M/s Augen Technologies Software Solutions Pvt Ltd , Bangalore V. Assistant Commissioner of Income TAx Circle-1(1), Bangalore

ITA 2176/BANG/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3963 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 14-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SIDDAPPAJI R N CIT HEARD ON PR
• Keywords: Reasonable cause; Ignorance of law
• Section: 273B

Judgement Text

ITA.2176 TO 2179/BANG/2017 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'A', BENGALURU BEFORE SHRI. JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NOS.2176 TO 2179/BANG/2017 (ASSESSMENT YEAR : 2009-10 TO 2012-13) M/S. AUGEN TECHNOLOGIES SOFTWARE SOLUTIONS P. LTD, NO.1201 & 1202, 12 TH FLOOR, HMG AMBASSADOR, 137, RESIDENCY ROAD, BENGLAURU 560 025 .. APPELL ANT PAN : BLRA0825G V. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE -1(2), BENGALURU .. RESPONDENT ASSESSEE BY : SHRI. MUKESH KUMAR JAIN, CA REVENUE BY : SHRI. SIDDAPPAJI R. N. ADDL. CIT HEARD ON : 03.10.2018 PRONOUNCED ON : 05.10.2018 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THE PRESENT APPEALS ARE FILED BY THE ASSESSEE AGAI NST THE COMMON ORDER OF THE CIT (A) -13, BENGALURU, FOR THE ASSESSMENT YEARS 2009-10 TO 2012-13, ON THE FOLLOWING EFFECTIV E GROUNDS : ITA.2176 TO 2179/BANG/2017 PAGE - 2 2. THE LEARNED ASSESSING OFFICER HAS ERRED IN NOT ACCEPTING THE APPELLANTS CONTENTION THAT THERE WAS A REASONABLE CAUSE FOR THE FAILURE ALLEGED IN TERMS OF SECTION 272A(2)(K). 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS DISMISSED THE APPEAL WITHOUT ACCEPTING THE APPELLANTS CONTENTION OF THERE BEING A REASONABLE CAUSE FOR FAILURE ALLEGED IN TERMS OF SECTION 272A(2)(K). 02. BRIEF FACTS ARE, THE CASE OF THE ASSESSEE WAS S ELECTED FOR SCRUTINY ON ACCOUNT OF DELAY IN FILING THE QUARTERL Y STATEMENT IN FORM 24Q AND 26Q. THE ASSESSEE HAS DRAWN OUR ATTEN TION TO PAGE 2 OF THE CIT (A)S ORDER GIVING THE DETAILS OF THE FO RM 24Q AND 26Q, ALONGWITH THE NUMBER OF DAYS DELAY IN FILING THE RE TURN, WHICH IS AS UNDER : ITA.2176 TO 2179/BANG/2017 PAGE - 3 THE AO HAD GIVEN SHOW CAUSE NOTICE TO THE ASSESSEE FOR THE DELAY IN REMITTANCE OF THE TDS TO THE GOVERNMENT ACCOUNT AND ALSO THE DELAY IN FILING THE QUARTERLY RETURNS, IN RESPONSE TO WHICH, IT WAS EXPLAINED THAT THE DELAY WAS OWING TO THE FINANCIAL PROBLEMS FACED BY THE COMPANY WHICH RESULTED IN DELAY IN REMITTING THE TDS AMOUNTS AND FILING THE RETURNS. THE AO WAS NOT CON VINCED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND HENCE IMPOSED THE PENALTY ON THE ASSESSEE, FOR ALL THE IMPUGNED ASSESSMENT YEARS . THE REASONING GIVEN BY THE AO WAS AS UNDER : IN THE DEDUCTOR'S CASE IT IS ALSO NOTICED THAT THE TDS AMOUNTS ALREAD Y DEDUCTED WERE NOT REMITTED WITHIN THE PRESCRIBED TIME AND THE REMITTANCE TO CENTRAL GOVERNMENT ACCOU NT IN SOME CASES WERE DELAYED UPTO ALMOST ONE YEAR. IN THIS CO NNECTION IT MAY BE MENTIONED THAT A PERSON WHO IS RESPONSIBLE F OR MAKING PAYMENTS AND DEDUCTION AT SOURCE IS ACTING IN A FID UCIARY CAPACITY AS AN AGENT OF THE REVENUE. THE AMOUNT OF TAX DEDUC TED DOES NOT ITA.2176 TO 2179/BANG/2017 PAGE - 4 BELONG TO DEDUCTOR BUT IS DUE TO REVENUE AND HENCE IT IS A BREACH OF THE FIDUCIARY RELATIONSHIP IF THE TDS IS NOT REM ITTED TO REVENUE WITHIN THE TIME FRAME PRESCRIBED. NEITHER THE FACT THAT INTEREST U/S. 201(1A) WAS PAID FOR THE DELAYED REMITTANCE WO ULD ABSOLVE TO THE DEDUCTOR FROM THE BREECH OF THE FIDUCIARY RE LATIONSHIP, NOR CAN THE DELAYED REMITTANCE BE HELD OUT AS A REASONA BLE CAUSE JUSTIFYING THE DELAY IN SUBMISSION OF QUARTERLY STATEMENTS AS PRESCRIBED IN SEC. 200(3). IN THE INSTANT CASE THE DEDUCTOR HAS CHOSEN TO RELY N THE FINANCIAL DIFFICULTIES FOR DUE COMPLIANCE WITH THE PROVISIONS. I AM NOT ABLE TO UNDERSTAND HOW COULD THE FINANCIAL DIFF ICULTIES BE THE REASON FOR NOT REMITTING IN TIME THE TDS SO DEDUCTE D; WHEN IT IS THE MONEY BELONGING TO THE GOVERNMENT AND THE DEDUC TOR HAS NO BUSINESS TO DEAL WITH THAT MONEY IN ANY MANNER EXCE PT TO DEPOSIT IT IN THE GOVT. ACCOUNT IN TIME. I AM NOT IMPRESSED BY THE ARGUMENTS AS THE ONUS FOR COMPLIANCE WITH THE PROVI SIONS OF CHAPTER XVIIB HAS BEEN CAST ON THE COMPANY ITSELF I NCLUDING THE PRINCIPAL OFFICER OF THE COMPANY BY VIRTUE OF THE P ROVISIONS OF SEC.204 OF THE INCOME TAX ACT. BEING AGGRIEVED BY THE LEVY OF PENALTY, THE ASSESSE E FILED APPEALS BEFORE THE CIT (A). 03. BEFORE THE CIT (A), AGAIN IT WAS REITERATED BY THE ASSESSEE THAT THERE WERE FINANCIAL DIFFICULTY AND HENCE THER E WAS DELAY IN REMITTING THE TDS AMOUNTS TO THE GOVERNMENT ACCOUNT AND CONSEQUENTIAL DELAY IN FILING THE RETURNS. THE CIT (A) AT PAGE 13 HAD DEALT WITH THE CONTENTION OF THE ASSESSEE IN TH E FOLLOWING MANNER : IN THE PRESENT CASE. BE FINANCIAL CRISIS IS CLAIMED TO BE A REASONABLE CAUSE FOR NOT FILING THE QUARTERLY RET URNS IN TIME. HOWEVER, ON PERUSAL OF THE ANNUAL REPORTS FIL ED ALONG WITH THE SUBMISSION DATED 21.06.2017, IT IS NOTICED THAT IN THE F.YS. 2008-09, 2009-10, 2010-11 AND 2011-12, THE CO MPANY INCURRED THE EXPENSES ON EMPLOYEES' COST OF RS. 12. 10 CRORES, RS. 12.74 CRORES, RS. 7.18 CRORES AND RS. 6.64 CROR ES RESPECTIVELY. IT IS ALSO NOTICED FROM THE ANNEXURES TO THE FINANCIAL STATEMENTS THAT THE LEGAL AND PROFESSIONA L EXPENSES TO THE EXTENT OF RS. 70.89 LAKHS , 1.36 CRORES, RS. 136 CRORES ITA.2176 TO 2179/BANG/2017 PAGE - 5 AND RS. 2.02 CRORES RESPECTIVELY INCURRED FOR THE A BOVE FINANCIAL YEARS. IT IS ALSO NOTICED FROM THE BALANC E SHEET THAT THE CASH BALANCE AVAILABLE AT THE END OF THE ABOVE FINANCIAL YEARS WAS RS. 4.57 LAKHS, 61.91 LAKHS, RS. 42.55 LAKHS AN D RS. 2.06 LAKHS RESPECTIVELY. THE ABOVE FACTS NOTICED FROM THE P&L ACCOUNTS AND BALANCE SHEETS REVEAL THAT THE APPELLA NT WAS IN A SOUND FINANCIAL CONDITION TO FILE THE QUARTERL Y RETURNS IN TIME AND ALSO FINANCIAL CRISIS CANNOT BE SAID TO BE A REASONABLE CAUSE FOR PAYMENT OF TDS WHICH IS DEDUCT ED ON BEHALF OF THE GOVERNMENT. THEREFORE, THE ABOVE DECI SIONS ON WHICH RELIANCE HAS BEEN PLACED BY THE APPELLANT ARE NOT APPLICABLE. ACCORDINGLY, THE APPEALS ON THE ABOVE G ROUND ARE DISMISSED. FURTHER THE CIT (A) HAD ALSO CONSIDERED THE VARIOUS SUBMISSIONS MADE BY THE ASSESSEE, AS UNDER : PENALTY UNDER SECTION 272A(2)(K) COULD BE LEVIED ON LY FROM THE DATE OF PAYMENT OF TAX AS THE STATEMENT UN DER SECTION 200(3) IS REQUIRED TO BE FILED ONLY AFTER PAYMENT O F TAX TO THE CENTRAL GOVERNMENT. HAVING CONSIDERED THE SUBMISSION, IT IS NOTICED FRO M THE PERUSAL OF CLAUSE (K) OF SUB-SECTION (2) OF SEC TION 272A THAT 'IF A PERSON FAILS TO DELIVER OR CAUSE TO BE D ELIVERED A COPY OF THE STATEMENT WITHIN THE TIME SPECIFIED IN SUB- SECTION (3) OF SECTION 200 ..., HE SHALL PAY, BY WA Y OF PENALTY, A SUM OF ONE HUNDRED RUPEES FOR EVERY DAY DURING WH ICH THE FAILURE CONTINUES'. THE SUB-SECTION (3) OF SECTION 200 PROVIDES THAT 'ANY PERSON DEDUCTING ANY SUM ON OR A FTER THE 11 DAY OF APRIL, 2005 IN ACCORDANCE WITH THE FOREGOING PROVISIONS OF THIS CHAPTER OR, AS THE CASE MAY BE, ANY PERSON BEING AN EMPLOYER REFERRED TO IN SUB-SECTION (1A) OF SECTION 192 SHALL, AFTER PAYING THE TAX DEDUCTED AT THE CREDIT OF THE CENTRAL GOVERNMENT WITHIN THE PRESCRIBED TIM E, PREPARE SUCH STATEMENTS FOR SUCH PERIOD AS MAY BE PRESCRIBED AND DELIVER OR CAUSE TO BE DELIVERED TO THE PRESCRIBED INCOME-TAX AUTHORITY OR THE PERSON AUTHO RISED BY SUCH AUTHORITY SUCH STATEMENT IN SUCH FORM AND V ERIFIED IN SUCH MANNER AND SETTING FORTH SUCH PARTICULARS A ND WITHIN SUCH TIME AS MAY BE PRESCRIBED' TIME LIMITS FOR FILING QUARTERLY STATEMENTS OF TDS IN TERMS OF SUB-SECTION (3)OF SECTION 200 HAVE BEEN PRESCRIB ED UNDER ITA.2176 TO 2179/BANG/2017 PAGE - 6 SUB-RULE (2) OF RULE 31A. SUB-RULE (2) OF RULE 31A AS EXISTED UPTO 31.10.2011 READS AS UNDER STATEMENTS REFERRED TO IN SUB-RULE (1) FOR THE QUAR TER OF THE FINANCIAL YEAR ENDING WITH THE DATE SPECIFIED I N COLUMN (2) OF THE TABLE BELOW SHALL BE FURNISHED BY THE DUE DATE SPECIFIED IN THE CORRESPONDING ENTRY IN CO LUMN (3) OF THE SAID TABLE:- THE ABOVE RULE WAS SUBSTITUTED BY THE INCOME-TAX (E IGHTH AMENDMENT) RULES 2011 W.E.F. 01.112011 AS UNDER :- '(2) STATEMENTS REFERRED TO IN SUB-RULE (1) FOR THE QUARTER OF THE FINANCIAL YEAR ENDING WITH THE DATE SPECIFIED I N COLUMN (2) OF THE TABLE BELOW SHALL BE FURNISHED BY (I) THE DUE DATE SPECIFIED IN THE CORRESPONDING ENT RY IN COLUMN (3) OF THE SAID TABLE, IF THE DEDUCTOR IS AN OFFICE OF GOVERNMENT; AND (II) THE DUE DATE SPECIFIED IN THE CORRESPONDING ENTRY IN COLUMN (4) OF THE SAID TABLE, IF THE DEDUC TOR IS A PERSON OTHER THAN THE PERSON REFERRED TO IN CLAUSE (I) ITA.2176 TO 2179/BANG/2017 PAGE - 7 HAVING CONSIDERED THE SUBMISSION, IT IS NOTICED FRO M THE PERUSAL OF CLAUSE (K) OF SUB-SECTION (2) OF SEC TION 272A THAT 'IF A PERSON FAILS TO DELIVER OR CAUSE TO BE D ELIVERED A COPY OF THE STATEMENT WITHIN THE TIME SPECIFIED IN SUB- SECTION (3) OF SECTION 200 .... HE SHALL PAY, BY WA Y OF PENALTY, A SUM OF ONE HUNDRED RUPEES FOR EVERY DAY DURING WHICH THE FAILURE CONTINUES' THE SUB-SECTION (3) OF SECTION 200 PROVIDES THAT 'ANY PERSON DEDUCTING ANY SUM ON OR AFTER THE 1 11 DAY OF APRIL, 2005 IN ACCORDANCE WITH THE FOREGOING PROVISIONS OF THIS CHAPTER OR, AS THE CAS E MAY BE, ANY PERSON BEING AN EMPLOYER REFERRED TO IN SUB - SECTION (1A) OF SECTION 192 SHALL, AFTER PAYING THE TAX DEDUCTED AT THE CREDIT OF THE CENTRAL GOVERNMENT WI THIN THE PRESCRIBED TIME, PREPARE SUCH STATEMENTS FOR SU CH PERIOD AS MAY BE PRESCRIBED AND DELIVER OR CAUSE TO BE DELIVERED TO THE PRESCRIBED INCOME-TAX AUTHORITY OR THE PERSON AUTHORISED BY SUCH AUTHORITY SH STATEMENT IN SUCH FORM AND VERIFIED IN SUCH MANNER AND SETTING FORTH SUCH PARTICULARS AND WITHIN SUCH TIME AS MAY BE PRESCRIB ED' TIME LIMITS FOR FILING QUARTERLY STATEMENTS OF TDS IN TERMS OF SUB-SECTION (3)OF SECTION 200 HAVE BEEN PRESCRIBED UNDER SUB-RULE (2) OF RULE 31A. SUB-RULE (2) OF RULE 31A AS EXISTED UPTO 31.10.2011 READS AS UNDER :- 'STATEMENTS REFERRED TO IN SUB-RULE (1) FOR THE QUARTER OF THE FINANCIAL YEAR ENDING WITH THE DATE SPECIFIED IN COLUMN (2) OF THE TABLE BELOW SHALL BE FURNISHED BY THE DUE DATE SPECIFIED IN THE CORRESPO NDING ENTRY IN COLUMN (3) OF THE SAID TABLE:- THE ABOVE RULE WAS SUBSTITUTED BY THE INCOME-TAX (E IGHTH AMENDMENT) RULES 2011 W.E.F. 01.11.2011 AS UNDER :- ITA.2176 TO 2179/BANG/2017 PAGE - 8 '(2) STATEMENTS REFERRED TO IN SUB-RULE (1) FOR THE QUARTER OF THE FINANCIAL YEAR ENDING WITH THE DATE SPECIFIED IN COLUMN (2) OF THE TABLE BELOW SHALL BE FURNISHED BY - (III) THE DUE DATE SPECIFIED IN THE CORRESPONDING E NTRY IN COLUMN (3) OF THE SAID TABLE, IF THE DEDUCTOR IS AN OFFICE OF GOVERNMENT; AND (IV) THE DUE DATE SPECIFIED IN THE CORRESPONDING EN TRY IN COLUMN (4) OF THE SAID TABLE, IF THE DEDUCTOR IS A PERSON OTHER THAN THE PERSON REFERRED TO IN CLAUSE (I) IT IS CLEAR FROM THE READING OF THE PROVISIONS AND RULE DISCUSSED ABOVE THAT AFTER PAYING THE TAX DEDUCTED AT SOURCE, THE ASSESSEE HAS TO FILE QUARTERLY RETURN WITHIN TH E TIME SPECIFIED IN RULE 31A IN ABSENCE OF WHICH THE PENAL TY U/S 272A(2)(K) IS ATTRACTED. IN SUCH CIRCUMSTANCES, THE QUESTION OF COMPUTATION OF PENALTY FROM THE DATE OF PAYMENT OF TAXES DOES NOT ARISE. THE APPEAL ON THE ABOVE GROUND IS A CCORDINGLY DISMISSED. BEING AGGRIEVED BY THE ORDER OF THE CIT (A), THE AS SESSEE IS IN APPEALS BEFORE US FOR THE IMPUGNED ASSESSMENT YEARS . 04. THE LEARNED AR BEFORE US HAS SUBMITTED THAT THE ASSESSEE WAS HAVING FINANCIAL DIFFICULTY AND HENCE WAS UNABLE TO REMIT THE TDS AMOUNTS TO THE GOVERNMENT AS ALSO TO FILE THE RETUR NS IN TIME. HE HAS DRAWN OUR ATTENTION TO THE BALANCE SHEETS FOR T HE IMPUGNED ITA.2176 TO 2179/BANG/2017 PAGE - 9 ASSESSMENT YEARS. IT WAS SUBMITTED THAT IN ALL THE YEARS THE ASSESSEE HAD A NEGATIVE RESERVE SURPLUS WHICH WENT TO PROVE THAT THE ASSESSEE WAS FACING FINANCIAL DIFFICULTY, HENCE THERE WAS RE ASONABLE CAUSE AS PER SECTION 273B OF THE ACT. AR RELIED UPON FOLLOW ING CASE LAWS : ITA.2176 TO 2179/BANG/2017 PAGE - 10 IN ADDITION TO THE ABOVE, RELIANCE WAS ALSO PLACED ON THE FOLLOWING DECISIONS : I) PRAVIN CHATARBHUJ BAJAJ V. ADDL. CIT [ITA.933/PUN/2016, DT.09.02.2018 ; AND II) GLOBAL VENTURES INC V. ADDL. CIT [ITA.1871/BANG/2017, DT.18.05.2018] 05. THE LD. DR HAS VEHEMENTLY SUBMITTED THAT THE OR DER PASSED BY THE LOWER AUTHORITIES IS IN ACCORDANCE WITH LAW. OUR ATTENTION WAS DRAWN TO THE JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT IN RAJA HARPAL SINGH INTER COLLEGE V. PR.CIT [(2016) 7 0 TAXMANN.COM 246] AND THE DECISION OF THE ITAT, CHANDIGARH IN WO RLD WIDE IMMIGRATION CONSULTANCY SERVICE LTD V. JCIT (TDS), [ITA.1020/CHD/2014, DT.23.07.2015]. HE FURTHER SUB MITTED THAT THE DECISIONS RELIED UPON BY THE ASSESSEE ARE NOT APPLI CABLE TO THE FACTS OF THE PRESENT CASE, AS IN THE PRESENT CASE THE ASS ESSEE WAS NOT HAVING FINANCIAL DIFFICULTY AS SUCCINCTLY MENTIONED BY THE CIT (A) RELEVANT PORTION HAS BEEN REPRODUCED HEREIN ABOVE. THE LD. DR FURTHER SUBMITTED THAT THE PRESENT CASE SHOULD BE D ECIDED ON ITS FACTS , AS FACTS OF THE PRESENT CASE DISTINGUISHABLE FROM THE OTHERS INASMUCH AS THE ASSESSEE HAS DEDUCTED THE TDS BUT N OT DEPOSITED THE SAME INTO THE ACCOUNT OF THE GOVERNMENT AND HE NCE ALSO COMMITTED DEFAULT IN NOT FILING THE RETURNS IN TIME . THE PRESENT CASE IS A CASE WHERE ASSESSEE HAD DELIBERATELY RETAINED THE TAX AFTER DEDUCTING IT, WHILE WORKING AS AN AGENT OF THE GOVE RNMENT AND HAD UTILISED IT FOR A CONSIDERABLE PERIOD OF TIME AND FURTHER DELAYED IN NOT FILING THE RETURNS AS REQUIRED UNDER LAW. ITA.2176 TO 2179/BANG/2017 PAGE - 11 06. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E RECORD AS ALSO THE CASE LAWS CITED BY BOTH THE PARTIES. UNDE R THE SCHEME OF INCOME-TAX, THERE IS AN OBLIGATION ON THE PART OF T HE PAYER TO DEDUCT THE TAX AT THE TIME OF MAKING THE PAYMENT TO THE PA YEE. UNDOUBTEDLY THE ASSESSEE HAS MADE PAYMENTS ON WHICH TAX WAS TO BE DEDUCTED. ADMITTEDLY THERE IS NO QUARREL THAT T HE PAYMENT WHICH IS SUBJECTED TO PAYMENT OF TDS WAS PAID BY THE ASSE SSEE TO THE PAYEE AND SUBSEQUENTLY THE TAX WAS BELATEDLY DEPOS ITED TO THE GOVERNMENT ACCOUNT. ASSUMING IF THE TDS WAS NOT TO BE DEDUCTED ON THE PAYMENT MADE BY THE ASSESSEE THEN WHOLE OF T HE PAYMENT ALONG WITH TAX WAS PAYABLE BY THE ASSESSEE TO PAYEE , IN OUR VIEW IF THERE WAS NO FINANCIAL DIFFICULTY IN MAKING THE 90 % OF THE PAYMENT THERE CANNOT BE FINANCIAL DIFFICULTY IN DEPOSITING THE ALREADY DEDUCTED TAX IN GOVERNMENT ACCOUNT. FURTHER TDS AFTER DEDUCTION BY THE ASSESSEE WAS REQ UIRED TO BE DEPOSITED BY THE PAYER IN THE GOVERNMENT ACCOUNT AN D IT WAS NOT PREVENTED BY ANY REASON TO DO SO. THE EXISTENCE OF THE FINANCES AT THE DISPOSAL OF THE ASSESSEE WAS QUITE APPARENT FRO M THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET OF THE ASSESSEE COMP ANY, MOREOVER THE ASSESSEE HAD NOT GIVEN DAY TO DAY CASH FLOW STA TEMENT TO SUBSTANTIATE FINANCIAL DIFFICULTY IN EVERY QUARTER AND THEREFORE THE ASSESSEE CANNOT BE PERMITTED TO TAKE THE DEFENCE OF FINANCIAL DIFFICULTY BEFORE US. . MOREOVER FROM THE FINANCIA LS OF THE ASSESSEE, AS MENTIONED BY THE CIT (A) (SUPRA), IT IS CLEAR TH AT THE ASSESSEE IS A RUNNING CONCERN AND IS ON A GROWTH PATH HAVING HUGE SALARY BILLS. FURTHER THE FINANCIALS OF THE ASSESSEE CLEARLY SHOW S THAT THERE IS ITA.2176 TO 2179/BANG/2017 PAGE - 12 BORROWING FROM THE FINANCIAL INSTITUTION AND UTILIS ATION OF FUND BY THE ASSESSEE FOR VARIOUS PURPOSES. IT IS ALSO CLEA R THAT THE ASSESSEE HAS BEEN MAKING HUGE PAYMENT TO THE EMPLOYEES / VEN DORS FOR WHICH THERE WAS NO FINANCIAL DIFFICULTY. IN THE CO NSIDERED OPINION OF THE BENCH IF THE ASSESSEE CAN DEDUCT THE TAX AND BUT CHOOSES NOT TO DEPOSIT THE SAME WITH THE GOVERNMENT ACCOUNT AND FURTHER CHOOSES NOT TO FILE THE RETURN IN TIME, THEN THE LA W CANNOT HELP A DELINQUENT AND CARELESS ASSESSEE. IN THE FACTS OF THE PRESENT CASE THE QUESTION OF HAVING ANY FINANCIAL DIFFICULTY DOES NO T ARISE AND IT HAS BEEN SET UP BY THE ASSESSEE ONLY WITH A VIEW TO COV ER UP ITS MIS- DEEDS. IF WE SEE THE CHART REPRODUCED HEREINABOVE , WE FAIL TO UNDERSTAND THAT HOW IN THE FIRST QUARTER OF FY 2008 -09 WHEN THE TDS AMOUNT OF RS.6,42,080/- WAS PAID BY THE ASSESSE E ALONG WITH THE PENALTY AFTER A PERIOD OF 58 DAYS, THERE WAS AN Y FINANCIAL DIFFICULTY. SIMILAR IS THE FACT WITH RESPECT TO OT HER QUARTERS ALSO. IF THE ASSESSEE WAS HAVING FINANCIAL DIFFICULTY IN THE FIRST QUARTER APRIL TO JUNE AND THE PAYMENT WAS MADE IN AUGUST AND THE TAX WAS DEPOSITED IN AUGUST ALONG WITH THE PENALTY, THEN WE FAIL TO UNDERSTAND HOW THE ASSESSEE CAN CLAIM THE FINANCIAL DIFFICULTY IN THE INTERREGNUM PERIOD OF TWO MONTHS ONLY WITHOUT FILIN G ANY CASH-FLOW STATEMENT. IN OUR VIEW, THERE MAY BE A FINANCIAL D IFFICULTY FOR ONE OR TWO WEEKS BUT FROM THE TABLE REFERRED HEREIN ABO VE, IT IS CLEAR THAT THERE IS NO CONTINUOUS FINANCIAL DIFFICULTY AS THE ASSESSEE HAD BEEN MAKING THE PAYMENT BELATEDLY ALONG WITH INTERE ST. THE PAYMENT OF /GOVERNMENT USE WAS NOT IN A PRIORITY LI ST OF THE ASSESSEE. MOREOVER ONCE THE ASSESSEE HAD DEDUCTED THE TAX FROM THE CONSIDERATION PAID TO THE PAYEE THEN IT IS AN OBLIG ATION ON THE PART OF ITA.2176 TO 2179/BANG/2017 PAGE - 13 THE ASSESSEE TO DEPOSIT THE SAME TO THE ACCOUNT OF THE GOVERNMENT. THE AMOUNT DEDUCTED BY THE ASSESSEE ON BEHALF OF TH E GOVERNMENT WAS IN THE CAPACITY OF A TRUSTEE AND NOT DEPOSITING THE AMOUNT IN TIME WITH THE GOVERNMENT WAS WITHOUT ANY JUST AND R EASONABLE CAUSE AND CANNOT BE PERMITTED, THEREFORE THE ACTION OF THE AO/ CIT (A) FOR IMPOSING THE PENALTY IS IN ACCORDANCE WITH LAW. 07. THE CASE LAWS RELIED UPON BY THE LD. AR ARE NOT APPLICABLE TO THE FACTS OF THE CASE. THE BASIC DECISION RELIED I S IN THE MATTER OF GLOBAL VENTURES INC (SUPRA) OF THE BANGALORE TRIBUN AL, WHERE IN PARA 6, IT IS HELD AS UNDER : 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD. THE ONLY ISSUE IN THE PRESENT APPEAL IS WHE THER THE PENALTY IS LEVIABLE UNDER THE CLAUSE (K) OF SUB-SEC TION (2) OF SECTION 272A OF THE ACT HAVING REGARD TO THE FACTS OF THE PRESENT CASE. UNDISPUTEDLY, THERE IS A DELAY IN FILING THE PRESCRIBED QUARTERLY RETURNS AND THE APPELLANT DEDUCTED THE TA X AT SOURCE ON THE PAYMENTS OF RENT AND REMITTED THE AMOUNT TO THE ACCOUNT OF GOVERNMENT OF INDIA BELATEDLY. THE DELAY WAS EXPLAI NED TO THE TDS OFFICER STATING THAT THE DELAY HAD OCCURRED ON ACCOUNT OF DELAY IN REMITTANCE OF TAX DEDUCTED AMOUNT TO THE G OVT. ACCOUNT AND IGNORANCE OF THE PROVISIONS OF LAW ON THE SUBJE CT. THIS EXPLANATION WAS FOUND TO BE NOT PLAUSIBLE BY BOTH T HE TDS OFFICER AS WELL AS THE CIT (APPEALS). WE NOTE THAT THE PROVISIONS OF SECTION 272A HAS TO BE READ WITH THE PROVISIONS OF SECTION 273B OF THE INCOME TAX ACT, 1961 WHICH PROVIDES THA T NOTWITHSTANDING ANYTHING CONTAINED IN SUBSECTION (2 ) OF SECTION 272A OF THE ACT, NO PENALTY SHALL BE IMPOSABLE FOR THE FAILURE REFERRED TO IN THE SAID PROVISIONS, IF IT IS PROVED THAT A REASONABLE CAUSE IS ESTABLISHED FOR THE SAID FAILURE. THEREFOR E THE STATUTE PROVIDES THAT IF THERE IS REASONABLE CAUSE FOR THE FAILURE, THE PENALTY UNDER THE PROVISIONS OF SUB-SECTION (2) OF SECTION 272A OF THE ACT CANNOT BE LEVIED. THEN THE ISSUE THAT COMES UP FOR CONSIDERATION IS WHETHER THE EXPLANATION TENDERED B Y THE APPELLANT IN SUPPORT OF DELAY IN SUBMISSION OF QUAR TERLY RETURNS CAN BE CONSIDERED TO BE PLAUSIBLE. THE EXPLANATION THAT THE DELAY ITA.2176 TO 2179/BANG/2017 PAGE - 14 WAS CAUSED ON ACCOUNT OF DELAYED REMITTANCE OF TAX DEDUCTED AMOUNT TO THE GOVT. ACCOUNT AND THE IGNORANCE OF TH E PROVISIONS OF LAW ON THE ISSUE AS THE COMPANY WAS NEWLY SET UP CAN BE CONSIDERED TO BE REASONABLE HAVING REGARD TO THE RA TIO LAID DOWN BY THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF BUDHAN SINGH & SONS (SUPRA) WHEREIN IT WAS HELD THAT WHEN THE ASSESSEE IS IN THE FIRST YEAR OF BUSINESS OPERATIONS, IGNORA NCE OF PROVISIONS OF LAW CAN BE HELD TO BE REASONABLE CAUSE FOR NON-C OMPLIANCE OF THE PROVISIONS OF LAW. FURTHER THE COLUMNS OF FORM 26Q ALSO CONTAINS COLUMNS REQUIRING THE DETAILS AS TO THE DA TE OF THE DEPOSIT OF THE TDS AMOUNT IN THE GOVT. ACCOUNT. THE REFORE, WHEN THERE IS A DELAY IN REMITTANCE OF THE TDS AMOUNT IN THE GOVT. ACCOUNT, THIS WOULD CONSTITUTE A REASONABLE CAUSE F OR NOT FILING THE PRESCRIBED RETURNS WITHIN THE DUE DATE. THE STA TUTE ALSO PRESCRIBES DIFFERENT PENAL PROVISIONS FOR DELAY IN REMITTING THE TDS AMOUNT TO THE GOVT ACCOUNT. THUS IN THE LIGHT O F THE ABOVE FACTS, THE EXPLANATION TENDERED BY THE ASSESSEE CAN NOT BE TERMED AS UNREASONABLE OR UNPLAUSIBLE. THEREFORE WE ARE OF THE CONSIDERED OPINION THAT THE CASE ON HAND IS NOT A F IT CASE FOR LEVY OF PENALTY U/S. 272A OF THE ACT. THE DECISIONS RELI ED ON BY THE LD. DR IN THE CASE OF CENTRAL SCIENTIFIC INSTRUMENTS OR GANISATION (SUPRA) & RAJA HARPAL SINGH INTER COLLEGE (SUPRA) A RE NOT APPLICABLE, IN AS MUCH AS, THE DECISIONS WERE RENDE RED CONSIDERED THAT THE EXPLANATION TENDERED BY THE ASS ESSEE IN SUPPORT OF BELATED SUBMISSIONS OF THE RETURNS WAS F OUND TO BE NOT PLAUSIBLE. IN THIS CASE, THE REASON FOR DELETING THE PENALTY W AS ON ACCOUNT OF THE NEW PROVISION OF LAW INSERTED INTO THE ACT WHIC H CAST AN OBLIGATION ON THE ASSESSEE TO DEPOSIT THE TAX AND F ILE THE RETURN OF INCOME. HOWEVER THE PRESENT CASE IS NOT IDENTICAL, AS IN THE PRESENT CASE THE ASSESSEE HAS PLEADED ALLEGED FINANCIAL DIF FICULTY AND NOT IGNORANCE OF LAW. 08. SIMILARLY IN THE MATTER OF PRAVIN CHATARBHUJ BA JAJ (SUPRA), THE FACTS BEFORE THE PUNE BENCH OF THE TRIBUNAL WERE DI FFERENT AS THERE WAS (I) A SERVER NON-FUNCTION THUS DEPRIVING THE AS SESSEE TO FILE THE ITA.2176 TO 2179/BANG/2017 PAGE - 15 E-TDS RETURNS (II) THERE WAS A COMPLICATION IN FILI NG THE TDS RETURN AND (III) IT WAS OBSERVED BY THE PUNE BENCH AS UNDE R : IN THIS BUNCH OF APPEALS THERE ARE CASES WHERE THE ASSESSEE HAS DEFAULTED IN NOT DEPOSITING TAX DEDUCT ED AT SOURCE IN TIME, IN SUCH CASES, PENALTY UNDER SECTIO N 272A(2)(K) OF THE ACT IS LEVIABLE. IN OUR VIEW THERE IS A DEFAULT ON THE PART OF THE A SSESSEE TO DEPOSIT THE TAX DEDUCTED AT SOURCE, IN TIME, CONSEQUENTLY W HICH RESULTED INTO DELAY IN FILING THE REQUISITE RETURN. 09. IN THE CONSIDERED OPINION OF THE BENCH THE PERI OD FOR FILING THE RETURN IS REQUIRED TO BE CONTEMPORANEOUSLY RECKONED FROM THE DATE OF LIMITATION PROVIDED FOR DEPOSITING THE TAX DEDUC TED AT SOURCE WITHIN THE TIME LIMIT OF THE RESPECTIVE QUARTER AS MENTIONED BY THE CIT (A) IN THE COMPOSITE ORDER. MERELY BECAUSE THE TAX AFTER DEDUCTION WAS NOT DEPOSITED IN TIME BY THE ASSESSEE WOULD NOT BE A GROUND FOR GIVING LAXITY OR ENLARGING THE TIME FOR FILING THE INFORMATION/ RETURN OF TDS AND HENCE IT CANNOT BE P LEADED A GROUND FOR NON IMPOSITION OF PENALTY ,AS THE DATE OF FILIN G OF THE RETURN WAS FOR WAS 15 TH JULY, 15 TH OCTOBER, 15 TH JANUARY AND 15 TH MAY OF THE RESPECTIVE FINANCIAL YEAR WERE PROVIDED U/S.200 RE AD WITH SUB-RULE OF RULE 31A. IN OUR VIEW THE EXPLANATION GIVEN BY THE ASSESSEE IS REQUIRED TO BE EXAMINED U/S.273B R.W. OTHER PROVISI ONS WHICH CAST A DUTY ON THE ASSESSEE TO DEDUCT THE TAX / DEPOSIT TH E TAX AND FILE THE RETURN AND ALSO IN THE LIGHT OF RULE 31A OF THE ACT , BUT NONETHELESS, THE ASSESSEE HAS TO MAKE OUT A CASE OF REASONABLE C AUSE FOR NOT FILING THE RETURN UNDER RULE 31 OF THE RULES R.W.SE CTION 200(3), IN ITA.2176 TO 2179/BANG/2017 PAGE - 16 THE PRESENT CASE THE ASSESSEE FAILED TO MAKE OUT A CASE OF REASONABLE CAUSE. HENCE, WE DO NOT FIND ANY MERIT IN THE SUBM ISSIONS OF THE ASSESSEE. THEREFORE WE ARE LEFT WITH NO OTHER OPTI ON BUT TO DISMISS ALL THE APPEALS OF THE ASSESSEE. 10. IN THE RESULT, APPEALS OF THE ASSESSEE ARE DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH OCTOBER, 2018. SD/- SD/- (JASON P. BOAZ) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBE R BENGALURU DATED :05.10.2018 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.