Sri Sun Developers, Coimbatore V. The Additional CIT, Coimbatore

ITA 2068/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73744 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 26-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: S SRIDHAR
• Keywords: Reasonable cause

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , ! ' , # $ BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NO. 2068/MDS/2013 ( / ASSESSMENT YEAR : 2008-09) SRI SUN CITY DEVELOPERS 116-117, VOC LAYOUT, WEST SAMBANDAM ROAD, R.S.PURAM, COIMBATORE-641 002. VS. ADDITIONAL COMMISSIONER OF INCOME TAX, TDS RANGE, COIMBATORE. PAN:CMBSO9762E ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR. N.MADHAVAN, JCIT / DATE OF HEARING : 13 TH FEBRUARY, 2014 ! /DATE OF PRONOUNCEMENT : 7 TH MARCH, 2014 % / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, COIMB ATORE DATED 19.09.2013 FOR THE ASSESSMENT YEAR 2008-09 I N AFFIRMING PENALTY LEVIED UNDER SECTION 272A(2)(K) O F THE ACT. 2. THE ADDITIONAL COMMISSIONER BY ORDER DATED 23.12.2011 PASSED UNDER SECTION 272A(2)(K) OF THE A CT LEVIED ITA NO.2068/MDS/2013 2 PENALTY OF ` 11,75,200/- STATING THAT ASSESSEE DID NOT FILE E- TDS RETURN IN TIME AND HAS RENDERED DISSERVICE TO T HE DEDUCTEES WHO ARE UNABLE TO CLAIM THEIR LEGITIMATE TAX CREDIT FOR THE TAX DEDUCTED FROM THEM BY CAUSING LOT OF HA RDSHIP AND GRIEVANCE. HOWEVER, COMMISSIONER OF INCOME TAX (AP PEALS) RESTRICTED THE PENALTY TO THE EXTENT OF ` 3,78,376/- TO THE EXTENT OF TDS DEDUCTIBLE. THE SUBMISSION OF THE ASS ESSEE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) WAS THAT THERE WAS A REASONABLE CAUSE IN NOT FILING E-TDS RE TURN IN TIME. 3. THE COUNSEL FOR THE ASSESSEE SUBMITS THAT BUSINE SS OF THE ASSESSEE WAS COMMENCED ON 18.01.2007, THE FIRST EFFECTIVE YEAR FOR FILING OF RETURN WAS 31.03.2008 AND A SURVEY WAS CONDUCTED ON 25.07.2008 IN THE PREMISES OF THE ASSESSEE AND ALL THE RECORDS INCLUDING FINANCE AGRE EMENTS, STATEMENTS, CHALLANS, ACCOUNTS ETC. WERE IMPOUNDED AND TILL TO-DAY NOT RELEASED BY THE DEPARTMENT. THE ASSESSEE WAS PURSUING PENDING ASSESSMENT WHICH WAS TIME BARRING ON 31.12.2011. THE COUNSEL SUBMITS THAT ASSESSEE WAS N EW TO ITA NO.2068/MDS/2013 3 THE BUSINESS AND BEING FIRST YEAR OF BUSINESS ACTIV ITIES WAS UNAWARE OF THE PROCEDURE OF FILING RETURN. THE COUN SEL SUBMITS THAT ASSESSEE DEDUCTED TDS AND REMITTED THE SAME IN TO GOVERNMENT ACCOUNT IN TIME AND THERE WAS NO DELAY I N REMITTING THE AMOUNT BY THE ASSESSEE AND IT WAS ONL Y DELAY IN FILING OF E-TDS RETURN AND THERE IS A REASONABLE C AUSE IN NOT FILING E-TDS RETURN IN TIME. THE ASSESSEE WAS PREV ENTED FROM FILING E-TDS RETURN FOR VARIOUS REASONS LIKE NEW TO BUSINESS, SEIZURE OF ALL RECORDS INCLUDING FINANCE AGREEMENTS , STATEMENTS, CHALLANS, ACCOUNTS ETC. IMPOUNDED AND N OT RELEASED BY THE DEPARTMENT TILL DATE AND ALSO BY IN TRODUCTION OF NEW PROCEDURE OF PAN MATCHING CONCEPT. 4. THE DEPARTMENTAL REPRESENTATIVE SUPPORTS THE OR DERS OF LOWER AUTHORITIES. 5. HEARD BOTH SIDES. PERUSED THE ORDERS OF LOWER AUTHORITIES. PENALTY WAS LEVIED FOR NON-FILING OF E-TDS RETURN BY THE ASSESSEE WHICH WAS CONFIRMED BY THE COMMISSI ONER OF INCOME TAX (APPEALS). HOWEVER, QUANTUM OF PENALT Y WAS ITA NO.2068/MDS/2013 4 RESTRICTED TO TDS DEDUCTIBLE BY THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER WAS OF THE VIEW TH AT THERE WAS NO REASONABLE CAUSE FOR NON-FILING OF E-TDS RET URN IN TIME, WHICH IS NOT CORRECT. THE SUBMISSIONS AND FA CTS SHOW THAT ASSESSEE IS NEW TO THE BUSINESS, ASSESSMENT YE AR UNDER APPEAL IS THE FIRST YEAR OF BUSINESS, THERE WAS A S URVEY AND ALL THE RECORDS INCLUDING FINANCE AGREEMENTS, STATEMENT S, CHALLANS, ACCOUNTS ETC. WERE IMPOUNDED BY THE DEPAR TMENT. THE ASSESSEE REMITTED THE DEDUCTED TDS INTO GOVERNM ENT ACCOUNT IN TIME AND THERE WAS ONLY DELAY IN FILING OF E-TDS RETURN. THERE IS NO DELAY IN DEDUCTION OF TDS AND REMITTANCE OF THE SAME INTO GOVERNMENT ACCOUNT. NONE OF THESE FACTS ARE DISPUTED BY THE AUTHORITIES BELOW. WE ARE OF TH E CONSIDERED VIEW THAT THE ASSESSEE WAS PREVENTED WIT H REASONABLE CAUSE IN NOT FILING E-TDS RETURN IN TIME . IN THE FACTS AND CIRCUMSTANCES, WE DELETE THE PENALTY LEVI ED UNDER SECTION 272A(2)(K) OF THE ACT. ITA NO.2068/MDS/2013 5 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 7 TH DAY OF MARCH, 2014 AT CHENNAI. SD/- SD/- (A.MOHAN ALANKAMONY) (CHALLA NAGEN DRA PRASAD) ACCOUNTANT MEMBER JUDI CIAL MEMBER CHENNAI, DATED THE 7 TH MARCH, 2014. SOMU COPY TO: (1) APPELLANT (4) CIT(A) (2) RESPONDENT (5) D.R (3) CIT (6) G.F.