Janardan Nirman Pvt. Ltd., Kolkata V. JCIT,(TDS), Range-57, Kolkata, Kolkata

ITA 1822/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1801 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 14-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & HONBLE SHRI M.BALAGANESH, AM ] I.T.A NO. 1822/KOL/20 16 ASSESSMENT YEAR : 2010-1 1 JANARDAN NIRMAN PVT. LTD. -VS- ITO, WARD-1(1), BURDWAN [PAN: AACCJ 0540 R] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI SUBASH AGARWAL , ADVOCATE FOR THE REVENUE : SHRI ARINDAM BHATTACHARJEE, ADDL. CIT DATE OF HEARING : 09.01.2018 DATE OF PRONOUNCEMENT : 12 .01.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-24, KOLKATA [IN SHORT THE L D CITA] IN APPEAL NO. 153/CIT(A)-24/KOL/2011-12 DATED 30.06.2016 AGAINST THE PENALTY ORDER PASSED BY THE JCIT(TDS), RANGE-57, KOLKATA[ IN SHORT THE LD AO] U NDER SECTION 272A(2)(K)/274 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATE D 18.10.2011 FOR THE ASSESSMENT YEAR 2010-11. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN UPHOLDING THE LEVY OF PENALTY U/S 272A (2)(K) OF THE ACT, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2 ITA NO.1822/KOL/2016 JANARDAN NIRMAN PVT. LTD. A.YR.2010-11 2 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EE HAD FILED QUARTERLY TDS STATEMENTS FOR EACH QUARTER FOR THE FINANCIAL YEAR 2009-10 WITH CO NSIDERABLE DELAY. THE REASON ADDUCED BY THE ASSESSEE FOR THE SAID DELAY WAS DUE TO NON-A VAILABILITY OF PAN OF THE 95% OF THE PAYEES. THE ASSESSEE STATED THAT ON RECEIPT OF THE PAN FROM 95% OF THE PAYEES THE ASSESSEE HAD DULY UPLOADED THE QUARTERLY TDS RETURN S FROM TIME TO TIME. HOWEVER, IT STATED THAT THE ASSESSEE HAD DULY DEDUCTED THE TAX AT SOURCE IN RESPECT OF EVERY PAYMENT MADE TO THE RESPECTIVE PAYEES AND HAD REMITTED THE SAID TAXES TO THE ACCOUNT OF THE CENTRAL GOVERNMENT IN DUE TIME. HENCE, IT WAS PLEAD ED THAT THERE WAS NO LOSS TO THE EXCHEQUER IN THIS REGARD. THE ASSESSEE FURTHER PLEA DED THAT THE DELAY IN OBTAINING THE PAN FROM 95% OF THE PAYEES WAS DUE TO REASONS BEYON D ITS CONTROL. THE LD. AO HOWEVER DID NOT HEED TO THESE CONTENTIONS OF THE AS SESSEE AND PLACED RELIANCE ON THE CBDT PRESS RELEASE VIDE NO. 402/92/1006-MC(10 OF 20 08) DATED 12.02.2008 WHEREIN THE LIMIT OF PAN FOR PAYEES HAS BEEN INCREASED FROM 90% TO 95% FOR THE PURPOSE OF UPLOADING THE TDS RETURNS. THE LD. AO STATED THAT T HIS CBDT PRESS RELEASE DATED 12.02.2008 WAS ISSUED PRIOR TO THE INCORPORATION OF THE COMPANY AND ACCORDINGLY, THE ASSESSEE OUGHT TO HAVE BEEN AWARE OF THE SAME. WITH THESE OBSERVATIONS, HE LEVIED THE PENALTY FOR DELAYED FILING OF QUARTERLY TDS RETURNS FOR EACH QUARTER @ RS. 100 PER DAY OF EACH SUCH FAILURE IN ACCORDANCE WITH THE PROVISI ONS OF SECTION 272A(2)(K) OF THE ACT. THIS ACTION OF THE LD. AO WAS UPHELD BY THE LD. CIT (A). AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: 1. FOR THAT LEARNED COMMISSIONER OF INCOME TAX(APPE ALS) SHOULD HAVE CANCELLED THE PENALTY ORDER U/S 272A(2)(K)/274 READ WITH SECTION 200(3) OF THE INCOME TAX ACT, 1961, DATED 18.10.2011, PASSED BY L EARNED JCIT(TDS), RANGE- 57, KOLKATA. 2. FOR THAT LEARNED CIT(A) FAILED TO CONSIDER MERI T OF THE CASE. 3. FOR THAT THE PENALTY LEVIED BY THE LEARNED JCIT & CONFIRMED BY THE LEARNED CIT(A) IS LIABLE TO BE DELETED. 4. FOR THAT THE ENTIRE PENALTY PROCEEDINGS SHOULD H AVE BEEN FOUND BY THE LEARNED CIT(A) AS NOT IN ACCORDANCE WITH THE LAW. 3 ITA NO.1822/KOL/2016 JANARDAN NIRMAN PVT. LTD. A.YR.2010-11 3 5. FOR THAT EACH GROUND IS WITHOUT PREJUDICE TO AL L OTHER GROUNDS. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THA T THE LD. AR STATED THAT COMPANY WAS INCORPORATED ON 14.08.2008 AND THE YEAR UNDER A PPEAL WAS THE SECOND YEAR OF OPERATIONS CARRIED OUT BY THE ASSESSEE, WHEREIN TH E ASSESSEE WAS STILL IN THE PROCESS OF REGULARIZATION THE VARIOUS TEETHING TROUBLES THAT N ORMALLY GETS ASSOCIATED WITH THE NEWLY INCORPORATED COMPANY. HE FURTHER STATED THAT THE DE LAY IN OBTAINING THE PAN FROM 95% OF THE PAYEES WAS DUE TO REASON BEYOND ITS CONTROL. HE PLEADED THAT THE ASSESSEE BEING IN THE SECOND YEAR OF OPERATIONS DURING THE YEAR UN DER APPEAL, WAS MORE CONCENTRATING ON THE DEVELOPMENT OF ITS BUSINESS ACTIVITIES AND I N THE PROCESS HAD TO ENGAGE ITSELF IN CARRYING ON OF BUSINESS WITH CERTAIN PEOPLE WHO ARE NOT ASSESSED TO TAX. WITH GREAT PERSUASION FROM THE SIDE OF THE ASSESSEE, CERTAIN P AYEES WERE MADE TO OBTAIN PAN AND THOSE PERMANENT ACCOUNT NUMBERS WERE DULY RECORDED BY THE ASSESSEE IN THE TDS RETURNS FILED ON QUARTERLY BASIS. THESE FACTORS HAD LARGELY CONTRIBUTED FOR THE DELAY IN FILING OF QUARTERLY TDS RETURNS BY THE ASSESSEE AN D ACCORDINGLY PLEADED THAT NO PENALTY WOULD BE EXIGIBLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. HE FURTHER PLEADED THAT THE ASSESSEE HAD DULY COMPLIED WITH THE PROVISIONS OF C HAPTER XVIIB OF THE ACT BY WAY OF PROPER DEDUCTION OF TAX AT SOURCE AND DUE REMITTANC E OF THE SAME TO THE ACCOUNT OF THE CENTRAL GOVERNMENT IN TIME. HENCE, HE PLEADED THAT THE CONDITION PRESCRIBED FOR FILING OF QUARTERLY TDS RETURNS IN TIME IS A MERE PROCEDURAL REQUIREMENT AND FOR THE REASONS STATED FOR THE DELAY HEREINABOVE THE ASSESSEE WOULD BE ENTITLED FOR IMMUNITY PROVIDED IN SECTION 273B OF THE ACT. HE PLACED RELIANCE ON THE DECISION OF CO-ORDINATE BENCH OF JAIPUR TRIBUNAL IN THE CASE OF M/S ARGUS GOLDEN T RADES VS. JCIT, TDS, JAIPUR IN I.T.A. NO. 522/JP/2016 FOR ASSESSMENT YEAR 2011-12 DATED 24.05.2017 IN SUPPORT OF ITS CONTENTIONS. IN RESPONSE TO THESE ARGUMENTS, THE L D. DR ARGUED THAT CBDT PRESS RELEASE DATED 12.02.2008 WAS IN THE PUBLIC DOMAIN A ND WAS ISSUED SIX MONTHS PRIOR TO INCORPORATION OF THE ASSESSEE COMPANY. HENCE, THE A SSESSEE COMPANY IS BOUND TO FOLLOW 4 ITA NO.1822/KOL/2016 JANARDAN NIRMAN PVT. LTD. A.YR.2010-11 4 THE SAME WHILE FILING TDS RETURNS AND ACCORDINGLY M ANAGE ITS BUSINESS AFFAIRS BY HAVING TRANSACTION WITH ORGANIZED PEOPLE HAVING PAN . 5. WE HAVE GIVEN THE CAREFUL CONSIDERATION ON THE ARGUMENTS ADVANCED BY BOTH THE PARTIES. WE FIND THAT THE ASSESSEE IS PREVENTED FRO M REASONABLE CAUSE BY NOT OBTAINING THE PAN FROM 95% OF PAYEES IN TIME IN THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE DETAILS OF PARTIES ON WHOM TAX HAS BEEN DE DUCTED FOR EACH QUARTER, THE ASSESSEE HAD DEDUCTED TAX AT SOURCE FROM 40 PARTIES IN QUART ER 1; 55 PARTIES IN QUARTER 2; 42 PARTIES IN QUARTER 3 AND 63 PARTIES IN QUARTER 4. S INCE MORE NUMBER OF DEDUCTEES WERE INVOLVED, THE EXPLANATION GIVEN BY THE ASSESSEE, THAT MORE TIME WAS TAKEN FOR OBTAINING PAN FROM THE RESPECTIVE PAYEES, IS UNDERSTANDABLE AND DESERVES TO BE APPRECIATED. THIS WOULD ALSO CONSTITUTE THE REASONABLE CAUSE IN TERM S OF SECTION 273B OF THE ACT WHEREIN THE ASSESSEE WOULD BE ELIGIBLE FOR IMMUNITY FROM LE VY OF PENALTY U/S 272A(2)(K) OF THE ACT. WE ALSO FIND THAT THE CO-ORDINATE BENCH OF JAI PUR TRIBUNAL IN THE CASE OF M/S ARGUS GOLDEN TRADES VS. JCIT, TDS, JAIPUR(SUPRA) HA D HELD AS UNDER: .. THE ASSESSEE HAS SUBMITTED THAT SIN CE THERE WERE LARGE NUMBER OF DEDUCTEES SCATTERED THROUGHOUT THE COUNTR Y, A FACT NOT DISPUTED BY THE REVENUE, IT TOOK THEM SOME TIME TO COLLECT THE PANS OF THESE DEDUCTEES AND THEREAFTER, IT WAS ABLE TO UPLOAD THE E-TDS RETURNS IN THE IT SYS TEM MAINTAINED BY THE REVENUE. FURTHER, THE TAXES HAVE DEDUCTED AND DEPOSITED AT T HE PRESCRIBED RATE WITH DELAY OF FEW DAYS. HENCE, THERE IS NO LOSS TO THE REVENUE WHICH IS CAUSED DUE TO THE DELAY IN FILING OF THE E-TDS RETURN WHICH IS TOTALLY UNINTENTIONAL . FURTHER, OUR ATTENTION WAS DRAWN TO THE DECISION OF THE CO-ORDINATE BENCHES IN CASE OF COLLECTOR LAND ACQUISITION, UCO BANK AND SBI (SUPRA) WHEREIN NON-AVAILABILITY OF PA N WAS HELD TO BE A REASONABLE CAUSE FOR DELAY IN FILING OF THE E-TDS RETURN. GIVE N THE PECULIARITY OF THE FACTS IN THE PRESENT CASE WHERE THERE WAS A CHANGE EFFECTED IN T HE IT SYSTEM FOR MANDATORY REQUIREMENT OF PANS OF ALL DEDUCTEES BEFORE THE RET URNS CAN BE VALIDATED AND UPLOADED, THE FACT THAT THERE WERE LARGE NUMBER OF DEDUCTEES SPREAD THROUGHOUT THE COUNTRY AND EFFORTS WERE MADE BY THE ASSESSEE TO OBTAIN THEIR PANS NUMBERS, THE FACT THAT TAXES HAVE BEEN DEDUCTED AND DEPOSITED, HENCE NO LOSS TO THE REVENUE, WE FIND THAT ASSESSEE HAS A REASONABLE CAUSE FOR DELAYED FILING OF ITS E -TDS RETURN IN TERMS OF SECTION 273B AND THE PENALTY UNDER SECTION 272(A)(K) IS HEREBY D ELETED. IN VIEW OF THE AFORESAID FINDING AND FACTS AND CIRC UMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE CO-ORDINATE BENCH DECISION OF JAIPUR TRIBUNAL REFERRED TO SUPRA, WE HOLD 5 ITA NO.1822/KOL/2016 JANARDAN NIRMAN PVT. LTD. A.YR.2010-11 5 THAT THE PENALTY LEVIED U/S 272A(2)(K) OF THE ACT W OULD HAVE TO BE CANCELLED. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALL OWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 12.01.2018 SD/- SD/- [N.V. VASUDEVAN] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED : 12.01.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. JANANDAN NIRMAN PVT. LTD., 31, LAKE AVENUE, KOLK ATA-700026. 2. JCIT(TDS), RANGE-57, KOLKATA, 10B, MIDDLETON ROW , 8 TH FLOOR, KOLKATA-700071. 3..C.I.T.(A)- , KOLKATA 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S