TH 130 M/s Bharathiyar PWCS Ltd., Namakkal V. ITO, Salem

ITA 255/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6103 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 27-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: S SRINIRANJANI
• Keywords: Question of law; Ignorance of law
• Section: 194C; 201(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.255/MDS/2017 ( )( / ASSESSMENT YEAR : 2009-10 TH 130 M/S BHARATHIYAR PWCS LTD., NO.86A, EAST COLONY, KOMARAPALAYAM, NAMAKKAL DT. 638 183. PAN : AAAAB 7285 P V. THE INCOME TAX OFFICER, TDS WARD, SALEM. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : MS. S. SRINIRANJANI, ADVOCATE -.+, / 0 / RESPONDENT BY : MS. S. VIJAYAPRABHA, JCIT 1 / 2% / DATE OF HEARING : 20.09.2017 3') / 2% / DATE OF PRONOUNCEMENT : 27.09.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), SALEM, DA TED 30.09.2016, CONFIRMING THE PENALTY LEVIED BY THE AS SESSING OFFICER UNDER SECTION 271C OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.255/MDS/17 2. THERE WAS A DELAY OF 16 DAYS IN FILING THIS APPE AL BY THE ASSESSEE. THE ASSESSEE HAS FILED A PETITION FOR CO NDONATION OF DELAY. WE HAVE HEARD THE LD. COUNSEL FOR THE ASSES SEE AND THE LD. D.R. WE FIND THAT THERE WAS SUFFICIENT CAUSE FOR N OT FILING THE APPEAL BEFORE THE STIPULATED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEAL. 3. MS. S. SRINIRANJANI, THE LD.COUNSEL FOR THE ASSE SSEE, SUBMITTED THAT THE ASSESSEE - CO-OPERATIVE SOCIETY, DUE TO IGNORANCE OF LAW, FAILED TO DEDUCT TAX IN RESPECT O F CONTRACT PAYMENT TO THE EXTENT OF ` 23,66,415/-. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE IN FACT DEDUCTED THE AMOUNT SUBSEQUENTLY T O THE EXTENT OF ` 30,272/- AND THE SAME WAS PAID TO THE DEPARTMENT ON 29.08.2013. THE BALANCE AMOUNT OF ` 18,476/- ALONG WITH INTEREST UNDER SECTION 201(1A) OF THE ACT TO THE EXTENT OF ` 33,636/- WAS REMITTED TO THE GOVERNMENT ACCOUNT ON 12.03.2014. THEREFORE, THE L D.COUNSEL BY PLACING RELIANCE ON THE UNREPORTED JUDGMENT OF APEX COURT IN CIT V. BANK OF NOVA SCOTIA IN CIVIL APPEAL NO.1704 OF 2008 DATED 07.01.2016, SUBMITTED THAT THE PENALTY CANNOT BE LE VIED. 4. ON THE CONTRARY, MS. S. VIJAYAPRABHA, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE PAID CO NTRACT AMOUNT 3 I.T.A. NO.255/MDS/17 WITHOUT DEDUCTING TAX, THEREFORE, THE ASSESSING OFF ICER LEVIED PENALTY UNDER SECTION 271C OF THE ACT. SINCE THE A SSESSEE HAS NOT COMPLIED WITH MANDATORY REQUIREMENT OF TDS UNDER SE CTION 194C OF THE ACT, ACCORDING TO THE LD. D.R., THE ASSESSIN G OFFICER LEVIED PENALTY OF ` 48,748/- AND THE SAME WAS RIGHTLY CONFIRMED BY THE CIT(APPEALS). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE FAILED TO DEDUCT TAX IN R ESPECT OF CONTRACT PAYMENT. THE ASSESSEE WAS EXPECTED TO DEDUCT ` 48,748/- UNDER SECTION 194C OF THE ACT IN RESPECT OF CONTRACT PAYM ENT. HOWEVER, THE SAME WAS NOT DEDUCTED DURING THE YEAR UNDER CON SIDERATION. HOWEVER, SUBSEQUENTLY, THE ASSESSEE DEDUCTED AND PA ID ` 30,272/- ON 29.08.2013. THE BALANCE AMOUNT OF ` 18,476/- ALONG WITH INTEREST OF ` 33,636/- WAS PAID ON 12.03.2014. THESE FACTUAL ASPECTS ARE NOT IN DISPUTE. ON IDENTICAL CIRCUMSTA NCES, DELHI HIGH COURT IN CIT V. ITOCHU CORPORATION (2004) 268 ITR 1 72 AND IN CIT V. MITSUI & CO. LTD. AND ANOTHER (2005) 272 ITR 545, D ELETED THE PENALTY. THE APEX COURT, AFTER REPRODUCING THE OBS ERVATION MADE BY THE DELHI BENCH OF THIS TRIBUNAL, CONFIRMED THE ORDER OF THE DELHI 4 I.T.A. NO.255/MDS/17 HIGH COURT IN BANK OF NOVA SCOTIA. IN FACT, THE AP EX COURT OBSERVED AS FOLLOWS:- 2. THE MATTER WAS PURSUED BY THE REVENUE BEFORE THE INCOME TAX APPELLATE TRIBUNAL. THE INCOME TAX APPELLATE TRIBUNAL VIDE ORDER DATED 31.03.2006 ENTE RED THE FOLLOWING FINDINGS:- 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. IN THE INSTANT CASE WE ARE NOT DEALIN G WITH COLLECTION OF TAX U/S 201(1) OR COMPENSATORY INTEREST U/S 201(1A). THE CASE OF THE ASSESSEE IS THAT THESE AMOU NTS HAVE ALREADY BEEN PAID SO AS TO END DISPUTE WITH RE VENUE. IN THE PRESENT APPEALS WE ARE CONCERNED WITH LEVY O F PENALTY U/S 271-C FOR WHICH IT IS NECESSARY TO ESTABL ISH THAT THERE WAS CONTUMACIOUS CONDUCT ON THE PART OF THE ASSESSEE. WE FIND THAT ON SIMILAR FACTS HON'BLE DE LHI HIGH COURT HAVE DELETED LEVY OF PENALTY U/S 271-C IN THE C ASE OF M/S ITOCHU CORPORATION, REPORTED IN 268 ITR 172 (DEL) AN D IN THE CASE OF CIT VS. MITSUI & COMPANY LTD. REPORT ED IN 272 ITR 545. RESPECTFULLY FOLLOWING THE AFORESAID JUDGMENTS OF HON'BLE DELHI HIGH COURT AND THE DECIS ION OF THE ITAT, DELHI IN THE CASE OF TELEVISION EIGHTEEN INDIA LTD., WE ALLOW THE ASSESSEES APPEAL AND CANCEL THE PENALTY AS LEVIED U/S 271-C. 3. BEING AGGRIEVED, THE REVENUE TOOK UP THE MATTER BEFORE THE HIGH COURT OF DELHI AGAINST THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL. THE HIGH COURT REJECTED THE APPEAL ONLY ON THE GROUND THAT NO SUBSTANTIAL QUESTION OF LAW ARISES IN THE MATTER. 6. RESPECTFULLY FOLLOWING THE JUDGMENT OF APEX COUR T IN BANK OF NOVA SCOTIA (SUPRA), PENALTY LEVIED BY THE ASSESSIN G OFFICER IS DELETED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 5 I.T.A. NO.255/MDS/17 ORDER PRONOUNCED ON 27 TH SEPTEMBER, 2017 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 27 TH SEPTEMBER, 2017. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A), SALEM 4. 1 92 / CIT, TDS, COIMBATORE 5. 7: -2 /DR 6. ( ; /GF.