Dcom Systems Limited, Ahmedabad V. The Addl. CIT, TDS Range, Ahmedabad

ITA 2485/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9582 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 21-12-2015
• Assessment Year: 2014-2015
• Appeal Filed On: 24-08-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R P MAURYA
• Assessee Lawyers: D K PARIKH
• Section: 11

Judgement Text

ITA NOS.2468, 2469 & 2485/AHD/2015 ASSESSMENT YEAR S : 20 11 - 12, 2012 - 13 & 2014 - 15 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV , JUDICIAL MEMBER ITA NO S . 2468, 2469 & 2485 /AHD/2015 ASSESSMENT YEAR S : 20 11 - 12, 2012 - 13 & 2014 - 15 RESPECTIVELY DCOM SYSTEMS LIMITED VS. A DDL. CIT 311, 3 RD FLOOR, VENUS ATLANTIS, TDS RANGE NR. PRAHLADNAGAR, AHMEDABAD . AUDA GARDEN, AHMEDABAD. [PAN AA CCD 4827 H ] (APPELLANT ) (RESPONDENT) APPELLANT BY : SHRI D.K. PARIKH , A.R. RESPONDENT BY : SHRI R.P. MAURYA ., D.R. DATE OF HEARING : 21 . 1 2 .201 5 D ATE OF PRONOUNCEMENT : 11 . 0 2 .2016 O R D E R PER RAJPAL YADAV, J.M. : 1. THE PRESENT THREE APPEALS ARE DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST ORDERS OF L EARNED CIT ( A ) DATED 17.07.2015, 17.07.2015 AND 21.07.2015 PASSED IN ASSESSMENT YEARS 2011 - 12, 2012 - 13 AND 2014 - 15 RESPECTIVELY. 2. FIRST WE T AKE I T A NO.2485/AHD/2015. IN THIS APPEAL GRIEVANCE OF THE ASSE SSE E IS THAT THE LEARNED CI T(A) HAS ERRED IN CONFIRMING LEVY OF PENAL TY AMOUNTING TO RS.27,030/ - IMPOSED UNDER SECTION 271C OF THE INCOME T AX AC T , 1961. ITA NOS.2468, 2469 & 2485/AHD/2015 ASSESSMENT YEAR S : 20 11 - 12, 2012 - 13 & 2014 - 15 PAGE 2 OF 5 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF CONTRACTING, SUB - CONTRACTING AND TR A DING OF EQUIPMENTS. A SURVEY UNDER SECTION 1 33A OF THE INCOME TAX ACT WAS CARRIED OUT ON 15.12.2013 AT THE BUSINESS PREMISES OF THE ASSESSEE. ACCORDING TO THE ASSESSING OFFICER, IT REVEALED IN THE SURVEY THAT THE ASSESSEE HAS FAILED TO DEDUCT TDS AND FAILED TO DEPOSIT THE TDS IN TO GOVERNMENT A CCOUN T DURING F INANCIAL YEAR Y 2013 - 14 . THE L EARNED ASSESSING OFFICER HAS NOTICED SUCH FAILURE IN TABULAR FORM IN PARAGRAPH NO.2 OF 271C ORDER. THE LEARNED A SSESSING OFFICER HAS C U LLED OUT THREE DEFECTS NAMELY (A) AS S ES SE E WAS SUPPOSED TO DEDUCT TDS UNDER S EC TION 1 94A , I T HAS DEDUCTED THE TDS AMOUNTING TO RS.4 5 ,217 / - BUT THE AMOUNT WAS NOT DEPOSITED IN THE GOVERNMENT TREASURY , (B) T HE ASSESSEE WAS REQUIRED TO DEDUCT THE TDS UNDER SECTION 192B, IT FAILED TO DEDUCT TDS OF R.68,598/ - , AND (C) THE ASSESSEE WAS TO DEDUCT T DS UNDER SECTION 194I , IT FAILED TO DEDUCT TDS OF RS.27,030/ - . LEARNED ASSESSING OFFICER HAS ACCORDINGLY IMPOSED PENALTY OF RS.1,40,845/ - . ON APPEAL, THE L EARNED CIT(A) H A S DELETED THE PENALTY OF RS.45,217/ - BY OBSERVING THAT THE SECTION CONTEMPL ATES DEDUCTION OF TDS. THE ASSESSEE HAS DEDUCTED THE TDS AND IF IT FAILED TO MAKE THE DEPOSIT, THEN FOR THAT VIOLATION IT CANNOT BE VISITED WITH PENALTY UNDER SECTION 271C OF THE ACT. SIMILARLY, WITH REGARD TO SECOND OBLIGATION OF NON - DEDUCTION OF TAX FO R RS.68,59 8 / - , IT WAS CONTENDED BEFORE THE L EARNED CIT(A) THAT THERE WAS NO PAYMENT MA D E BY T HE ASSESSEE. IT WAS ONLY A PROVISION. L EARNED CIT(A) HAS OBSERVED THAT THIS FACT B E VERIFIED BY THE L EARNED ASSESSING OFFICER IF IT IS A PROVISION THAT NO PENALT Y BE IMPOSED UPON TH E ASSESSEE. THE REVENUE HAS NOT CHALLE N GED TH E ORDER OF LEARNED CIT(A) ON THESE ISSUES. ITA NOS.2468, 2469 & 2485/AHD/2015 ASSESSMENT YEAR S : 20 11 - 12, 2012 - 13 & 2014 - 15 PAGE 3 OF 5 4. AS FAR AS THE PENALTY WITH REGARD TO NON - DEDUCTION OF TDS FOR RS.27,030 IS CONCERNED, ACCORDING TO THE L EARNED ASSESSING OFFICER, THE ASSESS E E D ID NOT RESPOND TO SHOW CAUSE NOTICE ISSUED BY HIM FOR THE LEVY OF PENALTY UNDER SECTION 271C OF THE INCOME TAX ACT. BEFORE THE L EARNED C IT ( A ) ALSO NO EXPLANATION WAS GIVEN. THE FINDING S OF THE LEARNED CIT(A) ON THIS ISSUE READ AS UNDER : - THE AMOUNT OF TDS NO T DEDUCTED OF RS.27,030/ - U/S.194I REMAINED UNEXPLAINED AS THE APPELLANT COULD NOT GIVE ANY EVIDENCE OF SUCH DEDUC T ION. IN ABSENCE OF ANY VERIFICATION BEFORE AO AT THE TIME OF ASSESSMENT AND PENALTY PROCEEDINGS AND ALSO NOW DURING APPELLATE PROCE EDINGS THE PENALTY FOR NON DEDUCTION OF TDS U/S.194I IS CONFIRMED. 5. ON DUE CONSIDERATION OF THE ABOVE FINDING S, WE DO NOT FIND ANY MERIT IN THE APPEAL. I T IS , THEREFORE , DISMISSED . 6. NOW WE T AKE I T A NO S . 2468 /AHD/2015 & 2 469/AHD/2015 . THE FACTS IN BOTH THESE APPEALS ARE COMMON. 7. THE GRIEVANCE OF THE ASSESSEE IS THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE LEVY OF PENALTY AMOUNTING TO RS.2,47,800/ - AND RS.1,42,800/ - IN A SSESSMENT YEARS 2011 - 12 AND 2012 - 13 RESPECTIVELY. PENALTIES HAVE BEEN IMPOSED UNDER SECTION 272A(2)(K) OF THE INCOME T AX A C T. 8. THE ASSESSEE HAS FAILED TO SUBMIT TDS RETURNS IN F ORM N O.24Q AND 26Q . O N ACCOUNT OF THIS FAILURE , PENALTY UNDER SECTION 272A(2)(K) OF THE INCOME T AX ACT HAS BEEN LEVIED UPON THE ASSESSEE. APPE AL TO THE L EARNED CIT(A) DID NOT BRING A NY RELIEF TO THE ASS E SS E E. ITA NOS.2468, 2469 & 2485/AHD/2015 ASSESSMENT YEAR S : 20 11 - 12, 2012 - 13 & 2014 - 15 PAGE 4 OF 5 9. BEFORE US , THE L EARNED COUNSEL FOR THE ASSESSEE CONTENDE D THAT THE ASSESSEE WAS NOT POSSESSING COMPLETE INFORMATION WITH REGARD TO PAN OF PAYEE. IT COULD NOT DEPOSIT THE T A X WELL IN TI ME FOR WHICH IT HAS ALREADY PAID INTEREST ETC. TO THE D EPARTMENT AND ON ACCOUNT OF NON - AVAILABILITY OF FUND AND INFORMATION , IT COULD NOT SUBMIT THE TDS RETURN WITHIN TIME. IN ORDER TO BUTTRESS THESE CONTENTIONS , T HE ASSESSEE HAS RELIED UPON THE ORDERS OF I . T . A . T . IN THE FOLLOWING CASE S : - 1) BRANCH MANAGER , ST A TE BANK OF INDIA VS. ADDL . CI T (TDS) [ 2 0 14] 41 TXAMAN N .COM 268 (CUTTACK TRIB. ) 2) BRANCH MANAGER (TDS), UCO BANK VS . ADDL . CIT (TDS) [ 2013 ] 35 TAXMAN N .COM 45 (CUTTACK TRIB. ) 3) ITO VS. AMCON E NGINEERS (P) LTD. - ITA NOS.2253 & 2254/DEL/2011 ORDER DATED 29.06.2012. 10. COPIES OF THESE DECISIONS HAVE BEEN FILED BY TH E ASSESSEE IN THE P APER B OOK. ON THE STRENGTH OF THESE DE C ISIONS HE CONTENDED THAT PENALTY CONFIRMED UNDER SEC TION 272A(2)(K) B E DELETED. 11. ON THE OTHER HAND, L EARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON TH E ORDERS O F TH E LD. REVENUE AUTHORITIES. 12. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION S AND GONE TH ROUGH THE RECORD S CAREFULLY. WE DO NOT DEE M IT NECE SS ARY T O RECIT E OR RECAPTURE ALL THE DECISION S REFERRED BY THE ASSESSEE IN ITS SUBMISSIONS. IT IS SUFFICE TO SAY THAT ALL THESE DECISIONS ARE TO THE EFFECT THAT IF AN ASSESSEE FAILS TO DEPOSIT THE DEDUCTED TDS ON PAUCITY ITA NOS.2468, 2469 & 2485/AHD/2015 ASSESSMENT YEAR S : 20 11 - 12, 2012 - 13 & 2014 - 15 PAGE 5 OF 5 OF FUNDS , THEN THAT CAN BE A POSSIBLE REASON FOR NOT FILI N G T HE TD S RETURN IN TIME. HOWEVER , WE FIND THAT THE ASSESSEE HAS DEPOSITED THE TDS AND SUCH DEPOSIT COULD B E MADE AFTER COLLECTION OF THE P AN OF THE PAYEES BECAUSE THE ASSESSEE HAS TO CALCULATE THE AMOUNT OF TDS DEDUCTED WITH RESPECT TO E A CH P A YEE . I NSPITE OF PAYMENT OF TDS TO THE GOVERNMENT ACCOUNT , T HE ASSESSEE HAS FAILED TO FURNISH THE RETURN IN T HE PRESCRIBED F ORM N O.24Q AND 26Q. THEREFORE, WE ACCEPT THE EXPLANATION OF THE AS SESSEE P A R T LY ON THE STRENGTH OF THE DECISIONS REFERRED BY THE ASSESSEE THAT PENALTY OUGHT TO BE COMPUTED FROM T HE DA T E OF PAYMEN T OF TDS AMOUNT IN T HE GOVERNMENT TREASURY TILL THE DATE OF FURNISHING THE STATEMENT. WE DIRECT THE LD. ASSESSING OFFICER TO COMPUTE THE PENALTY FOR THIS PERIOD . THESE A PPEALS OF THE ASSES SEE ARE PARTLY ALLOWED. 13. IN THE RESULT, ITA NO.2485/AHD/2015 IS DISMISSED AND ITA NOS.2468 & 2469/AHD/2015 ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 11 TH DAY OF FEBRUARY, 201 6 . SD/ - SD/ - PRAMOD KUMAR RAJPAL YADAV ( ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, THE 11 TH DAY OF FEBRUARY , 2016 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD