Pragati Transport Co. , Burdwan Paschim V. JCIT (TDS), Durgapur , Durgapur

ITA 1900/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2120 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 04-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHANKAR HALDER
• Assessee Lawyers: R H RAM
• Keywords: Reasonable cause; TDS
• Section: 273B; 234E

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.1900/KOL/2018 ( / ASSESSMENT YEAR: 2011-12) M/S PRAGATI TRANSPORT CO. VILLAGE & POST-JAMGRAM, DIST. BURDWAN,PASCHIM, PIN-713315 VS. JCIT, TDS,( DURGAPUR) ./ ./PAN/GIR NO.: AAGFP 6798 Q (ASSESSEE) .. (REVENUE) ASSESSEE BY : SHRI R.H. RAM, AR RESPONDENT BY : SHRI SHANKAR HALDER, JCIT, SR. DR / DATE OF HEARING : 18/04/2019 /DATE OF PRONOUNCEMENT : 19/06/2019 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED APPEAL FILED BY THE ASSESSEE , PER TAINING TO ASSESSMENT YEAR 2011-12, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-ASANSOL, WHICH IN TURN ARISES OUT OF PENAL TY ORDER PASSED BY THE ASSESSING OFFICER U/S 272A(2)(K) /274 OF THE INCOM E TAX ACT, 1961 (IN SHORT THE ACT) DATED 30/07/2013. 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE A S FOLLOWS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A), ASANSOL ERRED IN CONFIRMING THE PENALTY IMPOSED BY THE JCIT (TDS), DURGAPUR U/S 272A(2)(K) OF THE I.T. ACT, 1961 AMOUNTING TO RS. 5 5,719/- FOR ALLEGED DELAY IN SUBMITTING QUARTERLY RETURNS IN FORM NO. 26Q FOR QUARTER-3 AND QTR-4. PRAGATI TRANSPORT CO. ITA NO.1900/KOL/2018 ASSESSMENT YEAR:2011-12 P PP PA AA AG GG GE EE E | || | 2 22 2 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A), ASANSOL ERRED IN NOT APPRECIATING THE FACT THAT NO REASONAB LE OPPORTUNITY WAS PROVIDED BY THE A.O. TO EXPLAIN THE DELAY AND EVEN CIT(A) DID NOT PROVIDE THE REASONABLE OPPORTUNITY TO THE APPELLANT FOR FUR NISHING DOCUMENTARY EVIDENCE IN SUPPORT OF THE SERIOUS ILLNESS OF THE ACCOUNTANT WHO WAS BED RIDDEN FOR CONSIDERABLE PERIOD OF TIME AND WHO USED TO LOOK AFTER THE ENTIRE PROCEDURAL MATTER OF THE APPELLANT AND NO NEW ACCOU NTANT COULD BE APPOINTED TO HANDLE THE SENSITIVE ISSUE. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A), ASANSON ERRED IN CONFIRMING THE PENALTY WITHOUT APPRECIATIN G THE PROVISION CONTAINED U/S 275(1A) AND SECTION 273B WHEREAS HE SHOULD HAVE TAKEN A LIBERAL VIEW AS THE DEFAULT IS TECHNICAL IN NATURE. 4. THE APPELLANT CRAVES LEAVE TO ALTER, AMEND OR SU BSTITUTE ANY GROUND OR GROUNDS BEFORE OR AT THE TIME OF HEARING OF THE APP EAL. 3. BRIEF FACTS QUA THE ISSUE ARE THAT ASSESSING OFF ICER NOTICED THAT ASSESSEE HAS COMMITTED THE DEFAULT U/S. 272A(2)(K)/274 READ WI TH SECTION 200(3) OF THE I.T. ACT, 1961 FOR LATE FILING OF QUARTERLY TDS STATEMEN TS FOR F.Y. 2010-11. THERE IS DELAY OF 515 DAYS IN Q2 (II) 423 DAYS IN Q3 AND (I II) 303 DAYS IN Q4 IN FILLING OF FORM NO. 26Q BY THE ASSESSEE. ASSESSING OFFICER THE N NARRATED THE PROVISIONS OF SECTION 272A(2)(K) WHICH IS GIVEN BELOW FOR READY R EFERENCE: SECTION 272A(2)(K) OF THE INCOME TAX ACT, 1961 PROV IDES THAT: 272A(2) IF ANY PERSON FAILS - (A) ... (K) TO DELIVER OR CAUSE TO BE DELIVERED A COPY OF T HE STATEMENT WITHIN THE TIME SPECIFIED IN SUB-SECTION (3) OF SECTION 200 OR THE PROVISO TO SUB-SECTION (3) OF SECTION 206C; HE SHALL PAY, BY WAY OF PENALTY, A SUM OF ONE HUNDRED RUPEES FOR EVERY DAY DURING WHICH THE FAILURE CONTINUES. TAKING INTO ACCOUNT THE PROVISIONS OF SECTION 272A (2)(K) OF THE ACT AS EXPLAINED ABOVE, THE ASSESSING OFFICER NOTICED THAT SECTION 200(3) OF THE INCOME TAX ACT, 1961 REQUIRES THAT, AFTER DEDUCTING TAX AT SOURCE A ND DEPOSITING THE SAME IN THE CREDIT OF THE GOVERNMENT, THE DEDUCTOR MUST FILE QU ARTERLY TDS STATEMENTS MANDATORILY. FAILURE ON THE PART OF THE DEDUCTOR TO FILE CORRECT STATEMENTS AND IN PRAGATI TRANSPORT CO. ITA NO.1900/KOL/2018 ASSESSMENT YEAR:2011-12 P PP PA AA AG GG GE EE E | || | 3 33 3 TIME WOULD RESULT IN A TDS MISMATCH AND THE DEDUCTE ES WOULD BE DENIED THEIR DUE TDS CREDITS. IT WOULD ALSO INCREASE INTEREST BURDEN ON THE EXCHEQUER. IT IS FOR THIS REASON THAT CLAUSE (K) OF S. 272A(2) WAS INTRODUCED W.E.F. 01.04.2005 INTO THE STATUTE BOOK. THUS, VIOLATION OF THE PROVISIONS OF S. 200(3) R.W. RULE 31A OF THE RULES IS NOT MERELY A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS. IN FACT, W.E.F. 01.07.2012 THE PROVISIONS OF S. 272A(2)(K) OF THE A CT HAVE BEEN SUBSTITUTED BY A NEW SECTION 234E WHEREIN THE DEDUCTORS ARE MANDATOR ILY REQUIRED TO DEPOSIT A FEE OF RS. 200/- PER DAY FOR DELAY IN FILING OF TDS STA TEMENTS U/S 200(3) OF THE ACT. THUS, THE LEGISLATURE HAS EXPRESSED ITS INTENTION I N RESPECT OF S. 272A(2)(K) THROUGH THE FINANCE ACT, 2012. CONSIDERING THE ABOVE, IT WAS HELD THAT THE ASSESSE E HAD NO REASONABLE CAUSE AS PROVIDED IN SECTION 273B OF THE I.T. ACT, 1961 FOR DELAY IN FILING THE TDS STATEMENTS. FURTHER, THE INCOME TAX ACT, 1961 DOES NOT PROVIDE FOR ANY RELAXATION FOR LATE FILING OF QUARTERLY STATEMENT OF TDS AND IT IS EVIDENT THAT THE ASSESSEE DID NOT COMPLY WITH ITS STATUTORY OBLIGATION U/S 200(3) OF THE ACT. IN VIEW OF ABOVE, THE ASSESSING OFFICER WAS OF THE CONSIDERED OPINION THAT PENALTY U/S 272A(2)(K) IS IMPOSABLE UPON THE ASSESSEE AND THE QUANTUM OF PENALTY WAS COMPUTED BY ASSESSING OFFICER AS UNDER: 4. AGGRIEVED BY THE PENALTY ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS CONF IRMED THE PENALTY ORDER PRAGATI TRANSPORT CO. ITA NO.1900/KOL/2018 ASSESSMENT YEAR:2011-12 P PP PA AA AG GG GE EE E | || | 4 44 4 IMPOSED BY THE ASSESSING OFFICER . AGGRIEVED BY THE ORDER OF LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEES ACCOUNTANT HAS BEEN FEELING ILLNESS FOR 500 DAYS THEREFORE THERE WAS DE LAY IN FILING OF QUARTERLY TDS STATEMENT. THE ASSESSEES ACCOUNTANT WAS BED RIDDEN FOR 500DAYS AND THIS IS A REASONABLE CAUSE FOR DELAY IN FILING TDS STATEMENT AND HENCE PENALTY SHOULD NOT BE LEVIED. 6. THE LD. DR FOR THE REVENUE SUBMITTED BEFORE US THAT IN THIS CASE PENALTY OF RS. 55,719/- WAS IMPOSED VIDE ORDER U/S 272A(2)(K) DATE D 30.07.2013 FOR DELAY IN FILING OF QUARTERLY TDS STATEMENT FOR THE F.Y. 2010 -11 FOR THE 2 ND QUARTER BY 515 DAYS, 3 RD QUARTER BY 423 DAYS AND 4 TH QUARTER BY 303 DAYS. DURING THE COURSE OF THE APPEAL PROCEEDING, THE APPELLANT STATED THAT THE AC COUNTANT WAS BED RIDDEN AND HENCE THE FILINGS OF THE RETURNS WERE DELAYED. NO E VIDENCE WAS GIVEN TO SUPPORT THE CONTENTION THAT THE ACCOUNTANT WAS BED RIDDEN F OR MORE THAT 500 DAYS. FURTHER IF THE ACCOUNTANT IS BED RIDDEN FOR 500 DAYS, A NEW ACCOUNTANT COULD HAVE BEEN APPOINTED VERY EASILY, WHICH WAS NOT DONE. HENCE PE NALTY IMPOSED BY THE ASSESSING OFFICER SHOULD BE SUSTAINED. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE ASSESSEE WAS NOT GIVEN REASONABLE OPPORTUNITY BY THE ASSESSING OFFICER TO EXPLAIN THE DELAY IN FILING QUARTERLY RE TURNS IN FORM NO. 26Q. WE NOTE THAT THE ASSESSEE HAS SUBMITTED DOCUMENTARY EVIDENC E IN SUPPORT OF SERIOUS ILLNESS OF THE ACCOUNTANT OF THE ASSESSEE WHO WAS BED RIDDE N FOR CONSIDERABLE PERIOD OF TIME WHO USED TO LOOK AFTER THE ENTIRE ACCOUNTS AND TDS COMPLIANCE AND NO NEW ACCOUNTANT COULD BE APPOINTED BECAUSE SUITABLE CAND IDATE WAS NOT AVAILABLE IN THE MARKET THEREFORE THE DELAY IN FILING THE FORM 26Q H AS OCCURRED. WE NOTE THAT THE ASSESSEE HAS EXPLAINED SATISFACTORILY THE REASON OF NOT FILING THE RETURN IN FORM 26Q FOR QUARTER-3 AND QUARTER-4, WE CONSIDER THAT BECAU SE OF SERIOUS ILLNESS OF THE ACCOUNTANT OF THE ASSESSEE THE RETURN IN FORM 26Q H AS NOT BEEN FILED IN TIME AND PRAGATI TRANSPORT CO. ITA NO.1900/KOL/2018 ASSESSMENT YEAR:2011-12 P PP PA AA AG GG GE EE E | || | 5 55 5 CIRCUMSTANCES WAS BEYOND THE CONTROL OF THE ASSESSE E, HENCE IT IS SUFFICIENT AND REASONABLE CAUSE AS PER SECTION 273B OF THE ACT. WE NOTE THAT HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. 83 ITR 26 HELD AS FOLLOWS: 'PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDI CIALLY AND ON CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENAL TY IS PRESCRIBED THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED I N REFUSING TO IMPOSE PENALTY WHERE THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE O FFENDER IS NOT LIABLE TO THE ACT IN THE MANNER PRESCRIBED BY THE STATUE.' THEREFORE, RELYING ON THE JUDGMENT OF THE HONBLE S UPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. (SUPRA) AND CONSIDERING THE PE CULIAR FACTS AND CIRCUMSTANCES OF THE ASSESSEES CASE, WE DELETE THE PENALTY OF RS . 55,719/-. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 19.06.2019 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 19/06/2019 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. PRAGATI TRANSPORT CO. 2. JCIT(TDS), DURGAPUR 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