The Collector Land Acquisition, Chandigarh V. Addl. CIT (TDS), Chandigarh

ITA 1228/CHANDI/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57696 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 20-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI D.K.SRIVASTAVA, ACCOUNTANT MEMBER ITA NOS. 1226 TO 1229/CHD/2011 ASSESSMENT YEARS: 2007-08 TO 2010-11 THE COLLECTOR LAND ACQUISITION, VS ADDL. CIT(TDS), DEPARTMENT OF INDUSTRIES AND RANGE, CHANDIGARH COMMERCE, SECTOR 17, CHANDIGARH PAN NO. PTLC11477E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARRY RIKHY RESPONDENT BY : SMT. JAISHREE SHARMA DATE OF HEARING : 02.02.2012 DATE OF PRONOUNCEMENT : 09.03.2012 ORDER PER H.L.KARWA, VP THESE FOUR APPEALS BY THE ASSESSEE ARE DIRECTED AGA INST THE COMMON ORDER OF CIT(A), CHANDIGARH DATED 13.10.2011 IN CON FIRMING THE PENALTY OF RS. 6,11,600/- LEVIED U/S 272A(2)(K) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') FOR THE ASSESSMENT YEARS 2007-08 TO 2010 -11. 2. THE ISSUE IS COMMON AND, THEREFORE, WE WILL DISP OSE OF ALL THE APPEALS TOGETHER BY THIS COMMON ORDER. 2 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE PERSON RESPONSIBLE IN RESPECT OF COLLECTOR LAND ACQUISITION, DEPARTMENT O F INDUSTRIES & COMMERCE, PUNJAB CHANDIGARH (IN SHORT PR) HAD NO T FILED THE E-TDS QUARTERLY RETURNS ON RESPECTIVE DUE DATES AND SO HA D DEFAULTED U/S 200(3) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). IN RESPONSE TO THE SHOW CAUSE NOTICE, THE PERSON RESPONSIBLE HAD SUBMITTED BEFORE THE ADDL. CIT (IN SHORT THE ASSESSING OFFICER) THAT THE DELAY WAS DUE TO TH E FACT THAT THE LAND OWNERS HAVE NOT SUBMITTED THEIR PAN NUMBERS AND THERE WAS NO INTENTIONAL DELAY ON THE PART OF THE PR. THE ASSESSING OFFICER WAS NOT S ATISFIED WITH THE EXPLANATION ON THE GROUND THAT PR WAS SUPPOSED TO O BTAIN THE PAN NUMBERS OF THE PERSONS TO WHOM PAYMENT WAS MADE, PRIOR TO R ELEASE OF THE PAYMENT AND THE PR WAS SUPPOSED TO FILE THE RETURNS IN FORM NO. 26Q WITHIN PRESCRIBED PERIOD. HE ACCORDINGLY HELD THAT THE PR AS THE ASSESSEE IN DEFAULT IN NOT FILING THE E-TDS RETURNS IN FORM NO . 26Q WITHIN PRESCRIBED PERIOD AND LEVIED PENALTY U/S 272A(2)(K). THE TOTA L NUMBER OF DAYS OF DEFAULT WORKED OUT TO 6116 AND SO HE LEVIED PENALTY OF RS. 6,11,600/- @ RS. 100/- FOR EVERY DAY U/S 272A(2)(K) OF THE ACT. THE DELAY CALCULATED BY THE ASSESSING OFFICER WAS 4 DAYS, 2745 DAYS, 2720 AND 9 47 DAYS IN ASSESSMENT YEARS 2007-08, 2008-09, 2009-10 AND 2009-10 RESPECT IVELY. BEFORE THE CIT(A), THE PR TOOK THE FOLLOWING LINE OF ARGUMENTS :- 1. THE INCOME TAX OFFICER (TDS) CHANDIGARH VIDE LE TTER DATED INFORMED THAT THERE IS DELAY IN SUBMISSION OF QUARTERLY RETU RNS FOR THE FINANCIAL YEAR 2006-07 TO 2009-10. THE TOTAL NUMBER OF DELAY DAYS WERE CALCULATED AS 6116 DAYS THEREFORE IT ATTRACTS PENAL TY U/S 272A(2)(K) OF THE INCOME TAX ACT. 3 2. IN REPLY THE ASSESSEE HAS INFORMED TO THE ITO ( TDS) THAT DUE TO NON AVAILABILITY OF PAN THE TDS RETURNS COULD NOT BE F ILED IN TIME. BUT THE TAX WAS WELL DEDUCTED IN TIME AND DEPOSITED WITH TH E GOVT. ACCOUNT 3. IT IS SUBMITTED THAT THE COLLECTOR LAND ACQUIS ITION, DEPARTMENT OF INDUSTRIES IS A GOVERNMENT ORGANIZATION. THE ORG ANIZATION IS ACQUIRING LAND ON BEHALF OF PUNJAB GOVERNMENT. THE LAND COMP ENSATION IS PAID BY THE ORGANIZATION TO THE LAND OWNERS THROUGH THE DIS TRICT/HIGH COURTS. THE TDS IS DEDUCTED AT SOURCE ON THE INTEREST IS DE POSITED IN THE COURT AND NOT PAID DIRECTLY TO THE LAND OWNER S. THE MOSTLY LAND OWNERS/AGRICULTURIST DON'T HAVE PAN NUMBERS. 4. THE ASSESSING OFFICER IGNORED THE SUBMISSIONS MADE BY THE ASSESSEE AND PENALTY OF RS. 6,11,600/- WAS IMPOSED. 5. GOVT. HAS ISSUED GUIDELINES FOR SUBMISSION OF E TDS QUARTERLY RETURNS. IT WAS DECIDED THAT FORM 26Q WITH LESS THAN 70% OF PAN DATA WILL NOT BE ACCEPTED FOR THE QUARTER ENDING ON 30.09.2007. W ITH NON AVAILABILITY OF REQUISITE PAN DATA, WE COULD NOT SUBMIT THE ETDS R ETURNS. BEFORE 30.09.2007 WE WERE FILING THE ALL TDS RETURNS IN TI ME. THE DETAILS OF OUR TDS SUBMISSION IS AS UNDER: RECEIPT NUMBER RECEIPT DATE TAN FINANCIAL YEAR FORM NUMBER QUARTER 013270200005915 18/07/2006 PTLC11477E 2006 - 07 26Q QL 013270100003252 16/10/2006 PTLC 11477B 2006 - 07 26Q 02 013270200011493 15/01/2007 PTLC11477E 2006 - 07 26Q Q3 013270100010112 13/06/2007 PTLC11477E 2006 - 07 26Q Q4 013270100014146 11/07/2007 PTLC11477E 2007 - 08 26Q QL 013270200054786 07/08/2010 PTLC11477E 2 008 - 09 26Q QL 013270200054790 07/08/2010 PTLC11477E 2008 - 09 26Q Q2 013270200054801 07/08/2010 PTLC11477E 2008 - 09 26Q Q3 013270200054812 07/08/2010 PTLC11477E 2008 - 09 26Q Q4 013270200054823 07/08/2010 PTLC11477E 2009 - 10 26Q Q3 013270200054834 07/08/2010 PTLC11477E 2009 - 10 26Q QL 013270200055195 10/08/2010 PTLC11477E 2007 - 08 26Q Q2 013270200055206 10/08/2010 PTLC11477E 2007 - 08 26Q Q4 013270200055210 10/08/2010 PTLC11477E 2009 - 10 26Q Q2 01327020005522 1 TO/08/2010 PTLC11477E 2007 - 08 26Q Q3 BEFORE THE ABOVE NOTIFICATION ASSESSEE WAS FILLING ETDS RETURNS IN TIME. 4. THE CIT(A) DID NOT FIND ANY MERIT IN THE ABOVE S UBMISSIONS OF PR AND THEREFORE, CIT(A) UPHELD THE ORDER OF ASSESSING OFF ICER. HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. BEFORE US, SHRI HARRY RIKHY, LD. COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER VIDE LETTER DATED 12.8.2 010 INFORMED THE PR THAT 4 THERE WAS A DELAY IN FILING OF E-TDS QUARTERLY RETU RNS FOR THE FINANCIAL YEARS 2006-07, 2007-08, 2008-09 AND 2009-10. THE TOTAL N UMBER OF DAYS OF DEFAULT WAS 6116. A SHOW CAUSE NOTICE WAS ISSUED ON 14.12. 2010. IN REPLY, THE PR HAS INFORMED THAT DUE TO NON AVAILABILITY OF PAN NU MBER, THE E-TDS QUARTERLY RETURNS COULD NOT BE FILED IN TIME BUT TH E TAX WAS WELL DEDUCTED IN TIME AND DEPOSITED WITH THE GOVERNMENT ACCOUNT. 6. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED T HAT COLLECTOR LAND ACQUISITION, DEPARTMENT OF INDUSTRIES IS A GOVERNME NT ORGANIZATION. THE ORGANIZATION IS ACQUIRING LAND ON BEHALF OF THE PUN JAB GOVERNMENT. THE LAND COMPENSATION IS PAID BY THE ORGANIZATION TO THE LAN D OWNERS THROUGH THE DISTRICT / HIGH COURTS. THE TDS IS DEDUCTED AT SOU RCE ON THE INTEREST PAYMENT TO THE LAND OWNERS. BUT THE COMPENSATION A ND INTEREST IS DEPOSITED IN THE COURT AND NOT PAID DIRECTLY TO THE LAND OWNE RS. THE LAND OWNERS / AGRICULTURISTS DO NOT HAVE PAN NUMBERS. THE DEPARTM ENT WAS NOT ABLE TO FIND THE PAN NUMBERS OF THESE LAND OWNERS. THE PR SUBMIT TED THAT IT HAD ISSUED LETTERS TO INDIVIDUAL LAND OWNERS FOR PAN NUMBERS A T THE AVAILABLE ADDRESSES BUT NO RESPONSE WAS RECEIVED DUE TO IMPROPER ADDRES S. AS THE PAN NUMBERS WERE NOT PROVIDED BY THE DEDUCTEE, SO THE E-TDS RET URN COULD NOT BE FILED IN TIME. SHRI HARRY RIKHY, LD. COUNSEL FOR THE ASSESS EE FURTHER SUBMITTED THAT IT IS ACCEPTED THAT THERE WAS DELAY IN FILING THE E -TDS RETURNS BUT THERE WAS NO MALAFIDE INTENTION OF THE PR / DEPARTMENT. THE T DS WAS DEDUCTED AT THE RATES PRESCRIBED BY THE INCOME TAX DEPARTMENT. TAX WAS DEPOSITED WILL IN TIME IN THE GOVERNMENT TREASURY. THE DEPARTMENT HAS FULFILLED THEIR RESPONSIBILITY FOR DEDUCTION OF TAX AND DEPOSITING OF THE TAX. ON THE OTHER SIDE IT WAS THE RESPONSIBILITY OF THE DEDUCTEE TO I NFORM ABOUT THE PAN 5 NUMBER TO THE DEDUCTOR SO THAT TDS RETURN COULD BE FILED WITH THE INCOME TAX DEPARTMENT AND TAX CREDIT GOES TO DEDUCTEE. HE , THEREFORE, SUBMITTED THAT THE PENALTY LEVIED SHOULD BE CANCELLED. RELIA NCE WAS PLACED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F HINDUSTAN STEELS LTD V STATE OF ORISSA (1972) 83 ITR 26 (SC). 7. THE LD. DR SUPPORTED THE ORDERS OF CIT(A) AND AS SESSING OFFICER AND RELIED UPON THE REASONS MENTIONED IN THEIR RESPECTI VE ORDERS. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. IN OUR OPINION, THE PENALTY LEVIED IN ALL THE AFORESAID CASES DESERVES TO BE CANCELED. THE REASON S FOR TAKING SUCH A VIEW ARE STATED IN THE FOLLOWING PARAS. 9. IT IS AN ADMITTED FACT THAT THE AMOUNT OF TAX DE DUCTED AT SOURCE BY THE ASSESSEE (PERSON RESPONSIBLE) WAS PAID WITHIN THE L IMIT UNDER THE RELEVANT PROVISIONS OF THE INCOME TAX ACT, 1961. THERE WAS ONLY A TECHNICAL AND VENIAL BREACH TO THE PROVISIONS CONTAINED IN RULE 3 1A(2) OF THE INCOME TAX RULES, 1962 REQUIRING THE ASSESSEE TO SUBMIT QUARTE RLY RETURNS STATEMENT OF TAX DEDUCTED AT SOURCE WHICH WERE REQUIRED TO BE FI LED ON DUE DATE AS PER SECTION 200(3) OF THE I.T. ACT. AS REGARDS THE DEL AY IN SUBMITTING TDS RETURNS, IT WAS EXPLAINED BY THE ASSESSEE THAT DUE TO NON-FURNISHING OF PAN NUMBERS, THE TDS CERTIFICATE COULD NOT BE FILED IN TIME, BUT THE TAX WAS DEDUCTED IN TIME AND DEPOSITED WITH THE GOVERNMENT ACCOUNT. IT IS ALSO EXPLAINED THAT THE COLLECTOR LAND ACQUISITION, DEPA RTMENT OF INDUSTRIES IS A GOVERNMENT ORGANIZATION. THE ORGANIZATION IS ACQUIR ING LAND ON BEHALF OF 6 PUNJAB GOVERNMENT. THE LAND COMPENSATION IS PAID BY THE ORGANIZATION TO THE LAND OWNERS THROUGH THE DISTRICT / HIGH COURTS. THE TDS IS DEDUCTED AT SOURCE ON THE INTEREST PAYMENT TO THE LAND OWNERS. BUT THE COMPENSATION AND INTEREST IS DEPOSITED IN THE COURT AND NOT PAID DIR ECTLY TO THE LAND OWNERS. IT IS ALSO EXPLAINED THAT GENERALLY THE LAND OWNERS / AGRICULTURISTS DO NOT HAVE PAN NUMBERS. THE DEPARTMENT WAS NOT ABLE TO FIND P AN NUMBERS OF THESE LAND OWNERS. IT IS ALSO EXPLAINED BY THE ASSESSEE T HAT THE DEPARTMENT HAS ISSUED LETTERS TO INDIVIDUAL LAND OWNERS FOR PAN NU MBERS AT THE AVAILABLE ADDRESS BUT NO RESPONSE WAS RECEIVED DUE TO IMPROPE R ADDRESSES. HOWEVER, IT IS ALSO EXPLAINED THAT AS THE PAN NUMBERS WERE NOT PROVIDED BY THE DUDUCTEES, SO THE E-TDS RETURNS COULD NOT BE FILED IN TIME. IN OUR VIEW, THE ASSESSEE HAS SATISFACTORILY EXPLAINED THE REASONS R EGARDING NON FILING OF TDS RETURNS IN TIME, THEREFORE, NO PENALTY SHOULD BE LE VIED IN THESE CASES. EVEN OTHERWISE ALSO, THE ASSESSEE DID NOT DERIVE ANY BEN EFIT WHATSOEVER BY NOT FILING THE E-TDS RETURNS IN TIME, AS THE AMOUNT OF TDS WAS DULY DEPOSITED IN THE GOVERNMENT TREASURY WITHIN PRESCRIBED TIME. SUC H DELAY HAS NOT CAUSED ANY LOSS TO THE REVENUE / INCOME TAX DEPARTMENT. T HE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEELS LTD V STATE O F ORISSA 83 ITR 26 (SC) INTER ALIA HELD AS UNDER:- AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMI NAL PROCEEDINGS, AND PENALTY WILL NOT ORDINARILY BE IMP OSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS A GUILTY OR CONDUCT CONTUMAC IOUS OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF IT S OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MEREL Y BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHO ULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATI ON IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCIS ED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVA NT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCR IBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE 7 JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRI BED BY THE STATUTE. 10. FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CASE FROM FILING THE RETURNS WITHIN T HE STATUTORY PERIOD. EVEN OTHERWISE, THERE WAS ONLY A TECHNICAL AND VENIAL BR EACH TO THE PROVISIONS CONTAINED IN RULE 31A (2) OF THE INCOME TAX RULE, 1 962 READ WITH SECTION 200(3) OF THE INCOME TAX ACT, 1961. CONSIDERING TH E ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE OF THE CO NSIDERED OPINION THAT NO PENALTY CAN BE VALIDLY LEVIED ON THE FACTS AND CIRC UMSTANCES OF THE PRESENT CASE. WE, THEREFORE, CANCEL THE PENALTY IN ALL THES E CASES. 11. IN THE RESULT, THE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 9 TH DAY OF MARCH, 2012 SD/- SD/- (D.K.SRIVASTAVA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 9 TH MARCH, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR 8 6. THERE WAS NO MALAFIDE INTENTION OF THE DEPARTMENT F OR NOT SUBMITTING THE QUARTERLY ETDS RETURNS IN TIME. THE TDS WAS D EDUCTED AT THE RATES PRESCRIBED BY THE INCOME TAX DEPARTMENT. THE TAX WAS DEPOSITED WELL IN TIME IN THE REVENUE. THE DEPARTMENT HAS FULFILL THERE RESPONSIBILITY FOR DEDUCTION OF TAX AND DEPOSITING OF TAX. 7. ON THE OTHER SIDE IT'S THE RESPONSIBILITY OF THE DE DUCTEE TO INFORM THE PAN TO THE DEDUCTOR SO THAT THE TDS RETURN CAN BE FILED WITH THE INCOME TAX DEPARTMENT AND TAX CREDIT GOES TO THE DEDUCTEES. 8. DEPARTMENT HAS MADE MAXIMUM EFFORTS TO OBTAIN THE P AN OF THE DEDUCTEES. IN THIS REGARD DEPARTMENT HAS ISSUED LET TER TO LAND OWNERS ON DATED 22.11.2007, 09.01.2008, 03.03.2008 TO SUBMIT THEIR PAN. BUT NO RESPONSE RECEIVED. (COPY OF FEW LETTERS ARE ENCLOS ED). 9. A LETTER DATED 09.12.2006 WAS WRITTEN TO DISTT. JUDGE ROOPNAGAR, REGARDING THE INFORMATION OF PAN OF LAND FROM THE L AND OWNERS. BUT NO RESPONSE RECEIVED FROM THE DISTT. COURT. 9 10. EVEN PUBLIC NOTICES WAS ISSUED IN THE 'THE DAILY AJ IT' NEWSPAPER ON DATED 17.08.2010 FOR PAN OF LAND OWNERS FOR SU BMIS SION OF PAN. (COPY OF NEWS PAPER CUTTING IS ENCLOSED). 11. COPY OF ORDER U/S 201(1) & 201(IA) OF THE INCOME TA X ACT IS ATTACHED FOR THE ASSESSING YEAR 2009-10 & 2010-11. THE ORD ERS SHOW THAT THERE IS NO PENDING DEMAND RELATING TO TDS.