The Branch Manager, Cuttack V. Addl.CIT(TDS), Bhubaneswar, Bhubaneswar

ITA 187/CTK/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4769 (ITAT-CUTTACK)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 21-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Keywords: Initiation of penalty proceedings; Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI P.K.BANSAL(ACCOUNTANT MEMBER) AND SHRI D.T.GARASIA (JUDICIAL MEMBER) I.T.A NO. 187/CTK/2013 ASSESSMENT YEAR:2008-09 THE BRANCH MANAGER, STATE OF BANK OF INDIA, ATHAGARH BRANCH, CUTTACK TA NO.BBNSO 1160 F VS ADDL. CIT,(TDS), AAYAKAR BHAVAN, RAJASWA VIHAR, BHUBANESWAR. APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY : SHRI S.C.MOHANTY DATE OF HEARING: 07/10/2013 DATE OF PRONOUNCEMENT: 10 /10/2013 O R D E R PER BENCH: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE FOR ASS ESSMENT YEAR 2008-09 AGAINST ORDER DATED 21.12.2012 OF LD CIT(A) ON THE FOLLOWING GRO UNDS: 1. THAT THE LD CIT(A) CUTTACK IS NOT JUSTIFIED IN CONFIRMING ORDER OF THE AO IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LD CIT(A) SHOULD HAVE CONSIDERED THE WR ITTEN SUBMISSION OF THE APPELLANT THAT IT IS PURELY TECHNICAL NATURE AND NE WLY INTRODUCED ACT FOR WHICH THE APPELLANT IS NOT CONVERSANT. 3. THAT THE LD CIT(A) SHOULD HAVE CONSIDERED THAT T HERE WAS REASONABLE CAUSE OF DELAY IN FURNISHING STATEMENT IN FORM 26Q AND THERE WAS NO REVENUE LOSS TO THE DEPARTMENT AT ALL. 4. THAT THE PENALTY LEVIED IS HIGHLY EXCESSIVE AND ARBITRARY BEING PERSONAL LIABILITY OF THE APPELLANT WHO WOULD SUFFER WITHOUT FAULT. F OR SUBMISSION OF FORM 26Q 2 I.T.A NO. 187/CTK/2013 ASSESSMENT YEAR:2008-09 NUMBER OF DETAILS INCLUDING PAN OF CUSTOMER ETC, AN D PERSONS LIKE NSDL AUTHORITIES/LEGAL COUNSEL REQUIRED WHICH IS THE BEY OND THE CONTROL OF THE APPELLANT. 2. ALL THE ABOVE GROUNDS ARE INTERCONNECTED, THEREF ORE, DISPOSED OF BY THIS APPEAL. 3. THE SHORT FACTS OF THE CASE ARE THAT THE ADDL.CI T (TDS) FOUND FROM THE DATABASE OF THE DEPARTMENT THAT THE QUARTERLY E-TDS RETURN FOR ALL THE FOUR QUARTERS OF F.Y. 2008-09 HAVE BEEN FILED ON THE DATES MENTIONED BELOW: FINAN CIAL YEAR QTR/FORM NO. DUE DATE DATE OF FILING DELAY (IN DAYS) TDS (RS) PENALTY(RS.) 2008 - 09 1 ST /26Q 15.7.08 29.10 .10 836 2484 2484 - DO - 2 ND /26Q 15.10.08 29.10 .10 7 44 2484 2484 - DO - 3 RD /26Q 15.1.09 29.10 .10 6 52 2879 2879 - DO - 4 TH /26Q 15.6.09 29.10 .10 501 1668 1668 TOTAL 2733 9515 9515 4. AS PRIMA FACIE, IT WAS A FIT CASE FOR INITIATION OF PENALTY PROCEEDINGS, ADDL. CIT (TDS) ISSUED NOTICE UNDER SECTION 274 TO THE ASSESSEE-DED UCTOR ON 30.9.2010. IN REPLY TO SHOW CAUSE NOTICE THAT THE DELAY FOR CAUSE OF FILING E-TDS IS NOT INTENTIONAL BUT DUE TO UNAWARENESS OF KNOWLEDGE, NON-AVAILABILITY OF PARTIES PAN NUMBERS, PRESSURE OF BANKS ACCOUNTING WORKS, LONG ABSENCE OF BRANCH MANAGER DUE TO UNHEALTHY CONDITIO N. IT WAS SUBMITTED THAT DUE TO ABOVE, ASSESSEE DID NOT FILE E-TDS RETURN IN TIME. THE AD DL. CIT (TDS) REFERRING TO SECTION 272(2)(K) AND RULE 31A, HELD THAT THE GROUND TAKEN BY THE ASS ESSEE IS NOT ACCEPTABLE AS SAME CANNOT BE A REASON FOR NON-FULFILLING OF STATUTORY OBLIGATION . HE, THEREFORE, IMPOSED PENALTY OF RS.9515/- UNDER SECTION 272A(2)(K) OF THE ACT. 3 I.T.A NO. 187/CTK/2013 ASSESSMENT YEAR:2008-09 5. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVE R, AN ADJOURNMENT APPLICATION WAS FILED. SINCE THE ISSUE CAN BE DECIDED ON MERITS, W E PROCEED TO DISPOSE OF THE APPEAL EXPARTE AFTER HEARING LD D.R. AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 6. LD D.R. SUBMITTED THAT THERE IS A DELAY OF 836 D AYS IN THE FIRST QUARTER, 744 DAYS IN SECOND QUARTER, 652 DAYS IN THIRD QUARTER AND 501 D AYS IN 4 TH QUARTER OF FINANCIAL YEAR 2008-09 IN FILING E-TDS RETURN. THE PENALTY HAS BEEN IMPOS ED AS ASSESSEE HAS NOT SHOWN ANY REASONABLE CAUSE TO EXPLAIN THE DELAY. THE EXPLANA TION GIVEN BY THE ASSESSEE FOR NON-FILING OF E-TDS RETURN IS NOT ACCEPTABLE THEREFORE, THERE W AS NO REASONABLE CAUSE NOT TO FILE E-TDS RETURNS BY THE ASSESSEE BY 2733 DAYS IN ALL THE FOU R QUARTERS. HE THEREFORE, URGED TO UPHELD THE ORDER OF LD CIT(A). 7. HAVING HEARD LD D.R,. WE HAVE GONE THROUGH THE O RDERS OF AUTHORITIES BELOW. WE FIND FROM THE SUBMISSION OF THE ASSESSEE BEFORE LD CIT(A ) THAT ASSESSEE HAS TAKEN THE CONTENTION THAT TDS WORK IS USUALLY ENTRUSTED TO A STAFF OR JU NIOR OFFICER FOR EXPENDING SUBMISSION OF STATEMENT TO THE CENTRAL GOVERNMENT THROUGH NSDL, ( B) SECTION 272A(2)(K) HAS BEEN NEWLY INTRODUCED W.E.F. 1.4.2005. THE BRANCH MANGER WAS NOT KNOWN TO THESE TECHNICAL FORMALITIES. THEREAFTER, THE BANK HAS ENGAGED AN ADVOCATE FOR PR EPARING STATEMENT, WHO FOUND DIFFICULTY IN COMPLETING THE DETAILS STATEMENT IN ABSENCE OF PAN OF ALL CUSTOMERS WHERE TDS WAS MADE AND FORM NO.15G, 15H. THEREFORE, THERE WAS DELAY IN FI LING THE STATEMENT TO INCOME TAX DEPARTMENT. 4 I.T.A NO. 187/CTK/2013 ASSESSMENT YEAR:2008-09 8. WE HAVE GONE THROUGH THE PENALTY ORDER, WHICH ST ATES THAT IN FINANCIAL YEAR 2008-09 IN ALL FOUR QUARTERS, DUE DATE OF 1 ST QUARTER WAS 15.7.2008, ASSESSEE HAS FILED RETURN O N 29.10.10, AND THERE WAS DELAY OF 836 DAYS AND TDS WAS RS.2484 /-. THEREFORE, SAME AMOUNT OF PENALTY WAS IMPOSED. IN THE 2 ND , 3 RD AND 4 TH QUARTER, THERE WAS DELAY ABOUT 744., 652 & 501 DAY S, RESPECTIVELY AND THE AMOUNT OF TDS WAS RS.2484/-, R S.2879/- & 1668/-/- AND SAME AMOUNT OF PENALTY WAS IMPOSED IN THE ALL THE QUARTERS. WE FI ND FROM THE ORDER THAT ASSESSEE IS A NATIONALIZED BANK AND COMMITTED A TECHNICAL DEFAULT BY NOT FILING E-TDS RETURN IN TIME. IT IS THE CASE OF THE ASSESSEE THAT SECTION 272A(2)(K) HAS BE EN INTRODUCED W.E.F. 1.4.2005 AND ASSESSEE WAS COMPLETELY IGNORANT ABOUT PROVISIONS OF LAW. M OREOVER, THIS WAS A TECHNICAL IN NATURE AND DDO WAS NOT CONVERSANT WITH THE SUBMISSION OF STATE MENT WITH THE I.T.,DEPARTMENT AFTER DULY INTRODUCTION OF SECTION 272A(2)(K). THUS, THERE WA S A DELAY IN FILING THE STATEMENT. WHEN THE BANK MANAGER KNEW THIS TECHNICAL FLAW, HE ENGAGED A N ADVOCATE FOR EXPENDING THE STATEMENT TO I.T. AUTHORITIES THROUGH NSDL. THE ADVOCATE WHO WAS ENGAGED WITH THE JOB FOR PREPARING STATEMENT FOUND DIFFICULT IN COMPLETING THE DETAILS SUBMISSION IN ABSENCE OF PAN OF ALL CUSTOMERS AT THE RELEVANT TIME. THEREFORE, THE ADV OCATE HAS TAKEN TIME TO GET THIS INFORMATION. MOREOVER, THERE ARE FREQUENT TRANSFERS OF BRANCH MA NAGER AND OTHER STAFF, FOR WHICH, THERE WAS DELAY IN SUBMITTING THE STATEMENT TO I.T AUTHORITIE S. WE FIND THAT AS PER SECTION 273B NO PENALTY IS LEVIABLE ON THE ASSESSEE FOR ANY FAILURE IF HE PROVES THAT THERE WAS REASONABLE CAUSE FOR THE SAID FAILURE. WE ARE OF THE VIEW THAT ASSE SSEE HAD REASONABLE CAUSE AS NARRATED ABOVE FOR NON-FILING OF THE RETURN. 9. WE FIND THAT HONBLE APEX COURT IN THE CASE OF HINDUSTAN STEEL LTD VS. STATE OF ORISSA, 83 ITR 26 HELD THAT PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED 5 I.T.A NO. 187/CTK/2013 ASSESSMENT YEAR:2008-09 DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CO NDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. PENALTY WI LL NOT BE IMPOSED BECAUSE IT IS LAWFUL TO DO SO. THEREFORE, FOLLOWING THE DECISION OF HONBLE SUPREM E COURT IN THE CASE HINDUSTAN STEEL LTD (SUPRA), WE ARE OF THE VIEW THAT ASSESSEE HAS REASO NABLE CAUSE FOR NON-FILING THE E-TDS RETURN IN TIME. WE ALSO FIND THAT THIS IS A TECHNICAL BRE ACH OF LAW AND THERE IS NO LOSS TO THE REVENUE. IN VIEW OF THIS, IN THE INTEREST OF JUSTICE AND FAI R PLAY AND WHEN ASSESSEE IS A NATIONALIZED BANK, WE ARE OF THE VIEW THAT LENIENT VIEW SHOULD BE TAKE N. THEREFORE, WE DELETE THE PENALTY OF RS.9515/- IMPOSED BY THE AO AND CONFIRMED BY LD CIT (A). 10. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLO WED. PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER, 2013 SD/- (P.K.BANSAL) (ACCOUNTANT MEMBER) SD/- (D.T.GARASIA) (JUDICIAL MEMBER) CUTTACK: DATED 10 /10/2013 PARIDA COPY TO: 1. THE APPELLANT : THE BRANCH MANAGER, STATE OF B ANK OF INDIA, ATHAGARH BRANCH, CUTTACK 2. THE RESPONDENT: ADDL. CIT,(TDS), AAYAKAR BHAV AN, RAJASWA VIHAR, BHUBANESWAR. 3. COMMISSIONER OF INCOME TAX (APPEAL), CUTTACK 4. COMMISSIONER OF INCOME TAX, CUTTACK 5. DEPARTMENTAL REPRESENTATIVE, ITAT, CUTTACK //TRUE COPY// BY ORDER SR.PS, ITAT, CUTTACK