Rajesh Bansal, Chandigarh V. Addl. CIT (TDS), Chandigarh

ITA 1447/CHANDI/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8490 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 22-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: PRITISH GOYAL
• Keywords: Bonafide belief; Reasonable cause; TDS
• Section: 37; 139

Judgement Text

+* , , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B , CHANDIGARH . . , ' # , $ %& BEFORE SHRI N.K. SAINI, VICE PRESIDENT AND SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO.1447/CHD/2018 / ASSESSMENT YEAR : 2012-13 SH. RAJESH BANSAL, SCO 65, SECTOR 17C, CHANDIGARH. THE A DDL .CIT (TDS) , CHANDIGARH. ./ PAN NO.PTLR10561F / APPELLANT / RESPONDENT /ASSESSEE BY : SHRI PRITISH GOYAL, CA ! / REVENUE BY : SHRI MANJIT SINGH, CIT DR ' # $ /DATE OF HEARING : 27.03.2019 %&'( $ /DATE OF PRONOUNCEMENT: 05.04.2019 /ORDER PER SANJAY GARG, JUDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-I (HEREINAFTER REFERRED TO AS (LD.CIT(A) DATED 27.8.2018, PASSED U/S 250(6 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), RELATING TO ASSESSMENT YEAR 2 011-12. 2. THE SOLE GROUND RAISED BY THE ASSESSEE IN THIS A PPEAL RELATES TO THE LEVY OF PENALTY U/S 272A(2)(K) OF TH E ACT FOR LATE FILING OF TDS RETURN. ITA NO.1447/CHD/2018 A.Y.2012-13 2 THE APPEAL OF THE ASSESSEE IS BARRED BY TIME FOR TH REE DAYS. A SEPARATE APPLICATION FOR CONDONATION OF DEL AY HAS BEEN FILED, WHEREIN THE REASON FOR THE DELAY HAS BE EN EXPLAINED. CONSIDERING THE REASONS EXPLAINED AND TH E SHORTNESS OF PERIOD OF THREE DAYS, THE DELAY IS HER EBY CONDONED. 3. BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT I .E. PERSON RESPONSIBLE (HEREINAFTER REFERRED TO AS P R) HAD NOT FILED THE QUARTERLY TDS RETURN FOR FINANCIAL YE AR 2011- 12 BY RESPECTIVE DUE DATE AS PER THE PROVISIONS OF SECTION 200(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) READ WITH RULE 31A OF THE INCOME TAX RULES, 1962. THE A.O., THEREFORE, LEVIED THE PENALTY FOR L ATE FILING OF THE TDS RETURNS U/S 272A(2)(K) OF THE ACT. 4. BEING AGGRIEVED BY THE ABOVE ORDER OF PENALTY, T HE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) AND PLE ADED THAT THE DELAY IN FILING TDS RETURNS WAS NOT INTENT IONAL BUT DUE TO THE CIRCUMSTANCES BEYOND HIS CONTROL. FU RTHER, THE ASSESSEE HAD ALREADY DEDUCTED THE TAX AT SOURCE AND DEPOSITED THE SAME WITHIN THE STIPULATED PERIOD AND THERE WAS NO INTENTIONAL BREACH OF THE PROVISIONS OF THE ACT. HOWEVER, THE LD.CIT(A) DID NOT GET SATISFIED WITH T HE SUBMISSIONS MADE BY THE ASSESSEE AND CONFIRMED THE PENALTY. ITA NO.1447/CHD/2018 A.Y.2012-13 3 5. BEING AGGRIEVED BY THE ABOVE ORDER OF THE CIT(A) , THE APPELLANT/PR HAS COME UP IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORDS. THE LD. COUNSEL HAS SUBMI TTED THAT THOUGH THE APPELLANT/PR HAD DEDUCTED THE TAX A T SOURCE ON THE PAYMENTS MADE AND DEPOSITED THE SAME WITHIN THE STIPULATED PERIOD, HOWEVER, THE DELAY TO OK PLACE IN FILING THE TDS RETURNS. IT HAS BEEN EXPLAINED TH AT THE DELAY WAS DUE TO THE FACT THAT THE APPELLANT/PR CON TACTED HIS COUNSEL FOR PREPARATION AND FILING OF THE RETUR N AND THE SAID RETURN WAS ACCORDINGLY PREPARED AND KEPT READY FOR FILING MUCH BEFORE THE DUE DATE OF FILING BY THE CO UNSEL. BUT THE SAID RETURN COULD NOT BE FILED DUE TO THE FACT THAT THE CLERK OF THE COUNSEL FOR THE APPELLANT/PR MISPLACED THE SAID RETURN, WHICH FACT WAS NOT BROUGHT TO THE NOTICE OF THE COUNSEL AND ALSO THE SAID RETURN WAS TRACED BY THE CLERK OF THE COUNSEL VERY LATE. HOWEVER, EVEN ON BEING INFOR MED ABOUT THE SAID LAPSE ON THE PART OF THE CLERK OF TH E COUNSEL FOR THE APPELLANT/PR, THE SAID RETURN COULD NOT BE FILED IMMEDIATELY AS THE COUNSEL FOR THE APPELLANT/PR REM AINED UNWELL FOR SOMETIME. THEREAFTER, AS SOON AS THE COU NSEL FOR THE APPELLANT/PR COULD RESUME WORK, THE SAID RETURN WAS FILED WITHOUT ANY FURTHER DELAY IN THE MATTER. 7. THE LD. COUNSEL FOR APPELLANT/PR HAS FURTHER SUB MITTED THAT SO FAR THE APPELLANT/PR WAS CONCERNED, THE APPELLANT/PR TOOK ALL REASONABLE CARE IN COMPLYING WITH THE ITA NO.1447/CHD/2018 A.Y.2012-13 4 PROVISIONS OF THE ACT. THE DELAY IN FILING TDS RET URNS ON THE PART OF THE COUNSEL WAS DUE TO THE AFORESAID REASON , WHICH WAS BEYOND THE CONTROL OF THE APPELLANT/PR. THE LD . COUNSEL FOR APPELLANT/PR HAS SUBMITTED THAT SINCE THERE WAS NO INTENTIONAL BREACH OF THE PROVISIONS OF LAW AND THE RE WAS NO LOSS TO THE REVENUE SINCE THE TDS ALREADY DEDUCTED AT TIME AND DEPOSITED WITHIN THE DUE DATE. HE, THEREFORE, H AS SUBMITTED THAT THE PENALTY WAS NOT LEVIABLE IN THIS CASE UNDER THE PROVISIONS OF SECTION 272A(2)(K) OF THE A CT. THE LD. COUNSEL FOR APPELLANT/PR IN THIS RESPECT HAS MA DE THE FOLLOWING CASE LAW SUBMISSIONS: THE HON'BLE SUPREME COURT IN THE CASEOF HINDUSTAN STEELS LTD. V. CIT (1972) 83ITR 26 '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. ' M/S AMARTEX INDUSTRIES LTD. VS. ADDITIONAL COMMISSIONER OF INCOME TAX (TDS) ITAT CHANDIGARH BENCHES 'B' ITA NO. 1293 TO 1295/CHD/2012 'IT WAS HELD THAT THE DEFAULT OF THE ASSESSEE WAS ONL Y A TECHNICAL AND VENIAL IN NATURE AND WHEN THE DEFAULT W AS BROUGHT TO THE NOTICE OF THE ASSESSEE. IT WAS REMOVED BY FILING THE E-TDS RETURNS, SO, THE MISTAKE OF THE ASSESSEE FOR FAILURE TO FILE STATEMENT IN FORM NO. 24Q AND 26Q WAS UNDER THE BONAFIDE BELIEF AND THE DEFAULT WAS TECHNICAL IN NA TURE. MOREOVER, THERE WAS NO LOSS TO THE REVENUE SINCE TH E TDS DEDUCTED WAS DEPOSITED. ' COLLECTOR LAND ACQUISITION VS. ADDITIONAL COMMISSIONER OF INCOME TAX (TDS) ITAT CHANDIGARH BENCHES 'B' (2012) 31 CCH 234 CHD. TRIB. (2012) 52 SOT 81 (CHANDIGARH)(URO) ITA NO.1447/CHD/2018 A.Y.2012-13 5 'IT IS AN ADMITTED FACT THAT THE AMOUNT OF TAX DEDU CTED AT SOURCE BY THE ASSESSEE (PERSON RESPONSIBLE) WAS PAID WITHIN THE LIMIT UNDER THE RELEVANT PROVISIONS OF THE ACTAS SESSEE WAS PREVENTED BY SUFFICIENT CASE FROM FILING THE RET URNS WITHIN THE STATUTORY PERIODEVEN OTHERWISE, THERE WAS ONLY A TECHNICAL AND VENIAL BREACH TO THE PROVISIONS CONTAINED IN RULE 31A (2) OF THE INCOME TAX RULE, 1962 READ WITH SECTION 200(3) OF THE ACTASSESSEE HAS SATISFACTORILY EXPLAIN ED THE REASONS REGARDING NON FILING OF TDS RETURNS IN TIME , THEREFORE, NO PENALTY SHOULD BE LEVIED IN THESE CAS ES- EVEN OTHERWISE ALSO, THE ASSESSEE DID NOT DERIVE ANY BENEFIT WHATSOEVER BY NOT FILING THE E-TDS RETURNS IN TIME, AS THE AMOUNT OF TDS WAS DULY DEPOSITED IN THE GOVERNMENT TREASURY WITHIN PRESCRIBED TIMESUCH DELAY HAS NOT CAUSED ANY LOSS TO THE REVENUE/INCOME TAX DEPARTMENT. ' BRANCH MANAGER, PUNJAB NATIONAL BANK VS. ADDITIONAL COMMISSIONER OF INCOME TAX ITAT, LUCKNOW 'SMC' BENCH (2011) 140 TTJ (LUCKNOW) 622 : (2011) 59 DTR 381 : (2012) 52 SOT 142 (LUCKNOW)(URO) 'PENALTY UNDER S. 272A(2)(K)FAILURE TO FILE TDS RETU RN REASONABLE CAUSEASSESSEE COULD NOT COLLECT DETAILS OF PAN FROM ALL DEDUCTEESTHERE WAS ONLY A TECHNICAL BREACH ASSESSEE DID NOT DERIVE ANY BENEFIT WHATSOEVER BY N OT FILING THE QUARTERLY TDS STATEMENTS IN TIME AS THE AM OUNT OF TDS WAS DULY DEPOSITED IN THE GOVERNMENT TREASURY WIT HIN THE PRESCRIBED TIME THERE WAS ONLY A TECHNICAL AND VENIAL BREACH OF THE PROVISIONS CONTAINED IN R. 31A IN BEL ATED FURNISHING OF QUARTERLY STATEMENTS OF TDS FOR WHICH NO PENALTY UNDER S. 272A(2)(K) CAN BE LEVIED. ' ROYAL METAL PRINTERS (P) LTD. VS. ADDITIONAL COMMISSIONER OF INCOME TAX ITAT, MUMBAI 'D' BENCH (2010) 131 TTJ (MUMBAI)(UO) 59 : (2010) 37 SO T 139 'PENALTY UNDER S. 272A(2)(K)DELAY IN FILING TDS RETU RN REASONABLE CAUSEASSESSEE HAS BEEN REGULAR IN DEDUC TING TAX AND ALSO PAYING THE SAMEDELAY IN FILING THE RE TURNS, EVEN IF THEY ARE CHARACTERIZED AS NEGLIGENCE ON THE PART OF THE ASSESSEE, CAN ONLY BE CONSIDERED AS A TECHNICAL OR VENIAL BREACH OF LAW FOR WHICH PENALTY SHOULD NOT BE LEVIE D AUTOMATICALLY. ' 8. THE LD. DR, ON THE OTHER HAND, HAS SUBMITTED THA T SINCE THERE WAS A DEFAULT IN FILING TDS RETURNS ON TIME, THE PENALTY HAS BEEN LEVIED BY THE LOWER AUTHORITIES AS PER THE PROVISIONS OF LAW. ITA NO.1447/CHD/2018 A.Y.2012-13 6 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORDS. ADMITTEDLY, IN THIS CASE THE A SSESSEE HAD DEDUCTED TDS AS PER THE PROVISIONS OF LAW AND H AD DULY DEPOSITED THE SAME WITHIN THE STIPULATED TIME. HOWE VER, QUARTERLY RETURNS WERE NOT FILED IN TIME AS REQUIRE D AS PER THE PROVISIONS OF SECTION 200(3) OF THE ACT READ WI TH RULE 31A OF THE INCOME TAX RULES, 1962. THE ASSESSEE HAS DUL Y EXPLAINED THE REASONS FOR THE DELAY IN FILING THE T DS RETURNS. FROM THE ABOVE CIRCUMSTANCES, IT CAN BE GATHERED TH AT IT WAS NEITHER AN INTENTIONAL, NOR A DELIBERATE DEFIANCE O F PROVISIONS OF LAW. THE DELAY IN FILING THE TDS RETU RNS WAS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT AND THE APPELLANT/PR HAS DULY EXPLAINED THE REASONS FOR THE SAME. THE HON'BLE SUPREME COURT IN THE CASE OF HIND USTAN STEELS LTD. VS. CIT (SUPRA) HAS HELD THAT IN THE C ASE OF MERE TECHNICAL OR VENIAL BREACH OF PROVISIONS OF THE ACT , WHEREIN, THE BREACH FLOWS FOR BONAFIDE REASONS AND THE PARTY HAS NOT ACTED DELIBERATELY IN DEFIANCE OR DISREGARD OF THE PROVISIONS OF LAW, THE PENALTY SHOULD NOT BE LEVIED, EVEN THOU GH A MINIMUM PENALTY IS PRESCRIBED. FOLLOWING THE AFORES AID DECISION OF THE HON'BLE SUPREME COURT IN SIMILAR CIRCUMSTANCES, THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S AMARTEX INDUSTRIES LTD. VS. ADDL.CIT (S UPRA) HAS DELETED THE PENALTY. SIMILARLY, THE RELIANCE CAN AL SO BE PLACED ON THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF COLLECTOR LAND ACQUISITION VS. ITA NO.1447/CHD/2018 A.Y.2012-13 7 ADDL.CIT (SUPRA). CONSIDERING THE AFORESAID DECISIO NS VIS-- VIS THE FACTS OF THE CASE, WE DO NOT THINK THAT THI S IS A FIT CASE OF LEVY OF PENALTY U/S 272A(2)(K) OF THE ACT. THE PENALTY LEVIED BY THE LOWER AUTHORITIES, THEREFORE, IS ORDE RED TO BE DELETED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.04.2019. SD/- SD/- . . !'# (N.K. SAINI (SANJAY GARG ) / VICE PRESIDENT $%& / JUDICIAL MEMBER (%! /DATED: 5 TH APRIL, 2019 * * &) *+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 , $0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35# / GUARD FILE &) ' / BY ORDER, / ASSISTANT REGISTRAR