M/s.Country Club India Ltd., Hyderabad V. Addl. CIT, Hyderabad

ITA 1252/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77844 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 05-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K HARITA
• Assessee Lawyers: P MURALI MOHAN RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER AND S HRI V.DURGA RAO , JUDICIAL MEMBER ITA NO.1 250 /HYD/13 : ASSESSMENT YEAR 200 7 - 0 8 ITA NO.1 251 /HYD/13 : ASSESSMENT YEAR 200 8 - 0 9 ITA NO.1 252 /HYD/13 : ASSESSMENT YEAR 200 9 - 1 0 ITA NO.1 253 /HYD/13 : ASSESSMENT YEAR 20 1 0 - 11 M/S. COUNTRY CLUB INDIA LTD., HYDERABAD ( PAN - AA ACC 8276 B ) V/S. ADDL COMMISSIONER OF INCOME - TA X RANGE 14, HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : S HRI P.MURALI MOHAN RAO RESPONDENT BY : SMT. K.HARITA DR DATE OF HEARING 07.04 .2014 DATE OF PRONOUNCEMENT 11.04.2014 O R D E R PER V.DURGA RAO , JUDICIAL MEMBER: TH E S E FOUR APPEAL S BY THE ASSESSEE ARE DIRECTED AGAINST SIMILAR BUT SEPARATE ORDERS OF THE COMMISSIONER OF INCOME - TAX(APPEALS) - I I , HYDERABAD ALL DATED 1 5 . 07 .201 3 , CONFIRMING THE FOLLOWING AMOUNTS OF PENALTY LEVIED UNDER S.272A(2)(K) OF THE INCOME - TAX ACT, 196 1 FOR THE ASSESSMENT YEAR S 200 7 - 0 8 TO 2010 - 11 - ____________________________________________ ASSESSMENT YEAR PENALTY RS. _______________________ 2007 - 08 __________________ 13,07,200 2008 - 09 9,89,000 2009 - 10 7,02,600 2010 - 11 3,95,000 ____________________________________________ ITA NO. 1250 - 1253 / HYD/20 13 M/S. COUNTRY CLUB INDIA LTD., HYDERABAD 2 SINCE THE FACTUAL BACKGROUND AND THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON, THEY ARE BEING DISPOSED OF WITH THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 . FACTS OF THE CASE IN BRIEF, COMMON IN THE SE APPEALS, ARE THAT IN THE COURSE OF VERIFICATION OF THE ITD APPLICATION, IT WAS NOTICED THAT THE ASSESSEE HAS FAILED TO FILE THE QUARTERLY RETURNS I.E. 24Q AND 26Q FOR THE Y E ARS UNDER APPEAL WITHIN TH E STIPULATED TIME, AND THERE WAS A DELAY FOR ALL THE T HREE QUARTERS OF EACH OF THE Y EA RS UNDER APPEAL. OBSERVING THAT AS PER THE PROVISI O N S OF S.200(3) OF THE ACT READ WITH RULE 31A OF THE INCOME - TAX RULES, THE DEDUCTOR IS UNDER A STATUTORY OBLIGATION TO FURNISH QUARTERLY STATEMENTS FOR DETAILS O F TAX DEDU CTED AT SOU R CE TO THE PRESCRIBED AUTHORITY AND IN THE PRESCRIBED FORM WITHIN THE STIPULATED TIME, FOR THE NON - COMPLIANCE ON THE PART OF THE ASSESSEE, THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS UNDER S.271A(2)(K) OF THE ACT FOR THESE FOUR YEAR S . IN THE COU R SE OF PENALTY PROCEEDINGS INITIATED BY ISSUANCE OF NOTICE DATED 13.12.2010, ASSESSEE SUBMITTED THAT TDS RETURNS COULD NO T BE FILED DUE TO NON - AVAILABILITY O F THE P ER M ANE N T ACCOUNT N UMBERS AND ADDRESSES OF THE ASSESSEE DEDUCTEES AS IT IS MAN DATORY FOR FIL I NG O F RETURNS AS PER THE TDS PROVI S ION S OF THE IT ACT. NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND OBSERVING THAT IT IS THE STATUTORY OBLIGATION OF THE DEDCUTOR TO OBTAIN PAN NUMBERS OF THE PARTIES AGAINST WHOM THE TDS WAS MADE, AND THE DED U CTOR C OULD HAVE FIL E D E - TDS RETURNS WITH THE AVAILABLE P AN NOS. AND COULD HAVE FILED CORRECTED STATEMENTS AS AND WHEN HE GOT THE CORRE C T PAN NOS. FOR THE BALAN C E/REMAINING DEDUCTEES ARE AVAILABLE, PROCEEDED TO IMPOSE THE IMPUGNED PENALTIES UNDER S.272A(2)(K) OF THE ACT, FOR THE FAILURE ON THE PART OF THE ASSESSEE TO FILE FORM NOS.24Q AND 26Q FOR ALL THE FOUR QUARTERS OF THE FOUR YEARS UNDER APPEAL, VIDE SEPARATE PENALTY ORDERS DAT ED 24.6.2011 FOR THE ASSESSMENT YEAR 2006 - 07 AND DATED 28.6.2011 FOR THE OTHER THREE YEARS. 3 . ON APPEAL BEFORE THE CIT(A) THE ASSESSEE CONTENDED INTER - ALIA THAT THE ASSESSEE WAS PROMPTLY DEDUCTING THE TAX AND PAYING THE SAME INTO ITA NO. 1250 - 1253 / HYD/20 13 M/S. COUNTRY CLUB INDIA LTD., HYDERABAD 3 GOVERNMENT ACCOUNT, AND THE ONLY DEFAULT IS IN FILING THE QUARTERLY RETURNS BELATEDLY; THAT THE DELAY IN FILING THE QUARTERLY RETURNS OCCURRED BECAUSE THE ASSESSEE HAD TO COLLECT THE PAN NUMBERS OF THE DEDCUTEES BY INDIVIDUALLY CONTACTING THEM TO ENSURE BETTER COMPLIANCE IN QUOTING OF PAN IN E - TDS STATEMENTS; AND THAT THE LATE FILING OF THE TDS RETURNS WAS ALSO DUE TO THE SICKNESS OF THE ACCOUNTANT. AFTER DUE CONSIDERATION OF THESE CONTENTIONS OF THE ASSESSEE, IN THE LIGHT OF THE DECISIONS RELIED UPON BY THE LEARNED AUTHORI SED REPRESENTATIVE FOR THE ASSESSEE BEFORE HIM, THE CIT(A) CONFIRMED THE IMPUGNED PENALTIES LEVIED BY THE ASSESSING OFFICER. 4. AGGRIEVED BY THE ORDERS OF THE CIT(A), ASSESSEE PREFERRED THESE SECOND APPEALS BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE WAS NO DEFAULT IN DEDUC T ION OR REMITTING THE TDS TO THE C ENTRAL GOVERNMENT. TH E RE IS NO LOSS CAU S ED BY THE ASSESSEE BY DELAY IN FILING THE TDS RETURN. HE FURTHER SUBMITTED THAT THE DELAY IN FILING THE RETURN DUE TO NON - AV AILABILITY OF THE PAN NUMBERS OF THE DEDUCTEES . THEREFORE, PENALTY SHOULD N O T BE LEVIED UNDER S.272A(2)(K) OF THE ACT . HE RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF BRANCH MANAGER , PUNJAB NATIONAL BANK V/S. ADDL. COMMISSIONER OF INCOME - TAX (201 1) 16 TAXMAN N .COM.318 ( LUCKNOW ) , AND ALSO RELIED ON THE DECISION OF THE COLL E CTOR OF LAND ACQUISITION V/S. ADDL. COMMISSIONER OF INCOME - TAX (TDS) RANGE (2 0 12)21 TAXMAN N .COM.22 ( CHANDIGARH ) . 6. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE, D UTIFULLY SUPPORTED THE ORDERS PASSED BY THE REVENUE AUTHORITIES. 7. WE HEARD BOTH SIDES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES LAND OTHER MATERIAL AVAILABLE ON RECORD. IN THIS CASE, THE PENALTY UNDER S.272A(2)(K) OF THE OF THE INCOM E - TAX ACT, 1961 HAS B E EN LEVIED ON THE G R OUND THAT THE ASSESSEE HAS FAILED TO FILE QUARTERLY RETURN S , I.E. 24Q AND 26Q WITHIN THE STIPULATED TIME. WHEN THE ASSESSING OFFICER HAS ASKED THE ITA NO. 1250 - 1253 / HYD/20 13 M/S. COUNTRY CLUB INDIA LTD., HYDERABAD 4 ASSESSEE FOR THE REASONS FOR NON - FILING OF THE QUARTERLY RETURNS, THE AS SESSEE HAS SUBMITTED THAT THE RETURN COULD NOT BE FILED DUE TO NON - AVAILABILITY O F PAN AND ADDRESSES OF THE DEDUCTEES, AS IT IS MANDATORY FILING OF TH E RETURNS AS PER THE TDS PROVISIONS OF THE INCOME - TAX ACT, 1961. THE ASSESSING OFFICER, AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, IS OF THE OPINION THAT IT IS THE STATUTORY OBLIGATION OF THE DEDCUTOR TO OBTAIN PAN NUMBERS OF THE PARTIES AGAINST WHOM TDS WAS MADE. ACCORDINGLY PENALTY WAS IMPOSED UNDER S.272A(2)(K) OF THE ACT. ON APPEAL, THE CIT(A) HA S CONFIRMED THE PENALTY ORDERS OF THE ASSESSING OFFICER BY OBSERVING THAT IT IS THE STATUTORY OBLIGATION OF THE ASSESSEE TO FILE THE TDS RETURNS WELL IN TIME. THE ASSESSEE HAS SUBMI T TED BEFORE THE ASSESSING OFFICER AS WELL AS THE CIT(A) THAT HE HAS DEDU CTED THE TDS AND THE SAME WAS REMITTED TO THE CENTRAL GOVERNMENT AND THE QUARTERLY RETURNS WERE FILED BELATEDLY ONLY BECAUSE OF NON - AVAILABILITY OF PAN NUMBERS OF THE DEDCUTEES. THIS FACT WAS NOT DISPUTED BY EITHER ASSESSING OFFICER OR THE CIT(A). WE FIND THAT THERE IS A JUSTIFIED REASON FOR NON - FILING OF THE QUARTERLY RETURNS IN TIME. 8. UNDER SIMILAR CIRCUMSTANCES, THE HONBLE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF BRANCH MANAGER, PUNJAB NATIONAL BANK (SUPRA), HELD THAT SINCE THE AMOUNT OF TDS WAS DULY DEPOSITED IN GOVERNMENT TREASURY WITHIN THE PRESCRIBED TIME, AND THE DELAY HAS NOT CAUSED ANY LOSS TO THE REVENUE, PENALTY MUST BE DELETED. I N THE CASE OF COLLECTOR, LAND ACQUISITION (SUPRA), THE CHANDIGARH BENCH OF THE TRIBUNAL HAS HELD THAT S INCE THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM FILING THE RETURN WITHIN THE STATUTORY PERIOD AND NO LOSS OF REVENUE HAS BEEN CAUSED TO THE DEPARTMENT, PENALTY SHOULD BE SET ASIDE. TAKING INTO CONSIDERATION TOTALITY OF FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE AND KEEPING IN VIEW THE JUDICIAL PRECEDENTS, WE FIND THAT IT IS NOT A FIT CASE FOR IMPOSITION OF PENALTY UNDER S.272A(2)(K) OF THE ACT. WE ACCORDINGLY DELETE THE IMPUGNED PENALTIES IMPOSED BY THE ASSESSING OFFICER UNDER S.272A(2)(K) OF THE ACT FOR ALL THE FOUR YEARS, ALLOWING THE GROUNDS OF THE ASSESSEE IN THESE APPEALS. ITA NO. 1250 - 1253 / HYD/20 13 M/S. COUNTRY CLUB INDIA LTD., HYDERABAD 5 9. IN THE RESULT, ALL THE FOUR APPEALS OF THE ASSESSEE AR E ALLOWED. ORDER PRONOUNCED IN THE COURT ON 11.4.20 14 SD/ - SD/ - (B.RAMAKOTAIAH) ( V.DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DT/ - 11 TH APRIL, 2014 COPY FORWARDED TO: 1. M/S. COUNTRY CLUB INDIA LTD., C/O. M/S.P.MURALI & CO., CHARTERED ACCOUNTANTS, 6 - 3 - 6755/2/3,1ST FLOOR, SOMAJIGUDA, HYDERABAD - 82 2. A DDL COMMISSIONER OF INCOME - TAX 1 4 , HYDERABAD 3. 4. COMMISSIONER OF INCOME - TAX(APPEALS) II , HYDERABAD COMMISSIONER OF INCOME - TAX I HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S