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

ITA 1230/CHANDI/2011

• Counselvise Citation: 123021514 RSA 2011
• 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

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. 1230 & 1231/CHD/2011 ASSESSMENT YEARS: 2009-10 & 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 TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST THE COMMON ORDER OF CIT(A), CHANDIGARH DATED 13.10.2011 IN CON FIRMING THE PENALTY OF RS. 1,48,08,430/- LEVIED U/S 272A(2)(G) OF THE INCO ME TAX ACT, 1961 (IN SHORT 'THE ACT') FOR THE ASSESSMENT YEARS 2009-10 A ND 2010-11. 2. THE ISSUE IS COMMON AND, THEREFORE, WE WILL DISP OSE OF BOTH 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 DE FAULTED U/S 200(3) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') FOR N ON-ISSUING FORM NO.16A OR ISSUING LATE THE SAME TO THE DUDUCTEES. THE TOTAL D ELAY OF DEFAULT IN ISSUING FORM NO.16A, AS PER THE ORDER WAS 1192632 DAYS. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE HAD SUBMITTED BEFORE THE ASSESSING OFFICER THAT DELAY WAS DUE TO THE FACT THAT LAND OWNERS HAD NOT SUBMITTED THEIR PAN NUMBERS AND THERE WAS NO INTENTIONAL DELAY ON THE P ART OF THE ASSESSEE. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLAN ATION OF THE ASSESSEE ON THE GROUND THAT PR WAS SUPPOSED TO OBTAIN THE PAN N UMBERS OF THE PERSONS TO WHOM PAYMENT WAS MADE, PRIOR TO RELEASE OF THE P AYMENT AND THE PR WAS SUPPOSED TO ISSUE THE CERTIFICATES IN FORM NO. 16A, WITHIN PRESCRIBED PERIOD. HE ACCORDINGLY HELD THE ASSESSEE IN DEFAULT IN NOT ISSUING THE CERTIFICATE WITHIN PRESCRIBED TIME AND LEVIED PENALTY U/S 272A( 2)(G) OF THE INCOME TAX ACT, 1961. THE ASSESSING OFFICER LEVIED PENALTY OF RS. 1,48,08,426/-, EQUAL TO THE AMOUNT OF TAX DEDUCTIBLE / DEDUCTED AT SOURC E. THE ASSESSING OFFICER HAS CONSIDERED ACCUMULATED DEFAULT OF 192632 DAYS. HOWEVER, THE ASSESSING OFFICER HAS NOT GIVEN BREAK UP OF DELAY OF TWO ASSE SSMENT YEARS. 4. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE FILED WRITTEN SUBMISSIONS, RELEVANT PORTION OF WHICH IS R EPRODUCED BELOW:- GOVT. HAS ISSUED GUIDELINES FOR SUBMISSION OF ETDS 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 RE TURNS. BEFORE 3 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 PTLC11477B 2006 - 07 26Q 02 013270200011493 15/01/2007 PTLC11477E 2006 - 07 26Q Q3 013270100010112 13/06/2007 PTLC11477E 2006 - 07 26Q Q4 0132701 00014146 11/07/2007 PTLC11477E 2007 - 08 26Q QL 013270200054786 07/08/2010 PTLC11477E 2008 - 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 PTL C11477E 2007 - 08 26Q Q4 013270200055210 10/08/2010 PTLC11477E 2009 - 10 26Q Q2 013270200055221 TO/08/2010 PTLC11477E 2007 - 08 26Q Q3 BEFORE THE ABOVE NOTIFICATION ASSESSEE WAS FILLING ETDS RETURNS AND ISSUING FORM 16A IN TIME. 5. THE CIT(A) DID NOT FIND ANY MERIT IN THE ABOVE S UBMISSIONS OF THE ASSESSEE AND THEREFORE, CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER FOR THE REASONS STATED IN PARA 5 OF THE IMPUGNED ORDER AND, HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. BEFORE US, SHRI HARRY RIKHY, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE WAS DELAY IN ISSUING FORM NO.16A FOR THE FINANCIAL YEARS 2008-09 AND 2009-10. THE TOTAL NUMBER OF DELAY IN ALL THE EIGHT QUARTERS WAS 567. THE ASSESSING OFFICER HAS CALCULATED 192632 NUMBER OF DAYS IN ISSUING FORM NO. 16A, THEREFORE, HE WAS OF THE OPINION THAT PENA LTY U/S 272A(2)(G) OF THE ACT IS LEVIABLE. A SHOW CAUSE NOTICE WAS ISSUED ON DATED 16.8.2010. IN REPLY, THE ASSESSEE HAS SUBMITTED THAT DUE TO NON A VAILABILITY OF PAN NUMBERS, CERTIFICATES WERE NOT ISSUED BUT THE TAX W AS WELL DEDUCTED IN TIME AND DEPOSITED IN GOVERNMENT ACCOUNT. IT WAS ALSO EX PLAINED THAT AS THE 4 DEDUCTEE DID NOT INFORM PAN NUMBERS, THE CERTIFICAT E WAS NOT ISSUED TO THEM. THE CALCULATION OF DELAY IN NUMBER OF DAYS WAS NOT PROVIDED IN THE ORDER. SHRI HARRY RIKHY, LD. COUNSEL FOR THE ASSESSEE FURT HER SUBMITTED THAT THE COLLECTOR LAND ACQUISITION, DEPARTMENT OF INDUSTRIE S IS A GOVERNMENT ORGANIZATION. THE ORGANIZATION IS ACQUIRING LAND ON BEHALF OF PUNJAB GOVERNMENT. THE LAND COMPENSATION IS PAID BY THE OR GANIZATION 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 CO MPENSATION AND INTEREST IS DEPOSITED IN THE COURT AND NOT PAID DIRECTLY TO THE LAND OWNERS. THE LAND OWNERS / AGRICULTURISTS DO NOT HAVE PAN NUMBERS. TH E DEPARTMENT WAS NOT ABLE TO FIND THE PAN NUMBERS OF THESE LAND OWNERS. IT WAS ALSO SUBMITTED BY SHRI HARRY RICKY, LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE HAD ISSUED LETTERS TO INDIVIDUAL LAND OWNERS FOR PAN NUMBERS A T THEIR AVAILABLE ADDRESSES BUT NO RESPONSE RECEIVED DUE TO IMPROPER ADDRESSES. AS THE PAN NUMBERS WERE NOT PROVIDED BY THE DEDUCTEE, SO THE T DS CERTIFICATES WERE NOT ISSUED TO THEM. SHRI HARRY RIKHY, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS ACCEPTED THAT THERE WAS NO MALAFIDE INTE NTION OF THE DEPARTMENT. TDS WAS DEDUCTED AT THE RATES PRESCRIBED BY THE INC OME TAX DEPARTMENT. THE TAX WAS DEPOSITED WELL IN TIME IN THE GOVT. TRE ASURY. 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 INFORM THE PAN TO THE DEDUCTOR SO THAT THE TDS RETURN COULD BE FILED WITH THE INCOME TAX DEPARTMENT AND TAX CREDIT GOES TO THE DEDUCTEE. HE, THEREFORE, SUBMITTED THAT NO PENALTY IS LEVIABLE IN THIS CASE. RELIANCE WAS PLACED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF HINDUST AN STEELS LTD VS CIT (1972) 83 ITR 26 (SC). 5 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 THIS CASE, THE A SSESSING OFFICER HAS LEVIED THE IMPUGNED PENALTY FOR THE VIOLATION OF THE PROVI SIONS OF RULE 31 OF THE INCOME TAX RULE, 1962 READ WITH SECTION 200(3)(1) O F THE INCOME TAX ACT, 1961. THE ASSESSEE FAILED TO ISSUE TDS CERTIFICATE S WITHIN TIME PRESCRIBED U/S 200(3) READ WITH RULE 31 OF THE I.T. RULE, 1962 . THE EXPLANATION OF THE ASSESSEE FOR NON-ISSUING THE CERTIFICATES WITHIN TI ME PRESCRIBED WAS THAT THE INTEREST COMPONENT IN THE COMPENSATION PAID TO THE DISTRICT COURT FOR DISBURSEMENT TO THE LAND OWNERS / RIGHT HOLDERS IS TAXABLE AS PER INCOME TAX ACT, 1961 AND TAX @ 11.2% HAVE BEEN DEDUCTED AND DE POSITED IN THE GOVERNMENT ACCOUNT. THE ASSESSEE FURTHER EXPLAINED BEFORE THE AUTHORITIES BELOW THAT IT WAS DIFFICULT TO FILE RETURN AS THE P AYMENT OF COMPENSATION WAS MADE BY THE HON'BLE COURT AND NO PAN NUMBERS WERE A VAILABLE WITH THE OFFICE. IT IS ALSO SUBMITTED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES THAT ITS OFFICE HAS FILED ALL THE TDS RETURNS IN FORM NO . 24Q FOR THE IST, 2 ND , 3 RD AND 4 TH QUARTERS OF THE FINANCIAL YEARS 2006-07, 2007-08, 2008-09 AND 2009- 10. THE DELAY HAS BEEN ATTRIBUTED ON THE PART OF TH E LAND OWNERS DUE TO THE FACT THAT LAND OWNERS HAVE NOT SUBMITTED THEIR PAN NUMBERS REQUIRED FOR THE PURPOSE. HOWEVER, THE LAND OWNERS HAD BEEN ASKED TO SUBMIT THEIR PAN NUMBERS VIDE THIS OFFICE LETTERS DATED 22.11.2007, 9.1.2008, 3.3.2009 AND PUBLIC NOTICE HAD ALSO BEEN GIVEN IN DAILY AJIT NEW PAPAER ON 17.8.2010. THE ASSESSEE CATEGORICALLY STATED BEFORE THE LOWER AUTHORITIES THAT DUE TO NON 6 AVAILABILITY OF THE PAN NUMBERS THERE WAS A DELAY I N ISSUING FORM NO. 16A. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE, WE ARE OF THE VIEW, THAT THE ASSESSEE WAS PREVENTED BY SUFFIC IENT CAUSE FROM ISSUING CERTIFICATIONS IN FORM NO.16A WITHIN PERIOD PRESCRI BED BY THE RELEVANT RULE AND HENCE NO PENALTY IS LEVIABLE. EVEN OTHERWISE A LSO THERE WAS ONLY A TECHNICAL AND VENIAL BREACH OF PROVISIONS CONTAINED IN RULE 31 OF THE I.T. RULE, 1962 READ WITH SECTION 200(3) OF THE INCOME T AX ACT, 1961, REQUIRING THE ASSESSEE TO FURNISH A CERTIFICATE OF DEDUCTION AT SOURCE IN FORM NO.16A. THE TDS WAS DEDUCTED AT THE RATES PRESCRIBED BY THE INCOME TAX DEPARTMENT. THE TAX WAS DEPOSITED WELL IN TIME IN THE GOVT. TRE ASURY. THUS, THE ASSESSEE HAS FULFILLED ITS RESPONSIBILITY FOR DEDUCTION OF TAX AND DEPOSITING OF TAX. IT IS ALSO APPARENT FROM THE RECORDS THAT THE ASSESSEE HAS MADE A MAXIMUM EFFORTS TO OBTAIN THE PAN NUMBERS OF THE DEDUCTEES. IN OUR VIEW, DELAY IN FURNISHING THE CERTIFICATES HAS NOT CAUSED ANY LOSS TO THE REVENUE. THE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEE LS LTD V CIT (1972) 83 ITR 26 HAS 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 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. 7 9. IN THIS CASE, FORM NO. 16A WAS NOT SUBMITTED WIT HIN TIME AND HENCE THERE WAS ONLY TECHNICAL AND VENIAL BREACH OF PROVI SIONS CONTAINED IN RULE 31 OF THE INCOME TAX RULES, 1962 READ WITH SECTION 200 (3) OF THE INCOME TAX ACT, 1961. THEREFORE, IN VIEW OF THE DECISION OF TH E HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD V CIT (SUPRA), N O PENALTY CAN BE LEVIED. 10. VIEWED FROM ANY ANGLES, WE ARE OF THE CONSIDERE D OPINION THAT NO PENALTY CAN BE VALIDLY LEVIED IN THE FACTS AND CIRC UMSTANCES OF THE PRESENT CASE. WE, THEREFORE, CANCEL THE IMPUGNED PENALTY IN BOTH THE 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