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2016 (11) TMI 378 - ITAT MUMBAI

2016 (11) TMI 378 - ITAT MUMBAI - TMI - Late Filing Fee U/S 234E - default in submitting the TDS statements in time - Held that:- Assessing Officer has exceeded his jurisdiction in levying fee under Section 234E while processing the statement and make adjustment under Section 200A of the Act. Therefore, the impugned intimation of the lower authorities levying fee under Section 234E of the Act cannot be sustained in law. However, it is made clear that it is open to the Assessing Officer to pass a .....

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ITAT CHENNAI] - Decided in favour of assessee - I.T. A. No. 3850/Mum/2015 - Dated:- 9-9-2016 - SHRI R.C. SHARMA, AM AND SHRI SANDEEP GOSAIN, JM For The Appellant : Shri Vinayak S. Gokhale For The Respondent : Shri Neil Philip ORDER Per Sandeep Gosain, Judicial Member: This appeal by the revenue is directed against the order dated 06.04.2015 of Commissioner of Income Tax (Appeals)-59, Mumbai (hereinafter called as the CIT(A) ) for assessment year 2013-14on the grounds mentioned below:- 1) The LD. .....

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les for the same act. 3) (a) The Ld. CIT(A) erred by following the Judgement of Bombay High Court's dismissing, the Writ Petition Filed challenging the Jurisdiction or Competence for levy of Late Filing Fee U/S 234E. However for the assessee in this case is altogether different, as per ground No.2 in the grounds of appeal before his authority, is with regards to Time of the TDS Statement to be filed by the deductor which was dealt in the speaking order passed by his judicial authority. (b) U .....

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Finance Act, 2015, does not permit processing of TDS statement for 'default in payment of Late Fees' except i) Any arithmetical error, or incorrect claim, or ii) default in payment of Interest and iii) TDS Payable or refundable. iv) No notice of demand can be issued to recover Late Fee U/S 234E, as mentioned in item 5 of the intimation issued to the assessee dated 04/03/2014. Thus Late Fee for delay in submission of Quarterly Statements cannot be recovered by way of processing U/S 200 A .....

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g provision therein for raising a demand in respect of levy of fees under section 234E. 6) As per the limited Mandate of Section 200A, which, at the relevant point of time, permitted computation of amount recoverable from, or payable to, the tax deductor after making adjustments as already stated in paragraph 3(d), i),ii),iii) only and no other adjustments were permissible in the amount refundable to, or recoverable from, the tax deductor, were permissible in accordance with the law as it existe .....

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of fee of ₹ 53,200/- u/s 234E of the Act. In the present case ITO-TDS has passed order u/s 200A of I.T. Act thereby determining sum of ₹ 53,200/- to be paid by assessee vide order dated 04.03.2014. 3. Aggrieved by the order of the ITO-TDS-1(1)(4), assessee filed the appeal before CIT(A) and the CIT(A) after considering the case of the assessee had dismissed the appeal filed by the assessee vide order dated 06.04.2015. 4. Aggrieved by the order of CIT(A), the assessee filed the prese .....

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ted vs. Dy. CIT in the A.Y. 2013-14 and Writ Petition No.771 of 2014 in the case of Mr Rashmikant Kundalia and another vs. Union of India and others. 6. First of all we refer to the order passed by Hon ble ITAT Chennai Bench in ITA Nos.1019 to 1021/Mds/2015 and 1089 to 1092/Mds/2015 wherein identical question was in dispute and the Hon ble ITAT in the afore mentioned ITA had decided the said issue. The operative para is reproduced below for the sake of reference: 6. We have considered the rival .....

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tion 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 payable by, or the amount of refund due to, the deductor shall be det .....

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at 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 of rate of deduction of tax at s .....

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15, 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 the Income-tax Act, in sub-section (1), for clauses (c) to (e), the following clauses shall be substituted with effect from the pt day of June, 2015, namely:- "(c) the fee, if any, shall be computed in accordance with the pro .....

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nd (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 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 f .....

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ered 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 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 Office .....

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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 authority to pass an order separately levying fee under Section 234E of the Act. What is not permissible 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 .....

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so liable to fine. For the purpose of convenience, we are reproducing Section 396 of Indian Penal Code, hereunder:- "396. Dacoity with murder - If anyone of five or more persons, who are conjointly committing dacoity, commits murder in so committing dacoity, everyone 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 pro .....

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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 assessee is accepted, then the Magistrate or Sessions Judge, as the case may be, who is trying the accused for the offence punishable under Indian Penal 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 .....

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e 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 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 pa .....

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