Gotiz Infratech Ltd., Ahmedabad V. The Addl.CIT, TDS Range, Ahmedabad

ITA 2504/AHD/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2381 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-01-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 24-08-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHIV SEWAK
• Assessee Lawyers: K J SHAH

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.2504/AHD/2015 /BLOCK ASSTT. YEAR: 2012-2013 GOTIZ INFRATECH LTD. A-702, 7 TH FLOOR, MONDEAL SQUARE OFF. SG. HIGHWAY PRAHLADNAGAR, SATELLITE AHMEDABAD 380 015. VS ACIT, TDS RANGE AHMEDABAD. %& / (APPELLANT) '( %& / (RESPONDENT) ASSESSEE BY : SHRI K.J. SHAH, AR REVENUE BY : SHRI SHIV SEWAK, SR.DR / DATE OF HEARING : 13/01/2016 / DATE OF PRONOUNCEMENT: 18/01/2016 )*/ O R D E R THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF THE LD.CIT(A)-8, AHMEDABAD DATED 12.6.2015 PASSED FOR T HE ASSTT.YEAR 2012- 2013. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.2,14,600/- UNDER SECTI ON 272A(2)(K) OF THE INCOME TAX ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-CO MPANY IS ENGAGED IN THE REAL-ESTATE BUSINESS. A SURVEY WAS CARRIED OUT AT THE BUSINESS PREMISES ON 10.12.2013. DURING THE SURVEY, IT WAS NOTICED THAT THE ASSESSEE HAS NOT FILED TDS RETURN IN FORM NO.24Q AND 26Q ON DUE DATES. TH E AO HAS CALCULATED ITA NO.2504/AHD/2015 2 THE PERIOD OF DEFAULT I.E. DUE DATE FOR FILING OF S UCH RETURN AND ACTUAL FILING OF THE RETURN. HE WORKED OUT 2146 DAYS OF DELAY AND I MPOSED PENALTY OF RS.2,146,600/- I.E. AT THE RATE OF RS.100/- PER DAY . APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HIS WAS FIRST YEAR OF COMMERCIAL ACTIVITY BY THE COMPANY. THE DIRECTORS WERE NOT HAVING KNOWLEDGE OF ACCOUNTS, INCOME-TAX OR TDS. THE COMP ANY WAS LAUNCHING FOUR TOWNSHIP PROJECTS AND DIRECTORS WERE TO REMAIN PRESENT ON SITES APPROXIMATELY SIX-EIGHT KILOMETERS AWAY FROM THE OF FICE. THE COMPANY HAS NOT EMPLOYED ANY CHARTERED ACCOUNTANT OR TAX CONSUL TANT. DIRECTORS WERE MAINLY DEPENDED UPON THEIR AUDITORS AND CA. DUE TO THESE REASONS, THE COMPANY COULD NOT SUBMIT THE RETURN IN TIME. HE SU BMITTED THE DETAILS OF THE DIRECTORS AND POINTED OUT THAT SHRI RAMESHBHAI M. G OTI WAS EARLIER WORKING AS A BROKER IN REAL-ESTATE. HIS QUALIFICATION IS U PTO 12 TH STANDARD. THEREFORE, HE WAS NOT WELL-VERSED WITH THE INCOME TAX ACT. OT HER DIRECTOR IS AN MBBS DOCTOR AND MAINLY PRE-OCCUPIED IN HIS MEDICAL PROFE SSION. ON THE STRENGTH OF THESE FACTS, THE LD.COUNSEL FOR THE ASSESSEE PRAYED FOR DELETION OF PENALTY. ON THE STRENGTH OF ITATS ORDER PASSED IN ITA NO.2277/ AHD/2012 IN THE CASE OF GSL NOVA PETROCHEMICALS LTD. VS. JCIT, HE RAISED AN ALTERNATIVE PLEA AND CONTENDED THAT FOR COMPUTING THE PENALTY AMOUNT, TH E PERIOD SHOULD BE COMPUTED ONLY FROM THE DATE OF PAYMENT OF TAX TILL THE DATE OF FILING TDS RETURN, BECAUSE, IF THE TAXES ARE NOT PAID, THEN UP TO THAT DATE, THERE WAS NO QUESTION OF FILING TDS. HE SUBMITTED THAT THIS ARG UMENT WAS ACCEPTED BY THE ITAT IN THE CASE OF GSL NOVA PETROCHEMICALS LTD. VS . JCIT(SUPRA). THE ARGUMENT WAS ACCEPTED ON THE STRENGTH OF THE ITAT, MUMBAI BENCHS ORDER IN THE CASE OF PORWAL CREATIVE VISION P. LTD. CS. C IT, REPORTED IN 10 TAXMANN.COM 222 (MUM). HE PLACED ON RECORD COPY OF THE ORDER OF THE ITAT ITA NO.2504/AHD/2015 3 MUMBAI BENCHS ORDER IN ITA NO.5556 & 5557/MUM/2009 . ON THE OTHER HAND, LD.DR RELIED UPON THE ORDERS OF THE REVENUE A UTHORITIES BELOW. 5. I HAVE CONSIDERED RIVAL CONTENTIONS AND GONE THR OUGH THE RECORD CAREFULLY. A PERUSAL OF THE REASONS SHOWN BY THE A SSESSEE FOR NOT SUBMITTING TDS RETURN WOULD REVEAL THAT NONE OF THE REASONS CA N BE CONSIDERED AS SUFFICIENT FOR NOT COMPLYING WITH THE STATUTORY REQ UIREMENT. IF A COMPANY, WHICH IS ENGAGED IN REAL-ESTATE BUSINESS AND IN THE PROCESS OF LAUNCHING FOUR PROJECTS, IS NOT AWARE ABOUT THE ASPECTS OF THE TAX ATION, IS HIGHLY UNBELIEVABLE ASPECT. THE REAL-ESTATE COMPANIES ARE REQUIRED TO COMPLY WITH VARIOUS STATUTORY REQUIREMENTS NOT ONLY UNDER THE INCOME TA X ACT BUT ALSO UNDER OTHER STATE LAWS FOR GETTING SANCTION OF THE PROJEC T CLEARANCE. THEREFORE, IT IS TO BE CONSTRUED THAT SUCH A COMPANY IS BEING MANNED BY SKILLED MAN-POWER. WE DO NOT FIND ANY MERIT FOR EXPLANATION OF THE ASS ESSEE FOR NOT SUBMITTING TDS IN TIME. AS FAR AS ALTERATIVE CONTENTION IS CO NCERNED, IT IS BASED ON THE DECISIONS OF TWO DIVISION BENCHES OF ITAT. IN THE CASE OF GSL NOVA PETROCHEMICALS LTD. (SUPRA), THE TRIBUNAL HAS MADE THE FOLLOWING OBSERVATIONS: 7. REGARDING THE 2 ND CONTENTION, WE FIND THAT THIS WAS HELD BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF PORWAL CREATIVE VISION P.LTD. (SUPRA) THAT IF THE PAYMENT COULD NOT BE MAD E DUE TO FINANCIAL DIFFICULTY AND SINCE THE PAYMENT HAS NOT BEEN MADE, THE TDS RETURN COULD NOT BE FILED AS THE SAME REQUIRED DATA RELATI NG TO PAYMENT OF TDS AND HENCE, THE PENALTY FOR NOT FILING TDS RETURN IN TIME SHOULD BE LEVIED ONLY FROM THE DATE OF PAYMENT OF TAX TILL TH E DATE OF FLING OF TDS RETURN. IN THE PRESENT CASE ALSO, WE ORDER ACCORDI NGLY BY RESPECTFULLY FOLLOWING THIS TRIBUNAL DECISION AND THE AO IS DIRE CTED TO WORK OUT THE PENALTY ONLY ON THE BASIS I.E THE DEFAULT OF DELAY SHOULD BE WORKED OUT FROM THE DATE OF PAYMENT OF TAX TILL THE DATE OF FI LING OF TDS RETURN. WE HOLD ACCORDINGLY. ITA NO.2504/AHD/2015 4 6. RESPECTFULLY FOLLOWING THE ORDER OF THE ITAT IN THE CASE OF GSL NOVA PETROCHEMICALS LTD. (SUPRA), I ACCEPT ALTERNATIVE C ONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. THE ISSUE IS REMITTED TO THE FIL E OF THE AO FOR COMPUTATION OF PENALTY AMOUNTS AS PER THE DIRECTION OF THE ITAT IN THE CASE OF GSL NOVA PETROCHEMICALS LTD. (EXTRACTED SUPRA). 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 18 TH JANUARY, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER