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

ITA 188/CTK/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4758 (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. 188/CTK/2013 ASSESSMENT YEAR:2008-09 THE BRANCH MANAGER, SYNDICATE BANK, BAJRAKABATI ROAD, CUTTACK TA NO.BBNS 02074 C 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 U/S. 272A(2)(K) AND T HERE WAS NO REVENUE LOSS TO THE DEPARTMENT AT ALL. 2 I.T.A NO. 187/CTK/2013 ASSESSMENT YEAR:2008-09 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 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: FINANCIAL YEAR QTR/FORM NO. DUE DATE DATE OF FILING DELAY (IN DAYS) TDS (RS) PENALTY(RS.) 2008 - 09 1 ST /26Q 15.7.08 29.11 .10 8 67 13,474 13,474 - DO - 2 ND /26Q 15.10.08 29.11 .10 7 75 17,910 17,910 - DO - 3 RD /26Q 15.1.09 29.11 .10 683 24,761 24,761 - DO - 4 TH /26Q 15.6.09 15.12 .10 5 49 14,892 14,892 TOTAL 2 874 71,037 71,037 4. AS PRIMA FACIE, IT WAS A FIT CASE FOR INITIATION OF PENALTY PROCEEDINGS, ADDL. CIT (TDS) ISSUED NOTICE UNDER SECTION 274 TO THE ASSESS EE-DEDUCTOR ON 30.9.2010. IN REPLY TO SHOW CAUSE NOTICE THAT THE DELAY FOR CAUSE OF FI LING E-TDS IS NOT INTENTIONAL BUT DUE TO UNAWARENESS OF KNOWLEDGE, NON-AVAILABILITY OF PA RTIES PAN NUMBERS, PRESSURE OF BANKS ACCOUNTING WORKS, LONG ABSENCE OF BRANCH MANA GER DUE TO UNHEALTHY CONDITION. 3 I.T.A NO. 187/CTK/2013 ASSESSMENT YEAR:2008-09 IT WAS SUBMITTED THAT DUE TO ABOVE, ASSESSEE DID NO T FILE E-TDS RETURN IN TIME. THE ADDL. CIT (TDS) REFERRING TO SECTION 272(2)(K) AND RULE 31A, HELD THAT THE GROUND TAKEN BY THE ASSESSEE IS NOT ACCEPTABLE AS SAME CAN NOT BE A REASON FOR NON-FULFILLING OF STATUTORY OBLIGATION. HE, THEREFORE, IMPOSED PENAL TY OF RS.71,037/- UNDER SECTION 272A(2)(K) OF THE ACT. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVE R, AN ADJOURNMENT APPLICATION WAS FILED. SINCE THE ISSUE CAN BE DECIDED ON MERIT S, WE PROCEED TO DISPOSE OF THE APPEAL EXPARTE AFTER HEARING LD D.R. AND ON THE BAS IS OF MATERIAL AVAILABLE ON RECORD. 6. LD D.R. SUBMITTED THAT THERE IS A DELAY OF 867 D AYS IN THE FIRST QUARTER, 775 DAYS IN SECOND QUARTER, 683 DAYS IN THIRD QUARTER AND 54 9 DAYS IN 4 TH QUARTER OF FINANCIAL YEAR 2008-09 IN FILING E-TDS RETURN. THE PENALTY HAS BE EN IMPOSED AS ASSESSEE HAS NOT SHOWN ANY REASONABLE CAUSE TO EXPLAIN THE DELAY. THE EXPLANATION GIVEN BY THE ASSESSEE FOR NON-FILING OF E-TDS RETURN IS NOT ACCE PTABLE THEREFORE, THERE WAS NO REASONABLE CAUSE NOT TO FILE E-TDS RETURNS BY THE A SSESSEE BY 2874 DAYS IN ALL THE FOUR 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 JUNIOR OFFICER FOR EXPENDING 4 I.T.A NO. 187/CTK/2013 ASSESSMENT YEAR:2008-09 SUBMISSION OF STATEMENT TO THE CENTRAL GOVERNMENT T HROUGH NSDL, (B) SECTION 272A(2)(K) HAS BEEN NEWLY INTRODUCED W.E.F. 1.4.200 5. THE BRANCH MANGER WAS NOT KNOWN TO THESE TECHNICAL FORMALITIES. THEREAFTER, THE BANK HAS ENGAGED AN ADVOCATE FOR PREPARING STATEMENT, WHO FOUND DIFFICULTY IN CO MPLETING THE DETAILS STATEMENT IN ABSENCE OF PAN OF ALL CUSTOMERS WHERE TDS WAS MADE AND FORM NO.15G, 15H. THEREFORE, THERE WAS DELAY IN FILING THE STATEMENT TO INCOME TAX DEPARTMENT. 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 ON 29.11.10, AND THERE WAS DELAY OF 867 DAY S AND TDS WAS RS.13,474/-. THEREFORE, SAME AMOUNT OF PENALTY WAS IMPOSED. IN THE 2 ND , 3 RD AND 4 TH QUARTER, THERE WAS DELAY ABOUT 775, 683 & 549 DAYS, RESPECTIVELY A ND THE AMOUNT OF TDS WAS RS.17,910/-, RS.24,761/- AND RS.14,892/- AND SAME A MOUNT OF PENALTY WAS IMPOSED IN THE ALL THE QUARTERS. WE FIND FROM THE ORDER THAT ASSESSEE IS A NATIONALIZED BANK AND COMMITTED A TECHNICAL DEFAULT BY NOT FILING E-TDS R ETURN IN TIME. IT IS THE CASE OF THE ASSESSEE THAT SECTION 272A(2)(K) HAS BEEN INTRODUCE D 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 SUBMISSI ON OF STATEMENT WITH THE I.T.,DEPARTMENT AFTER DULY INTRODUCTION OF SECTION 272A(2)(K). THUS, THERE WAS A DELAY IN FILING THE STATEMENT. WHEN THE BANK MANAGER KNE W THIS TECHNICAL FLAW, HE ENGAGED AN ADVOCATE FOR EXPENDING THE STATEMENT TO I.T. AUT HORITIES THROUGH NSDL. THE 5 I.T.A NO. 187/CTK/2013 ASSESSMENT YEAR:2008-09 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 ADVOCATE HAS TAKEN TIME TO GE T THIS INFORMATION. MOREOVER, THERE ARE FREQUENT TRANSFERS OF BRANCH MANAGER AND OTHER STAFF, FOR WHICH, THERE WAS DELAY IN SUBMITTING THE STATEMENT TO I.T AUTHORITIES. WE FI ND 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 THA T ASSESSEE 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 ORDINA RILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LA W OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DI SREGARD OF ITS OBLIGATION. PENALTY WILL NOT BE IMPOSED BECAUSE IT IS LAWFUL TO DO SO. THEREFORE, FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE HINDUSTAN STEEL L TD (SUPRA), WE ARE OF THE VIEW THAT ASSESSEE HAS REASONABLE CAUSE FOR NON-FILING THE E- TDS RETURN IN TIME. WE ALSO FIND THAT THIS IS A TECHNICAL BREACH OF LAW AND THERE IS NO LOSS TO THE REVENUE. IN VIEW OF THIS, IN THE INTEREST OF JUSTICE AND FAIR 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. 71,037/- IMPOSED BY THE AO AND CONFIRMED BY LD CIT(A). 6 I.T.A NO. 187/CTK/2013 ASSESSMENT YEAR:2008-09 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, SYNDICATE BANK, BAJRAKABATI ROAD, 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