The Commander Works Engineers, Patiala V. JCIT (TDS), Chandigarh

ITA 1573/CHANDI/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7548 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-05-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 16-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURINDER MEENA
• Keywords: Bonafide belief; Reasonable cause
• Section: 273B; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.1573/CHD/2017 (ASSESSMENT YEAR : 2012-13) THE COMMANDER WORKS ENGINEERS, VS. THE JCIT (TDS), HEADQUARTER BLDG NO.26, CHANDIGARH. NEW LAL BAGH, PATIALA. PAN: PTLH12424G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIBHOR GARG, CA RESPONDENT BY : SHRI SURINDER MEENA, JCIT DATE OF HEARING : 23.05.2018 DATE OF PRONOUNCEMENT : 04.07.2018 ORDER PER ANNAPURNA GUPTA, AM : THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)- 1, LUDHIANA (HEREINAFTER REFERRED TO AS CIT(APPEALS )) DATED 7.9.2017 RELATING TO ASSESSMENT YEAR 2012-13, LEVYI NG PENALTY U/S 272A(2)(K) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), FOR LATE FILING OF TDS RETURNS. 2. BRIEFLY STATED, WHILE PERUSING THE TDS RETURNS F ILED BY THE ASSESSEE, THE JURISDICTIONAL ASSESSING OFFICER, TDS-1, PATIAIA OBSERVED THAT THE QUARTERLY STATEMENT IN FO RM NUMBER. 24Q FOR THE 1 ST , 2 ND , 3 RD AND 4 TH QUARTERS OF THE F.Y.2011-12 WERE FILED ON 03.03.2014, WHICH OTHERWI SE WAS DUE TO BE FILED ON 31.07.2011, 31.10.2011, 31.01.20 12 AND 15.05.2012 RESPECTIVELY. THERE WAS, THUS, A DELAY O F 945 DAYS, 855 DAYS, 765 DAYS AND 660 DAYS RESPECTIVELY IN 2 DELIVERING OR CAUSING TO BE DELIVERED THE SAID STAT EMENT WITHIN THE TIME SPECIFIED IN SUB- SECTION (3) OF SE CTION 200 OF THE ACT. THE PERSON RESPONSIBLE [HEREINAFTER REFERRED TO AS 'PR'] MAKING THE AFORESAID COMPLIA NCE WAS PUT TO NOTICE REQUIRING HIM TO SHOW CAUSE AS TO WHY PENALTY UNDER THE PROVISIONS OF SECTION 272A(2)(K) READ WIT H SECTION 274 OF THE ACT NOT TO BE LEVIED FOR LATE F ILING OF THE QUARTERLY STATEMENTS. IN RESPONSE, IT WAS SUBMITTED THAT TDS OF OFFICERS AND STAFF WORKING IN THE JURI SDICTION OF PR WAS BEING DEDUCTED BY PCDA WC, CHANDIGARH AND TD S RETURN WAS ALSO BEING FILED BY THEM. IT WAS SUBMITT ED THAT ON 27.03.2012, PCDA WC, CHANDIGARH, DIRECTED THE ASSESSEE PR TO OBTAIN SEPARATE TAN, DDO REGISTRATIO N NO., DDO CODE, PIN CODE OF PATIAIA OFFICE ETC. THEREAFTE R ALL THE SAID THINGS WAS APPLIED AND RECEIVED AND FURTHER INTIMATED TO PCDA (WC), CHANDIGARH ON 09.01.2013. FURTHER, NO INTIMATION WAS RECEIVED FROM PCDA(WC), CHANDIGARH TO THE ASSESSEE REGARDING DEDUCTION AND DEPOSIT OF TDS. IT WAS CONTENDED THAT ONLY AFTER RECEIVING NOTICE OF ITO (IDS), PATIALA REGARD ING NON FILING OF TDS RETURN OF 24Q OF QUARTER 1, 2 ND ,3 RD AND 4 TH OF F.Y. 2011-12, THE SAID TDS RETURNS WERE FILED ON 03.03.2014. IT WAS ALSO STATED THAT THERE WAS NO MA LAFIDE INTENTION OF THE ASSESSEE IN NOT SUBMITTING THE STA TEMENT IN TIME. REFERENCE WAS MADE OF THE DECISION OF THE ITAT LUCKNOW JUDGEMENT 2011(5) TMI 831 IN THE CASE OF 3 BRANCH MANAGER, PNB VS ADDL.COMMISSIONER OF INCOME TAX IN IT APPEAL NO.285(LUCK)2011, DATED 31.05.2011 . 4. REPUDIATING THE SUBMISSIONS OF THE ASSESSEE, THE JOINT COMMISSIONER OF INCOME TAX, TDS, CHANDIGARH H ELD THAT THE DELAY IN FILING THE STATEMENT WAS NOT OCCA SIONED BY ANY REASONABLE AND SUFFICIENT CAUSE AND PROCEEDE D TO PENALISE THE ASSESSEE UNDER THE PROVISIONS OF SECTI ON 272A(2)(K) OF THE ACT, LEVYING PENALTY OF RS.1,61,3 90/-. 5. THE MATTER WAS CARRIED IN APPEAL BEFORE THE CIT(APPEALS) WHO DISMISSED THE ASSESSEES APPEAL ST ATING THAT CONSIDERING THE PERIOD OF DEFAULT IT WAS CLEAR THAT THE PR HAD TREATED THE STATUTORY PROVISIONS WITH CONTEM PT AND THAT THERE WAS A CONSCIOUS DISREGARD OF THE OBL IGATION CAST ON IT AND THUS NO BONAFIDE REASON FOR THE DEFA ULT. THE LD.CIT(A) HELD AS UNDER: 6. THE SUBMISSIONS OF THE APPELLANT HAVE BEEN CONSIDERED. THERE IS NO DOUBT THAT THE PENALTY HAS BEEN LEVIED FOR THE TECHNICAL BREACH OF NOT FILING THE QUARTERLY STATEMENT WITHIN THE STIPULATED PERIOD AND THAT THERE WAS NO LOSS IN AS MUCH AS THE DUE TAXES WERE PAID ON TIME. EVEN IF THE AFORESAID TECHNICAL BREACH BE CONSIDERED VENIAL IN VIEW OF THE FACT THAT THERE IS NO LOSS OF REVENUE AS TAXES HAVE BEEN DEDUCTED AND PAID TO THE TREASURY OF THE GOVERNMENT , THE DEFAULT ON THE PART OF PR CANNOT BE TREATED WIT H LEVITY AS THE RESPONSIBILITY CAST UPON HIM HAS NOT B EEN DISCHARGED AS PER THE STATUTORY PROVISION IN THIS R EGARD. IT IS ALSO NOT A CASE OF A DEFAULT FOR A DAY OR TWO. T HE DEFAULT CONTINUED FOR MORE THAN A YEAR WHICH GOES ON TO SHOW THAT THE PR TREATED THE STATUTORY PROVISION O F LAW WITH AN UNDESERVING CONTEMPT. IF DUE CARE AND CAUTION IS NOT EXERCISED BY THE PERSON RESPONSIBLE FO R MAKING COMPLIANCE TO THE PROVISIONS OF LAW, THE ENSUING DEFAULT CANNOT BE CONSIDERED AS VENIAL. THE PRESCRIBED PENALTY FOR SUCH A BREACH HAS BEEN MANDATED BY THE STATUTE. THE PR IS CALLED UPON TO 4 EFFECT COMPLIANCE TO THE PROVISIONS IN EVERY QUARTER IN RESPECT OF THE WITHHOLDING TAX OBLIGATIONS, FAILNG WHICH THE PENALTY HAS TO BE IMPOSED. IN THE INSTANT CASE, THE PR CANNOT CLAIM THAT THE DEFAULT WAS OCCASIONED BECAUSE OF THE BONAFIDE BELIEF THAT SUCH QUARTERLY STATEMENT CAN BE FILED AS LATE AS HAS BEE N FILED IN THE INSTANT CASE. THE DEFAULT MAY NOT BE CONTUMACIOUS BUT THERE IS DEFINITELY A CONSCIOUS DISREGARD OF THE OBLIGATION CAST UPON THE PR. BESIDES , IF A DEFAULT OR A MISTAKE CAN BE AVOIDED OR OBVIATED BY EXERCISING SOME CARE AND CAUTION, SUCH DEFAULT CANNOT BE CONSIDERED AS OCCASIONED BY A REASONABLE CAUSE OR A SUFFICIENT CAUSE. IMPOSITION OF PENALTY IN SUCH CASES WOULD ALSO ACT AS A DETERRENT FOR THE PR TO BE CAREFUL AND NOT CAUSE BREACH OF THE STATUTORY PROVISION WITHOUT ANY REASONABLE CAUSE. THE IMPOSITION OF PENALTY IS, HEREBY, CONFIRMED. IT IS ORDERED ACCORDINGLY. 6. AGGRIEVED, THE ASSESSEE HAS COME UP IN APPEAL BE FORE US RAISING THE FOLLOWING GROUNDS: 1. BECAUSE THE ACTION FOR UPHOLDING THE LEVY OF PEN ALTY U/S 272A(2)(K) FOR RS.1,61,390/- IS BEING CHALLENGE D ON FACTS & LAW AND THE QUANTUM THEREOF IS BEING DISPUTED TOO. 2. THAT THE APPELLANT PRAYS FOR ANY CONSEQUENTIAL RE LIEF AND OR LEGAL CLAIM ARISING OUT OF THE PRESENT APPEAL AND LEAVE FOR ANY ADDITION, DELETION, AMENDMENT AND MODIFICATION IN THE GROUNDS OF APPEAL BEFORE THE DISPOSAL OF THE SAME. 7. BEFORE US, THE LD. COUNSEL FOR ASSESSEE REITERA TED THE CONTENTIONS MADE BEFORE THE CIT(APPEALS) THAT T HERE WAS REASONABLE CAUSE FOR THE DELAY. OUR ATTENTION W AS DRAWN TO THE SUBMISSIONS MADE IN THIS REGARD BEFORE THE CIT(APPEALS) PLACED AT PAPER BOOK PAGE 1 TO 3 AS UN DER: THE TDS OF THE APPELLANT AND OFFICERS AND STAFF WORK ING UNDER; HIM WAS BEING DEDUCTED AT SOURCES BY PCDA WC, CHANDIGARH AND RETURN OF TDS WAS BEING FILED BY THE M. ON 27/03/2012 APPELLANT HAD RECEIVED A LETTER FROM PCDA WC, CHANDIGARH TO APPLY AND OBTAIN SEPARATE TAN, DDO REGISTRATION NO., DDO CODE, PIN CODE OF PATIALA OFFICE . THEREAFTER ALL THE ABOVE WAS APPLIED IN DUE COURSE AND WE RECEIVED THE TAN ON 19TH APRIL, 2012. WE HAVE INTIM ATED 5 ALL THE ABOVE DETAILS TO PCDA (WC), CHANDIGARH ON 09/01/2013. AS NO INTIMATION WAS RECEIVED FROM PCDA (WC), CHANDI GARH REGARDING DEDUCTION AND DEPOSIT OF TDS BY APPELLANT I T WAS PRESUMED THAT THE TAX CONTINUED TO BE DEDUCTED AND DEPOSITED BY THE PCDA WC, CHANDIGARH IN THEIR OWN TA N FOR THE F/Y. 2011-12. AS SUCH WE HAD BONAFIDE BELIEF THA T THAT THE REQUIRED INFORMATION OF TDS FOR F/Y. 2011-12 WAS SUBMITTED BY THE CONTROLLING OFFICE CHANDIGARH TO TH E INCOME TAX AUTHORITIES AS IN THE PAST. THE ITO TDS- PATIALA ADVISED/REQUIRED US TO FILE THE TD S RETURNS, 24Q-1 TO 24Q-4 FOR THE F/Y. 2011-12 AT PATIA LA VIDE HER LETTER DATED 09/01/2014 ONLY THAN WE CAME TO KNO W THAT THE REQUIRED INFORMATIONS FOR PATIALA OFFICE HAVE NOT BEEN FILED. THE SEQUENCE OF CORRESPONDENCE WITH THE PCDA (WC), CHANDIGARH AND HQ DELHI AND RELEVANT RECORDS ARE ENCL OSED HEREWITH (ANN, PG 1 TO 37) 8. REFERRING TO THE ABOVE IT WAS CONTENDED THAT EAR LIER THE TDS COMPLIANCES WERE BEING DONE BY PCDA WC AND IT WAS ONLY ON 27/03/12 ,WHEN THE DUE DATE FOR FILING TDS RETURNS OF FIRST THREE QUARTERS OF THE YEAR HAD EXP IRED,THAT IT WAS ASKED TO OBTAIN AND APPLY FOR TAN AND OTHER REQUIREMENTS FOR DEDUCTING TDS AND EVEN AFTER THE ASSESSEE HAD COMPLIED WITH THE SAME IT WAS NEVER AS KED TO TAKE OVER THE TDS COMPLIANCES REQUIRED UNDER LAW .IT WAS CONTENDED THEREFORE THAT THE ASSESSEE WAS OF TH E BELIEF THAT THE TDS COMPLIANCES WOULD BE CONTINUED BY PCDA WC AND IT WAS ONLY WHEN NOTICES OF NON COMPLIA NCE WAS RECEIVED FROM THE ITO-TDS THAT THE ASSESSEE BEC AME AWARE OF ITS DEFAULT WHICH WAS IMMEDIATELY COMPLIED WITH. OUR ATTENTION WAS DRAWN TO A DATEWISE STATE OF CASE ANNEXED WITH THE SUBMISSIONS AS UNDER: 6 7 IT WAS ALSO POINTED OUT THAT DOCUMENTS EVIDENCING T HE SAME HAD ALSO BEEN ANNEXED THERETO .LD.COUNSEL FOR THE ASSESSEE THEREFORE CONTENDED THAT THE ASSESSEE HAD SUFFICIENTLY DEMONSTRATED THE EXISTENCE OF REASONAB LE CAUSE FOR THE LATE DEPOSIT OF TDS RETURNS AND THE F INDINGS OF THE CIT(A) IN THIS REGARD WERE THEREFORE INCORRE CT.IT WAS CONTENDED THAT THE PENALTY LEVIED THEREFORE OUGHT T O BE DELETED. THE LD. DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE CIT(APPEALS). 9. WE HAVE HEARD BOTH THE PARTIES ,GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND ALSO THE DOCUME NTS REFERRED TO BEFORE US. THE ISSUE BEFORE US BEING LE VY OF PENALTY U/S 272A(2)(K) OF THE ACT,FOR LATE DEPOSIT OF TDS RETURNS, THERE IS NO DISPUTE THAT NO PENALTY IS LEV IABLE IF THE ASSESSEE PROVES THAT THERE WAS A REASONABLE CAU SE FOR THE FAILURE,AS PROVIDED U/S 273B OF THE ACT. WE FIND MERIT IN THE CONTENTIONS OF THE LD. COUNSE L FOR ASSESSEE THAT THE ASSESSEE HAD SUFFICIENTLY DEMONST RATED THE EXISTENCE OF REASONABLE CAUSE FOR THE DEFAULT. THE LD. COUNSEL FOR ASSESSEE HAS CONTENDED THAT IT WAS NOT REQUIRED TO DEDUCT TDS EARLIER AND WAS ONLY INTIMAT ED ON 27.3.2012 TO OBTAIN TAN, DDO REGISTRATION NO., DDO CODE, ETC. TO FACILITATE TDS COMPLIANCES. THAT IT C OMPLIED WITH THE SAME, BUT IN THE ABSENCE OF ANY SPECIFIC O RDER TO DEDUCT TAX AT SOURCE, REFRAINED FROM DOING SO, PRES UMING 8 THAT IT WAS BEING CONTINUED TO BE DONE BY PCDA(WC) AND IT WAS ONLY WHEN ITO-TDS, ISSUED NOTICE TO IT REQU IRING IT TO FILE TDS RETURN VIDE LETTER DATED 9.1.2014 THAT THEY COME TO KNOW OF THE DEFAULT AND HENCE THE DELAY. CO PIES OF ALL CORRESPONDENCE IN THIS REGARD WERE ALSO PLA CED. NO INFIRMITY IN THESE FACTS HAVE BEEN POINTED OUT TO U S BY THE REVENUE. IT IS THEREFORE ABUNDANTLY CLEAR THAT THE PERSON RESPONSIBLE HAD A BONAFIDE REASON FOR THE DELAY IN FILING TDS RETURNS. BEING REQUIRED TO COMPLY WITH THE TDS REQUIREMENTS AND COMPLIANCES FOR THE FIRST TIME AND THAT TOO NOT BEING SPECIFICALLY INTIMATED TO DO SO BY TH E AUTHORITY WHO WAS EARLIER DOING IT, THE PERSON RESPONSIBLES BELIEF THAT THE AUTHORITY WAS CONTINU ING TO DO SO WAS A BONAFIDE AND REASONABLE BELIEF. THEREFO RE, THE FILING OF TDS RETURN LATER ON, ONLY ON BEING REQUI RED TO DO SO BY THE ITO TDS, AUTOMATICALLY RESULTED IN DELAY ON ACCOUNT OF A REASONABLE CAUSE. THERE IS NO MERIT IN THE CONTENTION OF THE CIT(APPEALS) THAT THE PENALTY WAS JUSTIFIED CONSIDERING THE HUGE PERIOD OF DELAY. TH E ASSESSEE HAVING DULY EXPLAINED THE CAUSE FOR THE DE LAY. PERSON RESPONSIBLE CANNOT BE HELD RESPONSIBLE FOR THE DELAY NOR CAN BE SAID TO HAVE CONSCIOUSLY DISREGARD ED THE OBLIGATION CAST UPON HIM. 10. IN VIEW OF THE ABOVE, WE HOLD THAT THE ASSESSEE HAVING SHOWN REASONABLE CAUSE FOR THE DELAY IN FILI NG TDS 9 RETURN, NO PENALTY U/S 272A(2)(K) OF THE ACT IS LEV IABLE AND THE SAME IS, THEREFORE DIRECTED TO BE DELETED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 4 TH JULY, 2018 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH