Appeal details
Counselvise Citation
[2015] 140 COUNSELVISE.COM (IT) 96751 (ITAT-COCHIN)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 month(s) 25 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
14-10-2015
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
13-10-2015
Assessment Year
2011-2012
Appeal Filed On
20-03-2015
Judgement Text
ITA NO S 194 TO 197/C /2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI B P JAIN , A M & GEORGE GEORGE.K , J M ITA NO S. 194 TO 197/COCH/2015 (ASST YEAR S 2009 - 10 TO 2012 - 13 ) M/S MANJOORAN HOUSING DEVELOPMENT P LTD J & R COMPLEX N H ROAD, PALARIVOTTOM KOCH I 682 025 VS THE ADDL COMMR OF INCOME TAX (TDS) KOCHI ( APPELLANT) (RESPONDENT) PAN NO. AABCM5988K ASSESSEE BY SH RAJA KANNAN REVENUE BY SH K P GOPAKUMAR, SR DR DATE OF HEARING 13 TH OCT 2015 DATE OF PRONOUNCEMENT 14 TH , OCT 2015 ORDER PE R BENCH : THESE FOUR APPEALS AT THE INSTANCE OF THE ASSESSEE ARE DIRECTED AGAINST FOUR SEPARATE ORDERS OF THE CIT(A), ALL DATED 19.12.2014. THE RELEVANT ASSESSMENT YEARS ARE 2009 - 10 TO 2012 - 13. 2 THE SOLITARY ISSUE THAT ARISES FOR OUR CONSIDERATION IS WHETHER THE CIT(A) IS JUSTIFIED IN CONFIRMING THE PENALTY IMPOSED U/S 271C OF THE ACT 1961. SINCE COMMON ISSUE IS INVOLVED IN THESE APPEALS AND THEY PERTAIN TO THE SAME ITA NO S 194 TO 197/C /2015 2 ASSESSEE, THESE APPEALS WERE HEARD TOGETHER AND DISPOSE OFF BY THIS CONSOLIDATED ORDE R. 3 THERE IS A DELAY OF 14 DAYS IN FILING THESE APPEALS. THE ASSESSEE FILED A PETITION/AFFIDAVIT FOR CONDONING THE DELAY IN FILING THESE APPEALS , WHICH WERE CONSIDERED AT THE TIME OF HEARING OF THE STAY PETITIONS .THE DELAY PETITION WAS ALLOWED AND CONDITIONAL STAY WAS GRANTED , WHICH WAS COMPLIED WITH BY THE ASSESSEE . 4 THE BRIEF FACTS RELATING TO THE ISSUE ARE AS FOLLOWS: THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF CONSTRUCTION AND SALE OF FLATS. FOR THE RELEVANT ASSESSMENT YEARS , IT WAS NOTICED THAT THE ASSESSEE HAD DE DUCTED TAX AT SOURCE; HOWEVER, IT HAD DEPOSITED THE SAME TO THE GOVERNMENT ACCOUNT BELATEDLY. HENCE, NOTICE U/S 271C OF THE A CT WAS ISSUED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX AND CONSEQUENTLY PENALTY WAS LEVIED FOR THE AYS 2009 - 10 TO 2012 - 13. TH E AMOUNTS OF PENALTY IMPOSED FOR THE RESPECTIVE ASSESSMENT YEARS ARE AS FOLLOWS: ASST YEAR CIT (A) ORDER DATED AMOUNT 2009 - 10 19.12.2014 4,95,468/ - 2010 - 11 19.12.2014 6,26,594/ - 2011 - 12 19.12.2014 16,99,708/ - 2012 - 13 19.12.2014 8,15,882/ - ITA NO S 194 TO 197/C /2015 3 5 AGGRIEVED BY THE PENALTY IMPOSED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. THE CIT(A) DISMISSED THE APPEALS OF THE ASSESSEE AND CONFIRMED THE PENALTY IMPOSED U /S 271C OF THE A CT. THE CIT(A) WAS OF THE V IEW THAT THE ASSESSEE IS A HABIT UAL DEFAULTER AND WAS ALWAYS REMITTING THE TAX DEDUCTED AT SOURCE TO THE GOVERNMENT ACCOUNT BELATEDLY. THE CIT(A) WAS OF THE VIEW THAT THE REASONABLE CAUSE THAT IS MENTIONED BY THE ASSESSEE F O R D E P O S I T I N G T H E T A X B E L A T E D L Y WAS FINANCIAL HARDSHIP OF THE ASSESSEE. AC CORDING TO THE CIT(A) FINANCIAL HARDSHIP OF THE ASSESSEE IS NOT A GROUND FOR WAIVER OR REDUCTION OF PENALTY IMPOSED U/S 271C. THE CIT(A), FOR HIS REASONING PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S U S TECHNOLOGY INTERNATIONAL P LTD REPORTED IN 195 TAXMAN 323 (KER) . 6 THE ASSESSEE BEING AGGRIEVED IS IN APPEAL S BEFORE US . AT THE TIME OF HEARING, THE LD COUNSEL FOR T HE ASSESSEE HAS SUBMITTED A BRIEF NOTE, THE CONTENTS OF WHICH , READ AS UNDER: A) THE AP P E LL AN T HAS PAID TDS AMOUNT AL O NG WITH INTEREST, BEFORE IN V OC ATI O N O F P ROCEEDINGS UNDER THE A CT . THE APPELLANT IS FOLLOWING ME R CANTI L E SYS T EM OF ACCOUNTIN G A ND EXPENSES WERE A CCOUNT E D W ITHOUT A CTU A L P AY M E NT OF T H E S A ME. TH E S A ME THOU G H R A ISED BEFORE TH E LOWER AUTH O RITIES, THE SAME WAS IGNORED T O BE CONSIDERED . THE DE DUCT EE S G O T PROPER CREDIT FOR THE TAX DEDUCTED B Y TH E APPELLANT . T HE APPE LL ANT DUE TO ITS FINAN C IAL HARDSHIPS, COULD NOT M A KE PAYMENTS TO SUPPLIERS, S T AT U T ORY DUES ETC . THE ' MITIG A TING C IRCUMST A NCE ' IN UST TECHNOLO G I E S CASE, REPORTED IN (2010) 195 T AXM A N 323 (KER), APPLIES TO THE C A SE OF THE PETITIONER . ITA NO S 194 TO 197/C /2015 4 B) THERE IS NO PROOF FO R TH E FINDING TH A T THE APPELL A NT H A S U SED / SIPHONED OF THE TDS AMOUNT FO R WORKING CAPITAL REQUIR E M E NTS. C) CL A SSIC CONC E PTS CASE, OUGHT TO BE TR E ATED GIVEN IN PECULIAR FACTUAL CI RCUM S TAN C ES O F THE CASE. EVEN AFTER C LASSIC CONCEPT JUDGMENT, DECISION IN US TECHNOLOGIES W ILL HOLD THE FIELD, BAS E D ON THE F A CTS A ND CIRCUMSTANCES OF E A CH C AS E ; AS CLAS S IC CONCEPTS WAS R E NDE RED FOLLOWING TH E LA W LAID DO W N IN US TECHNOLOGIES CASE. IN CLASSIC CONCEPTS CASE, THE DECISION W A S A GAINST THE AS S ESSEE FOR THE REASONS T HA T THE FACTS AND CIRCUMSTANCES OF THA T CA S E D I D N O T FALL WITHIN THE EXEMPTION C A RVED OUT FO R LE VY OF PENALTY U/S . 217 C , IN US TECHNOLO G IES DECISION. D) T HE AT T ENDING CIRCUMSTANCES IN THE CASE OF THE APPELLANT MAY KINDLY B E L OOKED INTO FOR REDUCING TH E QU A NTUM OF PENA L TY. 7 THE LD DR , ON THE OTHER HAND SUBMITTED THAT THE ISSUE IN QUESTION IS SQUARELY COVERED BY THE RECENT JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CLASSIC CONCEPTS HOME INDIA LTD IN ITA NO. 90 OF 2015 (JUDGMENT DATED 21.5.2015). 8 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, IN THE I NSTANT CASE IT IS A SITUATION WHERE THE ASSESSEE HAD DEDUCTED TAX AT SOURCE AND FAILED TO REMIT THE SAME TO THE CENTRAL GOVERNMENT ACCOUNT IN TIME. IN THE GROUNDS TAKEN BEFORE US, THE ASSESSEE HAS NOT STATED ANY REASONABLE CAUSE FOR ITS FAILURE TO REMIT TH E TAX WITHIN THE DUE DATE PRESCRIBED UNDER I T RULES. THE ASSESSEE HAS ONLY PLEADED ITS FINANCIAL DIFFICULTIES FOR THE REMITTANCE OF TAX BELATEDLY. AS RIGHTLY POINTED OUT BY THE LD CIT(A), THE TAX DEDUCTED IS THE MONEY DUE TO THE CENTRAL GOVERNMENT AND ITA NO S 194 TO 197/C /2015 5 THE DEDUCTOR DOES NOT HAVE ANY AUTHORITY TO RETAIN THE MONEY. IT IS THE DUTY OF THE DEDUCTOR TO REMIT THE TAX DEDUCTED AT SOURCE TO THE GOVERNMENT ACCOUNT WITHIN THE PRESCRIBED TIME AND FINANCIAL DIFFICULTIES STATED BY THE ASSESSEE IS NO GROUND FOR WAIV ER OR REDUCTION OF PENALTY IMPOSED U/S 271C. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CLASSIC CONCEPTS HOME INDIA PVT LTD (SUPRA) HAD CATEGORICALLY HELD THAT IN A CASE WHERE TAX HAS BEEN DEDUCTED BUT NOT PAID WITHIN THE TIME LIMIT PRESCRIBED UN DER THE LAW, REASONABLE CAUSE MENTIONED U/S 271B WOULD NOT COME TO THE RESCUE OF THE ASSESSEE. IN THE LIGHT OF THE ABOVE FACTUAL MATRIX AND THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT, CITED SUPRA, WE HOLD THAT THE CIT(A) IS JUSTIFIED IN CONFIRM ING THE PENALTY IMPOSED U/S 271C OF THE ACT. IT IS ORDERED ACCORDINGLY. 9 IN THE RESULT, THE APPEAL S FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF OCT 2015 . SD/ - S D / - ( B P JAIN ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN: DATED 14 TH , OCT 2015 RAJ* ITA NO S 194 TO 197/C /2015 6 COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT, 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN
