M/s Virgo Industries, Panchkula V. ITO (TDS), Panchkula

ITA 1123/CHANDI/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7414 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 22-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: SHALINI KAPOOR
• Keywords: Reasonable cause; Corroborative evidences
• Section: 273B; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 1123/CHD/2011 ASSESSMENT YEAR: 2008-09 M/S VIRGO INDUSTRIES, V ITO (TDS), # 129,SECTOR 10, PANCHKULA. PANCHKULA. PAN: RTKVO-1275B (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. SHALINI KAPOOR RESPONDENT BY : SMT.JAISHREE SHARMA DATE OF HEARING : 19.01.2012 DATE OF PRONOUNCEMENT : 25.01.2012 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 09.09.2011 PASSED BY THE LD . CIT(A) U/S 250(6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'TH E ACT'). 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) IS WRONG IN LEVYING A PENALTY OF RS.90,000/- U/S 272B OF THE INCOME-TAX ACT,1961 AS THERE WAS A REASONABLE CAUSE FOR SUCH FAILURE. THE DEDUCTOR ACTED BONAFIDE AND DEDUCTED THE TDS, AND ON THE BELIEF OF DEDUCTEE QUOTED PANS/NO PANS PROVIDED AND THE RETURN WAS ACCORDINGLY FILED. 2. THE LD. CIT(A) IS WRONG IN LEVYING PENALTY AS U/ S 139/A, 139A(5)(C), 139A(5B), 139A(5A), THE 2 DEDUCTEE SHOULD BE HELD RESPONSIBLE FOR PROVIDING AND QUOTING VALID PAN TO THE DEDUCTOR. 3. IN VIEW OF ALL THESE AND SUCH OTHER GROUNDS, WHI CH MAY BE TAKEN AT THE TIME OF HEARING, THE APPEAL MAY PLEASE BE ALLOWED AND JUSTICE RENDERED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED ITS ORIGINAL QUARTERLY TDS STATEMENT, FOR THE FINAN CIAL YEAR, 2007-08, VIDE RRR NO. 30870100085495. SUBSEQUENTLY, THE LD. AO ISSUED NOTICE FOR CONTRAVENTION OF SECTION 1 39(A) OF INCOME-TAX ACT,1961, FOR QUOTING OF INVALID PERMANE NT ACCOUNT NUMBER OF 9 (NINE) DEDUCTEES. HOWEVER, THE APPELLANT HAS NOT BEEN PROVIDED THE CORRECT PERMANE NT NUMBER AT THE TIME OF OCCURRENCE OF ABOVE TRANSACTI ON. NOW THE APPELLANT HAS RECEIVED SOME PAN NUMBERS BUT ALL PAN NUMBERS ARE NOT RECEIVED AND SOME PAN NUMBERS ARE S INCE NOT AVAILABLE AND HENCE, RETURN COULD NOT BE REVISE D. 4. THE ITO (TDS) FOUND, WHILING PERUSING THE QUARTE RLY RETURN IN FORM NO. 26Q THAT IT HAD OMITTED TO QUOTE PAN NUMBER AND HAS QUOTED INVALID PAN IN 9 CASES. THE AO AFFORDED TWO OPPORTUNITIES, TO EXPLAIN ITS POSITION , IN THE MATTER AND SUBSEQUENTLY LEVIED THE PENALTY OF RS.90 ,000/- @ RS.10,000/- PER DEFAULT VIDE HIS ORDER DATED 28.09. 2010. LD. CIT(A) UPHELD THE IMPUGNED PENALTY ON THE GROUN D OF NON-ISSUANCE OR NON-FILING OF SUBMISSION BY THE ASS ESSEE. THE LD. 'AR' CONTENDED THAT OUT OF 9 PARTIES, AS ME NTIONED AT PAGE 14 OF THE PAPER BOOK, 4 WERE NOT ALLOTTED PAN NUMBERS. THE LD. 'AR' FURTHER SUBMITTED THAT THERE IS NO DEFAULT ON THE PART OF THE ASSESSEE AS THE DEDUCTEE S HAD NOT 3 BEEN ALLOTTED PAN NUMBER. IN THE WRITTEN SUBMISSIO N, LD. 'AR' PLACED RELIANCE ON THE DECISION OF THE ITAT AH MEDABAD IN THE CASE OF FINANCIAL COOPERATIVE BANK LTD. V IT O (2009) 116 ITD 358 (AHD.). 5. LD. 'DR' PLACED RELIANCE ON THE ORDER OF THE LOW ER AUTHORITIES. 6. WE HAVE PERUSED FACTS OF THE CASE, RIVAL SUBMISS IONS AND FOUND THAT THE DEDUCTOR SHOULD NOT BE HELD RESP ONSIBLE FOR NOT QUOTING PAN NUMBER, IN VIEW OF THE SITUATIO N THAT OUT OF 9 PARTIES, 4 WERE NOT ALLOTTED PAN NUMBERS. MOREOVER, THE ASSESSEE HAS DEDUCTED THE TDS AND DEPOSITED IN THE GOVERNMENT ACCOUNT. THE CASE OF THE ASSESSEE IS AL SO COVERED BY THE DECISION OF THE AHMEDABAD BENCH DECI SION IN FINANCIAL CO-OPERATIVE BANK LTD.(SUPRA), WHICH IS REPRODUCED HEREUNDER : SECTION 272B, READ WITH SECTION 139A OF THE INCOME -TAX ACT,1961 AND RULES 114B TO 114D OF THE INCOME-TAX RULES, 1962 PENALTY FOR FAILURE TO COMPLY WITH PROVISIONS OF SECTION 139A-ASSESSMENT YEAR 2006-07- ASSESSEE, ENGAGED IN BUSINESS OF BANKING, WAS TO GE T EITHER PERMANENT ACCOUNT NUMBERS (PANS) OF DEPOSITO RS OR FORM NO.60 DULY FILLED IN BY THEM AS SPECIFIED I N SECTION 139A AND RULES 114B TO 114D-ASSESSEE OBTAINED FORM NO.60 FROM DEPOSITORS WHO DID NOT HAV E PANS BUT IN SOME CASES EITHER SAID FORM HAD NOT BEE N COMPLETELY FILLED UP OR SUPPORTING EVIDENCE WITH RE SPECT TO ADDRESSES OF DEPOSITORS WAS NOT AVAILABLE-AO IMPOSED PENALTY UNDER SECTION 272B FOR SAID FAILURE OF ASSESSEE-WHETHER ASSESSEE-BANK COULD BE PENALIZED F OR ITS FAILURE TO OBTAIN COMPLETELY FILLED IN FORM NO. 60 4 AND/OR SUPPORTING EVIDENCE WITH RESPECT TO ADDRESSE S OF THE DEPOSITORS-HELD,NO. 7. FURTHER, AS PRAYED BY THE ASSESSEE, THE FACT SIT UATION OF THE ASSESSEE IS ALSO COVERED UNDER THE PROVISION S OF SECTION 273B OF THE ACT, HAVING REASONABLE CAUSE FO R THE SAID FAILURE. FURTHER, THE PROVISIONS OF SECTION 27 2B OF THE ACT, CONTEMPLATE PENALTY, IF A PERSON QUOTES OR INT IMATES A NUMBER WHICH IS FALSE, AND WHICH HE EITHER KNOWS OR BELIEVES TO BE FALSE OR DOES NOT BELIEVE TO BE TRUE . IN VIEW OF THE ABOVE LEGAL AND FACTUAL DISCUSSIONS, AND HAVING REGARD TO THE DECISION OF THE ITAT, RELIED UPON BY THE APP ELLANT, WE DO NOT FIND ANY MERIT IN THE LEVY AND CONFIRMATION OF PENALTY BY THE LOWER AUTHORITIES, HENCE THE PENALTY ORDER I S CANCELLED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JAN.,2012. SD./- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25 TH JAN.,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH