Union Bank of India, Chandigarh V. JCIT (TDS), Chandigarh

ITA 1071/CHANDI/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9835 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 1071/CHD/2013 ASSESSMENT YEAR: 2009-10 THE UNION BANK OF INDIA, VS THE JCIT (TDS), SCO 68-69, CHANDIGARH. SECTOR 40C, CHANDIGARH. PAN: AAACU0564G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY JAIN RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 17.06.2015 DATE OF PRONOUNCEMENT : 19.06.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(APPEALS) CHANDIGARH DATED 02.09.2013 FOR ASSESSMENT YEAR 2008-09 CHALLENGING THE LEVY OF PEN ALTY UNDER SECTION 272A(2)(K) OF THE INCOME TAX ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE PERSON RESPONSIBLE HAS FAILED TO FILE QUARTERLY TDS RETURN IN FORM NO. 26Q FOR ASSESSMENT YEAR UNDER APPEAL. THE DUE DATE WAS 30.05.2009 BUT NO RETURN WAS FILED TILL TH E DATE OF PENALTY ORDER. IN RESPONSE TO THE PENALTY NOTIC E, IT WAS SUBMITTED THAT CONSULTANT HAD NOT FILED THE TDS RETURN DUE TO NON-AVAILABILITY OF THE REQUISITE NUM BER OF PANS. THE ASSESSING OFFICER WAS, HOWEVER, NOT SATI SFIED 2 AND LEVIED THE PENALTY. THE ASSESSEE RELIED UPON S EVERAL JUDGEMENTS BEFORE LD. CIT(APPEALS) BUT LD. CIT(APPE ALS) FOUND THAT TDS RETURNS IN FORM NO. 26Q WERE NOT FIL ED WITHIN THE DUE DATE AS PRESCRIBED BY RULES, THEREFO RE, PENALTY WAS CORRECTLY LEVIED AND APPEAL OF THE ASSE SSEE WAS DISMISSED. 3. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE RE PLY FILED BY ASSESSEE BEFORE ASSESSING OFFICER IN WHICH THE ASSESSEE BRIEFLY EXPLAINED THAT CONSULTANT INFORMED THE ASSESSEE THAT RETURN COULD NOT BE FILED DUE TO NON- AVAILABILITY OF REQUISITE NUMBER OF PANS. IT WAS DI FFICULT FOR THE ASSESSEE TO COLLECT PANS AT THAT STAGE, SIN CE ADDRESSES OF NUMBER OF CUSTOMERS WERE CHANGED AND T HEY COULD NOT BE CONTACTED. INSPITE OF BEST EFFORTS OF THE BANK, REQUISITE NUMBER OF PANS STILL TO BE COLLECTE D TO ENABLE THE ASSESSEE TO FILE TDS RETURN. THE LD. CO UNSEL FOR THE ASSESSEE REFERRED TO PRESS RELEASE OF CBDT DATED 12.02.2008 IN WHICH IT WAS CLARIFIED THAT FORM NO. 26Q RELEVANT IN THE CASE OF ASSESSEE WILL NOT BE ACCEPT ED FOR THE QUARTER ENDING ON 30.09.2007 WITH LESS THAN 70% OF THE PAN DATA. THE SAID DECISION WAS REVIEWED AND I T WAS DECIDED TO ENHANCE THE THRESHOLD LIMIT OF REQUIREME NT OF FILING PANS TO 85% FROM 70% IN CASE OF FORM 26Q. T HE TAX DEDUCTORS AND TAX COLLECTORS WERE ALSO ADVISED TO OBTAIN CORRECT PANS OF DEDUCTEES AND QUOTE THE SAME IN THE TDS RETURNS. THE LD. COUNSEL FOR THE ASSESSEE 3 REFERRED TO PB-23 TO 26 WHICH ARE THE ACKNOWLEDGEME NT OF FILING OF FORM NO. 26Q FOR ALL THE QUARTERS AND STATED THAT THE MOMENT ASSESSEE HAS OBTAINED REQUIRED NUMB ER OF PANS, IMMEDIATELY E-TDS RETURNS HAVE BEEN FILED. HE HAS RELIED UPON ORDER OF ITAT CHANDIGARH BENCH IN T HE CASE OF ASHIRWAD COMPLEX VS JCIT (ITA 895/2013 DATE D 22.11.2013) IN WHICH PENALTY WAS PARTLY CANCELLED. HE HAS ALSO RELIED UPON ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF STATE BANK OF BIKANER & JAIPUR VS ADDL. CIT (ITA 476/2014 DATED 09.12.2014) IN WHICH THE TRIBU NAL ACCEPTED THE REASONABLE CAUSE OF ASSESSEE FOR FAILU RE TO FILE E-TDS RETURN AND CANCELLED THE PENALTY. 4. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW. 4(I) ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW PENALTY NEED NOT BE IMPOSED IN THIS CASE. THE ASSESSING OFFICER NOTED THAT ASSESSEE FAILED TO FIL E E-TDS RETURNS FOR THE YEAR UNDER CONSIDERATION. THE ASSES SEE, HOWEVER, EXPLAINED BEFORE ASSESSING OFFICER THAT SI NCE REQUIRED NUMBER OF PANS COULD NOT BE COLLECTED DUE TO CHANGE OF THE ADDRESSES OF THE CUSTOMERS OF THE BAN K, THEREFORE, E-TDS RETURNS COULD NOT HAVE BEEN ACCEPT ED BY THE REVENUE DEPARTMENT. THEREFORE, AS AND WHEN REQUIRED PAN NUMBERS WERE OBTAINED, E-TDS RETURNS W ERE FILED LATER ON. SECTION 273B OF THE INCOME TAX ACT PROVIDES THAT NO PENALTY SHALL BE IMPOSABLE ON THE PERSON OR THE ASSESSEE AS THE CASE MAY BE FOR ANY F AILURE 4 REFERRED TO IN SECTION 272A(2) OF THE INCOME TAX AC T, IF HE PROVES THAT THERE WAS REASONABLE CAUSE FOR THE S AID FAILURE. IN THIS CASE, THE ASSESSEE EXPLAINED THAT THERE WAS A REASONABLE CAUSE FOR FAILURE TO COMPLY WITH T HE ABOVE REQUIREMENTS BECAUSE THE REQUIRED PAN NUMBERS WERE NOT AVAILABLE FOR FILING THE E-TDS RETUR N. IT IS NOT IN DISPUTE THAT TDS AMOUNT WAS DEDUCTED ON TIME AND PAID TO THE REVENUE DEPARTMENT. SINCE THE REQUIREMENT OF THE REVENUE DEPARTMENT WAS THAT SUFFICIENT PANS SHOULD BE QUOTED IN THE E-TDS RETUR N WHICH WAS EARLIER 70% AND LATER ON ENHANCED TO 85%, ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM FIL ING THE E-TDS RETURN ON TIME. NO LOSS HAS THUS, BEEN C AUSED TO REVENUE FOR NOT FILING E-TDS RETURN WITHIN THE P ERIOD OF LIMITATION. IT APPEARS THAT IT IS A TECHNICAL D EFAULT ON THE PART OF THE ASSESSEE AND SINCE ASSESSEE HAS A REASONABLE CAUSE FOR FAILURE TO COMPLY WITH THE PROVISIONS OF LAW, THEREFORE, THE DECISIONS STATED BY LD. COUNSEL FOR THE ASSESSEE SQUARELY APPLY IN THE CASE OF ASSESSEE. WE MAY ALSO NOTE HERE THAT SECOND PROVIS O HAD BEEN INSERTED BY FINANCE ACT, 2012 W.E.F. 01.07.201 2 IN SUB-SECTION (2) OF SECTION 272A OF THE INCOME TAX A CT WHEREBY NO PENALTY SHALL BE LEVIED UNDER THE PROVIS IONS REFERRED TO IN SUB-CLAUSE (K) OF THE ABOVE PROVISIO NS ON OR AFTER 1 ST DAY OF JULY, 2012. CONSIDERING THE HARDSHIP EXAMINED BY INSERTING THE ABOVE SECOND PROVISO TO T HE PROVISIONS INVOLVED IN THE PRESENT APPEAL, WE FI ND THAT 5 THE PRESENT CASE MAY NOT BE A FIT CASE FOR LEVY OF PENALTY. 5. CONSIDERING THE ABOVE DISCUSSION, WE SET ASIDE T HE ORDERS OF THE AUTHORITIES BELOW AND CANCEL THE PENA LTY. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH JUNE,2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19 TH JUNE,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH