Act were added in 2010, provisions of section 234E of the Act were added in 2012, then if by error, it was not there, then by way of insertion of clause (c) to section 200A(1) of the Act, the Assessing Officer is empowered to charge. He further relied on Chennai Bench of Tribunal, wherein it is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duct tax at source under sections 192 to 194LD, 195 to 196D of the Act. Under section 198 of the Act, it is provided that the tax deducted at source shall for the purpose of computing the income of assessee be deemed to be income received. Under section 199 of the Act, it is further provided that any deduction made in accordance with the provisions of Chapter and paid to the Central Government shall be treated as payment of tax on behalf of the person from whose income the deduction was made. The sum referred to in sub-section (1A) of section 192 of the Act and paid to the Central Government shall be treated as the tax paid on behalf of the person in respect of whose income such payment of tax has been made. 17. Section 200 of the Act lays down the duty of the person deducting tax, which reads as under:- 200. (1) Any person deducting any sum in accordance with the foregoing provisions of this Chapter shall pay within the prescribed time, the sum so deducted to the credit of the Central Government or as the Board directs. (2) Any person being an employer, referred to in sub-section (1A) of section 192 shall pay, within the prescribed time, the tax to the credit of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Chapter, by the office of the Government, then duty is upon the Treasury Officer or the Drawing Disbursing Officer or any other person, to deliver or cause to be delivered to the prescribed income tax authorities, or to the person authorized by such authority, statement in such form, verified in such manner, setting forth such particulars within such time as may be prescribed. Under section 200(3) of the Act, similar responsibility is on any person deducting any sum on or after first day of April, 2005 in accordance with foregoing provisions of the Chapter, including any person as an employer referred to in section 192(1A) of the Act. The onus is upon such person that he shall after paying the tax to the credit of Central Government within prescribed time, prepare such statement for such period as may be prescribed and deliver or cause to be delivered to the prescribed income tax authority or any person so authorized, such statement in such form and verified in such manner and setting forth such particulars and within such time as may be provided. The duty is upon a person deducting any sum in accordance with various provisions under the Chapter and also upon an employer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atement; (b) the interest, if any, shall 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 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 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 such statement; (ii) in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her lays down that the amount of fees referred to in sub-section (1) shall be paid before delivering or causing to be delivered a statement in accordance with sub-section 200(3) of the Act or the proviso to section 206C(3) of the Act. The provisions of said section have been made applicable to a statement to be delivered or cause to be delivered on or after the first day of July, 2012. 23. Reading the above said provisions of the Act, it transpires that where tax has been deducted at source by a deductor out of the account of deductee, then the onus is upon the deductor under section 200 of the Act to prepare a statement in such form and verified in such manner which is prescribed under the Act in which the particulars of tax deduction at source are to be provided and the said statement is to be delivered or cause to be delivered within such time as may be prescribed. Rule 31A of the Rules provided the time limit for the furnishing of statement for tax deduction at source on quarterly basis. Section 234E of the Act levies fees for default in furnishing the statements of tax deducted at source. Such fees is to be paid before delivering or causing to be delivered a statement in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer which processing the intimation under section 200A of the Act could charge late fee under the provisions of section 234E of the Act. The assessee claims that the Assessing Officer at best could charge the difference in tax deducted and not paid in Treasury from the deductor and / or any interest payable on such deduction of tax at source. However, till substitution of clause (c) to section 200A(1) of the Act by the Finance Act, 2015 w.e.f. 01.06.2015, the Assessing Officer was not empowered to charge fees under section 234E of the Act. The case of Revenue on the other hand, was that it was the duty of deductor while furnishing the statement under section 200(3) of the Act to deposit the fees referred to in section 234E(1) of the Act. The learned CIT-DR stressed that fees referred to in sub-section (1) had to be paid while delivering or causing to deliver the statement in accordance with provisions of section 200(3) of the Act or the proviso to section 206C(3) of the Act. However, various regulations and the statutory provisions in this regard point out that undoubtedly, the responsibility of the deductor was to deposit the tax deducted at source in time and if not so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in it and before vesting of such power, no order can be passed by the prescribed authority in charging of such fees under section 234E of the Act, while exercising jurisdiction under section 200A of the Act. Thus, in the absence of enabling provisions, under which the prescribed authority is empowered to charge the fees, the Assessing Officer while processing the returns filed by the deductor in respect of tax deducted at source can raise the demand on account of taxes, if any, not deposited and charge interest. However, prior to 01.06.2015, the Assessing Officer does not have the power to charge fees under section 234E of the Act while processing TDS returns. In the absence of enabling provisions, levy of fees could not be effected in the course of intimation issued under section 200A of the Act prior to 01.06.2015. 26. The Amritsar Bench of Tribunal in Sibia Healthcare (P) Ltd. v. DCIT [2015] 121 DTR 81 (Asr) (Trib) had held that the adjustment in respect of levy of fees under section 234E of the Act was indeed beyond the scope of permissible adjustments contemplated under section 200A of the Act. Such a levy could not be effected in the course of intimation under section 200A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Department had to provide due to the late filing of TDS statements. It was further held by the Hon'ble High Court that late filing of TDS returns / statements was regularized by payment of fees as set out in section 234E of the Act. Therefore, the findings of Hon'ble High Court were thus, that the fees sought to be levied under section 234E of the Act was not in the guise of tax sought to be levied on the deductor. The provisions of section 234E of the Act were held to be not onerous on the ground that section does not empower the Assessing Officer to condone the delay in late filing the income tax returns or that no appeal is provided from arbitrary order passed under section 234E of the Act. The Hon'ble High Court held that the right to appeal was not a matter of right but was creature of statute and if the Legislature deems fit not to provide remedy of appeal, so be it. The Hon'ble High Court further held that a person can always approach the court in extraordinary equitable jurisdiction under Article 226/227 of the Constitution as the case may be. The Hon'ble High Court therefore, observed that simply because no remedy of appeal was provided for the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocessing of TDS statements. It was thus, proposed to amend the provisions of section 200A of the Act so as to enable the computation of fees payable under section 234E of the Act at the time of processing of TDS statements under section 200A of the Act. The Memo explaining the Finance Bill, 2015 very categorically held that currently there does not exist any provision in the Act to enable the processing of TCS returns and hence, a proposal was made to insert a provision in this regard and also the post provision shall incorporate the mechanism for computation of fees payable under section 234E of the Act. The Finance Bill further refers to the existing provisions of the Act i.e. after processing of TDS statement, intimation is generated specifying the amount payable or refundable. This intimation generated after processing of TDS statement is (i) subject to rectification under section 154 of the Act; (ii) appealable under section 246A of the Act; and (iii) deemed as notice of payment under section 156 of the Act. The Finance Bill further provided that intimation generated after the proposed processing of TCS statement shall be at par with the intimation generated after processing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Finance Act, 2015 w.e.f. 01.06.2015. Accordingly, we hold that where the Assessing Officer has processed the TDS statements filed by the deductor, which admittedly, were filed belatedly but before insertion of clause (c) to section 200A(1) of the Act w.e.f. 01.06.2015, then in such cases, the Assessing Officer is not empowered to charge fees under section 234E of the Act while processing the TDS returns filed by the deductor. 30. The Hon'ble Bombay High Court in Rashmikant Kundalia v. Union of India (supra) has upheld the constitutional validity of said section introduced by the Finance Act, 2015 w.e.f. 01.06.2015 but was not abreast of the applicability of the said section 234E of the Act by the Assessing Officer while processing TDS statement filed by the deductor prior to 01.06.2015. In such scenario, we find no merit in the plea of learned CIT-DR that the Hon'ble Bombay High Court in Rashmikant Kundalia v. Union of India (supra) has laid down the proposition that fees under section 234E of the Act is chargeable in the case of present set of appeals, where the Assessing Officer had issued the intimation under section 200A of the Act prior to 01.06.2015. 31. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t at the time of processing of TDS statements under section 200A of the Act. In other words, the Assessing Officer is empowered to charge fees payable under section 234E of the Act in the intimation issued after insertion of clause (c) to section 200A(1) of the Act w.e.f. 01.06.2015. The Legislature itself recognized that under the existing provisions of section 200A of the Act i.e. prior to 01.06.2015, the Assessing Officer at the time of processing the TDS statements did not have power to charge fees under section 234E of the Act and in order to cover up that, the amendment was made by way of insertion of clause (c) to section 200A of the Act. In such scenario, it cannot be said that insertion made by section 200A(1)(c) of the Act is retrospective in nature, where the Legislature was aware that the fees could be charged under section 234E of the Act as per Finance Act, 2012 and also the provisions of section 200A of the Act were inserted by Finance (No.2) Act, 2009, under which the machinery was provided for the Assessing Officer to process the TDS statements filed by the assessee. The insertion categorically being made w.e.f. 01.06.2015 lays down that the said amendment is prosp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal held 'yes' that the assessing authority had such power and after 01.06.2015, the Assessing Officer was within his limit to levy fees under section 234E of the Act even while processing the TDS statements under section 200A of the Act. In view of the present set of facts, where the Assessing Officer had charged fees under section 234E of the Act while processing the statements under section 200A of the Act before 01.06.2015, there is no merit in the reliance placed upon by the learned CIT-DR on the said proposition laid down by the Chennai Bench of Tribunal and we dismiss the same. 36. Another reliance placed upon by the learned CIT-DR was in respect of amendment being retrospective or prospective and reliance was placed on the ratio laid down by Hon'ble Delhi High Court in CIT v. Naresh Kumar (supra). However, in view of our decision in the paras hereinabove, where power is being enshrined upon the Assessing Officer to levy or charge while processing the TDS returns w.e.f. 01.06.2015, such provision cannot have retrospective effect as it would be detrimental to the case of tax payer. The Hon'ble Delhi High Court was considering the application of amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords, the Legislature recognizes that a deductor who has filed his statement of tax deducted at source, which in turn, has been processed by the Assessing Officer and intimation is generated under which, if any amount is found to be payable, then such intimation generated after processing of TDS returns is subject to rectification under section 154 of the Act and / or is also appealable under section 246A of the Act, since the demand issued by the Assessing Officer is deemed to be a notice of payment under section 156 of the Act. Since the intimation in question issued by the Assessing Officer was appealable order under section 246A(1)(a) of the Act, therefore, the CIT(A) should have examined the legality of adjustment made under intimation issued under section 200A of the Act. The CIT(A) has rejected the present set of appeals on the surmise that first of all, no appeal is provided against the intimation issued under section 200A of the Act. Further, the CIT(A) has also decided the issue on merits and the assessee is in appeal before us on both these grounds. Vis- -vis the first issue of maintainability of appeal against the intimation issued under section 200A of the Act, we hold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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