Niho Construction Ltd., New Delhi V. JCIT, New Delhi

ITA 2113/DEL/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2990 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 23-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 10-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V R SOMBHADRA
• Keywords: Opportunity of being heard
• Section: 133A; 194C; 201(1)

Judgement Text

1 ITA NO. 2113/DEL/2015 \IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI C.M. GARG: JUDICIAL MEMBER ITA NO. 2113/DEL/2015 ASSTT. YRS: 2008-09 NIHO CONSTRUCTION LTD., VS. JCIT, RANGE-50, X-22, IST FLOOR, HAUZ KHAS, NEW DELHI. NEW DELHI. PAN: AABCN 8530 G ( APPELLANT ) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI V.R. SOMBHADRA SR. DR DATE OF HEARING : 23/02/2016. DATE OF ORDER : 03/03/2016. O R D E R PER S.V. MEHROTRA, A.M: THIS IS ASSESSEES APPEAL AGAINST THE ORDER DATE D 23.1.2015, PASSED BY THE LD. CIT(A)-13, NEW DELHI, IN APPEAL NO. TR 1 86/14-15, RELATING TO A.Y. 2008-09. 2. NONE PUT IN APPEARANCE ON BEHALF OF THE ASSESSEE AT THE HEARING. WE PROCEED TO DISPOSE OF THE REVENUES APPEAL, EX PART E, QUA THE ASSESSEE AND IN THAT PROCESS WE HAVE HEARD LD. DR AND PERUSED THE R ECORD. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY, HAVING ITS HEAD OFFICE AT DELHI AT X-22, HAUZ KHAS, NEW DELHI, IN T HE RELEVANT ASSESSMENT 2 ITA NO. 2113/DEL/2015 YEAR WAS ENGAGED IN THE BUSINESS OF REAL ESTATE DE VELOPMENT. A SURVEY OPERATION U/S 133A WAS CARRIED OUT ON 26.12.2007 AT THE BUSINESS PREMISES OF THE ASSESSEE COMPANY TO VERIFY THE COMPLIANCE TO THE VARIOUS PROVISIONS OF CHAPTER XVII OF THE ACT, 1961. DURING THE COURSE OF SURVEY OPERATION IT WAS NOTICED THAT THE ASSESSEE HAD NOT DEDUCTED TDS FOR THE FY 2007-08 ON EXPENSES OF ADVERTISEMENT, COMMISSION AND CONTRACT EXPENSES. THE TDS DEFAULT U/S 201(1) WORKED OUT AT RS. 5,62,192/- AN D INTEREST LIABILITY U/S 201(1A) WAS WORKED OUT AT RS. 1,10,881/- FOR THE F Y 2005-06 TO 2007-08. THE ASSESSEE WAS ALSO TREATED AS AN ASSESSEE IN DEF AULT U/S 194I FOR FY 2006- 07 AND 2007-08 IN RESPECT OF TDS ON EQUIPMENT RENT U/S 194C WHEREAS THE SAME WAS DEDUCTIBLE U/S 194I W.E.F. 13.7.2006. THE AO FURTHER NOTICED THAT THE ASSESSEE HAD DEDUCTED TDS BUT DEPOSITED THE TDS IN GOVERNMENT ACCOUNT BEYOND THE STIPULATED TIME. THEREFORE, HE W ORKED OUT INTEREST U/S 201(1A) AT RS. 1,11,073/- AND THE TOTAL LIABILITY F OR FY 2005-06 TO 2007-08 WAS WORKED OUT AT RS. 9,01,610/-. THE AO NOTICED THAT ASSESSEE HAD FILED TDS RETURNS BEYOND THE STATUTORY TIME LIMIT FOR THE FY 2005-06 TO 2007-08 AND, THERE FORE, HE INITIATED PENALTY PROCEEDINGS U/S 271C, 272A(2)(K) AND U/S 272A(2)(G) . THE AO PASSED THE COMBINED ORDER ON 8.2.2013 AND IMPOSED PENALTY OF R S. 1,89,406/- FOR FY 2006-07 AND RS. 2,33,838/- FOR FY 2007-08; RS. 2,43 ,000/- FOR FY 2005-06; 3 ITA NO. 2113/DEL/2015 RS. 2,06,400/- FOR FY 2006-07 AND RS. 1,69,900/- FO R FY 2007-08 U/S 272A(2)(G). HE FURTHER LEVIED PENALTY U/S 272A(2)(K ) OF RS. 21,100/- FOR FY 2005-06; RS. 19,200/- FOR FY 2006-07 AND RS. 28,500 /- FOR FY 2007-08, REJECTING THE ASSESSEES EXPLANATION THAT IT COULD NOT FILE TDS RETURN IN TIME DUE TO SOME TECHNICAL DISABILITY I.E. NON-AVAILABIL ITY OF PAN OF DEDUCTEES ETC. AND THE DEFAULT, IN ANY CASE, WAS MERELY A TE CHNICAL DEFAULT. 4. BEFORE LD. CIT(A) THE ASSESSEE HAD CONTENDED THA T (I) ASSESSEE COMPANY HAD DEDUCTED THE TAX FROM PAYMENTS MADE TO VARIOUS PARTIES DURING THE RELEVANT YEARS AS PER TH E PROVISIONS OF THE INCOME-TAX ACT. (II) THE ASSESSEE COMPANY VOLUNTARILY DEPOSITED THE SAID TDS REGULARLY AS PER THE PROVISIONS OF THE I.T. ACT. (III) TDS RETURN COULD NOT BE FILED DUE TO NON-AVAILABILI TY OF PAN OF DEDUCTEES. (IV) NON-FILING OF TDS RETURN WAS MERELY A TECHNICAL DEF AULT. (V) THERE WAS NO LOSS OF REVENUE. 5. LD. CIT(A) CONFIRMED THE AOS ACTION, INTER ALIA , OBSERVING THAT ASSESSEE FAILED TO EXPLAIN ANY COMPELLING REASON OR CIRCUMSTANCE FOR WHICH STATUTORY LIABILITY WAS NOT PERFORMED. HE FURTHER O BSERVED THAT THE SUBMISSION OF THE ASSESSEE THAT IT WAS REGULARLY DE POSITING TDS WAS NOT CORRECT IN VIEW OF THE FACT THAT THE ENTIRE DELAY A ND DEFAULT HAD COME OUT ONLY AFTER THE SURVEY OPERATION CONDUCTED AT THE BUSINES S PREMISES OF THE 4 ITA NO. 2113/DEL/2015 ASSESSEE. THE ASSESS4EES EXPLANATION REGARDING NON -AVAILABILITY OF PAN IS A CASUAL EXPLANATION WITHOUT HAVING ANY SINCERE EFFOR TS TOWARDS FULFILLMENT OF STATUTORY OBLIGATIONS. 6. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US AN D THE SOLE EFFECTIVE GROUND RAISED IS AS UNDER: THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN L AW WHILE CONFIRMING THE PENALTIES U/S 271C/274 AMOUNTING RS. 2,33,838/-. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. DR AN D PERUSED THE RECORD. THE PENALTY U/S 271C IS LEVIABLE FOR FAILUR E TO DEDUCT TAX AT SOURCE, WHEREAS PENALTY U/S 272A(2)(G) IS LEVIABLE IF A PER SON FAILS TO FURNISH A CERTIFICATE AS REQUIRED BY SECTION 203 OR SECTION 206C AND PENALTY U/S 272A(2)(K) IS LEVIABLE IF A PERSON FAILS TO DELIVER OR CAUSE TO BE DELIVERED A COPY OF THE STATEMENT WITHIN THE TIME SPECIFIED IN SUB-SECTION (3) OF SECTION 200 OR THE PROVISO TO SECTION 206C. 8. LD. CIT(A) HAS DECIDED ALL THE APPEALS BY REJECT ING THE ASSESSEES EXPLANATION REGARDING PAN BEING NOT AVAILABLE. THE CONSIDERATION FOR AT LEAST SECTION 271C AND 272A(2)(K) & (G) ARE DIFFERE NT. LD. CIT(A) SHOULD HAVE CONSIDERED THE ASSESSEES EXPLANATION KEEPING IN VIEW THE REQUIREMENTS OF THE RELEVANT SECTIONS. WE, THEREFORE, RESTORE TH IS MATTER TO THE FILE OF LD. 5 ITA NO. 2113/DEL/2015 CIT(A) TO PASS A REASONED ORDER IN ACCORDANCE WITH LAW AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ORDE R ACCORDINGLY. 9. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCEMENT IN OPEN COURT ON 03/03/2016. SD/- SD/- (C.M. GARG) (S.V. MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 03/03/2016. *MP* COPY OF ORDER TO: 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI.