TMI Blog2019 (5) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... confer power on the CIT(A) to declare the return of TDS as non est in law in a case where the return of TDS is filed without payment of fee u/s.234E of the Act. Besides the above, in the present case, the levy of fee u/s. 234E has already been deleted by the CIT(A) and therefore these provisions cannot be of any help to the conclusions of the CIT(Appeals) that the return filed without payment of fee u/s. 234E is invalid and can be declared as non est in law. As far as the power of enhancement under Explanation to section 251(1) which was relied on by the ld. DR is concerned, the Explanation is only with regard to clauses (a), (aa) and (b) of section 251(1) and is not applicable to clause (c). CIT(Appeals) in the cases to which the said clause applies can pass such orders as he thinks fit, but that power is circumscribed by the words in the appeal . Therefore, the CIT(Appeals) cannot travel beyond the subject matter of the appeal, which in the present case is as to, whether fee u/s. 234E can be levied or not; and not the question, whether the return of TDS filed by the assessee is non est in law? We are, therefore, of the view that the CIT(Appeals) had no power in the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues. (2) The amount of fee referred to in sub-section (1) shall not 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 delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012. 3. Aggrieved by the aforesaid order of the AO, the assessee filed an appeal before the CIT(A). The assessee s contention before CIT(A) was that the provisions of section 234E of the Act was inserted by the Finance Act, 2012 w.e.f. 1.7.2012. Section 200A of the Act is a provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1), the Board may make a scheme for centralised processing of statements of tax deducted at source to expeditiously determine the tax payable by, or the refund due to, the deductor as required under the said subsection. 4. Clause (c) to (f) of section 200A(1) was substituted by the Finance Act, 2015 w.e.f. 1.6.2015. The assessee contended that AO could levy fee u/s.234E of the Act while processing a return of TDS filed u/s.200(3) of the Act only by virtue of the provisions of Sec.200A(1)(c), (d) (f) of the Act and those provisions came into force only from 1.6.2015 and therefore the authority issuing intimation u/s. 200A of the Act while processing return of TDS filed u/s.200(3) of the Act, could not levy fee u/s. 234E of the Act in respect of statement of TDS filed prior to 1.6.2015. The assessee, thus, challenged the validity of charging of fee u/s. 234E of the Act. The assessee relied on the decision of the Hon ble High Court of Karnataka in the case of Fatehraj Singhvi v. UOI [2016] 73 taxmann.com 252 wherein the Hon ble Karnataka High Court held that amendment made u/s. 200A providing that fee u/s. 234E of the Act could be computed at the time of processin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e return shall be treated as non-est. However, even now no fee is paid by the appellant. 21. The only provision which provides for filing of belated TDS return is section 234E. Considering this the Hon. Bombay High Court had held (already discussed supra) that this is nothing but a privilege and a special service to the deductor allowing him to file the TDS return/statements beyond the time prescribed by the Act and/or the Rules. Thus, this argument no. 3 is also rejected. 8. The next argument of the ld. Counsel for the assessee was that u/s. 251(1)(c) of the Act which is applicable in the present case, the CIT(A) has no power to enhance and therefore in an appeal challenging the validity of levy of fee u/s. 234E of the Act by the assessee, he cannot go into the question, whether TDS return filed by the assessee has to be treated as non est . The CIT(Appeals), however, held that the CIT(A) has plenary powers in disposing of an appeal and that the CIT(A) was duty bound to correct errors in the orders of lower authorities. The CIT(A), therefore, rejected this contention of the assessee also. 9. Aggrieved by the order of CIT(Appeals), in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal was only with regard to correctness of levy of fee u/s. 234E of the Act. In that view of the matter, it was submitted that the CIT(Appeals) erred in going into an issue which was not subject matter of appeal before him. This submission was made without prejudice to the argument that u/s. 251(1)(c), the CIT(A) does not have powers of enhancement. U/s. 251(1)(c) which is applicable in the present case, the CIT(A) may pass such orders in the appeal as he thinks fit. It was submitted that the words in the appeal in section 251(1)(c) makes it clear that the CIT(Appeals) cannot travel beyond the subject matter of the appeal which in the case of assessee was validity of levy of fee u/s. 234E of the Act. It was, therefore, submitted that the order of CIT(Appeals) to the extent that it declares the return of income as non est , should be held to be bad in law and quashed. 13. We have given a very careful consideration to the rival submissions. The first aspect is as to, whether the TDS return filed u/s. 200(3) of the Act can be declared as non est . We have already extracted the provisions of section 200(3) of the Act. There is no such power confe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment; ( b ) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; ( c ) in any other case, he may pass such orders in the appeal as he thinks fit. (2) The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Explanation .-In disposing of an appeal, the Commissioner (Appeals) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the Commissioner (Appeals) by the appellant. 15. It is not in dispute before us that clause (c) of section 251 is the clause applicable in the present case. A reading of this clause shows that the CIT(Appeals) in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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