Case Law Details
District Government Pleaders Public Prosecutor Vs ACIT (ITAT Ahmedabad)
ITAT observe that in the instant facts, certain legal professionals have been appointed as public prosecutors to argue/plead cases on behalf of the Government of Gujarat. We have been further informed in this case that the professional remuneration is directly credited by the Government of Gujarat to the bank account of the aforesaid public prosecutors. The counsel for the assessee submitted before us that it is not in receipt of any advance from the Government of Gujarat, which it then disburses to the public prosecutors. Accordingly, we observe that in the instant case, the remuneration is paid directly by the Government of Gujarat and further the Gujarat Government is also responsible for deduction of tax at source and credit of same to the Central Government, in respect of remuneration/professional fee paid to public prosecutors. Therefore, given the above background, it is not clear to us on what is the role of assessee company in filing of TDS returns, especially when the remuneration is being paid to public prosecutors directly by the Gujarat Government after deducting taxes at source. Section 200 of the Act casts a duty on person deducting tax to pay the same within prescribed time to the credit of the Central Government. Section 200A of the Act draws out the procedure for processing of statements of tax deducted at source.
From the language of section 200A of the Act, it is clear that responsibility of preparing statement of TDS is on the person who has deducted any sum u/s. 200 of the Act. However, in the instant facts, it is unclear to us as to how the assessee is under an obligation to file TDS return in respect of taxes deducted at source by the Government of Gujarat, specially when the remuneration to the public prosecutors have been given directly by the Gujarat State in their bank accounts. It is also observed that the ld. CIT(A) while upholding the levy of fee u/s. 200A of the Act did not enquire into the aspect whether the assessee was under a legal obligation to file TDS return in respect of TDS so deducted (and subsequently deposited by the Government of Gujarat to the Central Government) and paid directly to the bank account of public prosecutors. In view of the above discussion, we are hereby restoring the file back to the ld. CIT(A) to analyze under what capacity the assessee is filing TDS returns and whether the assessee in the first instance, is under an obligation, to file statement of tax deducted at source u/s. 200A of the Act. In the result, the matter is being restored to the file of ld. CIT(A) with above the directions.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
These three appeals have been filed by the assessee against the order of ld. CIT(A)-8 for assessment years 2014-15, 2015-16 and 2016-17 vide order dated 28-05-2019 for all the assessment years under consideration.
2. Since common facts and issues are involved for all the years, the same are being disposed by way of by a common order.
3. The only issue for consideration before us is the levy of late filing fee on account of delay in filing of TDS statements, by the TDS Central Processing Cell u/s. 234E of the Act, on the assessee. The contention of the assessee before the ld. CIT(A) was that the assessee is a Government Authority working under the Department of Law, State of Gujarat. The assessee appoints various advocates on professional basis on behalf of Gujarat Government to plead cases on their behalf in the Ahmedabad Rural Courts, as public prosecutors. The assessee receives grants from State Government for payment of professional fees and pays the same to advocates who are on their panel. The amount of tax to be deducted is intimated to the State Treasury which is responsible to credit the same to the Central Government. The assessee has been regularly filing TDS returns for the TDS so deducted by the Gujarat Government from time to time. However, TDS statements for a few of the quarters for the assessment years under consideration i.e. assessment years 2014-15, 2015-16 & 2016-17 have been delayed. Accordingly, the TDS Central Processing Cell has levied late fee of Rs. 1,17,573/- for assessment year 2014-15, Rs. 1,21,799/- for assessment year 2015-16 and Rs. 1,11,670/- for assessment year 2017-18, under section 234E of the Act on the assessee for late filing as TDS Statement. In appeal, the ld. CIT(A) held that from the Scheme introduced by Finance Act, 2012, it can be seen that the levy of fee u/s. 234E is not in the nature of penalty but the same is in the nature of a compulsory levy and it is for this reason that the same has been included as a part of the processing of the TDS statement as per the provisions of section 200A of the Act. Accordingly, the CIT(A) held that there is no infirmity in the action of Assessing Officer in levy of fee u/s. 234E of the Act in the instant facts on the assessee, on account of late filing as TDS Statement.
4. The assessee is in appeal before us against the aforesaid order passed by ld. CIT(A) confirming the levy of penalty u/s. 234E of the Act on account of late filing of TDS return in case of some of the quarters for the assessment years under consideration before us. The counsel for the assessee submitted that delay filing of return of TDS is owing to lack of information forthcoming from the Government Treasury. Therefore, the delay in filing of TDS return has been caused due to reasons beyond the control of the assessee. Accordingly, levying of late filing fee u/s. 234E may kindly be directed to be vacated.
5. However, on going through the records of the case and the arguments put forward by the counsel for the assessee, we observe that in the instant facts, certain legal professionals have been appointed as public prosecutors to argue/plead cases on behalf of the Government of Gujarat. We have been further informed in this case that the professional remuneration is directly credited by the Government of Gujarat to the bank account of the aforesaid public prosecutors. The counsel for the assessee submitted before us that it is not in receipt of any advance from the Government of Gujarat, which it then disburses to the public prosecutors. Accordingly, we observe that in the instant case, the remuneration is paid directly by the Government of Gujarat and further the Gujarat Government is also responsible for deduction of tax at source and credit of same to the Central Government, in respect of remuneration/professional fee paid to public prosecutors. Therefore, given the above background, it is not clear to us on what is the role of assessee company in filing of TDS returns, especially when the remuneration is being paid to public prosecutors directly by the Gujarat Government after deducting taxes at source. Section 200 of the Act casts a duty on person deducting tax to pay the same within prescribed time to the credit of the Central Government. Section 200A of the Act draws out the procedure for processing of statements of tax deducted at source. Section 200A of the Act reads as under:-
“Processing of statements of tax deducted at source.
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 fee, if any, shall be computed in accordance with the provisions of section 234E”
6. Therefore from the language of section 200A of the Act, it is clear that responsibility of preparing statement of TDS is on the person who has deducted any sum u/s. 200 of the Act. However, in the instant facts, it is unclear to us as to how the assessee is under an obligation to file TDS return in respect of taxes deducted at source by the Government of Gujarat, specially when the remuneration to the public prosecutors have been given directly by the Gujarat State in their bank accounts. It is also observed that the ld. CIT(A) while upholding the levy of fee u/s. 200A of the Act did not enquire into the aspect whether the assessee was under a legal obligation to file TDS return in respect of TDS so deducted (and subsequently deposited by the Government of Gujarat to the Central Government) and paid directly to the bank account of public prosecutors. In view of the above discussion, we are hereby restoring the file back to the ld. CIT(A) to analyze under what capacity the assessee is filing TDS returns and whether the assessee in the first instance, is under an obligation, to file statement of tax deducted at source u/s. 200A of the Act. In the result, the matter is being restored to the file of ld. CIT(A) with above the directions.
7. In the result, the appeals of the assessee are allowed for statistical purposes for all the years under consideration.
Order pronounced in the open court on 29-03-2023
