Jaihind Projects Ltd., Ahmedabad V. The Addl. CIT, TDS Range, Ahmedabad

ITA 2488/AHD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94859 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-12-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 24-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D K PARIKH
• Keywords: Reasonable cause; Ignorance of law
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC-A BENCH AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NOS.2463 TO 2467/AHD/2015 & 2486 TO 2492/AHD/2015 (ASSESSMENT YEARS:2009-10 TO 2012-13 & 2008-09 TO 2014-15) JAIHIND PROJECTS LTD., 3 RD FLOOR, VENUS ATLANTIS PARK, ANANDNAGAR ROAD, SATELLITE, AHMEDABAD 380015 APPELLANT VS. THE ADDL. C.I.T., TDS RANGE, NAVJIVAN TRUST BUILDING, AHMEDABAD - 380014 RESPONDEN T PAN: AAACJ9366R /BY APPELLANT : SHRI D. K. PARIKH, A.R. /BY RESPONDENT : SHRI JAMES KURIAN, SR. D.R. /DATE OF HEARING : 07.12.2015 /DATE OF PRONOUNCEMENT : 09.12.2015 2 ITA NOS.2463 TO 2467/AHD/15 & 2486 TO 2492/AHD/15 ( JAIHIND PROJECTS LTD.) ORDER PER RAJESH KUMAR, A.M: THESE APPEALS FILED BY THE ASSESSEE ARE AGAINST THE ORDERS OF CIT(A)-8, AHMEDABAD OF VARIOUS DATES FOR ALL THE ABOVE ASSESS MENT YEARS. SINCE THE ISSUE INVOLVED IN SOME OF THE APPEALS IS OF COMMON NATURE AND THEREFORE THESE APPEALS ARE HEARD TOGETHER AND ARE BEING DISP OSED OF BY THE CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. WE SHALL TAKE UP THE ITA NO.2463/AHD/2015 FOR A.Y. 2009-10. ASSESSE E HAS RAISED FOLLOWING GROUND: 1. THE LEARNED ADDITIONAL COMMISSIONER OF INCOME TAX, TDS RANGE, AHMEDABAD HAS ERRED IN FACTS AND ON LAW IN LEVYING PENALTY OF RS.5,20,400/- U/S.272A(2)(K) OF THE ACT. 2. THE ISSUE RAISED IN THE GROUND OF APPEAL RELATES TO CONFIRMATION OF PENALTY BY CIT(A) OF RS.5,20,400/- LEVIED U/S.272A( 2)(K) BY ADDITIONAL COMMISSIONER OF INCOME TAX, TDS RANGE, AHMEDABAD. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY WAS ENGAGED IN THE BUSINESS OF LAYING OF CROSS COUNTRY PIPELINE S AND OPERATING SOLAR POWER PLANTS. A SURVEY WAS CARRIED OUT AT THE BUSINESS PREMISES OF ASSESSEE ON 13.11.2013 AND IT WAS FOUND BY SURVEY TEAM THAT ASS ESSEE WAS NOT FILING QUARTERLY STATEMENT IN FORM NO.27EQ FOR THE F.Y. 20 08-09 ON THE DUE DATES AND THEREFORE, THE A.O. CAME TO THE CONCLUSION THAT THE ASSESSEE WAS LIABLE FOR PENALTY U/S.272A(2)(K) OF THE ACT. THE ASSESSEE WA S ISSUED SHOW CAUSE NOTICE DATED 21.01.2014 WHICH WAS NOT REPLIED TO BY THE ASSESSEE AND THEREFORE, THE LD. A.O. LEVIED THE PENALTY BY OBSER VING THAT AS PER THE PROVISION OF SECTION 273B, THERE IS NO SCOPE FOR CO NSIDERING ANY REASONABLE CAUSE FOR FAILURE TO FILE STATEMENT IN TIME, SINCE, SECTION 273B EXCLUDES THE PENALTY U/S.272A(2)(K) OF THE ACT. THE A.O. CALCUL ATED THE DEFAULTS 5204 DAYS AND IMPOSED PENALTY @ 100/- PER DAY TOTAL AMOU NTING TO RS.5,20,400/- AS MENTIONED IN PARA 3 OF THE PENALTY ORDER. 3 ITA NOS.2463 TO 2467/AHD/15 & 2486 TO 2492/AHD/15 ( JAIHIND PROJECTS LTD.) 4. LD. CIT(A) CONFIRMED THE PENALTY BY HOLDING THAT THE ASSESSEE WAS RIGHTLY DECLARED ASSESSEE IN DEFAULT BY THE A.O.. THIS VIEW WAS ALSO CONFIRMED IN THE CASE OF INDO NISSIN FOOD LTD. VS. CIT (2004) 3 SOT 495 (BANGALORE), WHEREIN IT HAS BEEN HELD THAT IF TAXES WERE PAID VOLUNTARILY BEFORE DETECTION BY THE DEPARTMENT, THE SAME WOULD CONSTITUTE REASONABLE CAUSE. IN THE CASE OF THE APPELLANT, THE TCS WAS D EPOSITED AFTER DEFAULT WAS DETECTED DURING THE SURVEY. ACCORDINGLY, PENALTY L EVIED BY THE ADDL. CIT WAS CONFIRMED. HOWEVER, THE LD. CIT(A) DISAGREED W ITH THE FINDINGS OF A.O. THAT THE CONCEPT OF REASONABLE CAUSE AS IN SECTION 273B WAS NOT APPLICABLE TO THE PROVISION OF SECTION 272A(2)(K) OF THE ACT. 5. IN THE BEGINNING THE LD. A.R. OF THE ASSESSEE SU BMITTED THAT THE ASSESSEE WAS NOT AWARE OF THE PROVISIONS OF THE ACT WITH REG ARD TO TAX COLLECTION AT SOURCE U/S.206C OF THE ACT FROM THE SCRAP SALE. TH E ASSESSEE CAME TO KNOW ABOUT THIS TCS PROVISION ONLY WHEN SURVEY WAS CONDU CTED ON THE BUSINESS PREMISES OF THE ASSESSEE. THE ASSESSEE FULLY COOPE RATED WITH THE TEAM AND PAID THE TCS DUE ALONG WITH INTEREST TILL THE DATE OF DEPOSIT FROM THE ASSESSEES OWN POCKET AS IT WAS NOT POSSIBLE TO COL LECT THE TAX FROM THE SCRAP BUYERS. THE LD. A.R. WHILE ADVANCING HIS ARGUMENT MADE THREE FOLD SUBMISSIONS, NAMELY, (I). THAT THE ASSESSEE HAS NOT COLLECTED ANY TCS ON THE SALE OF SCRAP AND THEREFORE, THE PENALTY U/S.272A(2 )(K) WAS NOT IMPOSABLE AS THE PROVISO TO SECTION 206C REQUIRED FILING OF STAT EMENT IN FORM NO.27EQ ONLY IF THE ASSESSEE HAD COLLECTED THE TCS AND THE SAID STATEMENT WAS REQUIRED TO BE FILED ONLY AFTER THE AMOUNT OF TCS W AS COLLECTED AND PAID TO THE CENTRAL GOVERNMENT . IN THE PRESENT CASE, THER E WAS NO QUESTION OF FILING FORM NO. 27EQ UP TO 30 TH JUNE, 2012 AND HENCE, THE PENALTY U/S.272A(2)(K) WAS WRONGLY LEVIED. THE A.R. PLACED RELIANCE ON DE CISION IN M/S. POREWAL CREATIVE VISION PVT. LTD. VS. ACIT IN ITA NO. 5556 & 5557/MUM/2009, A.Y. 06-07 & 07-08, IN WHICH IT WAS HELD THAT QUART ERLY STATEMENT (SIMILAR 4 ITA NOS.2463 TO 2467/AHD/15 & 2486 TO 2492/AHD/15 ( JAIHIND PROJECTS LTD.) PROVISION TO SECTION 200(3) FOR TDS FORM NO.26Q) CA N BE FILED ONLY AFTER PAYMENT OF TAX TO THE CENTRAL GOVERNMENT AND FOR DE LAY OR DEFAULT TO COLLECT TAX THERE ARE OTHER PROVISIONS U/S.206C(6A) AND 206 C(7) AND THEREFORE, PENALTY WAS NOT LEVIABLE. (II). EVEN IF, THE DEFAUL T WAS THERE, NO PENALTY WAS LEVIABLE AS THE DEFAULT WAS TECHNICAL AND VENIAL AS THE ASSESSEE HAS MADE THE PAYMENT OF TCS ALONGWITH INTEREST TILL THE DATE OF DEPOSIT AND THEREFORE NO LOSS TO THE REVENUE. THE ASSESSEE DID NOT COLLECT THE TCS AND THUS, THE SAME WAS PAID OUT OF ASSESSEES OWN POCKET WITH INTEREST AND THEREFORE, THE ORDER U/S.206C(6A) AND 206C(7) WERE TO BE PASSED. RELIAN CE WAS PLACED ON THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN CASE OF H ARSIDDH CONSTRUCTION PVT. LTD. VS. CIT 244 ITR 417 (GUJ.), WHICH WAS FOL LOWED BY THE JURISDICTIONAL AHMEDABAD ITAT IN ACIT VS. LOK PRAKA SHAN LTD. IN ITA NO. 2815/AHD/2009 BY FOLLOWING THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF MOTILAL PADAMPAT SUGAR MILLS 118 ITR 326 & HARSIDDH CONSTRUCTION PVT. LTD. (SUPRA) AS WELL AS HINDUSTAN STEEL LTD. 8 3 ITR 26 (SC). & (III). LD. A.R. ALSO MADE ALTERNATE SUBMISSION THAT THE PENALT Y U/S.272A(2)(K) COULD NOT EXCEED THE AMOUNT OF TAX COLLECTIBLE ON THE SCR AP SALE AND ON THIS SCORE THE PENALTY WAS WRONGLY LEVIED TO THE TUNE OF RS.5 ,20,400/- WHEREAS IT CANNOT EXCEED THE ACTUAL TCS DUE I.E. RS.2,388/-. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY PLACED RELIANCE ON THE TRIBUNALS JUDGMENTS IN ITA NO.5556 & 5557/MUM/2009, A.Y. 06-07 & 07-08 AND ALS O IN ITA NO. 2815/AHD/2009, A.Y. 07-08. 6. THE LD. D.R., ON THE OTHER HAND, RELIED ON THE O RDERS OF AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT A SURVEY WAS CONDUCTED ON THE ASSESSEES BUSINESS PREMISES ON 13.11.2013 AND IT WAS FOUND THAT THE AS SESSEE HAD DEFAULTED IN NOT COLLECTING TCS ON THE SCRAP SALES AND DEPOSITIN G THE SAME INTO THE 5 ITA NOS.2463 TO 2467/AHD/15 & 2486 TO 2492/AHD/15 ( JAIHIND PROJECTS LTD.) GOVERNMENT TREASURY. IN THE PRESENT CASE, THE PENA LTY HAS BEEN IMPOSED UNDER THE PROVISION OF SECTION 272A(2)(K) BY THE LD . ADDL. CIT. THE RELEVANT EXTRACT OF SECTION 272A(2)(K) IS REPRODUCED AS UNDE R: (2) IF ANY PERSON FAILS- XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXX [(K) TO DELIVER OR CAUSE TO BE DELIVERED A COPY OF THE STATEMENT WITHIN THE TIME SPECIFIED IN SUB-SECTION (3) OF SECTION 20 0 OR THE PROVISO TO SUB-SECTION (3) OF SECTION 206C;] XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXX HE SHALL PAY, BY WAY OF PENALTY, A SUM [OF ONE HUND RED RUPEES] FOR EVERY DAY DURING WHICH THE FAILURE CONTINUES. [ PROVIDED THAT THE AMOUNT OF PENALTY FOR FAILURES IN RELATIO N TO [A DECLARATION MENTIONED IN SECTION 197A, A CERTIFICAT E AS REQUIRED BY SECTION 203 AND] RETURNS UNDER SECTIONS 206 AND 206 C [AND [ STATEMENTS UNDER SUB-SECTION (2A) OR SUB-SECTION (3) OF SECTIO N 200 OR THE PROVISO TO SUB-SECTION (3) OR UNDER SUB-SECTION (3A) OF SEC TION 206C ] ] SHALL NOT EXCEED THE AMOUNT OF TAX DEDUCTIBLE OR COLLECTIBLE, AS THE CASE MAY BE;] THE RELEVANT EXTRACTS OF PROVISION OF SECTION 206C SUB-SECTION 3ARE RELEVANT AND REFERRED TO SECTION 272A(2)(K) AND THEREFORE AR E REPRODUCED AS UNDER: (3) ANY PERSON COLLECTING ANY AMOUNT UNDER SUB-SEC TION (1) [OR SUB- SECTION (1C)] [OR SUB-SECTION (1D) SHALL PAY WITHIN [THE PRESCRIBED TIME] THE AMOUNT SO COLLECTED TO THE CREDIT OF THE CENTRAL GOVERNMENT OR AS THE BOARD DIRECTS: [ PROVIDED THAT THE PERSON COLLECTING TAX ON OR AFTER THE 1 ST DAY OF APRIL, 2005 IN ACCORDANCE WITH THE FOREGOING PROVISIONS OF THIS SECTION SHALL, AFTER PAYING THE TAX COLLECTED TO THE CREDIT OF THE CENTRAL GOVERNMENT WITHIN THE PRESCRIBED TIME, [PREPARE SUCH STATEMENT S FOR SUCH PERIOD AS MAY BE PRESCRIBED] AND DELIVER OR CAUSE TO BE DELIV ERED TO THE PRESCRIBED INCOME-TAX AUTHORITY, OR THE PERSON AUTH ORIZED BY SUCH AUTHORITY, SUCH STATEMENT IN SUCH FORM AND VERIFIED IN SUCH MANNER AND SETTING FORTH SUCH PARTICULARS AND WITHIN SUCH TIME AS MAY BE PRESCRIBED.] 6 ITA NOS.2463 TO 2467/AHD/15 & 2486 TO 2492/AHD/15 ( JAIHIND PROJECTS LTD.) A CLOSE PERUSAL OF THE ABOVE PROVISIONS OF SECTION 271A(2)(K) REVEALS THAT A PENALTY UNDER THIS SECTION CAN ONLY BE IMPOSED IF A PERSON FAILS TO DELIVER OR CAUSE TO BE DELIVERED A COPY OF STATEMENT IN FORM N O.27EQ WITHIN THE TIME SPECIFIED IN SUB-SECTION 3 OF THE SECTION 200 OR PR OVISO TO SUB-SECTION 3 OF SECTION 206C. THE PROVISO TO SUB-SECTION 3 OF SECT ION 206C PROVIDES FOR COLLECTION OF TAX ON OR AFTER 01.04.2005 AS PER THE PROVISION OF SECTION 206C AND AFTER COLLECTION PAY THE SAME TO THE CREDIT OF CENTRAL GOVERNMENT WITHIN THE PRESCRIBED TIME AND PREPARE STATEMENT IN FORM N O.27EQ AND DELIVER OR CAUSED TO BE DELIVER TO THE PRESCRIBED INCOME TAX A UTHORITY OR PERSON AUTHORIZED BY SUCH AUTHORITY ON OR BEFORE 15 TH DAY OF NEXT MONTH AFTER THE CLOSE OF THE QUARTER FOR THE FIRST THREE QUARTER EN DING ON 30 TH JUNE, 30 TH SEPTEMBER, 31 ST DECEMBER AND 15 TH MAY FOR THE LAST QUARTER ENDING ON 31 ST MARCH. WE FIND THAT THE ASSESSEE WAS NOT AWARE OF THE PROVISION OF TCS ON SALE OF SCRAP AND CAME TO KNOW ONLY UPON SURVEY BY THE DEPARTMENT. WE ALSO NOTE THAT IMMEDIATELY THEREAFTER THE ASSESSEE DEPOSITED AMOUNT OF TCS ALONGWITH INTEREST. WE ARE OF THE CONSIDERED VIEW THAT THE PENALTY CANNOT BE LEVIED UNDER THIS SECTION AS THE ASSESSEE HAS NOT C OLLECTED ANY TCS. THE PENALTY CAN ONLY BE IMPOSED U/S.271A(2)(K) WHERE TH E PERSON COLLECTS TCS AND NOT OTHERWISE. IN THE CASE OF M/S. PORWAL CREA TIVE VISION PVT. LTD. VS. ACIT IN ITA NO. 5556 & 5557/MUM/2009, A.Y. 06-07 & 07-08, IT HAS BEEN HELD THAT QUARTERLY STATEMENT CAN ONLY BE FILED AFT ER PAYMENT OF TAX TO CENTRAL GOVERNMENT AND FOR DELAY OR DEFAULT THERE ARE OTHER PROVISIONS AND PENALTY CANNOT BE LEVIED U/S.271A(2)(K) OF THE ACT. IT WAS ALSO HELD IN THE SAID DECISION THAT IF THE ASSESSEE FAILS TO DEDUCT AND D EPOSIT TDS, THERE ARE OTHER PROVISIONS FOR ENSURING COMPLIANCE I.E. IF THE ASSE SSEE FAILS TO DEDUCT TAX AT SOURCE OR AFTER DEDUCTING FAILS TO PAY TO THE CENTR AL GOVERNMENT, THE ASSESSEE IS DEEMED TO BE IN DEFAULT U/S.201(1) AND IS LIABLE OF PENALTY AND THE ASSESSEE IS ALSO LIABLE TO PAY INTEREST FOR THE PERIOD OF DE FAULT, TILL THE PAYMENT OF TAX U/S.201(1A). SINCE, THE TCS ALONGWITH INTEREST WAS PAID TO THE CENTRAL 7 ITA NOS.2463 TO 2467/AHD/15 & 2486 TO 2492/AHD/15 ( JAIHIND PROJECTS LTD.) GOVERNMENT AND HENCE, THERE IS NO LOSS OF REVENUE A ND THE DEFAULT IS PURELY TECHNICAL AND VENIAL. IN THE CASE OF ACIT VS. LOK PRAKASHAN LTD. IN ITA NO. 2815/AHD/2009, THE TRIBUNAL UPHELD THE FINDING OF C IT(A) THAT DELAY IN FILING QUARTERLY STATEMENT BY THE ASSESSEE WAS BECA USE OF LACK OF KNOWLEDGE OF THE LAW ON THE PART OF ASSESSEE AND NO LOSS TO R EVENUE TOOK PLACE BECAUSE OF THE SAID DELAY. THE BREACH OF DUTY ON THE PART OF THE ASSESSEE DOES MERELY TECHNICAL AND VENIAL BREACH AND THEREFORE, IN VIEW OF THE PROVISION OF SECTION 273B OF THE ACT, THE PENALTY WAS RIGHTLY DELETED. THE DELAY IN FILING THE QUARTERLY STATEMENT WAS CERTAINLY A DEFAULT ON THE PART OF ASSESSEE WHICH ATTRACTED PENALTY U/S.272A(2)(K) OF THE ACT, UNLESS THE ASSESSEE SHOWS A REASONABLE CAUSE WITHIN THE MEANING OF SECTION 273B OF THE ACT. THUS, WE ARE REQUIRED TO ADJUDICATE WHETHER ON FACTS OF THE INSTANT CASE THE CAUSE WHICH HAS BEEN SHOWN BY THE ASSESSEE CONSTITUTES A REASON ABLE CAUSE U/S273B OF THE ACT OR NOT. THE FINDING OF THE LEARNED COMMISSIONE R OF INCOME TAX (APPEALS) IS THAT THE ASSESSEE WAS PREVENTED FROM F ILING THE QUARTERLY STATEMENTS WITHIN PRESCRIBED TIME BECAUSE OF THE LA CK OF KNOWLEDGE OF THE REQUIREMENT OF LAW ON THE PART OF THE DIRECTORS OF THE ASSESSEE-COMPANY AND ITS EMPLOYEES. WE FIND THAT THE PROVISIONS OF FURN ISHING OF THE QUARTERLY STATEMENTS WERE INTRODUCED UNDER SUB-SECTION (3) OF SECTION 200 BY THE FINANCE (NO.2) ACT, 2004 W.E.F. 1-4-2005. WE FIND THAT REVENUE COULD NOT BRING ANY MATERIAL BEFORE US TO CONTROVERT THE ABOV E FINDING OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND TO SHOW T HAT THE ASSESSEE WAS EARLIER AWARE OF THIS REQUIREMENT OF LAW. FURTHER, ON THE FACTS OF THE CASE THAT THE ASSESSEE HAS PAID THE TAX WITHIN THE PRESCRIBED TIME, ITSELF SHOWS THAT ORDINARLILY THERE WOULD NOT BE ANY BENEFIT TO THE A SSESSEE FOR WHICH IT WOULD DELIBERATELY DELAY THE SUBMISSION OF THE QUARTERLY STATEMENTS. FURTHER, THE CONTENTION OF THE REVENUE THAT IGNORANCE OF LAW CAN NOT BE AN EXCUSE IS FOUND TO BE UNACCEPTABLE IN VIEW OF THE DECISION OF THE H ONBLE SUPREME COURT IN THE CASE OF MOTILAL PADAMPAT SUGAR MILLS CO. LTD. V S. STATE OF U.P. (1979) 8 ITA NOS.2463 TO 2467/AHD/15 & 2486 TO 2492/AHD/15 ( JAIHIND PROJECTS LTD.) 118 ITR 326 (SC) WHEREIN IT WAS HELD THAT THERE IS NO PRESUMPTION IN THIS COUNTRY THAT EVERY PERSON KNOWS THE LAW AND IT WOUL D BE CONTRARY TO COMMON SENSE AND REASON IF IT WERE SO. IT WAS ALSO STATED THAT IT IS IMPOSSIBLE TO KNOW ALL THE STATUTORY LAW, AND NOT VERY POSSIBLE T O KNOW ALL THE COMMON LAW. FURTHER, THE HONBLE MADRAS HIGH COURT IN TH E CASE OF CIT VS. K P V S MOHAMMAD ROWTHER & CO. 232 ITR 176 (MAD) HELD AS UNDER: IGNORANCE OF LAW CAN BE A REASONABLE CAUSE FOR THE FAILURE AND DELETION OF PENALTY WAS JUSTIFIED. FURTHER, IT IS OBSERVED THAT THE REVENUE COULD NOT BRING ANY MATERIAL BEFORE US TO SHOW THAT ANY LOSS TO THE REVENUE WAS CAUSED BECAUS E OF THE AFORESAID DELAY IN FURNISHING OF THE QUARTERLY STATEMENTS BY THE ASSESS EE. ON THE ABOVE FACTS, WE DO NOT FIND ANY ERROR IN THE FINDINGS OF THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS) THAT THE BREACH OF PROVISIONS BY THE ASSESSEE BY FILING THE QUARTERLY STATEMENTS WITH CERTAIN DELAY WAS TECHNICAL OR VENIAL BREAC H OF LAW ONLY. KEEPING IN VIEW THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. V. STATE OF ORISSA 83 ITR 26 (SC) AND THE DECISION OF T HE JURISDICTIONAL HIGH COURT IN THE CASE OF HARSIDDH CONSTRUCTION PVT. LTD. VS . CIT 244 ITR 417 (GUJ.), WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. IN THE CASE BEFORE US, THE ASSESSEE WAS NOT AWARE OF THE PROVISIONS OF TCS DEDUCTION AND DEPOSIT AND FILING OF QUARTERLY RETUR NS. THE ASSESSEE FIRST CAME TO KNOW UPON SURVEY ON ITS BUSINESS PREMISES AND TH EREAFTER IMMEDIATELY DEPOSITED TCS ALONG WITH INTEREST AND THUS, IT IS T ECHNICAL AND VENIAL BREACH OF PROVISION CAUSING NO LOSS TO REVENUE. WE ARE TH EREFORE OF THE CONSIDERED VIEW IN THE LIGHT OF ABOVE DECISIONS THAT THE PENAL TY LEVIED U/S.271A(2)(K) CANNOT BE SUSTAINED AND THEREFORE, THE SAME IS HERE BY ORDERED TO BE DELETED. A.O. IS DIRECTED ACCORDINGLY. ITA NOS. 2464, 2465 & 2467/AHD/15 FOR A.YS. 2010-11 TO 2012-13 8. THE ISSUE RAISED IN THE GROUND OF APPEAL IN ITA NOS. 2464 TO 2467/AHD/15 FOR A.Y. 2010-11 TO 2012-13 IS SAME AS DECIDED BY US IN ITA NO.2463/AHD/2015 FOR A.Y. 2009-10 AND THEREFORE, FA CTS BEING SAME, OUR DECISION IN THE SAID ITA SHALL APPLY TO THESE APPEA LS AS WELL AND AS A RESULT, 9 ITA NOS.2463 TO 2467/AHD/15 & 2486 TO 2492/AHD/15 ( JAIHIND PROJECTS LTD.) THE APPEALS OF THE ASSESSEE ARE ALLOWED BY DELETING THE PENALTY FOR A.Y. 2010- 11 RS.3,74,400/-, FOR A.Y. 2011-12 RS.2,28,400/- AN D FOR A.Y. 2012-13 RS.82,300/-. THE A.O. IS DIRECTED ACCORDINGLY. ITA NO.2466/MUM/2015 FOR A.Y. 2011-12 9. THE ISSUE RAISED IN THE GROUND OF APPEAL IN ITA NO. 2466/AHD/15 FOR A.Y. 2011-12 IS REGARDING TDS WHEREAS THE ISSUE AS DECIDED BY US IN ITA NO.2463/AHD/2015 FOR A.Y. 2009-10 IS REGARDING TCS AND THEREFORE, OUR DECISION IN THE SAID ITA SHALL APPLY TO THIS APPEAL AS WELL AND AS A RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED BY DELETING THE P ENALTY OF RS.1,45,600/-. THE A.O. IS DIRECTED ACCORDINGLY. ITA NO.2486/MUM/2015 FOR A.Y. 2008-09 10. IN A.Y. 2008-09 ASSESSEE HAS RAISED FOLLOWING G ROUND: 1. THE LEARNED ADDITIONAL COMMISSIONER OF INCOME TAX, TDS RANGE, AHMEDABAD HAS ERRED IN FACTS AND ON LAW IN LEVYING PENALTY OF RS.25,272/- FOR A.Y. 2008-09- U/S.271CA OF THE I.T. ACT. 11. THE ISSUE RAISED IN THE SOLE GROUND OF APPEAL I S AGAINST CONFIRMATION OF PENALTY BY CIT(A) LEVIED U/S.271CA. 12. DURING THE COURSE OF SURVEY, IT WAS FOUND THAT TCS WAS NOT COLLECTED ON THE SALE OF SCRAP OF RS.25,27,204/- AND THEREFOR E, THE DCIT, TDS CIRCLE, AHMEDABAD VIDE ORDER DATED 20.11.2013 PASSED U/S.20 6C(1) OF THE ACT DETERMINED THE DEMAND AT RS.25,272/- ON ACCOUNT OF DEFAULT OF TCS AND PROPOSED LEVY OF PENALTY U/S.271CA VIDE LETTER DATE D 20.11.2013. THE ASSESSEE WAS ISSUED SHOW CAUSE NOTICES DATED 21.01. 2014 AND 08.07.2014, WHICH WERE NOT REPLIED BY THE ASSESSEE AND THEREFOR E, THE ADDL. CIT LEVIED THE PENALTY OF RS.25,272/- U/S/.271CA FOR FAILURE T O COLLECT TAX ON SALE OF SCRAP. 10 ITA NOS.2463 TO 2467/AHD/15 & 2486 TO 2492/AHD/15 ( JAIHIND PROJECTS LTD.) 13. THE LD. CIT(A) CONFIRMED THE PENALTY BY REJECTI NG THE SUBMISSION OF THE ASSESSEE THAT THOUGH THE TAX WAS NOT COLLECTED BUT WAS DULY PAID ALONGWITH INTEREST AND THE SAME DID NOT MITIGATE TH E DEFAULT OF NON COLLECTION OF TAX U/S.206C. THE CIT(A) FURTHER OBSERVED THAT ASSESSEE WAS RIGHTLY DECLARED ASSESSEE IN DEFAULT BY ADDL. CIT(A) BY HOL DING THAT THIS VIEW WAS ALSO CONFIRMED IN THE CASE OF INDO NISSIN FOOD LTD. VS. CIT (2004) 3 SOT 495 (BANGALORE), WHEREIN IT HAS BEEN HELD THAT IF T AXES WERE PAID VOLUNTARILY BEFORE DETECTION BY THE DEPARTMENT, THE SAME WOULD CONSTITUTE REASONABLE CAUSE. IN THE CASE OF THE APPELLANT, THE TCS WAS D EPOSITED AFTER DEFAULT WAS DETECTED DURING THE SURVEY. ACCORDINGLY, PENALTY L EVIED BY THE ADDL. CIT WAS CONFIRMED. 14. THE LD. A.R. SUBMITTED THAT THE ASSESSEE WAS UN AWARE OF THE PROVISIONS OF TAX COLLECTION AT SOURCE U/S.206C ON THE SALE OF SCRAP AS SUBMITTED IN REPLY TO QUESTION NO.14 DURING THE COURSE OF SURVEY, WHIC H IS INCORPORATED BY CIT(A) IN HIS ORDER IN PARA NO.4. THE LD. COUNSEL FURTHER SUBMITTED THAT TAX WAS NOT COLLECTED DUE TO BONAFIDE OMISSION AND LACK OF KNOWLEDGE AND THE ASSESSEE PAID THE AMOUNT OF TCS WITH INTEREST OUT O F ITS OWN POCKET AND IN THE CASE OF BONAFIDE OMISSION OF LAW, PENALTY CANNO T BE IMPOSED. THE ASSESSEE ALSO SUBMITTED THAT THE FAILURE ON THE PAR T OF THE ASSESSEE WAS A TECHNICAL AND VENIAL BREACH WHICH RESULTED IN TO TH E NO LOSS TO THE REVENUE AS THE TCS WAS PAID ALONG WITH INTEREST THEREON TILL T HE DATE OF DEPOSIT AND THEREFORE, PENALTY COULD NOT BE IMPOSED. THE LD. C OUNSEL PLACED RELIANCE ON THE DECISION IN THE CASE OF KHODIDAS FAMILY TRUST V S. ACIT IN ITA NO.1478/AHD/2009 , DCIT VS. NUCLEAR POWER CORPORATI ON OF INDIA LTD. IN ITA NOS. 625 TO 627/AHD/2013 HARSIDDH CONSTRUCTION PVT. LTD. VS. CIT 244 ITR 417 (GUJ.), 15. THE LD. D.R., ON THE OTHER HAND, RELIED ON THE ORDERS OF AUTHORITIES BELOW. 11 ITA NOS.2463 TO 2467/AHD/15 & 2486 TO 2492/AHD/15 ( JAIHIND PROJECTS LTD.) 16. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE WAS NOT DEDUCTIN G TCS ON SALE OF SCRAP AND AFTER SURVEY THE ASSESSEE DEPOSITED THE TCS ALONG WITH INTEREST. EARLIER THE COMPLIANCE WITH TCS PROVISIONS COULD NOT BE MADE AS THE ASSESSEE WAS NOT AWARE OF SUCH PROVISION WHICH WAS A BONAFIDE OMISSI ON. IN THE CASE OF KHODIDAS FAMILY TRUST VS. ACIT IN ITA NO.1478/AHD/2 009, ITAT, AHMEDABAD B BENCH HELD AS UNDER: THE AMOUNT OF TDS ALONG WITH INTEREST U/S201(1A) OF THE ACT WAS PAID BY THE ASSESSEE AND THEREFORE THERE IS NO LOSS TO THE REVENUE AND IT WAS ONLY A TECHNICAL BREACH OF THE PROVISIONS OF THE LAW FOR NON-DEDUCTION OF THE TDS IN THE MATTE R. THE ABOVE FACTS SHOW THAT THE ASSESSEE HAD A REASONABLE CAUSE FOR FAILURE T O COMPLY WITH THE PROVISIONS OF LAW. THE REVENUE IS COMPENSATED BY PAYING THE INTEREST AS WELL AS DUE TAXES BY THE PAYEE. THEREFORE, THERE IS NO LOSS TO THE REVENUE IN THE MATTER. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER S OF THE AUTHORITIES BELOW AND CANCEL THE PENALTY. IN THE CASE OF CIT(A) VS. HARSIDDH CONSTRUCTION PVT . LTD., IT WAS HELD AS UNDER: PENALTY WAS NOT TO BE LEVIED FOR TECHNICAL OR VENIAL BREACH OF PROVISI ONS OF LAW AFTER FOLLOWING THE HINDUSTAN STEEL LTD VS STATE OF ORISSA (1972)83 ITR 26 SC. WE ARE THEREFORE OF THE VIEW THAT THE ASSESSEE HAD PAID TDS ALONG WITH INTEREST AND THEREFORE THERE WAS NO LOSS TO THE RE VENUE AND THERE WAS ONLY TECHNICAL OR VENIAL BREACH WITH CONSTITUTE REASONAB LE CAUSE WITHIN THE MEANING OF SECTION 273B OF THE ACT AND IN VIEW OF THIS THE ORDER OF CIT(A) CANNOT BE SUSTAINED AND WE DELETE THE PENALTY BY AL LOWING THE APPEAL OF THE ASSESSEE. A.O. IS DIRECTED ACCORDINGLY. ITA NOS. 2487 TO 2492/AHD/15 FOR A.YS. 2009-10 TO 2 014-15 17. THE ISSUE RAISED IN THE GROUND OF APPEAL IN ITA NOS. 2487 TO 2492/AHD/15 FOR A.Y 2009-10 TO 2014-15 IS SAME AS D ECIDED BY US IN ITA NO.2486/AHD/2015 FOR A.Y. 2008-09 AND THEREFORE, FA CTS BEING SAME, OUR DECISION IN THE SAID ITA SHALL APPLY TO THESE APPEA LS AS WELL AND AS A RESULT, 12 ITA NOS.2463 TO 2467/AHD/15 & 2486 TO 2492/AHD/15 ( JAIHIND PROJECTS LTD.) THE APPEALS OF THE ASSESSEE ARE ALLOWED BY DELETING THE PENALTY IN ALL THE APPEALS IN ITA NOS.2487 TO 2492/AHD/2015. THE A.O. IS DIRECTED ACCORDINGLY. 18. IN THE RESULT, ALL THE APPEALS OF ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 09 TH DAY OF DECEMBER, 2015. SD/- SD/- (SHAILENDRA KUMAR YADAV) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 09/12/2015 TRUE COPY S K SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE $ %&%'( ) / CONCERNED CIT 4 )- / CIT (A) , -./ 00'(1 '( 1 23& / DR, ITAT, AHMEDABAD 4 /56 / GUARD FILE. BY ORDER / 1 / 2 % '( 1 23&