Nu - Tech Prasiddhi Consortium, Bangalore V. The Additional Commissioner Of Income Tax, TDS, Range- 18, Bangalore

ITA 1703/BANG/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5172 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-09-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 30-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R PREMI J C IT BENGALURU
• Assessee Lawyers: SHUBHAM DALMIA
• Keywords: Principle of natural justice; Retrospective amendment; TDS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND S MT . BEENA PILLAI , JUDICIAL MEMBER ITA NO. 1 70 3 /BA NG/20 1 9 ASSESSMENT YEAR : 2011-12 M/S. NU-TECH PRASIDDHI CONSORTIUM, #370, 5H MAIN, 12 TH CROSS, DOLLARS COLONY (HIG), RMV 2 ND STAGE, BENGALURU. PAN : A AFFN 9282 N VS. THE ADDITIONAL COMMISSIONER OF INCOME TAX, TDS, RANGE1-8, BENGALURU 560 032. APPELLANT RESPONDENT ASSESSEE BY : SHRI. SHUBHAM DALMIA , C A REVENUE BY : S MT . R. PREMI , J CIT (DR)(ITAT), BENGALURU DATE OF HEARING : 2 4 .0 9 .2020 DATE OF PRONOUNCEMENT : 09 . 1 0.2020 O R D E R PER A. K. GARODIA, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-9, BENGALURU, DATED 30.05.2019, FOR ASSESSMENT YEAR 2011-12. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THE LEARNED COMMISSIONER OF APPEALS HAS FAILED IN APPRECIATING THE FACTS AND JUDGEMENTS PASSED BY THE LEARNED TRIBUNALS AND COURTS IN VARIOUS APPEALS, DELETING THE PENALTY IMPOSED U/S 272A(2)(K) OF THE INCOME TAX ACT, 1961, ITA NO. 1703/BANG/2019 PAGE 2 OF 5 2. THE LEARNED COMMISSIONER OF APPEALS HAS FAILED IN APPRECIATING THAT THE DELAY IN FILING IN TDS RETURN WAS DUE TO THE FACT THAT THE ASSESSE'S ACCOUNTANT HAS LEFT THE JOB AND THE ASSESSEE DID NOT HAVE APPROPRIATE TRAINED STAFF FOR CARRYING THE E-FILING OF E-TDS RETURNS WHICH WAS FIRST INTRODUCED WITH RETROSPECTIVE EFFECT FROM 01.04.2010. 3. THE LEARNED COMMISSIONER OF APPEALS HAS FAILED TO COMPLY WITH PRINCIPLES OF NATURAL JUSTICE. 4. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX APPEALS IN SO FAR AS IT IS AGAINST THE APPELLANT, IS OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 5. THAT THE PENALTY, IF ANY, COULD BE LEVIED ONLY IN RESPECT OF DELAY AFTER PAYMENT OF TAX. 6. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER APPEALS WAS NOT JUSTIFIED IN UPHOLDING THE PENALTY CHARGED U/S 272A(2)(K) OF THE INCOME TAX ACT, 1961. 2. LEARNED AR OF THE ASSESSEE REITERATED THE SAME CONTENTIONS WHICH WERE RAISED BY THE ASSESSEE BEFORE CIT(A). LEARNED DR OF THE REVENUE SUPPORTED THE ORDER OF CIT(A). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE ISSUE IN DISPUTE WAS DECIDED BY LEARNED CIT(A) AS PER PARA 9 OF HIS ORDER AND HENCE, ITA NO. 1703/BANG/2019 PAGE 3 OF 5 FOR READY REFERENCE, WE REPRODUCE PARA 9 FROM THE ORDER OF CIT(A). THIS PARA READS AS UNDER: 9. THE SIMILAR ARGUMENT WAS TAKEN BEFORE THE ADDITIONAL CIT VIDE LETTER DATED 19.04.13 FILED BEFORE THE ADDITIONAL CIT DURING THE PENALTY PROCEEDINGS. I HAVE CONSIDERED THE ISSUES. I FIND THAT THE CLAIM OF THE APPELLANT THAT IT TAKES ONE YEAR TO SEARCH FOR AN ACCOUNTANT IS FAR-FETCHED. EVEN, IF THE ACCOUNTANT HAD LEFT THE APPELLANT FIRM [WITHOUT NOTICE] A REASONABLE PERIOD TO APPOINT A NEW ACCOUNTANT WILL BE TWO TO THREE MONTHS. ANOTHER TWO TO THREE MONTHS CAN BE GIVEN TO THE NEW ACCOUNTANT TO UNDERSTAND AND UPDATE ALL THE RECORDS AND MAKE ALL THE COMPLIANCES. THEREFORE, AT BEST A PERIOD OF SIX MONTHS FROM JUNE 2010 COULD BE ALLOWED TO THE APPELLANT. THUS, THE DELAY OF ABOUT 18O DAYS FROM 30.06.2010 IS BEING ACCEPTED AS A REASONABLE DELAY AND BALANCE IS CONSIDERED TO BE UNREASONABLE. THE PENALTY LEVIED, THEREFORE, IS BEING PARTLY ALLOWED ACCORDINGLY. 4. FROM THE ABOVE PARA REPRODUCED FROM THE ORDER OF CIT(A), IT IS SEEN THAT IT IS HELD BY LEARNED CIT(A) THAT A PERIOD OF 2 TO 3 MONTHS CAN BE REQUIRED FOR APPOINTING A NEW ACCOUNTANT AND A FURTHER PERIOD OF 2 TO 3 MONTHS CAN BE ITA NO. 1703/BANG/2019 PAGE 4 OF 5 GIVEN TO THE NEW ACCOUNTANT TO UNDERSTAND AND UPDATE ALL THE RECORDS AND MAKE ALL THE COMPLIANCES AND ON THIS BASIS, HE HAS HELD THAT THE DELAY OF 180 DAYS FROM 30.06.2010 IS BEING ACCEPTED AS A REASONABLE DELAY AND BALANCE DELAY IS CONSIDERED TO BE UNREASONABLE. IN PARA 5 OF HIS ORDER, IT IS NOTED BY LEARNED CIT(A) THAT ACTUAL DATE OF FILING OF FORM NOS.24Q AND 26Q WAS 13.07.2011. HENCE, IT IS SEEN THAT THE DELAY IS OF ABOUT ONE YEAR FROM 30.06.2010 OUT OF WHICH LEARNED CIT(A) HAS ACCEPTED THAT DELAY OF 180 DAYS IS REASONABLE IN THE FACTS OF THE PRESENT CASE. IN PARA 8 OF HIS ORDER, IT IS NOTED BY LEARNED CIT(A) THAT IT WAS THE SUBMISSION OF THE ASSESSEE BEFORE HIM AND BEFORE THE AO THAT THE ACCOUNTANT WORKING WITH THE ASSESSEE FIRM HAD LEFT THE SERVICES WITHOUT GIVING ANY NOTICE AND THE ASSESSEE FIRM COULD OBTAIN SERVICE OF ANOTHER ACCOUNTANT ONLY AFTER ONE YEAR. HE FURTHER NOTED IN THE SAME PARA THAT AN AFFIDAVIT FROM THE ACCOUNTANT AND ANOTHER AFFIDAVIT FROM THE PARTNER OF THE FIRM WAS ALSO FILED BEFORE HIM. CONSIDERING THESE FACTS THAT THERE WAS ACTUAL DELAY OF ONE YEAR IN GETTING A NEW ACCOUNTANT, WE FEEL THAT RESTRICTING A PERIOD OF EMPLOYING ANOTHER ACCOUNTANT TO 180 DAYS IS ARBITRARY AND WITHOUT ANY BASIS. WHEN THE LEARNED CIT(A) HAS ACCEPTED THAT THE PERIOD CONSUMED IN GETTING NEW ACCOUNTANT AND MAKING HIM CONVERSANT ABOUT THE FACTS AND LEGAL POSITION OF THE ASSESSEES CASE, 180 DAYS IS A REASONABLE PERIOD, WE FEEL THAT LEARNED CIT(A) SHOULD NOT HAVE RESTRICTED SUCH PERIOD TO 180 DAYS INSTEAD OF ACCEPTING IT AT ONE YEAR AS SUBMITTED BY THE ASSESSEE BEFORE HIM. HENCE, WE FEEL THAT IN ITA NO. 1703/BANG/2019 PAGE 5 OF 5 THE FACTS OF PRESENT CASE, THE ENTIRE DELAY SHOULD BE ACCEPTED AS A REASONABLE DELAY AND NO PENALTY SHOULD BE IMPOSED. WE DELETE THE PENALTY CONFIRMED BY LEARNED CIT(A). 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (GEORGE GEORGE K) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED: 9 TH OCTOBER, 2020. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.