M/s.NESOTE Technologies P. Ltd, Kottayam v. The ITO, Kottayam

ITA 302/COCH/2016 | 2013-2014
Pronouncement Date: 14-10-2016 | Result: Allowed

Appeal Details

RSA Number 30221914 RSA 2016
Assessee PAN AACCN9022G
Bench Cochin
Appeal Number ITA 302/COCH/2016
Duration Of Justice 3 month(s) 10 day(s)
Appellant M/s.NESOTE Technologies P. Ltd, Kottayam
Respondent The ITO, Kottayam
Appeal Type Income Tax Appeal
Pronouncement Date 14-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 14-10-2016
Date Of Final Hearing 13-10-2016
Next Hearing Date 13-10-2016
Assessment Year 2013-2014
Appeal Filed On 04-07-2016
Judgment Text
ITA NO .302 TO 305/C/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH (SMC) KOCHI BEFORE SHRI GEORGE GEORGE K JUDICIAL MEMBER ITA NO S 302 TO 305/COCH/2016 (A SST YEAR S 2013 - 14 & 2014 - 15 ) M/S NESOTE TECHNOLOGIES P LTD VALIAPILLY BUILDING KADUTHURUTY PO KOTTAYAM VS THE INCOME TAX OFFICER WARD 1 KOTTAYAM ( APPELLANT) (RESPONDENT) PAN NO. AACCN9022G ASSESSEE BY SH CBM WARRIER REVENUE BY SH A DHANARAJ SR DR DATE OF HEARING 13 TH OCT 2016 DATE OF PRONOUNCEMENT 14 TH OCT 2016 ORDER PER GEORGE GEORGE K J M : THESE FOUR APPEALS AT THE INSTANCE OF THE ASSESSEE ARE DIRECTED AGAINST THE CONSOLIDATED ORDER OF THE CIT(A) DATED 24.5. 2016. THE RELEVANT ASSESSMENT Y EARS ARE 2013 - 14 AND 2014 - 1 5 . 2 THE GROUNDS RAISED IN THE APPEAL MEMO FOR ALL THE FOUR APPEALS ARE IDENTICAL E XCEPT FOR THE VARIANCE IN THE AMOUNT S . THE GROUND RAI S ED IN ITA NO.302/C/2016 FOR THE A Y 2013 - 14 READ AS FOLLOWS: 1 THE LEVY OF LATE FILING FEE U/S 234E OF THE I T A CT RS.38 400/ - IS NOT IN ACCORDANCE WITH LAW AND FACTS OF THE CASE. ITA NO .302 TO 305/C/2016 2 2. THE LATE FILING FEE U/S 234E IN RESPECT OF THE PERIOD PREVIOUS TO 1.6.2015 IS AGAINST T H E PROVISIONS OF THE A C T AND HENCE THE LIABILITY TO BE CANCELLED. 3. THE CIT(A) HAS GONE WRONG IN CONFIRMING THE LEVY OF LATE FEE U/S 234E 4. FOR THE ABOVE REASONS THE APPEAL MAY SUBMIT THE LEVY OF LATE FEEING FEE U/S 234E MAY BE CANCELLED. 3 BRIEFLY SATED TH E FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IS A COMPANY. IT HAD FILED TDS RETURNS BELATED FOR THE F INANCIAL YEA R 2012 - 13 FOR THE 2 ND 3 RD AND 4 TH QUARTER S . F OR THE FINANCIAL YEAR 2013 - 14 THE TDS RETURN WAS FILED BELATEDLY FOR THE 2 ND QUARTER. THE TDS RETURNS WERE PROCESS ED AND THE ORDERS U/S 200A OF THE I T ACT WERE PASSED BY LEVYING LATE FEE U/S 234E FOR THE BELATED FI LING OF TDS RETURNS. THE LEVY OF LATE FEE FOR THE VARIOUS QUARTERS FOR THE A Y 201 3 - 14 AND 2014 - 15 ARE AS FOLLOWS: I ) RS. 39 900 FOR Q - 3 A Y 2013 - 14 II ) RS. 8 400/ - FOR Q - 2 A Y 2013 - 14 III ) RS.15 230/ - FOR Q - 4 A Y 2013 - 14 IV ) RS.22 400/ - FOR Q 1 A Y 2014 - 15 4 AGGRIEVED BY THE IMPOSITION OF LATE FEE WHILE PASSING INTIMATION U/S 200A OF THE ACT TH E ASSESSEE PREFERRED APPEAL S TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) CONFIRMED THE IMPOSITION OF LATE FEE AND DISMISSED THE APPEAL S FILED BY THE ASSESSEE. ITA NO .302 TO 305/C/2016 3 5 AGGRIEVED BY THE ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL . THE LD COUNSEL FOR T HE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE INCOME TAX AUTHORITIES. THE LD DR PRESENT WAS DULY HEARD. 6 I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. TO ANALYZE THE ISSUE IT IS NECESSARY TO EXAM INE THE RELEVANT PROVISIONS NAMELY 234E 200A PRIOR TO ITS AMEND MENT W.E.1.6.2015 AND POST AMENDMENT. 6.1 SECTION 234E OF THE A CT WHICH WAS INSERTED BY FINANCE ACT 2012 W.E.F 1.7.2012 READ AS FOLLOWS: 234E. FEE FOR DEFAULTS IN FURNISHING STATEMENTS (1) WITHOUT PREJUDICE TO THE PROVISIONS OF THE ACT WHERE A PERSON FAILS TO DELIVER OR CAUSE TO BE DELIVERED A STATEMENT WITHIN THE TIME PRESCRIBED IN SUB - SECTION (3) OF SECTION 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 20 0 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 DELI VERED FOR TAX DEDUCTED AT SOURCE OR TAX COLLECTED AT SOURCE AS THE CASE MAY BE ON OR AFTER THE 1ST DAY OF JULY 2012 . 6.2 S ECTION 200A WHICH WAS INSERTED BY THE FINANCE ACT 2009 WITH EFFECT FROM 1ST APRIL 2010 READS AS FOLLOWS: ITA NO .302 TO 305/C/2016 4 200A: PROCESSING OF STATEMENTS OF TAX DEDUCTED AT SOURCE (1) WHERE A STATEMENT OF TAX DEDUCTION AT SOURCE OR A CORRECTION STATEMENT HAS BEEN MADE BY A PERSON DEDUCTING ANY SUM (HEREAFTER R EFERRED 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 ARITHMETICA L 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; (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 O F 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 P URPOSES 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 PRO CESSING 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. ITA NO .302 TO 305/C/2016 5 6.3 FINANCE ACT 2012 W.E.F 1.6.2015 HAD AMENDED SECTION 200A OF THE A C T. THIS AMENDMENT AS STATED IN THE FINANCE ACT 2015 READS AS FOLLOWS: 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. 6.4 . IN VIEW OF THE ABOVE AMENDMENT POST 1ST JUNE 2015 IN THE COURSE OF PROCESSING OF A TDS STATEMENT AND ISSUANCE OF INTIMATION UNDER SECTION 200A IN RESPECT THEREOF AN ADJUSTMENT COULD ALSO BE MADE IN RESPECT OF THE FEE IF ANY SHALL BE COMPUTED IN ACCORDANCE WITH T HE PROVISIONS OF SECTION 234E. THERE IS NO DISPUTE THAT WHAT IS IMPUGNED IN APPEAL BEFORE ME IS THE INTIMATIO N UNDER SECTION 200A OF THE ACT . I AM CONCERNED WITH PERIOD PRIOR TO 1.6.2015 AND PRIOR TO 1ST JUNE 2015 THER E WAS NO ENABLING PROVISION U / 200A FOR RAISING A DEMAND IN RESPECT OF LEVY OF FEES UNDER SECTION 234E OF THE ACT . WHILE EXAMINING THE CORRECTNESS OF THE INTIMATION UNDER SECTION 200A I HAVE TO BE GUIDED BY THE LIMITED MANDATE OF SECTION 200A WHICH AT THE RELEVAN T POINT OF ITA NO .302 TO 305/C/2016 6 TIME PERMITTED COMPUTATION OF AMOUNT RECOVERABLE FROM OR PAYABLE TO THE TAX DEDUCTOR AFTER MAKING THE FOLLOWING ADJUSTMENTS: (A). AFTER MAKING ADJUSTMENT ON ACCOUNT OF ARITHMETICAL ERRORS AND INCORRECT CLAIMS APPARENT FROM ANY INFORMATION IN T HE STATEMENT - SECTION 200A(1)(A) (B). AFTER MAKING ADJUSTMENT FOR INTEREST IF ANY COMPUTED ON THE BASIS OF SUMS DEDUCTIBLE AS COMPUTED IN THE STATEMENT. - SECTION 200A(1)(B) 6.5 . NO OTHER AD JUSTMENTS IN THE AMOUNT REFUNDABLE TO OR RECOVERABLE FROM THE TAX DEDUCTOR WERE PERMISSIBLE IN ACCORDANCE WITH THE LAW AS IT EXISTED AT THAT POINT OF TIME. 6.6 . IN VIEW OF THE ABOVE DISCUSSIONS IN MY CONSIDERED THE ADJUSTMENT IN RESPECT OF LEVY O F FEES UNDER SECTION 234E WAS INDEED BEYOND THE SCOPE OF PERMISSIBLE ADJUSTMENTS CONTEMPLATED UNDER SECTION 200A. THIS INTIMATION IS AN APPEALABLE ORDER UNDER SECTION 246A(A) AND THEREFORE THE CIT(A) OUGHT TO HAVE EXAMINED LEGALITY OF THE ADJUSTMENT MAD E UNDER THIS INTIMATION IN THE LIGHT OF THE SCOPE OF THE SECTION 200A. THE LD CIT(A) HAS NOT DONE SO. HE HAS JUSTIFIED THE LEVY OF FEES ON THE BASIS OF THE PROVISIONS OF SECTION 234E. THAT IS NOT THE ISSUE HERE. THE ISSUE IS WHETHER SUCH A LEVY COULD BE E FFECTED IN THE COURSE OF INTIMATION UNDER SECTION 200A. THE ANSWER IS CLEARLY IN NEGATIVE. NO OTHER PROVISION ENABLING A DEMAND IN RESPECT OF THIS LEVY HAS BEEN POINTED OUT TO ME ITA NO .302 TO 305/C/2016 7 AND IT IS THUS AN ADMITTED POSITION THAT IN THE ABSENCE OF THE ENABLING PROVISION UNDER SECTION 200A NO SUCH LEVY COULD BE EFFECTED. 6.7 THE ABOVE ISSUE HAS BEEN CONSIDERED BY THE AMRITSAR BENCH OF THE TRIBUNAL IN THE CASE OF SIBIA HEALTHCARE ( P) LIMITED VS . DEPUTY COMM I SSIONER OF INCOME TAX ( 2015 ) 61 TAXMANN . COM 70 AND HELD THAT LEVY OF FEE U/S . 234E IS BEYOND THE SCOPE OF PERMISSIBLE ADJUSTMENTS CONTEMPLATED U/S . 200A . 6.8 . THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF LIONS CLUB OF NORTH SURAT CHARITABLE TRUST VS . INCOME TAX OFFICER (TOS) - II 2015(9) TMI 1231 AND THE CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF SMT . G . INDHRANI VS . DEPUTY COMMISSIONER O F INCOME TAX CENTRALIZED PROCESSING CELL(TDS) (2015) 60 TAXMANN.COM 312 HAVE FOLLOWED THE VIEWS TAKEN BY THE AMRITSAR BENCH OF THE TRIBUNAL AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE . 6.9 IN VIEW OF THE AFORESAID REASONING AND RESPECTFULLY FOLLOW ING THE ORDERS OF THE COORDINATE BENCH ES OF THE TRIBUNAL I DELETE THE LEVY OF LATE FILING FEE U/S 234E OF THE ACT. IT IS ORDERED ACCORDINGLY. 7 I N THE RESULT THE APPEAL S FILED BY THE ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF OCT 2016 . SD/ - ( GEORGE GEORGE K) JUDICIAL MEMBER COCHIN: DATED 14 TH OCT 2016 RAJ* ITA NO .302 TO 305/C/2016 8 COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) KOTTAYAM 4 . CIT KOTTAYAM 5 . DR 6 . GUARD FILE BY ORD ER ASSISTANT REGISTRAR ITAT COCHIN