The ACIT, (OSD)Circle-8, Ahmedabad V. Sterling Ceramic Pvt. Ltd., Ahmedabad

ITA 2470/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85716 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 30-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Keywords: Bonafide belief; Non-deduction of tax
• Section: 27; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHRI SHAILENDRA KR. YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTAN T MEMBER THE ACIT(OSD), CIRCLE-8, 2 ND FLOOR, B BLOCK, PRATYAKSHAKAR BHAVAN, PANJRAPOLE, AMBAWADI, AHMEDABAD (APPELLANT) VS STERLING CERAMICS PVT. LTD, 921, NAVGHARIS POLE, SARASPUR CHAR RASTA, AHMEDABAD PAN: AAFCS 2069 F (RESPONDENT) REVENUE BY: SHRI M.K. SINGH, SR. D.R. ASSESSEE BY: NONE DATE OF HEARING : 23-02-2015 DATE OF PRONOUNCEMENT : 26-02- 2015 / ORDER PER : ANIL CHATURVEDI, ACCOUNTANT MEMBER:- THIS IS THE ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A)-XIV, AHMEDABAD DATED 06-07-2011 FOR A.Y. 2006-07. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE THOUGH N OTICE OF HEARING WAS SERVED ON THE ASSESSEE. WE THEREFORE PROCEED T O DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE ON THE BASIS OF MA TERIAL ON RECORD. ITA NO. 2470/AHD/2011 ASSESSMENT YEAR 2006-07 I.T.A NO. 2470/AHD/2011 A.Y. 2006-07 PAGE NO ACIT (OSD) VS. STERLING CERAMICS PVT LTD 2 3. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD ARE AS UNDER. 4. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN TH E BUSINESS OF MANUFACTURING OF GLAZED TILES. IN THIS CASE, IT WA S NOTICED THAT ASSESSEE WAS LIABLE TO PAY DIVIDEND DISTRIBUTION TAX (DDT) O F RS. 3,15,591/- U/S. 115- O OF THE ACT ON OR BEFORE 20 TH MARCH, 2006 BUT THE SAID TAX WAS PAID ON 17- 11-2006. A SHOW CAUSE NOTICE WAS ISSUED TO THE ASS ESSEE AND WAS ASKED TO SHOW CAUSE AS TO WHY NO PENALTY BE LEVIED U/S. 2 71(C) OF THE ACT TO WHICH ASSESSEE INTER ALIA SUBMITTED THAT ASSESSEE H AD PAID THE TAX ALONG WITH INTEREST AND IT WAS UNDER A BONAFIDE BELIEF TH AT IF TAX IS PAID LATE ALONG WITH INTEREST IT WOULD SUFFICE THE REQUIREMENT OF L AW AND NO PENALTY WOULD BE LEVIABLE. THE SUBMISSION OF THE ASSESSEE WAS NO T FOUND ACCEPTABLE TO AO AND HE THEREFORE VIDE ORDER DATED 01-11-2010 LEV IED PENALTY OF RS. 3,15,591/- U/S. 271(C) OF THE ACT. AGGRIEVED BY TH E ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO VIDE ORDER DAT ED 06-07-2011 DELETED THE PENALTY BY HOLDING AS UNDER:- DECISION : I HAVE CAREFULLY CONSIDERED THE PENALTY ORDER AND T HE SUBMISSION FILED BY THE APPELLANT. THE PROVISION OF SECTION 27 1 C READS AS UNDER: [PENALTY FOR FAILURE TO DEDUCT TAX AT SOURCE. 271 C. [(1) IF ANY PERSON FAILS TO- (A) DEDUCT THE WHOLE OR ANY PART OF THE TAX AS REQUIRED BY OR UNDER THE PROVISIONS OF CHAPTER XVII-B; OR (B) PAY THE WHOLE OR ANY PART OF THE LAX AS RE QUIRED BY OR UNDER (I) SUB-SECTION (2] OF SECTION 1 1 5-O; OR (II) THE SECOND PROVISO TO SECTION 194B, THEN, SUCH PERSON SHALL BE LIABLE TO PAY, BY WAY O F PENALTY, A SUM EQUAL TO THE AMOUNT OF TAX WHICH SUCH PERSON FA ILED TO DEDUCT OR PAY AS AFORESAID.] [(2) ANY PENALTY IRNPOSABLE UNDER SUB-SECTION (1) S HALL BE IMPOSED BY THE [JOINT] COMMISSIONER.] THEREFORE, A PERUSAL OF THE ABOVE SHOWS THAT PENALT Y U/S. 271C CAN BE IMPOSED, IF THE PERSON HAS FAILED TO DE DUCT THE DIVIDEND I.T.A NO. 2470/AHD/2011 A.Y. 2006-07 PAGE NO ACIT (OSD) VS. STERLING CERAMICS PVT LTD 3 TAX OR HAS NOT PAID THE WHOLE OR PART OF THE TAX DE DUCTED. AS PER THE ASSESSING OFFICER, THE APPELLANT HAS PAID THE TAX L ATE BY ABOUT 8 MONTHS AND, THEREFORE, THERE WAS A DEFAULT AS PER T HE PROVISIONS OF SECTION 271C OF THE ACT. IT IS NOTED FROM THE PERUS AL OF THE PENALTY ORDER AND THE DETAILS FILED BY THE APPELLANT DURING THE COURSE OF APPEAL PROCEEDINGS THAT THE APPELLANT HAS PAID THE TAX ON 17/11/2006 ALONG WITH THE INTEREST AS PROVIDED IN T HE INCOME TAX ACT. IT HAS ALSO BEEN POINTED OUT BY THE APPELLANT THAT THE COMPANY WAS UNDER BONAFIDE BELIEF THAT IF THE TAX IS PAID L ATE ALONG WITH INTEREST IT WOULD BE SUFFICIENT COMPLIANCE. AFTER C ONSIDERING THESE FACTS AND CIRCUMSTANCES, I AM OF THE OPINION THAT N O PENALTY U/S. 271C CAN BE IMPOSED ON THE APPELLANT AS HE HAS NOT COMMITTED ANY DEFAULT AS MENTIONED IN THE SECTION, HE HAS DEPOSIT ED THE DIVIDEND DISTRIBUTION TAX ALONG WITH INTEREST WITH THE DEPAR TMENT. THEREFORE, THE PENALTY IMPOSED BY THE JT. COMMISSIONER OF INCO ME TAX IS DELETED. 5. AGGRIEVED BY THE ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUND:- 1. THE LD. CIT(A)-XIV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS. 3,15,591/- LEVIED U/ S. 271(C) OF THE ACT. 6. BEFORE LD. DR SUPPORTED THE ORDER OF AO. 7. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIA L ON RECORD. WE FIND THAT LD. CIT(A) WHILE DELETING THE PENALTY HAS NOTED THAT THOUGH THE ASSESSEE HAD PAID TAX LATE BY ABOUT 8 MONTHS BUT TH E SAME WAS PAID ALONG WITH INTEREST AS PROVIDED IN THE ACT. HE AFT ER CONSIDERING THE SUBMISSION OF THE ASSESSEE HAS GIVEN A FINDING THAT NO PENALTY U/S. 271(C) COULD BE IMPOSED ON THE ASSESSEE AS THE ASSESSEE HA D NOT COMMITTED ANY DEFAULT AS CONTEMPLATED IN THE SECTION. BEFORE US, REVENUE HAS NOT BROUGHT ANY CONTRARY MATERIAL ON RECORD TO CONTROVE RT THE FINDINGS OF LD. CIT(A). WE, THEREFORE, FIND NO REASON TO INTERFERE WITH THE ORDER OF LD CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED . I.T.A NO. 2470/AHD/2011 A.Y. 2006-07 PAGE NO ACIT (OSD) VS. STERLING CERAMICS PVT LTD 4 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (SHAILENDRA KR. YADAV) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 26/02/2015 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,