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

ITA 240/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77265 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-04-2014
• Assessment Year: 2011-2012
• Appeal Filed On: 28-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAMJCIT
• Assessee Lawyers: S SRIDHAR
• Keywords: Reasonable cause

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , !' # , $ % BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NOS. 239 & 240/MDS/2014 ( / ASSESSMENT YEARS : 2010-11 & 2011-12) SRI SUN CITY DEVELOPERS, 116-117, VOC LAYOUT, SAMBANDAM ROAD (WEST) R.S.PURAM, COIMBATORE-641 002, VS ADDITIONAL COMMISSIONER OF INCOME TAX, TDS RANGE, 18/42, RACE COURSE ROAD, COIMBATORE-18. PAN:CMBSO9762E ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR. GURU BHASHYAM,JCIT / DATE OF HEARING : 10 TH APRIL, 2014 ! /DATE OF PRONOUNCEMENT : 30 TH APRIL, 2014 & / O R D E R PER BENCH: BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AGAINS T THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) -I, COIMBATORE DATED 7.1.2014 FOR THE ASSESSMENT YEARS 2010- 11 AND 2011-12 RESPECTIVELY. IN BOTH THESE APPEALS ASSESSEE IS AGITATING AGAINST LEVY OF PENALTY UND ER SECTION ITA NOS.239 & 240 /MDS/2014 2 272A(2)(K) OF THE ACT FOR NON-SUBMISSION OF TDS RET URNS BEFORE THE PRESCRIBED DATE. 2. COUNSEL FOR THE ASSESSEE, AT THE TIME OF HEARING , SUBMITS THAT ON IDENTICAL FACTS IN ASSESSEES OWN C ASE FOR THE ASSESSMENT YEAR 2008-09, THIS TRIBUNAL DELETED PENA LTY AND THE FACTS AND CIRCUMSTANCES BEING SIMILAR IN THESE APPEALS, HE PRAYS THAT PENALTY MAY BE DELETED. 3. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THIS T RIBUNAL DELETED PENALTY FOR THE ASSESSMENT YEAR 2008-09 ON THE GROUND THAT ASSESSMENT YEAR WAS THE FIRST YEAR OF B USINESS AND SINCE APPEALS UNDER CONSIDERATION ARE NOT RELAT ED TO ASSESSMENT YEAR 2008-09, PENALTY LEVIED BY THE ASSE SSING OFFICER FOR NON-FURNISHING OF TDS RETURNS IS JUSTIF IED. 4. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND THE DECISION RELIED ON. THE CO-ORDINATE BENCH O F THIS TRIBUNAL HAD CONSIDERED A SIMILAR ISSUE IN ASSESSEE S OWN ITA NOS.239 & 240 /MDS/2014 3 CASE FOR THE ASSESSMENT YEAR 2008-09 AND DELETED TH E PENALTY OBSERVING AS UNDER:- 2. THE ADDITIONAL COMMISSIONER BY ORDER DATED 23.12.2011 PASSED UNDER SECTION 272A(2)(K) OF THE A CT LEVIED PENALTY OF ` 11,75,200/- STATING THAT ASSESSEE DID NOT FILE E-TDS RETURN IN TIME AND HAS RENDERED DISS ERVICE TO THE DEDUCTEES WHO ARE UNABLE TO CLAIM THEIR LEGI TIMATE TAX CREDIT FOR THE TAX DEDUCTED FROM THEM BY CAUSIN G LOT OF HARDSHIP AND GRIEVANCE. HOWEVER, COMMISSIONER OF INCOME TAX (APPEALS) RESTRICTED THE PENALTY TO THE EXTENT OF ` 3,78,376/- TO THE EXTENT OF TDS DEDUCTIBLE. THE SUBMISSION OF THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) WAS THAT THERE WAS A REASONABL E CAUSE IN NOT FILING E-TDS RETURN IN TIME. 3. THE COUNSEL FOR THE ASSESSEE SUBMITS THAT BUSINESS OF THE ASSESSEE WAS COMMENCED ON 18.01.200 7, THE FIRST EFFECTIVE YEAR FOR FILING OF RETURN WAS 3 1.03.2008 AND A SURVEY WAS CONDUCTED ON 25.07.2008 IN THE PREMISES OF THE ASSESSEE AND ALL THE RECORDS INCLUD ING FINANCE AGREEMENTS, 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. TH E COUNSEL SUBMITS THAT ASSESSEE WAS NEW TO THE BUSINE SS AND BEING FIRST YEAR OF BUSINESS ACTIVITIES WAS UNA WARE OF THE PROCEDURE OF FILING RETURN. THE COUNSEL SUBMITS THAT ASSESSEE DEDUCTED TDS AND REMITTED THE SAME INTO 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 REA SONABLE CAUSE IN NOT FILING E-TDS RETURN IN TIME. THE ASSE SSEE WAS PREVENTED FROM FILING E-TDS RETURN FOR VARIOUS REASONS LIKE NEW TO BUSINESS, SEIZURE OF ALL RECORDS INCLUD ING FINANCE AGREEMENTS, STATEMENTS, CHALLANS, ACCOUNTS ETC. IMPOUNDED AND NOT RELEASED BY THE DEPARTMENT TILL D ATE AND ALSO BY INTRODUCTION OF NEW PROCEDURE OF PAN MATCHING CONCEPT. 4. THE DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDERS OF LOWER AUTHORITIES. ITA NOS.239 & 240 /MDS/2014 4 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 COMMISSIONER OF INCOME TAX (APPEALS). HOWEVER, QUANTUM OF PENALTY WAS RESTRICTED TO TDS DEDUCTIBLE BY THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER WAS OF THE VIEW THAT THERE WAS NO REASONABLE CAUSE FOR NON-FILING OF E-TDS RETURN IN TIME, WHICH IS NOT CORRECT. THE SUBMISSIONS AND FACTS SH OW THAT ASSESSEE IS NEW TO THE BUSINESS, ASSESSMENT YEAR UN DER APPEAL IS THE FIRST YEAR OF BUSINESS, THERE WAS A S URVEY AND ALL THE RECORDS INCLUDING FINANCE AGREEMENTS, STATEMENTS, CHALLANS, ACCOUNTS ETC. WERE IMPOUNDED BY THE DEPARTMENT. THE ASSESSEE REMITTED THE DEDUCTED TDS INTO GOVERNMENT ACCOUNT IN TIME AND THERE WAS O NLY 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 DISPUTE D BY THE AUTHORITIES BELOW. WE ARE OF THE CONSIDERED VIE W THAT THE ASSESSEE WAS PREVENTED WITH REASONABLE CAUSE IN NOT FILING E-TDS RETURN IN TIME. IN THE FACTS AND CIRCU MSTANCES, WE DELETE THE PENALTY LEVIED UNDER SECTION 272A(2)( K) OF THE ACT. 5. ON GOING THROUGH THE ABOVE ORDER OF THIS TRIBUNA L, WE FIND THAT THE ASSESSEE WAS PREVENTED WITH REASONABL E CAUSE IN NOT FILING TDS RETURNS AS ALL THE RECORDS INCLUD ING FINANCIAL AGREEMENTS, STATEMENTS, CHALLANS ACCOUNTS ETC. ARE IMPOUNDED TILL TO-DAY AND NOT RELEASED BY THE DEPA RTMENT. THE ASSESSEE WAS PURSUING PENDING ASSESSMENT WHICH WAS TIME BARRING ON 31.12.2011. EXCEPT THAT THESE ASSES SMENTS AND SUBSEQUENT TO THE ASSESSMENT YEAR OF 2008-09 W HICH WAS OF THE FIRST YEAR THERE WERE NO CHANGE IN OTHER FACTS AND ITA NOS.239 & 240 /MDS/2014 5 CIRCUMSTANCES. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT ASSESSEE WAS PREVENTED WITH REASONABLE CAUSE IN NOT FILING E- TDS RETURNS IN TIME FOR THESE ASSESSMENT YEARS ALSO AND THEREFORE WE DELETE THE PENALTY LEVIED UNDER SECTIO N 272A (2)(K) IN BOTH THE APPEALS. 6. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON WEDNESDAY, THE 30 TH DAY OF APRIL, 2014 AT CHENNAI. SD/- SD/- ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDRA PRASAD ) ' . #!$ # ( %& '() * ) ACCOUNTANT MEMBER / *+ JUDICIAL MEMBER/ ( *+ %( /CHENNAI, ,* /DATED, 30 TH APRIL, 2014 SOMU *- ./0/ /COPY TO: 1. APPELLANT 2. /RESPONDENT 3. 123 /CIT(A) 4. 1 /CIT 5. /4' 5 /DR 6. '67 /GF .