Samal Construction P. Ltd., Pune V. Additional Commissioner of Income-tax,

ITA 1124/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0040 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-09-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 26-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JADHAV
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E . , , , ! BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NO.1124/PUN/2016 # # / ASSESSMENT YEAR : 2011-12 SAMAL CONSTRUCTION P. LTD. MUKUND APART, GHARPURE COLONY, 1160-61/13, SHIVAJI NAGAR, PUNE-411 005 PAN : AACCS3930J ....... / APPELLANT / V/S. THE ADDL. COMMISSIONER OF INCOME TAX, (TDS) RANGE, PUNE / RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE REVENUE BY : SHRI S.K JADHAV / DATE OF HEARING : 17.09.2018 / DATE OF PRONOUNCEMENT : 19.09.2018 / ORDER PER D. KARUNAKARA RAO, AM: THIS IS THE APPEAL FILED BY ASSESSEE AGAINST THE ORDER OF CIT(A)-10, PUNE, DATED 09.02.2016 FOR THE A.Y. 2011-12. 2. THE SOLITARY GROUND RAISED BY THE ASSESSEE READS AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAS ERRED IN LEVYING PENALTY U/S. 272A(2)(K)/274 R.W.S. 200(3) OF THE INCOME TAX ACT, 1961 A SUM OF RS.40,0 00/-BY NOT CONSIDERING THE REASONABLE CAUSE IN FILING THE TDS RETURN BELATEDLY. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT TH E ASSESSEE FILED ITS RETURN OF TDS U/S.200(3) IN FORM NO.24Q FOR THE 4 TH QUARTER OF F.Y. 2010-11 ON 18.06.2012 AS AGAINST THE STATUTORY DUE DAT E OF 15-05-2011. THUS, THERE WAS DELAY OF 400 DAYS. AO TREA TED THE ASSESSEE 2 ITA NO.1124/PUN/2016 SAMAL CONSTRUCTION P. LTD. AS ASSESSEE-IN- DEFAULT AND INVOKED THE PROVISIONS OF SECT ION 272A(2)(K) AND LEVIED PENALTY OF RS.40,000/- . 4. BEING AGGRIEVED BY THE ORDER OF AO, ASSESSEE FILED AN A PPEAL BEFORE THE CIT(A). THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AND DISCUSSING THE PROVISIONS OF SECTION 273B CO NFIRMED THE PENALTY LEVIED BY THE AO. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE GROUND EXTRACTED ABOVE. 6. AT THE OUTSET, BEFORE US, LD. COUNSEL FOR THE ASSESSE E BROUGHT OUR ATTENTION TO THE GROUND AND SUBMITTED THAT THIS IS THE CASE OF LEVY OF PENALTY U/S.272A(2)(K) OF THE ACT AMOUNTING TO RS.40,000/- FOR DELAY OF 400 DAYS IN FILING THE TDS RETURN RELATING TO 4 TH QUARTER. HE SUBMITTED THAT ASSESSEE HAS DULY DEDUCTED AND PAID THE TDS TO THE GOVT. WITHIN THE PRESCRIBED TIME BUT THERE WAS DELAY IN FILING THE RETUR N. GIVING THE REASONS FOR DELAY, ASSESSEE SUBMITTED THAT DURING THE YE AR UNDER CONSIDERATION THE COMPANY WAS GOING THROUGH HUGE FINANCIA L PROBLEMS AND THERE WERE DELAY IN PAYMENT OF SALARIES AS SUCH THER E WAS A SUBSTANTIAL TURNOVER OF STAFF INCLUDING THE ACCOUNTS DEPART MENT AND THE COMPANY WAS LEFT OUT WITH ONLY ONE ACCOUNTANT WHO HAD GONE ON LEAVE ON ACCOUNT OF HER ILLNESS AND THEREFORE, THERE WAS DELAY IN FILING THE TDS RETURN. HE SUBMITTED THAT THE DELAY IN FILING THE TDS STA TEMENT DOES NOT INVOLVE ANY REVENUE LOSS AND IS MERELY A TECHNICAL DEFAULT. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AO LEVIED THE PENALTY WIT HOUT CONSIDERING THE REASONABLE CAUSE GIVEN BY THE ASSESSEE. 7. FURTHER ALSO, LD. COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THIS IS A COVERED ISSUE IN FAVOUR OF THE ASSESSEE BY VIRTUE OF DECIS ION OF THE PUNE 3 ITA NO.1124/PUN/2016 SAMAL CONSTRUCTION P. LTD. BENCH OF THE TRIBUNAL IN THE CASE OF NAV MAHARASHTRA VIDY ALAYA VS. ADDL.CIT (TDS), RANGE, PUNE AND OTHERS IN ITA NO.832/PN/2 016 & OTHERS, DATED 07-10-2016 FOR THE A.Y. 2011-12 AND SUBM ITTED THAT, THE REASONS FOR DELAY SINCE COMMON, THE SAID DECISION OF THE T RIBUNAL APPLY TO THE FACTS OF THE PRESENT CASE. LD. COUNSEL ALSO FILED TH E COPY OF SAID ORDER OF THE TRIBUNAL. 8. LD. DR FOR THE REVENUE HEAVILY RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 9. WE HEARD BOTH THE SIDES AND PERUSED THE ORDERS OF T HE REVENUE AS WELL AS THE DECISION RELIED ON BY THE LD. COUNSEL FOR THE AS SESSEE ON THE ISSUE UNDER CONSIDERATION. ON PERUSING THE FACTS OF THE C ASE, WE FIND THIS IS A CASE WHERE THE ASSESSEE REMITTED THE TDS IN T IME AND HOWEVER, THERE WAS A DELAY OF 400 DAYS IN FILING THE TDS RETURN FOR 4 TH QUARTER. THERE IS NO DISPUTE ON THE FACT THAT THE ASSESSMENT YE AR UNDER CONSIDERATION IS A.Y. 2011-12. THE CASE OF THE REVENUE IS THAT THE REASONABLE CAUSE SPECIFIED IN THE PROVISIONS OF SECTION 273 B OF THE ACT IS NOT APPLICABLE TO THE PENALTY LEVIED U/S.272A(2)(K) OF THE ACT. IN THIS REGARD, WE HAVE PERUSED THE RELEVANT PROVISIONS AND FIND THE AUTHORITIES ARE NOT CORRECT IN INTERPRETING THE SAID PROVISIONS AS TH ERE IS NO REFERENCE TO SECTION 272A(2)(K) IN THE SECTION 273B OF THE ACT. WE ALS O FIND THE REASON STATED BY THE ASSESSEE BEFORE THE CIT(A) THAT T HE DELAY IN FILING THE TDS RETURN IS DUE TO FINANCIAL STRINGENCY OF THE COMPA NY ON ONE SIDE AND ILLNESS OF ACCOUNTANT OF THE COMPANY ON OTHER SIDE WH ICH ARE FOUND TO BE REASONABLE CAUSES. 9.1 FURTHER, WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF AJA Y NARAYANRAO SAYALKAR VS. JCIT IN ITA NO.715/PUN/2016, DATE D 25-01- 4 ITA NO.1124/PUN/2016 SAMAL CONSTRUCTION P. LTD. 2018 FOR THE A.Y. 2011-12 HAD AN OCCASION TO DECIDE SIMILA R ISSUE AND GRANTED RELIEF TO THE ASSESSEE AS PER THE DISCUSSION GIVE N IN PARA NO.8 OF THE ORDER. WHILE ALLOWING THE APPEAL OF THE ASSESSEE, THE T RIBUNAL FOLLOWED THE CONSOLIDATED ORDER OF THE TRIBUNAL IN THE CAS E OF NAV MAHARASHTRA VIDYALAYA VS. ADDL.CIT (TDS), RANGE, PUNE AND OT HERS IN ITA NO.832/PN/2016 & OTHERS, DATED 07-10-2016 FOR THE A.Y. 2011-12. THEREFORE, WE FIND IT RELEVANT TO EXTRACT THE OPERATIONAL P ARA OF THE TRIBUNAL IN THE CASE OF AJAY NARAYANRAO SAYALKAR VS. JCIT (SUPRA) HERE AS UNDER : 8. THE CASE OF THE ASSESSEE BEFORE US IS THAT THE DELAY IN SUBMISSION OF E-TDS RETURN WAS BECAUSE OF THE PROBLEM OF AWARENESS OF RETURN PREPARATION UTILITY, WHICH WAS UPDATED BY NSDL IN THE FIRST YEAR, I.E. ASSESSMENT YEAR 2011-12. BECAUSE OF THE REQUIREMEN T OF E-TDS FURNISHING OF TDS STATEMENT ARISING FOR THE FIRST TIME IN ASSESSMENT YEAR 2011-12, THERE WERE PROBLEMS FACED BY THE ASSE SSEE AND HENCE, THE DELAY IN FILING QUARTERLY TDS RETURN LATE. WE HOLD THAT THE ASSESSEE HAD REASONABLE CAUSE IN NOT FURNISHING THE SAME IN TIME AND IN VIEW OF THE PROVISIONS OF SECTION 273B OF THE ACT, WE HOLD THAT THE ASSESSEE IS NOT LIABLE TO LEVY OF PENALTY UNDER SECTION 272A(2)(K) OF THE ACT. HENCE, THE ASSESSING OFFICER IS DIRECTED TO DELETE THE SAM E. WE FIND IT IS NOT THE CASE OF THE REVENUE THAT THE ASSES SEE IS A HABITUAL DEFAULTER IN FILING THE TDS RETURNS LATE. SINCE THE FACTS OF T HE PRESENT CASE ARE SIMILAR TO THE ONE ADJUDICATED BY THE TRIBUNAL, W E HOLD THAT ASSESSEE IS NOT LIABLE TO PENALTY U/S.272A(2)(K) OF THE ACT. ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 19 TH DAY OF SEPTEMBER, 2018. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 19 TH SEPTEMBER, 2018. SATISH 5 ITA NO.1124/PUN/2016 SAMAL CONSTRUCTION P. LTD. & ( / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS)-10, PUNE. 4. THE CIT (TDS), PUNE. 5. , , # , / DR, ITAT, A BENCH, PUNE. 6. & / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE S ECRETARY , / ITAT, PUNE.