Harikishan Dass Ramkishan, Kolkata V. I.T.O Wd - 45(4),kolkata, Kolkata

ITA 1887/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4724 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 07-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 12-06-2013
• Court: TRIBUNAL
• Department Lawyers: S NEHTPAL DATTA
• Assessee Lawyers: B C JAIN FCA LD
• Keywords: Bonafide belief
• Section: 143(3); 263

Judgement Text

1 I.T.A NO. 1887/KOL/2013 HARIKISHAN DASS RAMKISHAN IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, K OLKATA BEFORE : SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A NO. 1887/KOL/2013 A.Y : 2007-08 HARIKISHAN DASS RAMKISHAN VS. I.T.O WARD 45(4) , KOLKATA PAN: AACFH 0436M (APPELLANT) (RESPONDENT) FOR THE APPELLANT/ASSESSEE : SHRI B.C. JAIN, FCA, LD.AR FOR THE RESPONDENT/DEPARTMENT: SHRI S NEHTPAL DATTA, JCIT, SR.DR DATE OF HEARING: 07-06-2016 DATE OF PRONOUNCEMENT: 05-08-2 016 ORDER SHRI S.S. VISWANETHRA RAVI, JM THIS APPEAL OF THE ASSESSEE AGAINST THE ORDER DA TED 21-05-2013 OF THE CIT, KOLKATA-IV, KOLKATA CONFIRMING THE PENALTY LEVIED BY THE AO U/S. 272A(2)(F) OF THE I.T ACT, 1961 FOR THE ASSESSMENT YEAR 2007-08 TO THE E XTENT OF RS. 57,172/-. 2. ONLY EFFECTIVE GROUND IN THIS APPEAL OF ASSESSEE IS AS TO WHETHER THE LD.CIT(A) JUSTIFIED IN CONFIRMING THE PENALTY ORDER TO THE EX TENT OF RS. 57,172/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM DEALING WITH THE BUSINESS OF TRADING OF RAW JUTE, YARN AND SHARES. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING A 2 I.T.A NO. 1887/KOL/2013 HARIKISHAN DASS RAMKISHAN TOTAL INCOME OF RS. 93,427/-. THE AO DETERMINED THE INCOME OF THE ASSESSEE AT RS.1,00,300/- AND PASSED AN ASSESSMENT ORDER U/S. 143(3) OF THE ACT ON 29-12-2009 . THEREAFTER, THE LD. CIT HAVING EXERCISING HIS JURI SDICTIONAL POWER U/S. 263 OF THE ACT FOUND THE DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, THE ASSESSEE HAD COMMITTED A DEFAULT FOR NON-COGNIZANCE OF DISALLOWANCE OF INTE REST EXPENDITURE U/S. 40(A)(IA) R.W.S 194A OF THE ACT AND NOTICE WAS ISSUED TO THE ASSES SEE. IN RESPONSE TO SUCH NOTICE THE ASSESSEE SUBMITTED THAT THE LOAN CREDITORS HAS DEPO SITED THEIR FORM NO.15G/15H REQUESTING THE ASSESSEE NOT TO DEDUCT TDS AT SOURCE ON SUCH AMOUNT. BESIDES, THE ASSESSEE ALSO SUBMITTED THAT IT IS NOT CONVERSANT W ITH INTRICATE TAX LAWS AND IT IS NOT ASSISTED BY ANY QUALIFIED OR COMPETENT TAX ADVISOR. THE ASSESSEE ALSO SUBMITTED THAT IT DID NOT DERIVE ANY PECUNIARY BENEFITS AND DOES NOT HAVE ULTERIOR MOTIVE. 4. HAVING CONSIDERED THE SUBMISSIONS OF THE ASSESSE E, THE CIT CONFIRMED THE IMPUGNED PENALTY BY OBSERVING AS UNDER AS UNDER:- KEEPING IN VIEW THE ABOVE DISCUSSION, IT IS HERE BY HELD THAT THE ASSESSEE HAS COMMITTED DEFAULT WHICH ATTRACTS THE PENAL CONSEQUENCE U/S. 272A(2)(F) OF IT ACT AND THE PENALTY UNDER THIS SEC TION IS HEREBY LEVIED. IT HAS BEEN NOTICED THAT THE ASSESSEE WAS LIABLE TO FU RNISH SUCH FORM NO.15G/15H ON OR BEFORE 7 TH APRIL, 2007. THOUGH THE ASSESSEE NEVER FURNISHED THESE FORMS AS PER SEC. 197A(2) TILL DATE , HOWEVER, ASSESSEES SUBMISSION BEFORE THE UNDERSIGNED IN THE COURSE OF PROCEEDING U/S. 263 OF IT ACT CAN BE HELD AS SUFFICIENT COMPLIANCE TO THE PROVISION OF THIS SECTION. THEREFORE, THE DATE OF ORDER U/S. 263 OF IT ACT I.E . 29.03.2012 IS TAKEN AS COMPLIANCE DATE. THE PENALTY LEVIABLE COMES TO RS.1 ,81,800/- FOR DEFAULT OF 1818 DAYS (W.E.F 8.4.2007 TO 29.03.2012)( RS.100 /- FOR DAY DEFAULTS). AS PER THE DATA AVAILABLE, THE ASSESSEE WAS LIABLE TO DEDUCT RS.57,172/- ON THE PAYMENT OF INTEREST EXPENSES OF RS.5,71,723/- T O TWENTY NINE DEDUCTEES. THEREFORE, THE PENALTY LEVIED SHALL BE R ESTRICTED TO RS.57,172/-. 3 I.T.A NO. 1887/KOL/2013 HARIKISHAN DASS RAMKISHAN 5. AS AGGRIEVED BY SUCH ORDER OF THE CIT IN RESTRI CTING THE IMPUGNED PENALTY, NOW THE ASSESSEE IS IN APPEAL BEFORE US AND REITERATED THE SAME SUBMISSIONS AS MADE BEFORE THE CIT. IN SUPPORT OF HIS SUBMISSION, THE LD.AR R ELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD VS . STATE OF ORISSA REPORTED IN 83 ITR 26(SC). 6. ON THE OTHER HAND, THE LD.DR SUBMITS THAT THE SE CTION 272A(2)(F) IS VERY MUCH CLEAR THAT ANY ONE FAILS TO SUBMIT FORM NO.15/15H WITHIN TIME AS SPECIFIED THEREIN IS/ARE GUILTY AND PENALTY CAN BE IMPOSED FOR SUCH F AILURE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE CASE LAW SUPRA AS RELIED ON BY THE LD.AR FOR THE ASSESSEE BEFORE US. WE FIND FROM THE IMPUGNED ORDER OF CIT THAT TH E ASSESSEE HAS TO SUBMIT THE FORM NO. 15G/15H ON OR BEFORE 7-4-2007. BUT, HOWEVER, BE FORE THE CIT U/S. 263 PROCEEDINGS THE ASSESSEE REQUESTED TO TAKE THE CO MPLIANCE AS ON DATE I.E 29-03-2012 AS REQUIRED U/S. 272A(2)(F) OF THE ACT. WE FURTHER FIND FROM THE ORDER OF THE CIT THAT THERE IS DELAY IN DEFAULT OF 1818 DAYS (W.E.F 8-4 -2007 TO 29-03-2012) FOR WHICH THE SPECIFIED AMOUNT U/S. 272A(2)(F) THE LEVIABLE PENAL TY COMES TO RS.1,81,800/-. BUT THE CIT RESTRICTED THE PENALTY TO RS.57,172/-. IN THIS REGARD, WE MAY REFER TO THE DECISION SUPRA AS RELIED ON BY THE LD.AR DURING THE ARGUMENTS BEF ORE US THAT THE FACTS THEREIN ARE SALES TAX OFFICER IMPOSED PENALTY ON THE ASSESS EE FOR FAILURE TO REGISTER THE ASSESSEE AS A DEALER. THE APPELLATE ASSISTANT COMMI SSIONER CONFIRMED THE ORDER OF THE SALES TAX OFFICER. IN SECOND APPEAL THE TRIBUNAL SU BSTANTIALLY REDUCED THE PENALTY IMPOSED ON THE ASSESSEE THEREIN. THE HONBLE HIGH C OURT OF ORISSA ALSO CONFIRMED THE PENALTY IMPOSED AND AGREED WITH THE ORDER OF THE T RIBUNAL THEREIN. HONBLE SUPREME 4 I.T.A NO. 1887/KOL/2013 HARIKISHAN DASS RAMKISHAN COURT IN THE CASE OF SUPRA THEREIN HELD THAT THE LIABILITY TO PAY PENALTY DOES NOT ARISE MERELY UPON PROOF OF DEFAULT IN REGISTERING THE A SSESSEE AS A DEALER. RELEVANT PORTION OF WHICH IS REPRODUCED HEREIN BELOW FOR BETTER UNDE RSTANDING :- .. AN ORDER IMPOSING PENALTY FOR FAILURE TO CA RRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRI MINAL 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 CONSCIOUS DISREGARD OF IT S OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTO RY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDI CIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EV EN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE T HE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THER E IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BR EACH FLOWS FROM A BONAFIDE BELIEF THAT THE OFFENDER IS NOT LIABLE T O ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 8. A PERUSAL OF THE AFORESAID OBSERVATIONS OF THE HONBLE SUPREME COURT, THE HONBLE COURT HELD THAT AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEE DING, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED, EITHER ACTED D ELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACT ED IN CONSCIOUS 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 P ERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCIS ED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. IN THE PRESENT CAS E THE LOAN CREDITORS SUBMITTED THE REQUISITE FORM NO.15G/15H WITH THE ASSESSEE. HE COU LD NOT PRODUCE THE SAME BEFORE THE AUTHORITIES BELOW WITHIN TIME AS SPECIFIED U/S. 272A(2)(F). HOWEVER, BEFORE CIT-A THE ASSESSEE SUBMITTED THAT IT IS NOT CONVERSANT WI TH INTRICATE TAX LAWS AND NOT ASSISTED 5 I.T.A NO. 1887/KOL/2013 HARIKISHAN DASS RAMKISHAN BY ANY QUALIFIED/COMPETENT TAX ADVISOR. HE DID NOT GET ANY PECUNIARY BENEFITS OUT OF IT. TAKING INTO CONSIDERATIONS THE OBSERVATIONS MA DE BY THE HONBLE SUPREME COURT IN THE CASE OF SUPRA, WE COULD NOT SEE ANY DELIBERATE ACT OF DEFIANCE OF LAW AND AN ACT CONSCIOUS DISREGARD FOR FILING FORMS 15G/15H BEFORE THE AUTHORITIES AND IN OUR VIEW FOR NOT PRODUCING THE SAID FORM NOS. 15G/15H WITH THE A UTHORITIES WITHIN TIME SPECIFIED IS A STATUTORY OBLIGATION AND CIT-A COULD HAVE EXE RCISED HIS DISCRETION JUDICIALLY IN CANCELLING PENALTY CONSIDERING ALL THE RELEVANT CIR CUMSTANCES AS SUBMITTED BY THE ASSESSEE. TAKING INTO CONSIDERATIONS THE SUBMISSION S MADE BY THE ASSESSEE BEFORE THE CIT-A THAT NON SUBMISSION OF FORM NOS.15G/15H IS A TECHNICAL AND VENIAL BREACH OF THE PROVISIONS OF THE ACT. WE FIND THAT THE ASSESS EE NEITHER ACTED DELIBERATELY NOR DEFIANCE OF LAW IN SUBMITTING THE SAID FORMS BEFORE THE AUTHORITIES. THUS, WE ARE OF THE VIEW THAT THE FACTS AND LAWS AS LAID BY THE HONBLE SUPREME COURT IN THE CASE OF SUPRA IS APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. WE HOLD THAT THE PENALTY IMPOSED IS UNJUSTIFIED. ACCORDINGLY, THE SA ME IS CANCELLED AND THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED AS STATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH AUGUST, 2016. SD/- SD/- P.M.JAGTAP S.S.VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 05 /08 /2016 *PRADEP/SR.PS 6 I.T.A NO. 1887/KOL/2013 HARIKISHAN DASS RAMKISHAN COPY OF ORDER FORWARDED TO: 1 APPELLANT/ASSESSEE: SHRI HARIKISHAN DASS TRAMKISHA N 216 MAHATMA GANDHI ROAD, KOL-7. 2 RESPONDENT/DEPARTMENT: THE INCOME TAX OFFICER WARD 45(4), GROUND FLOOR, 3 GOVT. PLACE(W), KOL-1. 3 THE CIT(A), 4 5 CIT, 5. D.R. TRUE COPY, BY ORDER ASSTT. REGISTRAR , ITAT, KOLKATA