Fodder Development, Jalandhar V. The JCIT (TDS), Ludhiana

ITA 171/ASR/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0636 (ITAT-AMRITSAR)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 28-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKER
• Assessee Lawyers: DR GURPREET SINGH ADO
• Keywords: Bonafide belief; Retrospective amendment; Reasonable cause; Bonafide mistake
• Section: 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. (CAMP AT JALANDHAR) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NOS. 43, 171, 172 & 173(ASR)/2016 ASSESSMENT YEARS: 2007-08, 2007-08 TO 2009-10 PAN: ABNPS2270A FODDER DEVELOPMENT OFFICER, VS. INCOME TAX OFFICER , LADOWALI ROAD, (TDS)-II, JALANDHAR. JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH.DR. GURPREET SINGH, ADO, RESPONDENT BY: SH. BHAWANI SHANKER, DR DATE OF HEARING: 27/06/2016 DATE OF PRONOUNCEMENT: 27/06/2016 ORDER PER A.D. JAIN, JM; THESE FOUR APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST THE COMBINED ORDER DATED 21.09.2015, PASSED BY THE LD. CIT(A)-2, JALANDHAR. 2. IN ITA NO. 171(ASR)/2016 FOR THE A.Y. 2007-08, T HE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL, WHICH ARE SIMILAR IN OTHER APPEALS, EXCEPT VARIATION IN AMOUNTS; 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE CIT(A)-2, JALANDHAR HAS GRAVELY ERRED IN IMPOSING PENALTY FOR THE ASSESSMENT YEAR 2007-08 AT RS.3500/- AGAINST LAW AN D WITHOUT ANY JUSTIFICATION. THE PAYMENT OF TDS STANDS MADE I N TIME AND THERE IS NO LOSS TO THE STATE EXCHEQUER. 2 ITA NO.43, 171 TO 173(ASR)/2016 AYS 2007-09 TO 20 09-10 1.1. THAT THE ASSESSEE IS IN APPEAL IS A DEPARTMENT OF PUNJAB GOVT. THERE IS BONAFIDE DELAY IN OMISSION OF FILING THE S TATEMENT. THE CIT(APPEALS)-2, JALANDHAR HAS NOT IMPOSED PENALTY F OR THE FINANCIAL YEAR 2005-06, HE OUGHT TO HAVE EXERCISED THE SAME DISCRETION FOR OTHER YEARS, BEING ON THE SAME FOOTI NG. 2, THAT THE DELAY IN FILING STATEMENTS HAS OCCURRE D DUE TO SHORTAGE OF STAFF AND THE LACK OF CONCERNED CLERK. THE DELAY IS A BONAFIDE MISTAKE AND DESERVES TO BE EXONERATED. 3. THE APPEAL IN ITA NO.43(ASR)/2015 HAS BEEN FILED IN DUPLICATE. HENCE, THE SAME IS DISMISSED, BEING FILED IN DUPLICATE. NO W, WE PROCEED TO DECIDE THE REMAINING THREE APPEALS OF THE ASSESSEE. 4. THE BRIEF FACTS OF THE CASES ARE THAT THE ASSESS EE IS A PERSON RESPONSIBLE AND HAD DEDUCTED TAX AT SOURCE ON VARIOUS PAYMENTS BUT HAD FAILED TO FILE QUARTERLY TDS RETURNS WITHIN THE PRESCRIBED PERIOD OF TIME, THEREFORE, ASSESSING OFFICER IMPOSED PENALTY U/S 272A(2)(K) OF THE ACT @ OF RS.100 PER DAY FOR EACH DAY OF DEFAULT. 5. AGGRIEVED WITH THE ORDER THE ASSESSEE FILED APPE ALS BEFORE LD. CIT(A) AND SUBMITTED THAT THE RETURNS COULD NOT BE FILED WITHI N THE PRESCRIBED PERIOD AS THE ASSESSEE WAS NOT HAVING TECHNICAL STAFF AND IT WAS DEPENDENT UPON OUTSIDE AGENCY TO FILE THE RETURNS AND THEREFORE, THERE WAS A REASONABLE CAUSE FOR LATE FILING OF THE RETURNS. THE ASSESSEE ALSO RELIED UPO N VARIOUS CASE LAWS BEFORE THE LD. CIT(A) BUT LD. CIT(A) DID NOT AGREE WITH THE CO NTENTIONS OF ASSESSEE AND UPHELD THE ACTION OF ASSESSING OFFICER. 3 ITA NO.43, 171 TO 173(ASR)/2016 AYS 2007-09 TO 20 09-10 6. AGGRIEVED THE ASSESSEE IS IN APPEALS BEFORE US. 7. DR. GURPREET SINGH, ADO, APPEARED ON BEHALF OF T HE ASSESSEE AND SUBMITTED THAT ASSESSEE WAS A RESPONSIBLE PERSON AN D DUE TO LACK OF TECHNICAL STAFF IT WAS DEPENDENT UPON THE OUTSIDE AGENCY FOR THE PREPARATION AND FILING OF RETURNS. HE FURTHER SUBMITTED THAT TDS WAS PAID WIT HIN PRESCRIBED PERIOD AND THEREFORE, NO LOSS HAD OCCURRED TO THE REVENUE AND THE DELAY IN FILING OF RETURNS WAS A TECHNICAL BREACH OF LAW. HE ALSO RELIED ON T HE CASE LAWS RELIED BEFORE THE LD. CIT(A) AND PRAYED THAT THE PENALTY SUSTAINED B Y LD. CIT(A) BE DELETED. 8. THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORD ERS OF AUTHORITIES BELOW. 9. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT A.O HAS IMPOSED PENA LTIES FOR DEFAULTS IN LATE FILING OF TDS RETURNS IN VARIOUS QUARTERS FOR THE A SSESSMENT YEARS 2008-09 TO 2009-10. THE CONTENTION OF THE ASSESSEE THAT IT WAS NOT HAVING TECHNICAL STAFF AND WAS DEPENDENT UPON THE OUTSIDE AGENCY FOR FILIN G OF RETURNS WAS NOT ACCEPTED BY THE LD. CIT(A). WE FIND THAT ASSESSEE H AD DEDUCTED THE TAX AT SOURCE AND HAD DEPOSITED THE SAME WITH CENTRAL GOVT . WITHIN THE STIPULATED PERIOD AND NEITHER THE GOVT., NOR THE PAYEE SUFFERE D ANY LOSS. THE MISTAKE COMMITTED BY ASSESSEE IS A TECHNICAL ONE AND MOREOV ER THE ASSESSEE BEING A PERSON RESPONSIBLE DOES FACE PROBLEMS DUE TO LACK O F TECHNICAL STAFF TO DEAL WITH THE FILING OF TDS RETURNS. THE PENALTY U/S 272 A(2)(K) IS NOT A MANDATORY PENALTY AND BEFORE IMPOSING OF PENALTY THE REVENUE AUTHORITIES MUST EXAMINE THE FACTS AND CIRCUMSTANCES FOR COMMITTING THE MIST AKE. WE FURTHER FIND THAT 4 ITA NO.43, 171 TO 173(ASR)/2016 AYS 2007-09 TO 20 09-10 VIDE FINANCE ACT, 2012 W.E.F., 01.07.2012, THE LEGI SLATURE ITSELF HAS REMOVED THIS PENALTY PROVISION BY ADDING A PROVISO TO SECTI ON 272A(2)(K). THE PENAL PROVISIONS ALONG WITH AMENDMENT PROVISIONS W.E.F., 1.07.2012 ARE REPRODUCED HEREUNDER: SECTION 272A (2) (K) (2) IF ANY PERSON FAILS- (A) TO COMPLY WITH A NOTICE ISSUED UNDER SUB-SECTION (6 ) OF SECTION 94; OR (B) TO GIVE THE NOTICE OF DISCONTINUANCE OF HIS BUSINES S OR PROFESSION AS REQUIRED BY SUB-SECTION (3) OF SECTION 176; OR (C) TO FURNISH IN DUE TIME ANY OF THE RETURNS, STATEMEN TS OR PARTICULARS MENTIONED IN SECTION 133 OR SECTION 206 [.] [FOR SECTION 206 C] OR SECTION 285B; OR (D) TO ALLOW INSPECTION OF ANY REGISTER REFERRED TO IN SECTION 134 OR OF ANY ENTRY IN SUCH REGISTER OR TO ALLOW COPIES OF SUCH R EGISTERED OR OF ANY ENTRY THEREIN TO BE TAKEN; OR (E) TO FURNISH THE RETURN OF INCOME WHICH HE IS REQ UIRED TO FURNISH UNDER SUB-SECTION (4A) OR SUB-SECTION (4C) OR SECTION 139 OR TO FURNISH IT WITHIN THE TIME ALLOWED AND IN THE MANNER REQUIRED THOSE SUB-S ECTION; OR (F) TO DELIVER OR CAUSE TO BE DELIVERED IN DUE TIME A COPY OF THE DECLARATION MENTIONED IN SECTION 197A; OR (G) TO FURNISH A CERTIFICATE AS REQUIRED BY SECTION 203 [OR SECTION 206C] OR (H) TO DEDUCT AND PAY TAX AS REQUIRED BY SUB-SECTIO N (2) OF SECTION 226; (I) TO FURNISH A STATEMENT AS REQUIRED BY SUB-SECTI ON (2C) OF SECTION 192;] [(J) TO DELIVER OR CAUSE TO BE DELIVERED IN DUE TIM E A COPY OF THE DECLARATION REFERRED TO IN SUB-SECTION (1A) OF SECTION 206C;] ([(K) TO DELIVER OR CAUSE TO BE DELIVERED A COPY OF THE STATEMENT WITHIN THE TIME SPECIFIED IN SUB SECTION (3) OF SECTION 200 OR THE PROVISO TO SUB-SECTION (3) OF SECTION 206C;] [ PROVIDED FURTHER THAT NO PENALTY SHALL BE LEVIED UNDER THIS SECTION FOR THE FAILURE REFERRED TO IN CLAUSE (K), IF SUCH FAILURE RELATES TO A STATEMENT REFERRED TO IN SUB-SECTION (3) OF SECTION 200 OR TH E PROVISO TO SUB-SECTION (3) 5 ITA NO.43, 171 TO 173(ASR)/2016 AYS 2007-09 TO 20 09-10 OF SECTION 206C WHICH IS TO BE DELIVERED OR CAUSED TO BE DELIVERED FOR TAX DEDUCTED AT SOURCE OR TAX COLLECTED AT SOURCE, AS T HE CASE MAY BE, ON OR AFTER THE 1 ST DAY OF JULY, 2012.] 10. FROM THE ABOVE PROVIDED AMENDMENT W.E.F., 1.7.2 012, WE FIND THAT FINDING THIS PROVISION HARSH THE LEGISLATURE ITSELF HAS REMOVED THIS PENALTY. THE REMOVAL OF THIS PENALTY BEING BENEFICIAL TO THE ASS ESSEE, IT CAN BE HELD TO BE APPLICABLE WITH RETROSPECTIVE EFFECT AND THEREFORE, THE PENALTY FOR THE YEAR UNDER CONSIDERATION IS NOT IMPOSABLE. FURTHER, WE FIND TH AT PENALTY IS NOT AUTOMATIC AND IS NOT MANDATORY. FOR EVERY TECHNICAL BREACH OF PROVISIONS, PENALTY CANNOT BE IMPOSED. 11. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF HINDUSTAN STEEL LTD. (1972) 83 ITR 26 HAS HELD AS UNDER: AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OU T A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDING, AND PENA LTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIB ERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHON EST, OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENAL TY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSI DERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY I S PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE J USTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FRO M A BONAFIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRE SCRIBED BY THE STATUS. IN VIEW OF THE ABOVE DISCUSSION, IT IS CLEAR THAT T HE DELAY IN FILING THE RETURN WAS SUPPORTED BY REASONABLE CAUSE AND IN ANY CASE W AS ONLY A TECHNICAL AND VENIAL BREACH OF THE PROVISIONS OF LAW. UNDER T HESE CIRCUMSTANCES WE HUMBLY REQUEST YOUR GOODSELF TO CANCEL THE PENALTY LEVIED OF RS.12,900/- U/S 272A(2)(K) OF THE ACT. 6 ITA NO.43, 171 TO 173(ASR)/2016 AYS 2007-09 TO 20 09-10 12. IN VIEW OF THE FACTS AND CIRCUMSTANCES AND IN V IEW OF THE ABOVE JUDICIAL PRECEDENTS, WE DO NOT HAVE ANY HESITATION IN DELETI NG THE PENALTIES CONFIRMED BY LEARNED CIT(A). 13. IN THE RESULT, THE APPEALS OF THE ASSESSEE I N ITA NO. 43(ASR)/2016 IS DISMISSED AND THAT OF ITA NOS. 171 TO 173(ASR)/2016 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/0 6/2016. SD/- SD/- (T. S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27/06/2016. /SKR/ COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE:FODDER DEVELOPMENT OFFICER (2) THE ITO TDS-II, JALANDHAR. (3) THE CIT(A), JLR (4) THE CIT,, JLR (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.