MMJ Exports Private Limited , Kolkata V. JCIT (TDS), Range - 58, Kolkata

ITA 18/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9325 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 04-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Keywords: Principle of natural justice; Reasonable cause; TDS
• Section: 273B; 274; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.18/KOL/2019 ( / ASSESSMENT YEAR:2011-12) MMJ EXPORTS PVT. LTD. 113, PARK STREET, PODDAR POINT, KOLKATA-700016 VS. JCIT(TDS), RANGE-58, KOLKATA ./ ./PAN/GIR NO.: AACCM 0683 N (APPELLANT) .. (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SMT. RANU BISWAS, ADDL. CIT / DATE OF HEARING : 31/10/2019 /DATE OF PRONOUNCEMENT : 10/01/2020 / O R D E R PER BENCH: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERT AINING TO ASSESSMENT YEAR 2011-12, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-24, KOLKATA, IN APPEAL NO. 1082/CIT(A)-24/ KOL/14-15, WHICH IN TURN ARISES OUT OF PENALTY ORDER PASSED BY THE ASSESSING OFFICER U/S 272A(2)(K) / 274 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DA TED 19/09/2013. 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F ASSESSEE IN SPITE OF ISSUANCE OF NOTICE FOR HEARING MORE THAN ONE OCCASION AND LD . DEPARTMENTAL REPRESENTATIVE(DR), WAS PRESENT FOR THE APPELLANT R EVENUE. IN THE ABSENCE OF ANY APPEARANCE BY THE ASSESSEE, THE APPEAL IS BEING DIS POSED OF EX PARTE QUA THE MMJ EXPORTS PVT. LTD. ITA NO.18/KOL/2013 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 2 22 2 ASSESSEE, AFTER HEARING LD. DR FOR THE REVENUE ON M ERITS IN TERMS OF RULE 24 OF THE INCOME TAX APPELLATE, TRIBUNAL, RULES, 1963. 3. GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE A S FOLLOWS: 1) FOR THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE IMPOSITION OF PENALTY IS PERVERSE, RATHER AGAINST E VIDENCE AND MATERIAL ON RECORD AND WITHOUT AN IOTA OF MATERIAL OR EVIDENCE TO SUPPORT AND SUSTAIN THE SAME. 2) FOR THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE IMPUGNED PENALTY IMPOSED AMOUNTING TO RS. 21,273/- (RUPEES T WENTY ONE THOUSAND TWO HUNDRED AND SEVENTY THREE ONLY) BY THE JOINT CO MMISSIONER OF INCOME TAX (TDS), RANGE-58, KOLKATA AND CONFIRMED BY THE L D. COMMISSIONER OF INCOME-TAX (APPEAL)-24, KOLKATA IS PERVERSE AND OUG HT TO BE DELETED IN ENTIRETY. 3) FOR THAT, THE APPELLANT CRAVES LEAVE TO ADD, ALT ER, AMEND OR WITHDRAW ANY GROUND AT ANY TIME BEFORE OR AT THE TIME OF HEA RING. 4. BRIEF FACTS QUA THE ISSUE ARE THAT DURING THE PE NALTY PROCEEDINGS THE ASSESSING OFFICER ISSUED NOTICE U/S 272A(2)(K) / 274 OF THE A CT, FOR LATE FILING OF QUARTERLY TDS STATEMENTS FOR THE F.Y. 2010-11 ON 29 TH MARCH, 2013 INVOLVING DELAYS IN FILING OF FORM NO. 26Q BY THE ASSESSEE. IN RESPONSE TO THE SAID NOTICE THE ASSESSEE FILED A WRITTEN SUBMISSION ALONG WITH ITS ANNEXURE. THE ASSESSING OFFICER REJECTED THE CONTENTION OF THE ASSESSEE AND HELD THAT THERE WAS A DELAY OF PAYMENT OF QUARTERLY STATEMENTS RELATING TO Q.1 TO Q.4 IN FORM NO. 24Q / 26Q WHICH ARE AS FOLLOWS- FORM NO. PERIODICITY DELAY (DAYS) 24Q Q.1 413 24Q Q.2 321 24Q Q.3 229 24Q Q.4 162 26Q Q.1 413 26Q Q.2 321 26Q Q.3 229 26Q Q.4 162 THE A/R OF THE ASSESSEE CONTENDED VIDE LETTER DAT ED 16/05/2013 EXPLAINING THE DELAY IN SUBMISSION OF RETURN WAS THAT THE COMPANY IS DOING THE BUSINESS OF TRADING BAMBOO AND SUPPLYING THE SAME TO BAMBOO BOA RD MANUFACTURER. WE PURCHASED BAMBOO AND MADE A NOT BE AVAILABLE DURING THE RAINS. THE REASON FOR D ELAY IN PAYMENT OF TDS WAS THAT WE COULD NOT SELL THE STOCK OF BAMBOO AND MONE Y, GOT STUCK. THE ASSESSING OFFICER REJECTED THE CONTENTION OF TH E ASSESSE REASONS FURNISHED BY THE A/R OF THE ASSESSEE DOES NOT CONSTITUTE A REASONABLE CAUSE AS PROVIDED IN SECTION FOR ANY RELAXATION FOR LATE FILING OF QUARTERLY STA TEMENT OF TDS IN THE CIRC UMSTANCES AS MENTIONED BY THE ASSESSEE AND IT IS EV IDENT THAT THE ASSESSEE DID NOT COMPLY WITH ITS STATUTORY OBLIGATION U/S 200( 3) OF THE ACT. THUS, IT IS EVIDENT THAT THE ASSESSEE HAS FAILED TO COMPLY WITH ITS ST ATUTORY OBLIGATION OF FILING QUARTERLY S TATEMENT OF TDS WITHIN THE SPECIFIED DATE. THEREFOR E, THE CONTENTION OF THE ASSESSEE WA S NOT ACCEPTED OF THE ACT WAS IMPOSED OFFICER AS UNDER: 5. ON APPEAL, THE LD. CIT(A) CONFIRMED THE PENALTY U/S 27 2A(2)(K) / 274 OF THE ACT OBSERVING THE FOLLOWING: THE FACTS OF THE APPEAL IS THAT THE DUE DATE OF DE POSIT OF THE TDS WAS 30.04.2011 AND THE DUE DATE OF FILING OF THE RETURN WAS 15.05. 2011. BUT AS THE PAYMENT OF THE TDS WAS MADE ON 29.09.2011, THE TDS RETURN COULD NO T UPLOADED. HENCE THE LATE PAYMENT OF T HE TDS LED TO THE LATE FILING OF THE TDS RETURN. THE ARGUMENT OF THE APPELLANT FOR JUSTIFYING THE LA TE SUBMISSION OF THE TDS RETURN CANNOT BE ACCEPTED AS A REASONABLE GROUND FOR DELAY AS THE APPELLANT HAD NOT FURNISHED ANY JUSTIFICATION FOR THE DELAY IN AMOUNT OF TDS WAS DUE TO BE DEPOSITED ON 30.04.2011 , BUT WAS DEPOSITED ON MMJ EXPORTS PVT. LTD. ITA NO. ASSESSMENT YEAR: TRADING BAMBOO AND SUPPLYING THE SAME TO BAMBOO BOA RD MANUFACTURER. WE PURCHASED BAMBOO AND MADE A STOCK FOR RAINY SEASON THINKING THAT BAMBOO WILL NOT BE AVAILABLE DURING THE RAINS. THE REASON FOR D ELAY IN PAYMENT OF TDS WAS THAT WE COULD NOT SELL THE STOCK OF BAMBOO AND MONE Y, GOT STUCK. THE ASSESSING OFFICER REJECTED THE CONTENTION OF TH E ASSESSE E AND REASONS FURNISHED BY THE A/R OF THE ASSESSEE DOES NOT CONSTITUTE A REASONABLE CAUSE AS PROVIDED IN SECTION 273B OF THE ACT. FURTHER, THE ACT DOES NOT PROVIDE FOR ANY RELAXATION FOR LATE FILING OF QUARTERLY STA TEMENT OF TDS IN THE UMSTANCES AS MENTIONED BY THE ASSESSEE AND IT IS EV IDENT THAT THE ASSESSEE DID NOT COMPLY WITH ITS STATUTORY OBLIGATION U/S 200( 3) OF THE ACT. THUS, IT IS EVIDENT THAT THE ASSESSEE HAS FAILED TO COMPLY WITH ITS ST ATUTORY OBLIGATION OF FILING TATEMENT OF TDS WITHIN THE SPECIFIED DATE. THEREFOR E, THE CONTENTION OF S NOT ACCEPTED BY THE ASSESSING OFFICER AND PENALTY U/S 272A( WAS IMPOSED . THE QUANTUM OF PENALTY IS QUANTIFIED APPEAL, THE LD. CIT(A) CONFIRMED THE PENALTY U/S 27 2A(2)(K) / 274 OF THE ACT OBSERVING THE FOLLOWING: THE FACTS OF THE APPEAL IS THAT THE DUE DATE OF DE POSIT OF THE TDS WAS 30.04.2011 AND THE DUE DATE OF FILING OF THE RETURN WAS 15.05. 2011. BUT AS THE PAYMENT OF THE TDS WAS MADE ON 29.09.2011, THE TDS RETURN COULD NO T UPLOADED. HENCE THE LATE HE TDS LED TO THE LATE FILING OF THE TDS RETURN. THE ARGUMENT OF THE APPELLANT FOR JUSTIFYING THE LA TE SUBMISSION OF THE TDS RETURN CANNOT BE ACCEPTED AS A REASONABLE GROUND FOR DELAY AS THE APPELLANT HAD NOT FURNISHED ANY JUSTIFICATION FOR THE DELAY IN THE PAYMENT OF THE AMOUNT OF TDS. THE AMOUNT OF TDS WAS DUE TO BE DEPOSITED ON 30.04.2011 , BUT WAS DEPOSITED ON MMJ EXPORTS PVT. LTD. ITA NO. 18/KOL/2013 ASSESSMENT YEAR: 2009-10 P PP PA AA AG GG GE EE E | || | 3 33 3 TRADING BAMBOO AND SUPPLYING THE SAME TO BAMBOO BOA RD MANUFACTURER. WE STOCK FOR RAINY SEASON THINKING THAT BAMBOO WILL NOT BE AVAILABLE DURING THE RAINS. THE REASON FOR D ELAY IN PAYMENT OF TDS WAS THAT WE COULD NOT SELL THE STOCK OF BAMBOO AND MONE Y, GOT STUCK. E AND HELD THAT THE REASONS FURNISHED BY THE A/R OF THE ASSESSEE DOES NOT CONSTITUTE A REASONABLE 273B OF THE ACT. FURTHER, THE ACT DOES NOT PROVIDE FOR ANY RELAXATION FOR LATE FILING OF QUARTERLY STA TEMENT OF TDS IN THE UMSTANCES AS MENTIONED BY THE ASSESSEE AND IT IS EV IDENT THAT THE ASSESSEE DID NOT COMPLY WITH ITS STATUTORY OBLIGATION U/S 200( 3) OF THE ACT. THUS, IT IS EVIDENT THAT THE ASSESSEE HAS FAILED TO COMPLY WITH ITS ST ATUTORY OBLIGATION OF FILING TATEMENT OF TDS WITHIN THE SPECIFIED DATE. THEREFOR E, THE CONTENTION OF AND PENALTY U/S 272A( 2)(K) QUANTUM OF PENALTY IS QUANTIFIED BY ASSESSING APPEAL, THE LD. CIT(A) CONFIRMED THE PENALTY U/S 27 2A(2)(K) / 274 OF THE ACT THE FACTS OF THE APPEAL IS THAT THE DUE DATE OF DE POSIT OF THE TDS WAS 30.04.2011 AND THE DUE DATE OF FILING OF THE RETURN WAS 15.05. 2011. BUT AS THE PAYMENT OF THE TDS WAS MADE ON 29.09.2011, THE TDS RETURN COULD NO T UPLOADED. HENCE THE LATE THE ARGUMENT OF THE APPELLANT FOR JUSTIFYING THE LA TE SUBMISSION OF THE TDS RETURN CANNOT BE ACCEPTED AS A REASONABLE GROUND FOR DELAY AS THE APPELLANT HAD NOT THE PAYMENT OF THE AMOUNT OF TDS. THE AMOUNT OF TDS WAS DUE TO BE DEPOSITED ON 30.04.2011 , BUT WAS DEPOSITED ON MMJ EXPORTS PVT. LTD. ITA NO.18/KOL/2013 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 4 44 4 28.09.2011 AND THE APPELLANT HAS NOT FURNISHED ANY GROUNDS EXPLAINING, THE DELAY IN THE DEPOSITION OF THE TAX. THE DELAY IN THE DEPO SIT OF TAX WAS ON ACCOUNT OF THE APPELLANT ITSELF AND IT CANNOT TAKE THAT JUSTIFICAT ION TO EXPLAIN THE DELAY IN THE FILING OF THE TDS RETURN. HENCE THE CONTENTION OF T HE APPELLANT IS NOT ACCEPTANCE AND THE PENALTY IMPOSED IS UPHELD. HENCE APPEAL IS NOT ALLOWED. 6. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LD. COUNSEL FOR THE ASSESSE HAS RELIED THE ORDER OF THE LOWER AUTHORITIES BELOW AND ON THE OTHER HAND , THE LD. DR HAS PRIMAR ILY REITERATED THE STAND TAKEN BY THE LD ASSESSING OFFICER WHICH WE HAVE ALREADY N OTED IN OUR EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREV ITY. 8. WE NOTE THAT DURING THE APPELLATE PROCEEDINGS T HE ASSESSEE SUBMITTED THE FOLLOWING WRITTEN SUBMISSION, WHICH IS REPRODUCED B ELOW: 5. VIDE NOTIFICATION NO. 41 OF CBDT DATED 31.05.20 10, DUE DATE OF DEPOSIT OF TDS FOR THE LAST QUARTER OF THE F.Y. 2010-11 WAS 30 .04.2011 AND DUE DATE OF FILING OF TDS RETURN FOR THE LAST QUARTER OF THE RELEVANT ASSESSMENT YEAR WAS 15.05.2011. SO, IT IS OBVIOUS THAT A MINIMUM PERIO D OF 15 DAYS WAS PROVIDED BY THE CBDT FOR PREPARATION OF TDS RETURN. IN OUR CAS E, THE AMOUNTS WERE CLEARED FROM OUR BANK ON 28.09.2011 AND RETURN WAS FILED ON 24.10.2011 (PHOTOCOPY OF CHALLANS AND RECEIPT OF RETURNS ENCLOSED). THEREFOR E, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THERE WAS ONLY A DELAY O F 11 (ELEVEN) DAYS WHICH MAY KINDLY BE IGNORED AND CONDONED FOR THE PURPOSE OF IMPOSITION OF PENALTY U/S 272A(2)(K) R.W. 274 OF THE INCOME-TAX ACT, 1961 AS IMPOSITION WILL ONLY RESULT IN FURTHER FINANCIAL STRESS FOR THE APPELLANT. HOWEVER , INTEREST AMOUNTING TO RS.2,590/- IMPOSED BY THE DEPARTMENT HAS ALREADY BE EN PAID BY THE APPELLANT ON 17.01.2013 (PHOTOCOPY OF CHALLANS ENCLOSED). 6. THE APPELLANT WISHES TO RELY ON THE UNDER MENTIO NED AUTHORITIES:- I) PORWAL CREATIVE VISION PVT. LTD. VS. ACIT [139 TTJ 001] II) R. KARUPPASWAMY VS. 2 ND ITO [9 TTJ 442] III) CREST COMMUNICATION LTD. VS. ADDL. DIT [106ITD 558] IV) 3 RD ITO VS. BOMBAY CABLE CO. (P) LTD. [11 TTJ 385] V) BRANCH MANAGER, PUNJAB NATIONAL BANK VS. ADDL. CIT [140 TTJ 622] VI) HINDUSTAN STEEL LTD. VS. STATE OF ORISSA [83ITR 26] 9. WE HAVE HEARD LD. D.R. AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. V. STATE OF ORISSA [83 ITR 26], WHEREIN THE COURT HELD AS UNDER: MMJ EXPORTS PVT. LTD. ITA NO.18/KOL/2013 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 5 55 5 'AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDING, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN C ONSCIOUS DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PE RFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERC ISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EV EN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE P ENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNIC AL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FRO M A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRI BED BY THE STATUTE.' HENCE THE APPELLANT PETITIONS YOUR KIND CONSCIENCE FOR DELETION OF PENALTY IMPOSED ON THE APPELLANT U/S 272A(2)(K) R.W. 274 O F THE INCOME TAX ACT, 1961 IN THE SPECIAL FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE FOR THE SAKE OF RESTORATION OF NATURAL JUSTICE AS THE BREACH WAS J UST TECHNICAL IN NATURE. MOREOVER, SINCE THOSE WELL INITIAL DAYS; TDS COMPLI ANCES WAS SEEMED AND DEEMED AS COMPLICATED AND THE ASSESSEE ACROSS THE L ENGTH AND BREADTH OF THE COUNTRY WERE OF THE BONA FIDE BELIEF THAT THE OFFEN DER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. WE NOTE THAT PENALTY IMPOSED BY ASSESSING OFFICER I S RS. 21,273/- (SMALL AMOUNT). WE NOTE THAT THE ASSESSEE COMPANY WAS IN ACUTE FINA NCIAL PROBLEMS AND WAS NOT AWARE OF THE STRINGENT PROVISIONS RELATING TO TDS. THE COMPANY MADE SUBSEQUENT COMPLIANCE AND PAID AMOUNT OF TDS ON 28.09.2011. CO NSIDERING THE FACTS AND CIRCUMSTANCES AND TAKING INTO ACCOUNT THAT THERE IS NO LOSS OF REVENUE AND CONSIDERING THE SMALLNESS OF AMOUNT , WE DELETE THE PENALTY OF RS. 21,273/-. 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 10.01.2020 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 10/01/2020 ( SB, SR.PS ) MMJ EXPORTS PVT. LTD. ITA NO.18/KOL/2013 ASSESSMENT YEAR:2009-10 P PP PA AA AG GG GE EE E | || | 6 66 6 COPY OF THE ORDER FORWARDED TO: 1. MMJ EXPORTS PVT. LTD. 2. JCIT(TDS), RANGE-58, KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES