Municipal Commissioner, Chilakaluripeta V. THE ITO (TDS), Guntur

CO 13/VIZ/2015

• Counselvise Citation: [2016] 112 COUNSELVISE.COM (IT) 4191 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-06-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 14-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reasonable cause; TDS

Judgement Text

ITA NO.600/VIZAG/2014 MUNICIPAL COMMISSIONER, CHILAKALURIPET 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.600/VIZAG/2014 ( / ASSESSMENT YEAR: 2009-10) ITO(TDS), WARD - 3(4), GUNTUR VS. MUNICIPAL COMMISSIONER, CHILAKALURIPET [PAN : HYDMO3565C ] ( % / APPELLANT) ( &'% / RESPONDENT) C.O. NO.13/VIZAG/2015 (ARISING OUT OF I.T.A.NO.600/VIZAG/2014) ( / ASSESSMENT YEAR: 2009-10) MUNICIPAL COMMISSIONE R, CHILAKALURIPET VS. ITO(TDS), WARD - 3(4), GUNTUR ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI M.N. MURTHY NAIK, DR / RESPONDENT BY : SHRI G.V.N. HARI, AR / DATE OF HEARING : 01.06.2016 / DATE OF PRONOUNCEMENT : 10.06.2016 ITA NO.600/VIZAG/2014 MUNICIPAL COMMISSIONER, CHILAKALURIPET 2 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), VIJAYAWADA DATED 18.8.2014 FOR THE ASSESSME NT YEAR 2009-10 AND THE CROSS APPEAL FILED BY THE ASSESSEE IN SUPPO RT OF THE ORDER OF CIT(A). 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS A LOCAL AUTHORITY REPRESENTED BY MUNICIPAL COMMISSIONER, MUNICIPAL OFFICE, CHILAK ALURIPET. THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-3(TDS) , VIJAYAWADA HAS ASCERTAINED FROM THE ASSESSEES RECORDS FOR THE FIN ANCIAL YEARS 2008-09, 2009-10, 2010-11 & 2011-12 THAT IT WAS REQUIRED TO FILE RETURNS IN FORM NO.24Q I.E. QUARTERLY STATEMENT OF DEDUCTION OF TAX AT SOURCE IN RESPECT OF THE SALARY AND STATEMENT OF DEDUCTION OF TAX IN RESPECT OF PAYMENTS OTHER THAN SALARY IN FORM NO.26Q UNDER THE PROVISIO NS OF SECTION 200(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT'). THE ASSESSING OFFICER FROM THE RECORDS ASCERTAINED THAT THERE WAS A DELAY IN RESPECT OF FILING OF RETURNS FOR THE QUARTERS, ACCO RDINGLY LEVIED PENALTY U/S 272A(2)(K) OF THE ACT AS UNDER:- ITA NO.600/VIZAG/2014 MUNICIPAL COMMISSIONER, CHILAKALURIPET 3 F.YS. NATURE OF RETURN DELAY IN FILING THE RETURNS 2008-09 24Q 6997 DAYS 26Q 4443 DAYS 2009-10 24Q 5537 DAYS 26Q 3037 DAYS 2010-11 24Q 3577 DAYS 26Q 1621 DAYS 2011-12 24Q 2075 DAYS 26Q 685 DAYS IN VIEW OF THIS, THE ASSESSING OFFICER ISSUED A SHO W-CAUSE NOTICE ASKING THE APPELLANT AS TO WHY PENALTY SHOULD NOT BE LEVIE D ON IT FOR SUCH DEFAULT UNDER THE PROVISIONS OF SECTION 272A(2)(K) OF THE ACT. IN RESPONSE, THE REPLY FILED BY THE APPELLANT WAS FOUN D TO BE UNSATISFACTORY BY THE ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICER LEVIED THE PENALTY U/S. 272A(2)(K) OF THE ACT FOR T HE AFORESAID DEFAULT @ RS. 100/- PER DAY FOR FOUR ASST. YEARS AS UNDER ASST. YEAR TOTAL PENALTY LEVIED 2009-10 RS. 11,44,000/- 2010-11 RS. 8,57,400/- 2011-12 RS. 5,19,800/- 2012-13 RS. 2,76,000/- 3. ON BEING AGGRIEVED, ASSESSEE CARRIED MATTER IN A PPEAL BEFORE THE CIT(A). IT WAS SUBMITTED BEFORE THE CIT(A) MAINLY THAT DUE TO ACUTE SHORTAGE OF STAFF AND DUE TO BEING UNAWARE OF THE P ROCEDURE FOR FILING E- TDS, THE ASSESSEE WAS PREVENTED IN FILING THE RETUR NS IN TIME. HE ALSO SUBMITTED THAT SUFFICIENT ACCOUNTING STAFF WAS NOT AVAILABLE. THEREFORE, HE IS NOT ABLE TO FILE E-TDS RETURNS ON TIME AND DE LAY MAY BE CONDONED. THEREFORE, ASSESSEE IS PREVENTED FROM THE ABOVE REA SONABLE CAUSE AND ITA NO.600/VIZAG/2014 MUNICIPAL COMMISSIONER, CHILAKALURIPET 4 PRAYED THAT PENALTY MAY BE DELETED. THE LD. CIT(A) AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE DELETED THE PENALTY LEVIED BY THE A.O. 4. ON BEING AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THOUGH DUE TO NON- AVAILABILITY OF ACCOUNTING STAFF AND THE WORK RELAT ING TO TDS MATTER WAS BECAME MUCH DIFFICULT TO THE STAFF AND MOREOVER THE FREQUENT TRANSFERS FOR THE STAFF FROM ONE PLACE TO ANOTHER PLACE CAUSE D DELAY IN FILING THE E- TDS RETURNS. 5. ON THE OTHER HAND, THE LD. D.R. HAS SUBMITTED TH AT THE ASSESSEE HAS FAILED TO FILE E-TDS RETURNS ON TIME AND THEREF ORE, A.O. CORRECTLY IMPOSED PENALTY U/S 272(2)(K) OF THE ACT AND HE STR ONGLY SUPPORTED THE ORDER PASSED BY THE A.O. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE A.O. HAS IMPOSED THE PENALTY FOR NON-FILING OF THE E-TDS U/S 272(2)(K) OF THE ACT. HOWEVER, THE ASSESSEE HAS SUBMITTED EX PLANATION BEFORE THE CIT(A) THAT DUE TO NON-AVAILABILITY OF ACCOUNTING S TAFF, THE WORK RELATING TO E-TDS WAS ALSO BECAME MUCH DIFFICULT TO THE STAF F AND MOREOVER, THE FREQUENT TRANSFERS OF THE STAFF FROM ONE PLACE TO A NOTHER PLACE CAUSED DELAY IN FILING E-TDS RETURNS. THE SAME WAS ACCEPT ED BY THE CIT(A) ITA NO.600/VIZAG/2014 MUNICIPAL COMMISSIONER, CHILAKALURIPET 5 WITH A VIEW THAT THERE IS A SUFFICIENT AND REASONAB LE CAUSE FOR NON-FILING OF THE E-TDS RETURNS AND PENALTY WAS DELETED. WE FIND THAT THE LD. CIT(A) AFTER CONSIDERING EXPLANATION OF THE ASSESSE E CAME TO A CONCLUSION THAT THE EXPLANATION GIVEN BY THE ASSESS EE IS A REASONABLE FOR NON-FILING OF E-TDS RETURNS IN TIME AND ACCORDINGLY PENALTY IS DELETED. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED AS U NDER: I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE B Y THE APPELLANT, GONE THROUGH THE ORDERS UNDER SECTION 2/2A(2)(K) FO R ALL THE FOUR ASSESSMENT YEARS BESIDES PERUSING ALL OTHER MATERIA L AVAILABLE ON RECORDS INCLUDING THE CASE LAWS RELIED UPON. THIS P ENALTY UNDER SECTION 272A(2)(K) IS ATTRACTED WHEN THERE IS A DEL AY IN FILING QUARTERLY TDS RETURNS AND AS PER THE AR, FOR BELATE D FILING THERE WAS A REASONABLE CAUSE. THE CAUSES PUT FORTH WERE A CUTE SHORTAGE OF STAFF, PRESSURE OF WORK DUE TO FREQUENT TRANSFER S OF STAFF FROM ONE PLACE TO ANOTHER PLACE AND LACK OF KNOWLEDGE IN FILING E-TDS RETURNS ON THE PART OF THE EMPLOYEES ETC, APPEARS T O BE REASONABLE AND IN MY OPINION WOULD NOT ATTRACT THE IMPUGNED PE NALTY UNDER SECTION 272A(2)(K). IT IS IMPORTANT TO NOTE HERE TH AT LAW IS WELL- SETTLED THAT AN ORDER IMPOSING PENALTY IS A RESULT OF QUASI-CRIMINAL PROCEEDINGS AND PENALTY SHOULD NOT ORDINARILY BE IM POSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT, CONTUMACIOUS OR DISHONEST, OR AC TED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. NO PENALTY SHOULD BE IMPOSED IF THE APPELLANT WAS ACTING IN HONEST AND GENUINE BELIEF I N A PARTICULAR MANNER. AS HELD BY THE SUPREME COURT IN HINDUSTAN STEEL LIMITED V STATE OF ORISSA, REPORTED IN (1972) 83 ITR 26, PENA LTY SHOULD NOT BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHET HER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTOR Y OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCIS ED JUDICIALLY AND ON CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. E VEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO I MPOSE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE THE PENALTY, WHE N THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHEN THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFEN DER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. IN THE CIRCUMSTANCES, I AM OF THE VIEW THAT THE AO WAS NOT JUSTIFIED IN MAK ING THE IMPUGNED ORDERS FOR FOUR ASSESSMENT YEARS UNDER CON SIDERATION. ITA NO.600/VIZAG/2014 MUNICIPAL COMMISSIONER, CHILAKALURIPET 6 7. IN VIEW OF THE ABOVE, WE FIND THAT THERE IS NO R EASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A). THUS, THI S GROUND OF APPEAL RAISED BY THE REVENUE IS DISMISSED. 8. IN VIEW OF THE ABOVE, C.O. FILED BY THE ASSESSEE BECAME INFRUCTUOUS AND THE SAME IS DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALSO DISMI SSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 10 TH JUN16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 10.06.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ITO (TDS), WARD-3(4), GUNTUR 2. / THE RESPONDENT MUNICIPAL COMMISSIONER, MUNICIP AL OFFICER, CHILAKALURIPET MUNICIPALITY, CHILAKALURIPET, GUNTUR DIST. 3. ) / THE CIT(TDS), VIJAYAWADA 4. ) ( ) / THE CIT(A),VIJAYAWADA 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM