TH 110 M/s. Arignar Anna PWCS Ltd., Namakkal V. ITO, Salem

ITA 1364/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5994 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 29-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVANJCIT
• Assessee Lawyers: S SRINIRANJANI
• Keywords: Initiation of penalty proceedings; Reasonable cause

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI ... , , # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A. NO. 1364/MDS/2017 / ASSESSMENT YEAR : 2009-10 TH 110 M/S. ARIGNAR ANNA PWCS LTD., NO. 39, B-6, KON THEATRE ROAD, KOMARAPALAYAM, NAMAKKAL 638 183 [PAN: AAAAA 9242K] VS. THE INCOME TAX OFFICER, TDS WARD, SALEM. ( / APPELLANT) ( / RESPONDENT) % & / APPELLANT BY : SHRI. S. SRINIRANJANI, ADVOCATE )*% & / RESPONDENT BY : SHRI. N. MADHAVAN, JCIT & /DATE OF HEARING : 14.08.2017 & /DATE OF PRONOUNCEMENT : 11.10.2017 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), SALEM IN ITA NO. 251/2013-14 DATED 28.03.2017, WHEREIN, THE CIT(A) CONFIRMED THE PENALTY LEVIED BY THE JCIT, TDS RANGE, TRICHY U/S. 271C. :-2-: ITA NO. 1364/MDS/2017 2. TH 110 M/S. ARIGNAR ANNA PWCS LTD., THE ASSESSEE , IS A COOPERATIVE SOCIETY MANAGED BY THE GOVERNMENT OF TAMILNADU. DU RING ASSESSMENT YEAR 2009-10, IT MADE PAYMENTS FOR SIZING CHARGES TO M/S . SRI LAKSHMI SIZING MILLS AT RS. 10,19,428/- WITHOUT DEDUCTING TAX AND HENCE DISALLOWED SUCH EXPENSES U/S. 40(A)(IA) AND ADDED TO ITS INCOME. THE ITO-TD S, BY A CONSOLIDATED ORDER U/S. 201(1)/201(1A) DATED 27.12.2013 RAISED A DEMAN D OF RS. 22,092/- AND RS. 15,224/-, UNDER THESE SECTIONS, RESPECTIVELY. IT APPEARS THAT HE HAS SENT A PROPOSAL FOR INITIATION OF PENALTY PROCEEDINGS U/ S. 271C BY A LETTER DATED 06.05.2013 TO THE JCIT, TDS RANGE, TRICHY. THE JCI T BY HIS ORDER U/S. 271C DATED 30.12.2013 LEVIED A PENALTY OF RS. 20,092/-. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) PLEADING, INTER A LIA, THAT THE APPELLANT IS A COOPERATIVE SOCIETY MANAGED BY GOVERNMENT OF TAMILN ADU, WHICH IS NOT AWARE OF THE STRINGENT PROVISIONS OF DEDUCTION OF T DS AND REMITTANCE OF THE SAME TO GOVERNMENT ACCOUNT ETC., THE CIT(A) DISMIS SED THE APPEAL. 3. AGGRIEVED, THE ASSESSEE FILED THIS APPEAL WITH T HE FOLLOWING GROUNDS OF APPEAL: 2. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT THAT TH E NON DEDUCTION OF TDS WAS PURELY BY MISTAKE AND NOT WITH ANY OTHER MALA F IDE INTENTION. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N NOT CONSIDERING THE FACT THAT THE TDS REQUIRED TO BE DE DUCTED HAS BEEN DEDUCTED IN FULL AND REMITTED TO THE EXCHEQUER. 4. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT T O HAVE CONSIDERED THE CASE LAWS CITED BEFORE HIM WHICH SUP PORT THE STAND OF THE :-3-: ITA NO. 1364/MDS/2017 APPELLANT THAT PENALTY U/S. 271C CANNOT BE LEVIED I F THERE IS A REASONABLE CAUSE FOR NON-DEDUCTION OF TDS. 4. THE AR SUBMITTED THAT IN THE ASSESSMENT YEAR 200 9-10, THE ASSESSEE ITSELF DISALLOWED THE EXPENSES ON CONTRACT PAYMEN TS U/S. 40(A)(IA) AND ADDED THEM TO ITS TOTAL INCOME, AS IT DID NOT DEDUC T TAXES AND REMIT THE SAME TO GOVERNMENT ACCOUNT. SEEKING OUR ATTENTION TO TH E COPY OF STATEMENT OF FACTS FILED BEFORE THE CIT(A), THE AR SUBMITTED THA T THE ASSESSEE, HOWEVER, HAS REMITTED THE TDS U/S. 201 AT RS. 22,092/- AND I NTEREST U/S. 201(1A) AT RS. 15,244/-, THE TOTAL SUM OF RS. 20,997/-, ON 26.02.2 013 ITSELF. THEREAFTER ONLY THE JCIT INITIATED PENALTY PROCEEDINGS U/S. 271C ON 28.06.2013. BOTH THE ITO, TDS, SALEM AND THE JCIT, TDS RANGE, TRICHY PAS SED ORDERS U/S. 201(1)/201(1A) AND U/S. 271C, ON 27.12.2013 AND 30. 12.2013, RESPECTIVELY. SINCE, THE ASSESSEE HAS REMITTED THE IMPUGNED TDS A ND THE INTEREST ON 26.02.2013 ITSELF, WELL AHEAD OF THE INITIATION OF RESPECTIVE PROCEEDINGS, THE CIT(A) SHOULD NOT HAVE SUSTAINED THE LEVY OF PENALT Y AND PLEADED THAT THE PENALTY MAY BE DELETED. PER CONTRA, THE DR SUPPORT ED THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HEARD THE RIVAL CONTENTIONS AND FIND MERITS I N THE SUBMISSIONS OF THE AR. SINCE, THE IMPUGNED TDS AND INTEREST WERE REMI TTED WELL AHEAD OF THE INITIATION OF THE RESPECTIVE PROCEEDINGS AND THE AS SESSEES PLEA THAT IT WAS UNAWARE OF THE TDS PROVISIONS, WHEN IT WAS MADE AWA RE OF THEM IT COMPLIED :-4-: ITA NO. 1364/MDS/2017 WITH THE PROVISIONS APPEARS REASONABLE AND HENCE, T HE PENALTY LEVIED U/S. 271C IS DIRECTED TO BE DELETED. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 11 TH DAY OF OCTOBER, 2017 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) ! ' /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) ' /ACCOUNTANT MEMBER /CHENNAI, 0 /DATED: 11 TH OCTOBER, 2017 JPV & )12 32 /COPY TO: 1. %/ APPELLANT 2. )*% /RESPONDENT 3. 4 ( )/CIT(A) 4. 4 /CIT 5. 2 ) /DR 6. 7 /GF