THE BRANCH MANAGER, CENTRAL BANK OF INDIA, Jaipur V. JDIT(I & CI), Jaipur

ITA 133/JPR/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9695 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 08-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P P MEENA CIT DHK
• Keywords: Reasonable cause
• Section: 133(6)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH DQY HKKJR ] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM VK;DJ VIHY LA- @ ITA NOS. 133 TO 135/JP/2017 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2012-13 BRANCH MANAGER, CENTRAL BANK OF INDIA, SULTANPUR, KOTA (RAJ). CUKE VS. JDIT, (I&CI), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACC 2498 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (CA). JKTLO DH VKSJ LS @ REVENUE BY : SHRI P.P. MEENA (CIT) LQUOKBZ DH RKJH[K @ DATE OF HEARING : 08/03/2017 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 10/03/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE COMMON ORDER DATED 30/12/2016 OF LD. CIT (A), ALWAR, PERTAIN ING TO THE ASSESSMENT YEAR 2012-13. IN ALL THESE APPEALS, THER E ARE ONLY ONE COMMON ISSUE, WHICH IS AGAINST CONFIRMATION OF PENA LTY U/S 272A(2)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) OF RS . 53,000/- EACH FOR DELAY IN FURNISHING INFORMATION UNDER THE VARIOUS C ODES ASKED BY ITA 133 TO 135/JP/2017_ BRANCH MANAGER, CBI VS. JDIT(I&CI) 2 ISSUING NOTICE BY THE ITO (INTELLIGENCE), KOTA U/S 1 33(6) OF THE ACT READ WITH RULE 114E OF THE INCOME TAX RULES, 1962 (IN SHOR T THE RULES). 2. SINCE, COMMON ISSUES ARE INVOLVED IN ALL THE APP EALS, THEREFORE, ALL THE APPEALS ARE BEING HEARD TOGETHER AND FOR TH E SAKE OF CONVENIENCE AND BREVITY, COMMON ORDER IS BEING PASS ED. 3. BRIEF FACTS OF THE CASE ARE THAT THE ITO (INTELLI GENCE), KOTA ASKED FOR FURNISHING INFORMATION UNDER VARIOUS CODES ON 1 8/6/2012. HOWEVER, THERE WAS A DELAY IN COMPLIANCE OF MORE THAN 530 DAY S AND WHEN THE SHOW CAUSE NOTICE WAS ISSUED FOR LEVYING PENALTY U/S 272A(2)(C) OF THE ACT. THE ASSESSEE SUBMITTED THAT DUE TO PROMOTION OF OFFICERS AND LDC STAFFS DURING THE YEAR 2012-13, THERE WAS A SHORTAG E OF OFFICERS AND STAFFS, THEREFORE, COMPLIANCE COULD NOT BE MADE IN TIME. IT WAS ALSO SUBMITTED THAT IN THE FUTURE NO SUCH FAULT HAS BEEN ACCRUED. THE NON- COMPLIANCE WAS NOT DELIBERATE. IT WAS DUE TO BONAFIDE SHORTAGE OF STAFFS. IT WAS ALSO SUBMITTED THAT THE ASSESSEE IS A PUBLIC SECTOR UNDERTAKING AND THE BRANCH OFFICE IS SITUATED AT SU LTANPUR, KOTA, WHICH IS A SMALL PLACE. STAFF WAS IN SHORTAGE, THEREFORE, IT WAS LITTLE BIT DIFFICULT TO DEDUCE THE INFORMATION ASKED FROM RECORDS, WHICH WAS VOLUMINOUS. THEREFORE, IT TOOK TIME TO COMPLY WITH THE NOTICES. H OWEVER, THEREAFTER, ITA 133 TO 135/JP/2017_ BRANCH MANAGER, CBI VS. JDIT(I&CI) 3 IT HAS BEEN MADE A POINT THAT NO DELAY IN FURNISHIN G ANY INFORMATION WOULD TAKE PLACE IN FUTURE. THE LD AR OF THE ASSESSEE HAS RELIED ON THE VARIOUS DECISIONS I.E. DECISION IN THE CASE OF SYND ICATE BANK VS. ACIT, ITA NOS. 1501 TO 15013/HYD/14 DATED 26/08/2015, WHER EIN THE HONBLE ITAT HAS HELD THAT WHEN THERE IS A REASONABLE CAUSE F OR NON- COMPLIANCE OF NOTICE, THE PENALTY COULD NOT BE LEVI ABLE. RELIANCE WAS ALSO PLACED ON THE DECISION IN THE CASE OF CIT VS. S UPERINTENDING ENGINEER, P.W.D., UDAIPUR, (2003), 260 ITR 641 (RAJ) , WHEREIN THE HON'BLE HIGH COURT HAS HELD THAT THE DISCRETION TO LEVY THE PENALTY U/S 272A(2)(C) OF THE ACT IS VESTED WITH THE AUTHORITY W HICH HAS TO EXERCISE THE SAME JUDICIOUSLY ON CONSIDERING OF ALL RELEVANT FACTS AND CIRCUMSTANCES. A BONAFIDE BREACH CANNOT LEAD TO LEV Y OF PENALTY. 4. ON THE OTHER HAND, THE LD CIT DR HAS VEHEMENTLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON THE RECORD AND ALSO GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE. THE BRANCH O FFICE FROM WHOM THIS INFORMATION WAS SOUGHT BY ISSUING NOTICE U/S 133(6) OF THE ACT IS LOCATED IN THE RURAL AREA OF KOTA DISTRICT. THE BRAN CH WAS HAVING ITA 133 TO 135/JP/2017_ BRANCH MANAGER, CBI VS. JDIT(I&CI) 4 SHORTAGE OF OFFICERS AND STAFFS, THEREFORE, IT TOOK TIME TO DEDUCE THE NECESSARY INFORMATION UNDER THE VARIOUS CODES. THERE IS NO SUBSEQUENT BREACH IN COMPLIANCE. IN VIEW OF THESE FACTS, NO PE NALTY COULD HAVE BEEN LEVIED. CONSIDERING THE CASE LAWS RELIED BY THE AR OF THE ASSESSEE INCLUDING THE DECISION OF HONBLE JURISDICTIONAL HI GH COURT IN THE CASE OF CIT VS. SUPERINTENDING ENGINEER, P.W.D., UDAIPUR (SU PRA), WHEREIN THE HON'BLE HIGH COURT HAS HELD AS UNDER:- THE APEX COURT IN HINDUSTAN STEEL LTD. V. STATE OF ORISSA [1972] 83 ITR 26 HAS OBSERVED THAT AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDING AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. THE APEX COURT FURTHER OBSERVED THAT PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. THE POWERS ARE TO BE EXERCISED JUDICIOUSLY. THE APEX COURT HELD AS FOLLOWS: WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS ITA 133 TO 135/JP/2017_ BRANCH MANAGER, CBI VS. JDIT(I&CI) 5 PRESCRIBED, 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 PRESCRIBED BY THE STATUTE. THUS, THE PENALTY UNDER SECTION 272A(2)(C) CANNOT BE LEVIED IN A ROUTINE MANNER. THE DISCRETION VESTED WITH THE AUTHORITY IS TO BE EXERCISED JUDICIOUSLY ON CONSIDE RATION OF ALL THE RELEVANT CIRCUMSTANCES. A BONA FIDE BREACH CANNOT LEAD TO A PENALTY UNDER SECTION 272A(2)(C). AND THE ITAT HYDERABAD BENCH IN THE CASE OF SYNDICAT E BANK VS. ACIT (SUPRA), WHEREIN IT HAS BEEN HELD:- 9. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PE RUSING THE CASE LAW RELIED UPON BY THE LD. COUNSEL OF THE ASSES SEE, I AM OF THE OPINION THAT THERE IS NO NEED FOR LEVY OF PENALTY IN THE GIVEN CASES. FIRST OF ALL, THE NOTICE ISSUED U/S. 136 IS A GENERAL NOTICE ASKING FOR INFORMATION WHICH IS NO T IN THE DOMAIN OF THE ITO, CIB. THE CBDT ITSELF HAS PRESCRIBED CERTAIN LIMITS FOR CALLING FOR INFORMATION AND INCO ME TAX ACT ALSO PRESCRIBES VARIOUS LIMITS FOR FURNISHING INFOR MATION ON A REGULAR BASIS FROM THE BANKS IN ANNUAL RETURNS. THE DETAILS ASKED IN VARIOUS CODES IS NEITHER PRESCRIBED BY THE ACT NOR SUPPORTED BY THE BOARDS CIRCULAR. THIS INFORMATION IS SPECIFICALLY ASKED BY ITO, CIB IN A PARTICULAR FORMA T MAY BE ON THE STRENGTH OF INTERNAL INSTRUCTIONS. FOR EXAMP LE, THE TIME DEPOSITS EXCEEDING RS. 2 LAKHS UNDER CODE NO. 0 03 IS ITA 133 TO 135/JP/2017_ BRANCH MANAGER, CBI VS. JDIT(I&CI) 6 NOT TO BE GENERALLY FURNISHED BY THE BANKS TO THE DEPARTMENT IN THE PRESCRIBED ANNUAL RETURN, LIKEWISE , OTHER CODES ALSO FOR WHICH DIFFERENT AMOUNTS WERE PRESCRIBE D BY THE ACT. THIS INDICATES THAT THIS INFORMATION WAS SPE CIFICALLY ASKED FOR BY THE ITO, CIB. CONSIDERING ALL THESE FACTUAL ASPECTS OF THE CASE A ND ALSO THE CASE LAWS RELIED UPON, WE DELETE THE PENALTY LEVIED BY THE ASS ESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) IN ALL THE THREE APPEALS . 6. IN THE RESULT, ALL THE THREE APPEALS OF THE ASSE SSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/03/2017. SD/- SD/- DQY HKKJR HKKXPAN (KUL BHARAT) (BHAGCHAND) U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ TK;IQJ TK;IQJ TK;IQJ@ @@ @ JAIPUR FNUKAD@ DATED:- 10 TH MARCH, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE BRANCH MANAGER, CENTRAL BANK OF INDIA, SULTANPUR, KOTA (RAJ). 2. IZR;FKHZ @ THE RESPONDENT- THE JDIT, (I&CI), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 133 TO 135/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR