Income Tax Appellate Tribunal - HyderabadMsv It Solutions Private Limited, ... vs Income Tax Officer, Ward(Tds)-1(4), ... on 26 October, 2018IN THE INCOME TAX APPELLATE TRIBUNAL
          HYDERABAD BENCH 'B', HYDERABAD

      BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER
     AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER

                ITA Nos. 177 & 178/Hyd/2018
            Assessment Years: 2013-14 & 2014-15

MSV IT Solutions Pvt.          vs.   Income-tax Officer, Ward -
Ltd., Hyderabad.                     16(4), Hyderabad.

PAN - AAHCM6063B

        Appellant                            Respondent

                 Assessee by: Shri T. Rajendra Prasad
                  Revenue by: Shri Nilanjan Dey

              Date of hearing: 08/10/2018
      Date of pronouncement: 26/10/2018

                           O RDE R

PER S. RIFAUR RAHMAN, AM:Both these appeals filed by same assessee are directed
against the orders of CIT(A) - 8, Hyderabad, both dated, 11 th
October, 2017 for AY 2013-14 and 2014-15. Since identical
issues are involved in both these appeals they were clubbed
and heard together and, therefore, a common order is passed
for the sake of convenience.ITA No. 177/Hyd/20182.    Brief facts of the case are that the AO levied late fee u/s
234E of Rs. 36,600/-. Against this, the assessee preferred an
appeal before the CIT(A) with a delay of 1531 days and
requested for condonation of delay on the ground that there
was no legal remedy of appeal u/s 246A against the impugned
order at the relevant point of time. The CIT(A) did not condone2              I.T.A. No. 177 & 178/Hyd/18MSV IT Solutions Pvt. Ltd., Hyd.the delay and not admitted the appeal of the assessee by
observing as under:" 4. I have considered the submission made by the AR.
     From the submissions of the AR. I am constrained to
     note that the AR completely misconstrued and
     misunderstood the Issue with regard to maintainability of
     appeals on order u/s.200A(1). The order u/s.200A(1)
     was always an appealable order as per the provisions of
     Section 246A(1)(a). The relevant portion of this clause
     was substituted by some other clauses by theFinance
     Act, 2015w.e.f. 01.06.2015. It did not have any bearing
     on the appealability of the order ujs.200A(1)(c) wherein
     levy of late fee ujs.234E has been made as one of the
     items of adjustment. The reasons adduced by the
     appellant for the huge delay of more than 4 years in
     filing of appeal has no substance. I am, therefore, nlot
     satisfied with the appellant's explanation for not
     presenting the appeal within the period of limitat ion in
     terms of provisions ofSection 249(3)of the Act and
     after a lapse of more than 4 years. Hence, the delay in
     filing of appeal is not condoned. Accordingly, the appeal
     is not admitted at the threshold stage itself. "3.   Aggrieved by the order of CIT(A) the assessee is in
appeal before us and raised the following grounds of appeal:"1. The Appellant "MSVIT Solutions Private Limited" filed
     its TDS return of Quarter 4 for the Financial Year 2012 -
     13 on dt.14.11.2013. The sa me is processed and
     Intimation Orderu/s.200Aof the Income Tax Act passed
     on dt.08.12.2013. As per the Intimation Order, Late filing
     fee of Rs.36, 600/leviedu/s.234Eof the Income Tax Act.2. The Present Appeal is filed against the order passed
     undersection 200Afor Levying Late fee of Rs.36,600/ -
     u/s.234E of the Income Tax Act.3. As per the provisions ofsection 200Aof the Act, the
     TDS,CPCshall make adjustments for any arithmetical
     error in the statements or an incorrect claim apparent
     from any information in the statement and also the
     interest, if any shall be computed on the basis of the
     sums deductible as computed in the statement.
     However, there is no provisionu/s 200Aof the Act, for
     computation of the fee, if any in accordance with the
     provisions ofsection 234Eof the Act, before insertion of3               I.T.A. No. 177 & 178/Hyd/18MSV IT Solutions Pvt. Ltd., Hyd.sub-clause (c) to the statute by theFinance Act, 2015w.e.f 1.6.2015.4. Also the memorandum explaining the Finance bill
     categorically stated that there is no enabling provision insection 200Aof the Act, for computation of feeu/s 234Eof the Act, hence the Finance bill, 2015 proposes to
     insert enabling provision insection 200Aof the Act. In
     the absence of enabling provision in section 200A of the
     Act, for levy of late fee u/s 234E of the Act be fore
     insertion of sub clause (c) to section 200A of the Act, no
     adjustments can be made in the intimations issued u/s
     200A of the Act by the A.O.5. Income Tax Appellate Tribunal Vishakhapatnam
     Bench order produced for ready perusal in support of
     the present issue in Appeal. The Appellant under Appeal
     relied upon the decisions of ITAT, Pune in the case of
     Gajanana Constructions Vs.           CIT,CPC(TDS),
     Ghaziabad (2016) 161 ITO 313 (Pune Tribunal) and also
     various Tribunal/High Court Decisions. The coordinate
     bench of this Tribunal, under similar circumstances held
     that power to charge/collect feesu/s 234Eof the Act
     was vested with revenue only on substitution of clause(c) tosection 200Aof the Act videFinance Act, 2015w.e.f. 1.6.2015. Hence, prior to 1.6.2015, no fee could
     have been leviedu/s.234Eof the Act while issuing
     intimationu/s 200Aof the Act.6. There is no enabling provision insection 200Aof the
     Act, before insertion of sub c1ause(c) intosection 200Aof the Act by theFinance Act, 2015w.e.f. 1.6.2015 and
     hence, no adjustments can be made towards late fee
     payableu/s 234Eof the Act, for belated filing of TD S
     statementsu/s.200 (3)of the Act, while issuing
     intimationu/s 200Aof the Act, for processing TD5
     statements filed and processed for the assessment
     years prior to 1.6.2015.7. In the present case, the TD5 returns has been filed
     and processed by the TD5,CPCbefore 01.06.2015.Therefore, fee payableu/s.234Eof the Act, cannot be
     levied while processing TDS statementsu/s 200Aof the
     Act in the present case also. Appellant request for
     deletion of Late fee of Rs.36,600 leviedu/s.234Eof the
     Act."4.   Considered the rival submissions and perused the
material on record. Before the CIT(A), the AR of the assessee4               I.T.A. No. 177 & 178/Hyd/18MSV IT Solutions Pvt. Ltd., Hyd.requested for condonation of delay on the ground that there
was no legal remedy of appeal u/s 246A against the impugned
order at the relevant point of time. However, the CIT(A)
rejected the submission of the assessee and did not condone
the delay and did not admit the appeal f or adjudication. We
are of the view that, to meet the ends of justice, we set aside
the order of CIT(A) and restore the case back to his file with a
direction to condone the delay and adjudicate the appeal on
merits in accordance with law after providing reasonable
opportunity of being heard to the assessee.5.    In the result, appeal of the assessee is treated as
allowed for statistical purposes.ITA No. 178/Hyd/20186.    Brief facts of the case are that the AO levied late fee of
Rs. 24,400/- u/s 234E. The assessee appealed against the
action of the AO to CIT(A) and contended before him that the
provisions to include late fee u/s 234E in the intimationu/s
200Aof the Act came into effect only through theFinance Act,
2015w.e.f. 01/06/2015 and, therefore, prior to 01/06/2015
such inclusion of late fee u/s 234E in the intimation u/s 200A
is not permissible under the law and consequently any such
levy is unsustainable and hence the levy is liable to be
deleted. In support of these contentions, the AR of the
assessee relied upon the decision of the Pune Bench of ITAT
in the case of Gajanan Constructions and Others in ITA No.
1292 & 1293/PN/2015, dated 29/08/2016.7.    The CIT(A) after considering the submissions of the
assessee, confirmed the action of the AO following the5              I.T.A. No. 177 & 178/Hyd/18MSV IT Solutions Pvt. Ltd., Hyd.judgment of Hon'ble Gujarat High Court in the case ofRajesh
Kourani Vs. Union of India.8.    Aggrieved by the order of CIT(A), the assessee is in
appeal before us raising three grounds of appeal, which are
against the levy of late feeu/s 234Eof the Act.9.    Considered the rival submissions and perused the
material on record. We find that similar issue came up for
consideration before the coordinate bench of this Tribunal
(where both the Members are party) in the case of M /s Terra
Infra Development Ltd., in ITA Nos. 1876 & 1875/Hyd/2017
vide order dated 03/10/2018. In the said case, the coordinate
bench has observed as under:"4. We find that though the provisions for levy of fee in
      certain cases has been brought into the Statute book
      w.e.f. 1.7.2012, it has been brought under the purview of
      section 200A only w.e.f. 1.6.2015. Therefore, as rightly
      held by the Coordinate Bench in the case of M/s.
      Sonalac Paintings & Coatings Ltd (167 DTR (Chd. Trib)183) we hold that the interest u/s 234E cannot be levied
      in respect of TOS returns filed prior to 1.6.2015. For the
      sake of ready reference, the relevant para is
      reproduced, hereunder:"10. Now coming to the merits of the case, we find
            force in the argument of the learned Counsel for
            the assessee that prior to 01.06.2015, there was
            no mandate, as per the Statute, to make any
            adjustment on account of levy of fees uls 234E
            while processing TOS returns uls 200A. We have
            taken note of the order of the Hon'ble Gujarat High
            Court holding the amendment made to section
            200A w.e.f. 01.06.2015, giving power to make
            adjustment on account of fees u/s 234E while
            processing returns u/s 200A to be retrospective in
            nature, stating that this power given to the AO is a
            machinery     provision    while   the   substantive
            provision of the power to levy fees uls 234E was
            always there on the Statute from 01.06.2012. But
            at the same time, we note that the Hon'ble6               I.T.A. No. 177 & 178/Hyd/18MSV IT Solutions Pvt. Ltd., Hyd.Karnataka High Court held that levy of fees uls
            234E while processing returns, T DS u/s 200A prior
            to 01.06.2015 was without any authority of law.
            With two divergent view of the Hon'ble High Courts
            on the issue and in the absence of any decision by
            the jurisdictional High Court, we concur with the
            learned Counsel for the assessee that as per the
            well accepted rule of construction, if two
            reasonable constructions of a statute are possible
            the construction which favours the assessee must
            be adopted. In view of the same, respectfully
            following the decision of the Karnataka High Court
            in the case of Fatheraj Singhvi (289 CTR 602), we
            hold that the fees levied in all the present cases
            u/s 234E prior to 01.06.2015 in the intimations
            made uls 200A was without authority of law and
            the same is therefore, directed to be deleted. In
            view of the above, all the appeals of the assessee
            stand allowed".9.1 As the issue under consideration is materially identical to
that ofthe above decision, respectfully following the same, we
set aside the order of CIT(A) and direct the AO to delete levy
of late fee imposed u/s 234E. Accordingly, grounds raised are
allowed.10.   In the result, appeal of the assessee is allowed.11.   To sum up, appeal in ITA No. 177/Hyd/18 is allowed for
statistical purposes and appeal in ITA No. 178/Hyd/18 is
allowed.Pronounced in the open court on 26 th October, 2018.Sd/-                           Sd/-
      (P. MADHAVI DEVI)             (S. RIFAUR RAHMAN)
      JUDICIAL MEMBER              ACCOUNTANT MEMBER

Hyderabad, dated 26 th October, 2018

kv7              I.T.A. No. 177 & 178/Hyd/18MSV IT Solutions Pvt. Ltd., Hyd.


Copy forwarded to:1.   MSV IT Solutions Pvt. Ltd., Plot No. 37, Silpa Brindavan,
     Yellamma Banda, Kukatpally, Hyderabad - 500 0722.   ITO, Wad - 16(4), IT Towers, AC Guards, Masab Tank,
     Hyd. - 500 0043.   CIT(A) - 8, Hyderabad4.   CIT (TDS), Hyderabad5.   The DR, ITAT, Hyderabad6.   Guard File