Syndicate Bank, Hyderabad V. Addl.CIT(CIB), Hyderabad, Hyderabad

ITA 1508/HYD/2014

• Counselvise Citation: 150822514 RSA 2014
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 21-08-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 25-09-2014
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: GOPALA KRISHNA
• Keywords: Reasonable cause
• Section: 273B; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. ASST. YEAR APPELLANT RESPONDENT 1501/HYD/14 2011-12 SYNDICATE BANK, ECIL CROSS ROADS, KUSHAIGUDA, HYDERABAD [PAN: AACCS4699E] ADDL. CIT (CIB), HYDERABAD 1502/HYD/14 2011-12 SYNDICATE BANK, SHALIBANDA, HYDERABAD ADDL. CIT (CIB), HYDERABAD 1503/HYD/14 2011-12 SYNDICATE BANK, RAJBHAWAN ROAD, KHAIRATABAD, HYDERABAD ADDL. CIT (CIB), HYDERABAD 1504/HYD/14 2011-12 SYNDICATE BANK, NEAR MT PARK, TRIMULGHERRY, P.O. SECUNDERABAD ADDL. CIT (CIB), HYDERABAD 1505/HYD/14 2011-12 SYNDICATE BANK, JOURNALIST COLONY, A-BLOCK, JUBILEE HILLS, HYDERABAD ADDL. CIT (CIB), HYDERABAD 1506/HYD/14 2011-12 SYNDICATE BANK, DEWAN DEVDI PATHERGATTY, HYDERABAD ADDL. CIT (CIB), HYDERABAD 1507/HYD/14 2011-12 SYNDICATE BANK, YELLYSETTY HOUSE, NEW NALLAKUNTA, HYDERABAD ADDL. CIT (CIB), HYDERABAD 1508/HYD/14 2011-12 SYNDICATE BANK, CHAITANYAPURI X ROADS HYDERABAD ADDL. CIT (CIB), HYDERABAD 1509/HYD/14 2011-12 SYNDICATE BANK, SAINIKPURI, SECUNDERABAD ADDL. CIT (CIB), HYDERABAD 1510/HYD/14 2011-12 SYNDICATE BANK, SATYA HOSPITAL, MALAKPET, HYDERABAD ADDL. CIT (CIB), HYDERABAD I.T.A. NOS. 1501 TO 1513/HYD/14 SYNDICATE BANK :- 2 -: 1511/HYD/14 2011-12 SYNDICATE BANK, RAMACHANDRA PURAM, ASHOK NAGAR, B.H.E.L., MEDAK DIST., ADDL. CIT (CIB), HYDERABAD 1512/HYD/14 2011-12 SYNDICATE BANK, HABSIGUDA, HYDERABAD ADDL. CIT (CIB), HYDERABAD 1513/HYD/14 2011-12 SYNDICATE BANK, VLR COMPLEX,1 ST FLOOR, KACHIGUDA STATION ROAD, HYDERABAD ADDL. CIT (CIB), HYDERABAD FOR ASSESSEE : SHRI GOPALA KRISHNA, AR FOR REVENUE : SHRI RAJAT MITRA, DR DATE OF HEARING : 21-08-2015 DATE OF PRONOUNCEMENT : 26-08-2015 O R D E R PER B. RAMAKOTAIAH, A.M. : THESE APPEALS ARE BY RESPECTIVE BRANCHES OF SYNDIC ATE BANK LEVYING PENALTY U/S. 272A(2)(C) OF THE INCOME TAX A CT [ACT] OF VARIOUS AMOUNTS VARYING FROM RS. 40,000/- TO RS. 50,000/-. SINCE COMMON ISSUES ARE INVOLVED, WE HAVE HEARD THE CASES TOGETH ER AND DECIDED BY THIS COMMON ORDER. 2. BRIEF FACTS LEADING TO THE PRESENT PROCEEDINGS A RE THAT ITO, CIB-4 ISSUED NOTICE U/S. 133(6) OF THE ACT TO EACH OF THE BRANCH CALLING FOR INFORMATION IN RESPECT OF SPECIFIC AREAS: I.T.A. NOS. 1501 TO 1513/HYD/14 SYNDICATE BANK :- 3 -: DATE OF NOTICE CODE NO. CODE UNDER WHICH INFORMATION WAS CALLED FOR 27-09-2010 CODE NO. 003 TIME DEPOSITS EXCEEDING RS. 2 LAKHS WITH BANKING COMPANY. 27-09-2010 CODE NO. 006 PAYMENT IN CASH FOR PURCHAS E OF BANK DRAFTS OR PAY ORDERS OR BANKERS CHEQUE FROM A BANKING COMPANY OF AN AMOUNT AGGREGATING RS. 1,00,000/- OR MORE DURING ANY ONE DAY. 27-09-2010 CODE NO. 007 DEPOSIT IN CASH AGGREGATING RS. 2,00,000 OR MORE, WITH BANKING COMPANY DURING ANY ONE DAY. 3. AS SEEN FROM THE NOTICE ISSUED ON 27-09-2010 UND ER THE 3 CODES, ASSESSEE WAS TO SUBMIT THE INFORMATION BY 20-10-201 0. AS THERE WAS NO COMPLIANCE TO THE NOTICE, ON 07-01-2011 ANOTHER LET TER WAS ISSUED. ON 10 TH FEBRUARY, 2011, NOTICE U/S. 272A(2)(C) ISSUED TO S HOW CAUSE WHY PENALTY SHOULD NOT BE LEVIED AND COMPLIANCE TO BE M ADE ON 21 ST FEBRUARY, 2011 TO 24 TH FEBRUARY, 2011 IN VARIOUS CASES. HOWEVER, IN ALL THE PENALTY ORDERS, THE ADDL. CIT RECORDS THAT ASSE SSEE ASKED TIME TILL APRIL 2011. WE WERE INFORMED THAT ASSESSEE HAS COM PLIED SUBSTANTIALLY TO THE VARIOUS NOTICES AS UNDER: ITA NO INFORMATION SUBMITTED BY THE BRANCH DATE OF LETTER SUBMITTED BY BRANCH SEEKING EXTENSION OF TIME DATE OF SUBMISSIONS OF DATA BY BRANCH 1501 KUSHAIGUDA BRANCH -- 30-03-2011 1502 SHALIBANDA BRANCH 23-02-2011 11-04-2011 1503 RAJBHAVAN ROAD BRANCH 18-02-2011 15-03-2011 1504 TIRUMULGHERRY BRANCH -- 10-03-2011 1505 JOURNALIST COLONY BRANCH 24-02-2011 13-04-2011 1506 PATHERGATTY BRANCH 23-02-2011 18-03-2011 1507 NEW NALLAKUNTA BRANCH 23-02-2011 11-04-2011 1508 CHAITANYAPURI BRANCH -- 27-04-2011 1509 SAINIKPURI BRANCH -- 25-02-2011 1510 MALAKPET BRANCH 23-02-2011 20-04-2011 1511 R C PURAM BRANCH 17-02-2011 08-04-2011 I.T.A. NOS. 1501 TO 1513/HYD/14 SYNDICATE BANK :- 4 -: 1512 HABSIGUDA BRANCH -- 15-04-2011 1513 KACHIGUDA BRANCH 22-02-2011 08-04-2011 4. HOWEVER, THE ADDL. CIT CONSIDERED THE NON-SUBMIS SION OF INFORMATION AS WILLFUL DEFAULT AND LEVIED PENALTY I N ALL THE CASES IN FEBRUARY 2011 AS UNDER: THE COMPLIANCE TO THE FIRST NOTICE WAS DUE ON 20-1 0-2010 AS NO DETAILS WERE FILED AND NO COMPLIANCE WAS MADE TH E DEFAULT COMMENCES FROM THIS DAY AND CONTINUES UP TO THE DAT E OF THIS ORDER, NAMELY 25-03-2011. MONTH NO. OF DAYS OCTOBER 10 NOVEMBER 30 DECEMBER 31 JANUARY 31 FEBRUARY 28 MARCH 25 TOTAL 155 AND CONSEQUENTLY THE PENALTY @ RS. 100/- PER DAY FO R EACH DEFAULT COMES TO RS. 15,500/- IN RESPECT OF EACH NOTICE. H ENCE, THE TOTAL PENALTY FOR THREE NOTICES WORKS OUT TO RS. 46,500/- AND THE SAME IS ACCORDINGLY, HEREBY LEVIED. 5. SIMILAR ORDERS WERE PASSED IN OTHER CASES ALSO L EVYING PENALTY, FROM THE DATE OF DEFAULT, FOR EACH OF THE CODE IE. AT THREE TIMES FOR SINGLE NOTICE. 6. LD. CIT(A) CONFIRMED ALL THE PENALTIES AS HE DID NOT FIND ANY REASONABLE CAUSE. 7. BEFORE US, LD. COUNSEL SUBMITTED THAT THE SO CAL LED NOTICES ISSUED BY THE OFFICERS WERE NOT RECEIVED BY THE RESPECTIVE BRANCHES AND ONLY SECOND REMIND NOTICE ASKING FOR INFORMATION AND NO TICE OF PENALTY WAS I.T.A. NOS. 1501 TO 1513/HYD/14 SYNDICATE BANK :- 5 -: RECEIVED. IN MANY CASES, THE NOTICE DT. 27-09-2010 WERE NEVER RECEIVED AND IN SUPPORT SUBMITTED THAT EVERY BRANCH IS MAINT AINING AN INWARD REGISTER AND THE NOTICES WERE NOT RECEIVED AS PER T HE BANK RECORDS. THE DEPARTMENT DID NOT SEND THE NOTICE BY REGISTERED PO ST. HOWEVER, THE BRANCHES RECEIVED THE SECOND NOTICE DT. 08-12-2010, WHICH WAS NOT MENTIONED IN THE PENALTY ORDER. IN COMPLIANCE TO T HAT NOTICE, AS THE BANK IS NOT A DIRECT ASSESSEE AND HEAD OFFICE IS LO CATED IN MANIPAL, KARNATAKA STATE, THE MATTER WAS REFERRED TO THE HEA D OFFICE. BRANCH HAS TO OBTAIN PRIOR APPROVALS AND DIRECTIONS FROM THEIR CENTRAL OFFICE. SINCE THIS PROCESS HAS TAKEN MORE THAN 45 DAYS, ASSESSEE COULD NOT COMPLY TO GENERAL NOTICE ISSUED. IN THE MEAN TIME, ADDL. CIT ISSUED SHOW CAUSE NOTICE OF PENALTY PROCEEDINGS. THEREAFTER, IT APPR OACHED THE OFFICER FOR PROVIDING SUFFICIENT TIME TO COMPLY WITH THE SHOW C AUSE NOTICE. THE BANKS REQUESTED FOR AN OPPORTUNITY AND ASKED TIME O F 40 DAYS IN LIEU OF OPERATIONAL DIFFICULTIES SUCH AS 31 ST MARCH HAPPENS TO BE CLOSURE OF THE FINANCIAL YEAR AND WORK LOAD OF EACH BRANCH BEING P HENOMENAL, IN PREPARATION OF DATA IN THE SPECIAL FORM PROVIDED BY THE DEPARTMENT NEEDS TIME TO COMPOSE AND COMPLY IN THE REQUIRED FORMAT. NOT ONLY NECESSARY SKILLED EMPLOYEES AND SOFTWARE SUPPORT WAS REQUIRED , BANK IS ALSO HAVING DEFICIENCY OF STAFF. THEREFORE, WITHOUT CON SIDERING THE REASONABLE CAUSE AND REQUEST MADE BY ASSESSEE, THE ADDL. CIT L EVIED PENALTY THAT TOO THREE TIMES FOR THE DELAY OCCURRED TREATING TH E ONE NOTICE AS THREE NOTICES FOR THREE DIFFERENT CODES. IT WAS SUBMITTE D THAT NOTICES WERE COMPLIED SUBSEQUENTLY, THE DATA WAS FURNISHED IN TH E MONTH OF MARCH AND APRIL, 2011. IT WAS SUBMITTED THAT ASSESSEE HAS A REASONABLE CAUSE AND RELIED ON VARIOUS CASE LAW: 1. ASST. COMMISSIONER OF INCOME TAX VS. GAYATRI TRADER S [1996] 58 ITD 121 (HYD) (SB) IN THE ITAT HYDERABAD BENCH B (SPECIAL BENCH) ; I.T.A. NOS. 1501 TO 1513/HYD/14 SYNDICATE BANK :- 6 -: 2. M/S. ROYAL METAL PRINTERS PVT. LTD., MUMBAI VS. ADD L. COMMISSIONER OF INCOME TAX (TDS), RANGE-3, MUMBAI; 3. CIT VS. ASHAPURA GARMENTS (P) LTD. ; AND 4. SUPREME COURT OF INDIA IN THE CASE OF M/S. KRANTI A SSOCIATES PVT. LTD & ANR. [APPELLANT(S)] VS. SH. MASOOD AHMED KHAN & OTHERS. 8. SINCE ASSESSEE WAS CONTENDING THAT VARIOUS NOTIC ES WERE NOT RECEIVED AND DATE OF NOTICES MENTIONED IN ADDL. CIT S ORDER VARY FROM ASSESSEES RECEIPT OF NOTICES, THE DR WAS ASKED SPE CIFICALLY TO OBTAIN THE RECORDS. IT IS ALSO SEEN IN SOME OF THE ORDERS THA T THE ADDL. CIT INITIATED PENALTY FOR ONE NOTICE BUT LEVIED FOR VARIOUS OTHER PERIODS ALSO, THE DETAILS OF WHICH ARE NOT IN THE KNOWLEDGE OF ASSESS EES. LD. DR AFTER REFERRING THE MATTER TO THE AO SUBMITTED THAT THE R ECORDS COULD NOT BE TRACED AT PRESENT AND EXPRESSED HIS INABILITY TO FU RNISH THE NECESSARY DETAILS. HE RELIED ON THE ORDERS OF ADDL. CIT LEVY ING PENALTY. 9. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PERU SING THE CASE LAW RELIED UPON BY THE LD. COUNSEL OF THE ASSESSEE, I A M OF THE OPINION THAT THERE IS NO NEED FOR LEVY OF PENALTY IN THE GIVEN C ASES. FIRST OF ALL, THE NOTICE ISSUED U/S. 136 IS A GENERAL NOTICE ASKING F OR INFORMATION WHICH IS NOT 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 INFORMATIO N ON A REGULAR BASIS FROM THE BANKS IN ANNUAL RETURNS. THE DETAILS ASKE D 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 FORMAT MAY BE ON THE STRENGTH OF INTERNAL INSTRUCTIONS. F OR EXAMPLE, THE TIME DEPOSITS EXCEEDING RS. 2 LAKHS UNDER CODE NO. 003 I S NOT TO BE GENERALLY I.T.A. NOS. 1501 TO 1513/HYD/14 SYNDICATE BANK :- 7 -: FURNISHED BY THE BANKS TO THE DEPARTMENT IN THE PRE SRIBED ANNUAL RETURN, LIKEWISE, OTHER CODES ALSO FOR WHICH DIFFER ENT AMOUNTS WERE PRESCRIBED BY THE ACT. THIS INDICATES THAT THIS IN FORMATION WAS SPECIFICALLY ASKED FOR BY THE ITO, CIB. 10. INSTEAD OF GIVING THIS SEPARATE NOTICE FOR EACH CODE, A COMMON NOTICE WAS ISSUED FOR ALL THE THREE CODES. ADDL. C IT INITIATED PENALTY PROCEEDINGS BY ISSUING ONLY ONE NOTICE BUT LEVIED P ENALTY FOR THREE NOTICES AS EXTRACTED ABOVE. THIS INDICATES THAT WI THOUT ISSUING NOTICE, THE ADDL. CIT, CIB LEVIED PENALTY THREE TIMES FOR T HE SAME DEFAULT. THIS CANNOT BE JUSTIFIED. NOT ONLY THAT, THERE WERE VAR IOUS NOTICES WHICH ARE MENTIONED IN THE ORDER WHICH ARE NOT IN THE KNOWLED GE OF ASSESSEE, THEREFORE SERVICE OF THE NOTICE ALSO IS TO BE DOUBT ED. AS FAR AS BANK IS CONCERNED, THEY MAINTAIN THEIR INWARD REGISTER AND LD. COUNSEL FAIRLY STATED THAT THEY HAVE NOT RECEIVED SOME OF THE NOTI CES WHICH AO IS ALLEGED TO HAVE ISSUED. BE THAT AS IT MAY, THE REV ENUE IS UNABLE TO FURNISH THE RECORDS AT PRESENT TO EXAMINE WHETHER T HE NOTICES HAVE BEEN PROPERLY ISSUED OR NOT? FOR THESE REASONS, IT IS D IFFICULT TO SUSTAIN PENALTIES AS LEVIED BY THE ADDL. CIT. 11. NOT ONLY THAT, THE PENALTY U/S. 272A(2)(C), IS SUBJECT TO PROVISIONS OF SECTION 273B. SECTION 273B OF THE ACT PROVIDES AN EXCEPTION TO THE RIGID PROVISIONS OF SECTION 272A BY PROVIDING THAT IN THE EVENT OF ASSESSEE HAVING A REASONABLE CAUSE FOR THE FAILURE, PENALTY SHALL NOT BE IMPOSED BY THE AUTHORITIES CONCERNED. AS SUBMITTED BY THE LD. COUNSEL IN ITS CASE, ASSESSEE BEING ONLY A BRANCH OFFICE OF THE PUBLIC SECTOR BANK WITH HEAD OFFICE AT MANIPAL, IT TOOK SOME TIME TO G ET NECESSARY APPROVALS AND FURTHER, BECAUSE OF THE YEAR ENDING BUSINESS AN D SHORTAGE OF STAFF, THERE WAS DELAY IN COMPLYING TO THE NOTICE. ASSESS EE HAS COMPLIED TO THE NOTICES EVEN THOUGH THEY ARE NOT IN PRESCRIBED FORM AT NOR PRESCRIBED BY I.T.A. NOS. 1501 TO 1513/HYD/14 SYNDICATE BANK :- 8 -: THE ACT. IN VIEW OF THIS, I AM OF THE OPINION THAT THERE IS REASONABLE CAUSE FOR NON- COMPLIANCE AS REQUIRED AND THEREFORE , PENALTY U/S. 272A(2)(C) CANNOT BE LEVIED, WHERE THERE IS BONAFID E AND REASONABLE CAUSE FOR NON-COMPLIANCE TO THE NOTICE. THE SAME W AS REITERATED BY THE CO-ORDINATE BENCH IN THE CASE OF M/S. ROYAL METAL P RINTERS PVT. LTD., VS. ADDL. CIT (TDS) IN ITA NO. 6840/MUM/2008 DT. 29-01- 2010. SINCE LEVY OF PENALTY IS NOT AUTOMATIC BUT SUBJECT TO REASONA BLE CAUSE, THERE IS A REASONABLE CAUSE EXPLAINED BY ASSESSEE WHICH SHOULD HAVE BEEN CONSIDERED BY THE CIT(A) AT LEAST. CONSIDERING THE FACTS OF THE CASE AS STATED EARLIER AND ALSO THE LAW ON THE SUBJECT, I A M OF THE OPINION THAT ON THE FACTS OF THE CASE LEVY OF PENALTY IS NOT WARRAN TED. ACCORDINGLY, PENALTIES LEVIED ARE CANCELLED. 12. IN THE RESULT, ALL THE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2015 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 26 TH AUGUST, 2015 TNMM I.T.A. NOS. 1501 TO 1513/HYD/14 SYNDICATE BANK :- 9 -: COPY TO : 1. SYNDICATE BANK, BRANCH: D.NO. A/A, ELECTRONIC C OMPLEX, ECIL CROSS ROADS, KUSHAIGUDA, R.R. DIST. HYDERABAD. C/O. N.G. RAO & ASSOCIATES, H.NO. 6-3-1186/A/6, (NEW NO. 325) 2 ND FLOOR, CHINNA BALREDDY BUILDING, BEGUMPET, HYDERABA D. 2. SYNDICATE BANK, BRANCH: 20-4-194/7, NEW ROAD, SHALIBANDA, HYDERABAD. 3. SYNDICATE BANK, BRANCH: 6-2-953/A, RAJBHAWAN ROA D, KHAIRATABAD, HYDERABAD. 4. SYNDICATE BANK, BRANCH: NEAR MT PARK, TRIMULGHE RRY, P.O. SECUNDERABAD. 5. SYNDICATE BANK, BRANCH: 66A, JOURNALIST COLONY, A-BLOCK, JUBILEE HILLS, HYDERABAD. 6. SYNDICATE BANK, BRANCH: 22-7-267, DEWAN DEVDI PATHERGATTY, HYDERABAD. 7. SYNDICATE BANK, BRANCH: 2-2-1130/2, YELLYSETTY HOUSE, NEW NALLAKUNTA, HYDERABAD. 8. SYNDICATE BANK, BRANCH: H.NO. 18-78/A, CHAITAN YAPURI X ROADS, HYDERABAD. 9. SYNDICATE BANK, BRANCH: SAINIKPURI, SECUNDERA BAD. 10. SYNDICATE BANK, BRANCH: 16-10-33, SATYA HOSPITA L, MALAKPET, HYDERABAD. 11. SYNDICATE BANK, BRANCH: D.NO. 23-59 & 23-60, RAMACHANDRA PURAM, ASHOKNAGAR, B.H.E.L., MEDAK DIST ., 12. SYNDICATE BANK, BRANCH: D.NO. 7-71/4, MAHESHWAR INAGAR, ST. NO.8, HABSIGUDA, R.R. DISTRICT., HYDERABAD. 13. SYNDICATE BANK, BRANCH: 3-4-1, VLR COMPLEX, 1 ST FLOOR, KACHIGUDA STATION ROAD, HYDERABAD. 14. ADDL. CIT (CIB), HYDERABAD. 15. CIT(APPEALS)-VII, HYDERABAD. 16. CIT-(CIB), HYDERABAD. 17. D.R. ITAT, HYDERABAD. 18. GUARD FILE. I.T.A. NOS. 1501 TO 1513/HYD/14 SYNDICATE BANK :- 10 - :