2022 (10) TMI 115 - AT - Income Tax

Tribunal overturns fees for 2013-15, upholds interest for 2010-11.

The Tribunal allowed the appeals for A.Ys. 2013-14 and 2014-15 by quashing the levy of fees under Section 234E. For A.Y. 2010-11, the Tribunal partly ... Addition u/s 234E - Intimation u/s 200A of the Act before 01.06.2015 i.e. before the amendment brought into effect from 01.06.2015 in section 200A - HELD THAT:- As decided in M/s. Keshav Industries Pvt. Ltd. [2020 (7) TMI 812 - ITAT INDORE] wherein fee u/s 234E of the Act was levied in the statements processed u/s 200A of the Act before 01.06.2015 i.e. before the amendment brought into effect from 01.06.2015 in section 200A of the Act thereby enabling the revenue authorities to raise demand in respect of levy of fees u/s 234E CIT(A) erred in confirming the levy of late fees u/s 234E of the Act by the assessing officer. Accordingly findings CIT(A) in all these 10 appeals are reversed as we have recently taken a considered view against the revenue on earlier orders of Ld. CIT(A) wherein the identical orders by respective CIT(A) were passed and accordingly the revenue is directed to delete the levy of fees u/s 234E of the Act in all these 10 cases. Thus, common issue raised in these bunch of appeals is decided in favour of the assessee(s). Short-deduction of TDS plus interest thereon u/s 201 of the Act - short-deduction between the revenue and assessee is for the reason that the revenue has computed deductible amount of TDS on “gross salary”, whereas the assessee has computed TDS deductible on the basis of “net salary” i.e. gross salary (-) deductions under Chapter VI-A - HELD THAT:- We observe that the approach of assessee is in accordance with the provisions of TDS as prescribed in Income-tax Act, 1961, which permit the consideration of deductions under Chapter- VIA while computing deductible amount of TDS. Therefore, we do not find any mistake in assessee’s action. That brings us to observe that the revenue authorities have wrongly computed short-deduction of Rs. 56,650/- and consequently interest thereon of Rs. 28,590/-. We do not find any merit in these demands created by revenue which are not as per law. Therefore, we delete these demands. Resultantly, Ground No. 2 to 4 are allowed. Default in timely payment of TDS u/s 201 - HELD THAT:- As assessee admits delay in payment of TDS, although the assessee has pleaded reasons for delay, which again are multiple and vague. We note that TDS once deducted is a money belonging to exchequer and timely payment to Govt. A/c is mandated under the provisions of Income-tax Act, 1961. Further, section 201 prescribes levy of interest in clear terms. Therefore, the levy of interest is statutory and the assessee has to bear the same and the reasons advanced by assessee cannot exonerate from levy of interest. Accordingly, we are not inclined to grant any relief to assessee on this account. Ground No. 5 is thus dismissed. Issues Involved:1. Condonation of delay in filing appeals.2. Levy of fee under Section 234E of the Income Tax Act, 1961.3. Demand for short deduction of TDS and interest under Section 201 of the Act.4. Demand of interest on delayed payment of TDS.5. Legality of late fee recovery under Section 200A of the Act.Issue-wise Detailed Analysis:1. Condonation of Delay in Filing Appeals:There was a delay of 2 years and 5 days in filing the appeals before the Tribunal. The assessee filed an affidavit explaining that the notice was received by the staff and not reported to the assessee. The Tribunal found this explanation genuine and condoned the delay. Similarly, for the appeal concerning A.Y. 2010-11, there was a delay of about 6 months in filing the appeal before the CIT(A). The Tribunal accepted the reason provided by the assessee and condoned the delay.2. Levy of Fee under Section 234E:The issue pertains to the addition under Section 234E for late filing fees. The Tribunal referenced the Co-ordinate Bench decision in ITA Nos. 510/Ind/2019 and ITA Nos. 500 to 508/Ind/2019, which favored the assessee. The Tribunal observed that before 01.06.2015, there was no enabling provision in Section 200A of the Act to levy fees under Section 234E. Consequently, the Tribunal quashed the levy of fees under Section 234E for the periods before 01.06.2015, and allowed the appeals for A.Ys. 2013-14 and 2014-15.3. Demand for Short Deduction of TDS and Interest under Section 201:The assessee contested the demand for short deduction of TDS and interest thereon for A.Y. 2010-11. The Tribunal noted that the revenue computed TDS on gross salary, whereas the assessee computed TDS on net salary after Chapter VI-A deductions. The Tribunal found the assessee's computation correct as per the Income Tax Act provisions and deleted the demand for short deduction and interest.4. Demand of Interest on Delayed Payment of TDS:The assessee admitted to a delay in depositing TDS but cited unavoidable circumstances. The Tribunal held that the levy of interest under Section 201 is statutory and mandatory, and the reasons provided by the assessee did not exempt them from this liability. Therefore, the Tribunal upheld the demand for interest on delayed TDS payment.5. Legality of Late Fee Recovery under Section 200A:The assessee challenged the levy of late fee under Section 200A. However, the Tribunal noted that this ground was not raised before the CIT(A) and did not emanate from the record. Consequently, the Tribunal dismissed this ground.Conclusion:The Tribunal allowed the appeals for A.Ys. 2013-14 and 2014-15 by quashing the levy of fees under Section 234E. For A.Y. 2010-11, the Tribunal partly allowed the appeal by deleting the demand for short deduction of TDS and interest but upheld the demand for interest on delayed TDS payment. The challenge to the late fee recovery was dismissed.