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2016 (10) TMI 430 - ITAT MUMBAI

2016 (10) TMI 430 - ITAT MUMBAI - TM - Demand raised by the AO u/s 234E of the Act in the intimation processed u/s 200A - Held that:- Prior to 01.06.2015, there was no enabling provision in Section 200A of the Act for making adjustment in respect of the statement filed by the assessee with regard to tax deducted at source by levying fee under Section 234E of the Act. The Parliament for the first time enabled the Assessing Officer to make adjustment by levying fee under Section 234E of the Act wi .....

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, I.T.A. No. 4434/Mum/2015, I.T.A. No. 4435/Mum/2015, I.T.A. No. 4436/Mum/2015, I.T.A. No. 4437/Mum/2015 - Dated:- 24-8-2016 - Shri B.R. Baskaran (AM) & Shri Pawan Singh (JM) For The Assessee : Shri Sunil Nahta For The Department : Shri B.S. Bist ORDER Per Bench:- In all these appeals, the solitary issue challenged by the assessee relates to the demand raised by the AO u/s 234E of the Act in the intimation processed u/s 200A of the Act prior to 01-06-2015. We notice that an identical issue w .....

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ts, 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 representative on behalf of the assessee. However, in some of appeals, none has come present and adjournment has been sought. However, considering the short and common issue involved in all the appeals which can be adjudicated on the basis of only a few material facts, we proceed to decide the appeals rejecting the adjournment applications, if any, mo .....

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der 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 Officer (TDS) [hereinafter referred to as the AO(TDS)] raised demand in each of the above cases by way of an intimation issued under section 200A of the Act for levy of fees under section 234E for delay in filing of TDS statement beyond the period stipulated as per the provisions of section 200(3) of the Act. Aggrieved by this levy of fees, the respective .....

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IT (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 before the Ld. CIT(A) (w.e.f. 1.7.2012) under section 246A(a) and therefore the Ld. CIT(A) could have examined the validity of the adjustments made under the intimation under section 200A in the light and scope of the provisions of section 200A. The Tribunal further observed that since there was no enabling provision under section 200A before 01.06. .....

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le 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 behalf of the assessees that the TDS statements filed by the assessee has to be processed in the manner as laid down in the provisions of section 200A as in force during the relevant period. That the levy of fees under section 234E of the Act, thus, cannot be a subject matter of process, while processing the statement under section 200A of the Act so far .....

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t 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. It has therefore been contended that the AO(TDS) has rightly exercised his jurisdiction while making adjustment of the fees leviable under section 234E for non compliance/delay in filing the TDS statements as provided under section 200(3) of the Act. 7. We have heard the rival contentions and have also gone through the case laws cited before us. So .....

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ior 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 decision of the Hon ble Bombay High Court in the case of Rashmikant Kundalia vs. Union of India (supra) so far as the issue is concerned, is of no help to the Revenue. One of the contentions raised before the Hon ble Bombay High Court was that under the provisions of the Act, no appeal is provided for or from an arbitrary order passed under section 234 .....

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se 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 independently rather, the issue is that while processing the TDS statements under section 200A of the Act, whether or not, the fees leviable under section 234E can be adjusted therein? No doubt, the order passed under section 200A is an appealable order before the Ld. CIT(A) under section 246 of the Act (w.e.f. 1.7.2012). The appellate order of the Ld. CIT(A .....

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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 such a power was not vested with the AO (TDS). The said decision has been further followed by the Ahmedabad Bench of the Tribunal in a recent decision dated 05.02.16 in the case of Varun Radiators Pvt. Ltd. vs DCIT (CPC- TDS) 2016-TIOL-436-ITAT-AHM. However, we have come across another decision of the Chennai Bench dated 10.07.15 in the case of Smt. .....

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oordinate Chennai Bench of the Tribunal has also examined the other contention of the Revenue that section 234E is an independent section and the fees can be levied by the AO (TDS), independent of the provisions of section 200A, for the default/delay in filing the TDS statements as prescribed under section 200(3) of the Act. The Tribunal, considering the above submissions, held that if the assessee fails to pay the fees before filing the statement under section 200(3) of the Act, the Assessing A .....

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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. The Ld. counsel invited our attention to Section 234A of the Act and submitted that when an assessee fails to deliver the statement within the prescribed time, the assessee is liable to pay by way of fee a sum of Z200/- for every day during such a period the failure continues. Referring to the word used in the section 234E "he shall be liable .....

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Departmental Representative, submitted that Section 234E of the Act provides for payment of fee, if the assessee fails to deliver the statement as prescribed in Section 200(3) of the Act. Therefore, the Assessing Officer has every authority to levy fee either by a separate order or while processing the statement under Section 200A of the Act. 6. We have considered the rival submissions on either side and perused the relevant material on record. Section 200A of the Act provides for processing of .....

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shall be computed after making the following adjustments, namely :- (i) any arithmetical error in the statement ; or (ii) an incorrect claim, apparent from an 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 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, .....

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which the statement is filed. Explanation -For the purposes of this sub-section, "art 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 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 stateme .....

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. 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 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 determi ned after .....

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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 adjustment in respect of the statement filed by the assessee with regard to tax deducted at source by levying fee under Section 234E of the Act. The Parliament for the first time enabled the Assessing Officer to make adjustment by levying fee under Section 234E of the Act with effect from 01.06.2015. Therefore, as rightly submitted by the Ld. counsel for th .....

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tatement of tax deducted at source is beyond the scope of adjustment provided under Section 200A of the Act. Therefore, such adjustment cannot stand in the eye of law. 8. The next contention of the assessee is that Section 234E of the Act says that the assessee "shall be liable to pay" by way of fee, therefore, the assessee has to voluntarily pay the fee and the Assessing Officer has no authority to levy fee. The argument of the Ld.counsel for the assessee is very attractive and fancif .....

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atement under Section 200A of the Act by making adjustment after 01 .06.2015. However, prior to 01 .06.2015, the Assessing Officer had every authority to pass an order separately levying fee under Section 234E of the Act. What is not permissible is that levy of fee under Section 234E of the Act while processing the statement of tax deducted at source and making adjustment before 01 .06.2015. It does not mean that the Assessing Officer cannot pass a separate order under Section 234E of the Act le .....

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de, hereunder:- "396. Dacoity with murder - If any one of five or more persons, who are conjointly committing dacoity, commits murder in so committing dacoity, every one of those persons shall be punished with death, or imprisonment for life, or rigorous imprisonment for a term which may extend to ten years, and shall also be liable to fine." Similarly, Section 408 of Indian Penal Code provides for criminal breach of trust by a clerk or servant. In addition to imprisonment which may ex .....

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prisonment, shall also levy fine. If the contention of the Ld.counsel for the assessees is accepted, then the Magistrate or Sessions Judge, as the case may be, who is trying the accused for the offence punishable under Indian Pencal Code, may not have authority to levy fine. 10. It is well known principle that the fine prescribed under the Indian Penal Code has to be levied by the concerned Magistrate or Sessions Judge who is trying the offence punishable under the Indian Penal Code. Therefore, .....

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re filing the statement under Section 200(3) of the Act. However, if the assessee fails to pay the fee before filing the statement under Section 200(3) of the Act, the assessing authority is well within his limit in passing a separate order levying such a fee in addition to processing the statement under Section 200A of the Act. In other words, before 01.06.2015, the assessing authority could pass a separate order under Section 234E levying fee for delay in filing the statement under Section 200 .....

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