IN INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER I.TA No.4365/Mum/2015 ( Assessment Year: 2014-15 Mahesh Anand Sontakke, DCIT (TDS), City Survey No. 19, Central Processing Centre Vs. Raza Estate Above Suzuki (TDS), Show Room, Aayakar Bhavan, Opp. BMC School, Sector 3, Vaishali, Link Road, Sakinaka, Ghaziabad U.P. -201 010 Ghatkopar Mumbai-400 072 PAN/GIR No.BLTPS 7030R ( Appellant) .. (Respondent) Appellant by: None Respondent by: Shri N. Sathya Moorthy Date of Hearing :20.07.2016 Date of Pronouncement :23.09.2016 O R D E R PER C.N. PRASAD, JM: This appeal is filed by assessee against order of Ld. CIT(A)-59, Mumbai dated 14.05.2015 pertaining to assessment year 2014-15. 2. assessee has raised following grounds in its appeal: 2 ITA No.4365/M/2015 1. On facts and in circumstances of case and in law, Learned Commissioner of Income-tax (Appeals) erred in confirming Late Filing Levy of Rs. 15,000/- without providing proper opportunity to appellant. 2. On facts and in circumstances of case and in law, Learned Commissioner of Income-tax (Appeals) erred in confirming levying late filing levy of Rs. 15,000/- for delay in filing of quarterly statements (26Q). 3. On facts and in circumstances of case and in law, Learned Commissioner of Income-tax (Appeals) erred in confirming levying late filing levy . 3. None appeared on behalf of assessee inspite of notice issued to assessee. Therefore, we heard Ld. Departmental Representative and disposed off this matter ex parte on merit. 4. Brief facts are that Assessing Officer while passing intimation u/s.200A of I.T. Act charged late filing fee in respect of quarterly statement of TDS in Form No. 26Q. 5. assessee preferred appeal before Ld. CIT(A). However, Ld. CIT(A) dismissed appeal of assessee holding that issue is covered by decision of Hon ble Bombay High Court in case of Rashmikant Kundalia Vs Union of India dated 9.2.2015. 6. We have heard Ld. Departmental Representative and we find that similar issue has arisen in bunch of appeals namely M/s. Kash Realtors Pvt. Ltd & Others in ITA No. 4199/M/2015 dated 27.7.2016 wherein Co-ordinate Bench considering various 3 ITA No.4365/M/2015 decisions including jurisdictional decision which CIT(Appeals) relied on i.e. Rashmikant Kundalia Vs Union of India dated 9.2.2015 held as under: In this bunch of 17 appeals, sole issue involved is as to whether or not, for period prior to 01.06.15, fees under section 234E of Income Tax act, 1961 (hereinafter referred to as Act) in respect of defaults in furnishing TDS statements, could be levied in intimation under section 200A of Act. 2. In some of appeals there is representation by Ld. Counsel/authorized representative on behalf of assessee. However, in some of appeals, none has come present and adjournment has been sought. However, considering short and common issue involved in all appeals which can be adjudicated on basis of only few material facts, we proceed to decide appeals rejecting adjournment applications, if any, moved in any of above captioned appeals. 3. In all these cases, there was admittedly delay in filing of TDS returns. period involved is after 01.07.12, but prior to 01.06.15. These dates are relevant because 1.7.2012 is date of insertion of section 234E into Income Tax Act, 1961 whereas 1.6.2015 is 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 facts of these cases, in course of processing of TDS returns, Assessing Officer (TDS) [hereinafter referred to as AO(TDS)] raised demand in each of above cases by way of intimation issued under section 200A of Act for levy of fees under section 234E for delay in filing of TDS statement beyond period stipulated as per provisions of section 200(3) of Act. Aggrieved by this levy of fees, respective assessees carried matter in appeal before Ld. CIT(A) but without any success. Being aggrieved by orders of Ld. CIT(A), assessees in above captioned appeals have come in appeal before us. 4 ITA No.4365/M/2015 5. We have heard rival contentions and have also perused material on record. contention of Ld. respective Counsels for assessees has been that this issue has already been considered by Amritsar Bench of Tribunal in case of Sibia Healthcare Pvt. Ltd. vs. DCIT (2015) 171 TTJ (ASR) 0145 wherein Amritsar Bench of Tribunal has held that since intimation under section 200A is appealable order before Ld. CIT(A) (w.e.f. 1.7.2012) under section 246A(a) and therefore Ld. CIT(A) could have examined validity of adjustments made under intimation under section 200A in light and scope of provisions of section 200A. Tribunal further observed that since there was no enabling provision under section 200A before 01.06.15 providing for adjustment in respect of levy of fees under section 234E while processing TDS statements, hence in absence of such enabling provision, no such levy could be affected. 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. Tribunal therefore held that action of AO in making adjustments with regard to fees leviable under section 234E while processing TDS statements under section 200A for period prior to 1.6.2015, was not legally valid. It has therefore been contended on behalf of assessees that TDS statements filed by assessee has to be processed in manner as laid down in provisions of section 200A as in force during relevant period. That levy of fees under section 234E of Act, thus, cannot be subject matter of process, while processing statement under section 200A of Act so far as period prior to 01.06.15 is concerned. 6. Ld. D.R., on other hand, has relied upon decision of Hon ble Bombay High Court in case of Rashmikant Kundalia vs. Union of India dated 09.02.15 which decision has been relied upon by Ld. CIT(A) in impugned order wherein jurisdictional Hon ble Bombay High Court has upheld constitutional validity of section 234E. Ld. D.R. has further submitted that, even otherwise, section 234E of Act is independent section and AO (TDS) has otherwise jurisdiction to levy penalty for delay in filing TDS statements as provided under section 200(3) of Act. It has therefore been contended that AO(TDS) has rightly exercised his jurisdiction while making 5 ITA No.4365/M/2015 adjustment of fees leviable under section 234E for non compliance/delay in filing TDS statements as provided under section 200(3) of Act. 7. We have heard rival contentions and have also gone through case laws cited before us. So far as reliance of Revenue on decision of Hon ble Bombay High Court in case of Rashmikant Kundalia vs. Union of India (supra) is concerned, we find that in said case constitutional validity of section 234E was challenged. Hon ble Bombay High Court has upheld validity of section 234E. However, issue whether fees leviable under section 234E can be adjusted while processing TDS statements under section 200A of Act in relation to period prior to 01.06.15, has neither been raised before Hon ble Bombay High Court nor has been adjudicated. Hence, reliance of Revenue on decision of Hon ble Bombay High Court in case of Rashmikant Kundalia vs. Union of India (supra) so far as issue is concerned, is of no help to Revenue. One of contentions raised before Hon ble Bombay High Court was that under provisions of Act, no appeal is provided for or from arbitrary order passed under section 234E of Act. Hon ble Bombay High Court observed that right of appeal is not matter of right but is creature of statute and if legislature deems it fit not to provide remedy of appeal, so be it. Hon ble Bombay High Court has observed that even in such scenario, aggrieved party is not left remediless rather such aggrieved person can always approach Hon ble High Court in extraordinary equitable jurisdiction under article 226/227 of Constitution of India, as case may be. 8. However, in cases before us, grievance of assessees is not against levy of fees under section 234E of Act independently rather, issue is that while processing TDS statements under section 200A of Act, whether or not, fees leviable under section 234E can be adjusted therein? No doubt, order passed under section 200A is appealable order before Ld. CIT(A) under section 246 of Act (w.e.f. 1.7.2012). appellate order of Ld. CIT(A) passed under 250 of Act is further appealable before this Tribunal under section 253 of Act. Hence, we do not find any illegality in course adopted by assessees of invoking appealable jurisdiction of this Tribunal for redressal of their grievance on this issue. 6 ITA No.4365/M/2015 9. So far as issue whether for period prior to 01.06.15, such adjustment can be made while processing statements under section 200A of Act is concerned, we find that Amritsar Bench of Tribunal in case of Sibia Healthcare Pvt. Ltd. vs. DCIT (supra) has held that in absence of enabling provision under section 200A prior to 01.06.15 such power was not vested with AO (TDS). said decision has been further followed by Ahmedabad Bench of Tribunal in recent decision dated 05.02.16 in case of Varun Radiators Pvt. Ltd. vs DCIT (CPC- TDS) 2016-TIOL-436-ITAT-AHM. However, we have come across another decision of Chennai Bench dated 10.07.15 in case of Smt. G. Indhirani & Others vs. DCIT, CPC-TDS in ITA No.109/Mas/2015 & others wherein Chennai Bench of Tribunal has considered decision of Amritsar Bench of Tribunal in case of Sibia Healthcare Pvt. Ltd. vs. DCIT (supra) and has arrived at similar finding that under section 200A, in absence of enabling provision for period before 01.06.15, levy of fee under section 234E while processing TDS statements was not permissible to AO (TDS). However, co-ordinate Chennai Bench of Tribunal has also examined other contention of Revenue that section 234E is independent section and fees can be levied by AO (TDS), independent of provisions of section 200A, for default/delay in filing TDS statements as prescribed under section 200(3) of Act. Tribunal, considering above submissions, held that if assessee fails to pay fees before filing statement under section 200(3) of Act, Assessing Authority may pass separate order levying of such fee under section 234E of Act, if same is not barred by time limit or otherwise under any other provisions of law. Assessing Authority, however, could not adjust fees leviable under section 234E while processing TDS statement under section 200A of Act. However, after 01.06.15 Assessing Authority is well within his limit to levy fee under section 234E of Act even while processing statement under section 200A and making adjustment. relevant part of decision of Chennai Bench of Tribunal for sake of completeness is reproduced as under: 4. Ld. counsel invited our attention to Section 234A of Act and submitted that when assessee fails to deliver statement within prescribed time, assessee is liable to 7 ITA No.4365/M/2015 pay by way of fee sum of Z200/- for every day during such period failure continues. Referring to word used in section 234E "he shall be liable to pay", Ld. counsel pointed out that assessee is liable to pay fee. However, it does not empower Assessing Officer to levy fee. Section 234E(3) of Act provides for payment of fee before delivery of statement under Section 200(3) of Act. Therefore, fee has to be paid by assessee voluntarily before filing statement under Section 200(3) of Act and assessing authority has no power to levy fee. 5. On contrary, Sh. P. Radhakrishnan, Ld. Departmental Representative, submitted that Section 234E of Act provides for payment of fee, if assessee fails to deliver statement as prescribed in Section 200(3) of Act. Therefore, Assessing Officer has every authority to levy fee either by separate order or while processing statement under Section 200A of Act. 6. We have considered rival submissions on either side and perused relevant material on record. Section 200A of Act provides for processing of statement of tax deducted at source by making adjustment as provided in that Section. For purpose of convenience, we are reproducing provisions of Section 200A of Act:- "200A. (1) Where statement of tax deduction at source or correction statement has been made by person deducting any sum (hereafter referred to in this section as deductor) under section 200, such statement shall be processed in following manner, namely : (a) sums deductible under this Chapter shall be computed after making following adjustments, namely : (i) any arithmetical error in statement ; or (ii) incorrect claim, apparent from information in statement (b) interest, if any, shall be computed on basis of sums deductible as computed in statement ; (c) sum payable by, or amount of refund 8 ITA No.4365/M/2015 due to, 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) intimation shall be prepared or generated and sent to deductor specifying sum determined to be payable by, or amount of refund due to, him under clause (c); and (e) amount of refund due to deductor in pursuance of determination under clause (c) shall be granted to deductor: Provided that no intimation under this sub-section shall be sent after expiry of one year from end of financial year in which statement is filed. Explanation -For purposes of this sub-section, "art incorrect claim apparent from any information in statement" shall mean claim, on basis of entry, in statement- (i) of item, which is inconsistent with another entry of 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 provisions of this Act; (2) For purposes of processing of statements under sub- section (1), Board may make scheme for centralised processing of statements of tax deducted at source to expeditiously determine tax payable by, or refund due to, deductor as required under said sub-section. 7. Assessing Officer cannot make any adjustment other than one prescribed above in Section 200A of Act. By Finance Act, 2015, with effect from 01.06.2015, Parliament amended Section 200A by substituting sub-section (1) of clauses (c) to (e). For purpose of convenience, we are reproducing amendment made in Section 200A by Finance Act, 2015 as under:- "In section 200A of Income-tax Act, in sub-section (1), for clauses (c) to (e), following clauses shall be substituted with effect from 1st day of June, 2015, namely:- 9 ITA No.4365/M/2015 "(c) fee, if any, shall be computed in accordance with provisions of section 234E; (d) sum payable by, or amount of refund due to, d e du c t o r s ha ll b e d e t e rmin e d ft e r d ju s t me n t o f t h e amount computed under clause (b) and clause (c) against any amount paid under section 200 or section 201 or section 234E and any amount paid otherwise by way of tax or interest or fee; (e) intimation shall be prepared or generated and sent to deductor specifying sum determined to be payable by, or amount of refund due to, him under clause (d); and (f) amount of refund due to deductor in pursuance of determination under clause (d) shall be granted to deductor." Therefore, it is obvious that prior to 01.06.2015, there was no enabling provision in Section 200A of Act for making adjustment in respect of statement filed by assessee with regard to tax deducted at source by levying fee under Section 234E of Act. Parliament for first time enabled Assessing Officer to make adjustment by levying fee under Section 234E of Act with effect from 01.06.2015. Therefore, as rightly submitted by Ld. counsel for assessees, while processing statement under Section 200A of Act, Assessing Officer cannot make any adjustment by levying fee under Section 234E prior to 01.06.2015. In case before us, Assessing Officer levied fee under Section 234E of Act while processing statement of tax deducted at source under Section 200A of Act. Therefore, this Tribunal is of considered opinion that fee levied by Assessing Officer under Section 234E of Act while processing statement of tax deducted at source is beyond scope of adjustment provided under Section 200A of Act. Therefore, such adjustment cannot stand in eye of law. 8. next contention of assessee is that Section 234E of Act says that assessee "shall be liable to pay" by way of fee, therefore, assessee has to voluntarily pay fee and Assessing Officer has no authority to levy fee. argument of Ld.counsel for assessee is very attractive and fanciful. However, we do not find any substance in that argument. When Section 234E clearly says that assessee 10 ITA No.4365/M/2015 is liable to pay fee for delay in delivery of statement with regard to tax deducted at source, assessee shall pay fee as provided under Section 234E(1) of Act before delivery of statement under Section 200(3) of Act. If assessee fails to pay fee for periods of delay, then assessing authority has all powers to levy fee while processing statement under Section 200A of Act by making adjustment after 01 .06.2015. However, prior to 01 .06.2015, Assessing Officer had every authority to pass order separately levying fee under Section 234E of Act. What is not permissible is that levy of fee under Section 234E of Act while processing statement of tax deducted at source and making adjustment before 01 .06.2015. It does not mean that Assessing Officer cannot pass separate order under Section 234E of Act levying fee for delay in filing statement as required under Section 200(3) of Act. 9. contention of assessee can also be examined in light of provisions of Indian Penal Code. Section 396 of Indian Penal Code provides for punishment for dacoity with murder. punishment is imprisonment for life or rigorous imprisonment for term which may be extended to ten years and also liable to fine. For 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 so committing dacoity, every one of those persons shall be punished with d eath, or imprisonment for life, or rigorous imprisonment for 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 clerk or servant. In addition to imprisonment which may extend to seven years, accused who is found to be guilty shall also be liable to fine. Similarly, other provisions of Indian Penal Code also say that in addition to imprisonment, accused shall be liable to pay fine. language used by Parliament in Indian Penal Code is "shall also be liable to fine". This means that Magistrate or Sessions Judge, who tries accused for offence punishable under provisions of Indian Penal Code, in addition to punishment of imprisonment, shall also levy fine. If contention of Ld.counsel for assessees is accepted, then Magistrate or Sessions Judge, as case may be, who is trying accused for offence punishable under Indian Pencal Code, may not have authority to levy fine. 11 ITA No.4365/M/2015 10. It is well known principle that fine prescribed under Indian Penal Code has to be levied by concerned Magistrate or Sessions Judge who is trying offence punishable under Indian Penal Code. Therefore, contention of Ld.counsel that merely because Parliament has used language he shall be liable to pay by way of fee", assessee has to pay fee voluntarily and Assessing Officer has no authority to levy fee could not be accepted. No one would come forward to pay fee voluntarily unless there is compulsion under statutory provision. Parliament welcomes citizens to come forward and comply with provisions of Act by paying prescribed fee before filing statement under Section 200(3) of Act. However, if assessee fails to pay fee before filing statement under Section 200(3) of Act, assessing authority is well within his limit in passing separate order levying such fee in addition to processing statement under Section 200A of Act. In other words, before 01.06.2015, assessing authority could pass separate order under Section 234E levying fee for delay in filing statement under Section 200(3) of Act. However, after 01 .06.2015, assessing authority is well within his limit to levy fee under Section 234E of Act even while processing statement under Section 200A and making adjustment. 11. In view of above discussion, this Tribunal is of considered opinion that Assessing Officer has exceeded his jurisdiction in levying fee under Section 234E while processing statement and make adjustment under Section 200A of Act. Therefore, impugned intimation of lower authorities levying fee under Section 234E of Act cannot be sustained in law. However, it is made clear that it is open to Assessing Officer to pass separate order under Section 234E of Act levying fee provided limitation for such levy has not expired. Accordingly, intimation under Section 200A as confirmed by CIT(Appeals) in sofar as levy of fee under Section 234E is set aside and fee levied is deleted. However, other adjustment made by Assessing Officer in impugned intimation shall stand as such. 12. In result, all appeals filed by assessees are allowed as indicated above. 7. In case in hand also intimation u/s. 200A has been processed prior to 1.6.2015 wherein fee u/s. 234E was levied. Taking consistent view in this matter, following said decision, we 12 ITA No.4365/M/2015 set aside demand raised u/s. 234E of Act in intimation processed u/s. 200A of Act prior to 1.6.2015. 8. In result, appeal filed by assessee is allowed. Order pronounced in open court on 23rd September, 2016. Sd/- Sd/- (RAJENDRA) (C.N. PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 23rd September, 2016 Rj , Sr. PS Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai Mahesh Anand Sontakke v. DCIT (TDS), Central Processing Centre (TDS), Ghaziabad