Rajaguru Spinning Mills Pvt. Ltd., ... vs Assessee

Smt. G. Indhirani, The Deputy Commissioner of 11/105, Seerangan Street, v. Income Tax, CPC - TDS, No.5, Sangeevrayan Pet, TDS - CPC, Aaykar Bhavan, Salem - 636 006. Sector - 3, Vaishali, Ghaziabad, Uttar Pradesh - 201010. PAN : AAHPI 0407 J (अपीलाथ+/Appellant) (,-यथ+/Respondent)

आयकर अपील सं./ITA No.1089/Mds/2015 नधा'रण वष' / Assessment Year : 2013-14

M/s Rajaguru Spinning Mills Ltd., The Deputy Commissioner of C/o Shri S. Sridhar, Advocate, v. Income Tax, CPC - TDS, 112/1, Periyar Street, TDS - CPC, Aaykar Bhavan, Erode - 638 001. Sector - 3, Vaishali, Ghaziabad, Uttar Pradesh - 201010. PAN : AAACR 9898 Q (अपीलाथ+/Appellant) (,-यथ+/Respondent)

आयकर अपील सं./ITA No.1090/Mds/2015 नधा'रण वष' / Assessment Year : 2013-14

Shri A. Dhakshinamurthy, The Deputy Commissioner of C/o Shri S. Sridhar, Advocate, v. Income Tax, CPC - TDS, 112/1, Periyar Street, TDS - CPC, Aaykar Bhavan, Erode - 638 001. Sector - 3, Vaishali, Ghaziabad, Uttar Pradesh - 201010. PAN : ACGPD 9193 F (अपीलाथ+/Appellant) (,-यथ+/Respondent) 2 I.T.A. Nos.1019 to 1021/Mds/15 I.T.A. Nos.1089 to 1092/Mds/15

आयकर अपील सं./ITA No.1091/Mds/2015 नधा'रण वष' / Assessment Year : 2013-14

M/s Padma Textiles, The Deputy Commissioner of C/o Shri S. Sridhar, Advocate, v. Income Tax, CPC - TDS, 112/1, Periyar Street, TDS - CPC, Aaykar Bhavan, Erode - 638 001. Sector - 3, Vaishali, Ghaziabad, Uttar Pradesh - 201010. PAN : ACGPD 9193 F (अपीलाथ+/Appellant) (,-यथ+/Respondent)

आयकर अपील सं./ITA No.1092/Mds/2015 नधा'रण वष' / Assessment Year : 2013-14

M/s Murthy Lungi Company, The Deputy Commissioner of C/o Shri S. Sridhar, Advocate, v. Income Tax, CPC - TDS, 112/1, Periyar Street, TDS - CPC, Aaykar Bhavan, Erode - 638 001. Sector - 3, Vaishali, Ghaziabad, Uttar Pradesh - 201010. PAN : AAHFM 9766 E (अपीलाथ+/Appellant) (,-यथ+/Respondent)

अपीलाथ+ क. ओर से/Appellants by : Shri S. Sridhar, Advocate ,-यथ+ क. ओर से/Respondent by : Sh. P. Radhakrishnan, JCIT

सन ु वाई क. तार ख/Date of Hearing : 25.06.2015 घोषणा क. तार ख/Date of Pronouncement : 10.07.2015

आदे श /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

All these appeals of the different assessees are directed

against the respective orders of the Commissioner of Income Tax

(Appeals), Salem. Since common issue arises for consideration in

all these appeals, we heard these appeals together and disposing

the same by this common order.

3 I.T.A. Nos.1019 to 1021/Mds/15

I.T.A. Nos.1089 to 1092/Mds/15

2. The only issue arises for consideration is with regard to levy

of fee under Section 234E of the Income-tax Act, 1961 (in short 'the

Act') while processing the statement furnished by the assessees

under Section 200A of the Act.

3. Shri S. Sridhar, the Ld.counsel for the assessees, submitted

that under Section 200A of the Act, the statement filed by the

assessee has to be processed in the manner in which it was laid

down. Levy of fee under Section 234E of the Act cannot be a

subject matter of process, while processing the statement under

Section 200A of the Act. Referring to Finance Act, 2015, the

Ld.counsel pointed out that with effect from 01.06.2015, the

Parliament by way of amendment to Section 200A of the Act

empowered the Assessing Officer to levy fee under Section 234E of

the Act while processing under Section 200A of the Act. Therefore,

according to the Ld.counsel, prior to 01.06.2015, the Assessing

Officer had no authority to levy fee, if any, under Section 234E of

the Act. Referring to the decision of Amritsar Bench of this Tribunal

in I.T.A. No.90/Asr/2015 dated 09.06.2015, the Ld.counsel pointed

out that prior to 01.06.2015, there was no enabling provision in

Section 200A for raising a demand in respect of levy of fee under

Section 234E of the Act. Therefore, according to the Ld. counsel, 4 I.T.A. Nos.1019 to 1021/Mds/15 I.T.A. Nos.1089 to 1092/Mds/15

the fee levied under Section 234E of the Act, while processing the

statement filed under Section 200A of the Act is not justified.

According to the Ld. counsel, levy of fee under Section 234E of the

Act while processing the statement is beyond the scope of Section

200A of the Act.

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 `200/- for every day during such a period the

failure continues. Referring to the word used in the section 234E

"he shall be liable to pay", the Ld.counsel pointed out that the

assessee is liable to pay fee. However, it does not empower the

Assessing Officer to levy the fee. Section 234E(3) of the Act

provides for payment of the fee before delivery of statement under

Section 200(3) of the Act. Therefore, the fee has to be paid by the

assessee voluntarily before filing the statement under Section

200(3) of the Act and the assessing authority has no power to levy

the fee.

5. On the contrary, Sh. P. Radhakrishnan, the Ld. Departmental

Representative, submitted that Section 234E of the Act provides for

payment of fee, if the assessee fails to deliver the statement as 5 I.T.A. Nos.1019 to 1021/Mds/15 I.T.A. Nos.1089 to 1092/Mds/15

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 the statement of tax deducted at source

by making adjustment as provided in that Section. For the purpose

of convenience, we are reproducing the provisions of Section 200A

of the Act:-

"200A. (1) Where a statement of tax deduction at source or a correction statement has been made by a person deducting any sum (hereafter referred to in this section as deductor) under section 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 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 ;

6 I.T.A. Nos.1019 to 1021/Mds/15 I.T.A. Nos.1089 to 1092/Mds/15

(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 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 statements under sub-section (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 sub-section.

7. The Assessing Officer cannot make any adjustment other

than the one prescribed above in Section 200A of the Act. By

Finance Act, 2015, 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:-

7 I.T.A. Nos.1019 to 1021/Mds/15

I.T.A. Nos.1089 to 1092/Mds/15

"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 determined after adjustment of the 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) 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 (d);

and

(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 fee under Section 234E of the Act with

effect from 01.06.2015. Therefore, as rightly submitted by the

Ld.counsel for the assessees, while processing statement under

Section 200A of the Act, the Assessing Officer cannot make any 8 I.T.A. Nos.1019 to 1021/Mds/15 I.T.A. Nos.1089 to 1092/Mds/15

adjustment by levying fee under Section 234E prior to 01.06.2015.

In the case before us, the Assessing Officer levied fee under

Section 234E of the Act while processing the statement of tax

deducted at source under Section 200A of the Act. Therefore, this

Tribunal is of the considered 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 Officer has no authority to levy fee. The argument of the

Ld.counsel for the assessee is very attractive and fanciful.

However, we do not find any substance in that argument. When

Section 234E clearly says that the assessee is liable to pay fee for

the delay in delivery of the statement with regard to tax deducted at

source, the assessee shall pay the fee as provided under Section

234E(1) of the Act before delivery of the statement under Section

200(3) of the Act. If the assessee fails to pay the fee for the periods

of delay, then the assessing authority has all the powers to levy fee 9 I.T.A. Nos.1019 to 1021/Mds/15 I.T.A. Nos.1089 to 1092/Mds/15

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 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

levying fee for the delay in filing the statement as required under

Section 200(3) of the Act.

9. The contention of the assessee can also be examined in the

light of the provisions of Indian Penal Code. Section 396 of Indian

Penal Code provides for punishment for dacoity with murder. The

punishment is imprisonment for life or rigorous imprisonment for a

term which may be extended to ten years and also liable to fine.

For the 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 death, or imprisonment for life, or rigorous imprisonment for a 10 I.T.A. Nos.1019 to 1021/Mds/15 I.T.A. Nos.1089 to 1092/Mds/15

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 extend to seven years, the accused who is found to be

guilty shall also be liable to fine. Similarly, the other provisions of

Indian Penal Code also say that in addition to imprisonment, the

accused shall be liable to pay fine. The language used by the

Parliament in Indian Penal Code is "shall also be liable to fine". This

means that the Magistrate or Sessions Judge, who tries the

accused for 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 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, the contention of the Ld.counsel that

merely because the Parliament has used the language "he shall be 11 I.T.A. Nos.1019 to 1021/Mds/15 I.T.A. Nos.1089 to 1092/Mds/15

liable to pay by way of fee", the assessee has to pay the fee

voluntarily and the Assessing Officer has no authority to levy fee

could not be accepted. No one would come forward to pay the fee

voluntarily unless there is a compulsion under the statutory

provision. The Parliament welcomes the 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 pass a separate order under Section 234E levying fee for

delay in filing the statement under Section 200(3) of the Act.

However, after 01.06.2015, the assessing authority is well within his

limit to levy fee under Section 234E of the Act even while

processing the statement under Section 200A and making

adjustment.

11. In view of the above discussion, this Tribunal is of the

considered opinion that the Assessing Officer has exceeded his

jurisdiction in levying fee under Section 234E while processing the 12 I.T.A. Nos.1019 to 1021/Mds/15 I.T.A. Nos.1089 to 1092/Mds/15

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 separate order under Section 234E of the Act levying fee

provided the limitation for such a levy has not expired. Accordingly,

the intimation under Section 200A as confirmed by the CIT(Appeals)

in sofar as levy of fee under Section 234E is set aside and fee

levied is deleted. However, the other adjustment made by the

Assessing Officer in the impugned intimation shall stand as such.

12. In the result, all the appeals filed by the assessees are

allowed as indicated above.

Order pronounced on 10th July, 2015 at Chennai.

sd/- sd/- (ए. मोहन अलंकामणी) (एन.आर.एस. गणेशन) (A. Mohan Alankamony) (N.R.S. Ganesan) लेखा सद य/Accountant Member या यक सद य/Judicial Member

चे नई/Chennai, th 4दनांक/Dated, the 10 July, 2015. Kri.

आदे श क. , त5ल6प अ7े6षत/Copy to:

अपीलाथ+/Appellant / ,-यथ+/Respondent / आयकर आय8 ु त (अपील)/CIT(A), Salem / आयकर आय8 ु त/CIT, TDS, Chennai / 6वभागीय , त न ध/DR / गाड' फाईल/GF.