Kiri Industries Ltd., Ahmedabad V. The Addl. CIT, TDS Range, Ahmedabad

ITA 2733/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9928 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-12-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 28-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P B PARMAR
• Keywords: Principle of natural justice; Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER ./ ITA NO. 2733/AHD/2015 / ASSESSMENT YEAR: 2011-12 KIRI INDUSTRIES LTD., PLOT NO.299/1/A, PHASE-II, VATVA, GIDC, AHMEDABAD .. APPELLANT PAN : AHMKO 1019 E VS ADDL. CIT, TDS RANGE, AHMEDABAD .. RESPONDENT ASSESSEE(S) BY : SHRI P.B. PARMAR , AR REVENUE BY : SHRI DILEEP KUMAR , SR - DR / DATE OF HEARING 17/12/2015 /DATE OF PRONOUNCEMENT 01/01/2016 / O R D E R THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -8, AHMEDABAD, DATED 21.07.2015 FOR ASSESSMENT YEAS 201 1-12. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED FOLLOW ING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FAC TS OF THE CASE IN CONFIRMING THE ACTION OF LD. AO IN LEVYING PENALTY OF RS.54,200/- U/S 272A(2)(K) OF THE ACT. 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING THE ACTION OF LEARNED AO IN LEVYING PENALTY WITHOUT APPRECIATING THE FACT THAT DELAY WA S CAUSED IN FILING TDS STATEMENT DUE TO ACUTE SHORTAG E OF FUNDS COUPLED WITH INADEQUATE STAFF AND FACILITIES. (SMC) ITA NO. 2733/AHD/2015 SHRI KIRI INDUSTRIES LTD VS. ACIT AYS : 2011-12 2 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T THE CASE OF APPELLANT FALLS WITHIN THE AMBIT OF SECTION 273B. 4. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT THE APPELLANT HAS ALREADY COMPENSATED THE APPELLANT FOR SUCH DELAY BY DEPOSITING TDS ALONG WITH INTEREST FOR SUC H DELAYED PERIOD. 5. BOTH THE LOWER AUTHORITIES HAVE PASSED THE ORDER S WITHOUT PROPERLY APPRECIATING THE FACT AND THAT THE Y FURTHER ERRED IN GROSSLY IGNORING VARIOUS SUBMISSIO NS, EXPLANATIONS AND INFORMATION SUBMITTED BY THE APPEL LANT FROM TIME TO TIME WHICH OUGHT TO HAVE BEEN CONSIDER ED BEFORE PASSING THE IMPUGNED ORDER. THIS ACTION OF T HE LOWER AUTHORITIES IS IN CLEAR BREACH OF LAW AND PRI NCIPLES OF NATURAL JUSTICE AND THEREFORE DESERVES TO BE QUASHE D. 3. AT THE TIME OF HEARING BEFORE ME, THE LD. AUTHOR IZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT SI MILAR ISSUE AROSE BEFORE THE TRIBUNAL IN THE CASE OF GTPL INFON ET PVT LTD VS. ACIT IN ITA NOS.2582 & 2583/AHD/2015 FOR AY 2011-12 & 2012-13, WHEREIN THE TRIBUNAL HAS DECIDED THE SIMIL AR ISSUE ON SIMILAR FACTS IN FAVOUR OF THE ASSESSEE, BY OBSERVI NG AS UNDER:- 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAD F ULLY DEPOSITED THE AMOUNT OF TDS ALONG WITH INTEREST PRI OR TO THE ISSUANCE OF THE SHOW CAUSE NOTICE AND THE REAS ON FOR LATE PAYMENT OF TAXES WAS FINANCIAL CRUNCH IN THE B USINESS OF THE ASSESSEE WHICH IN OUR VIEW CONSTITUTE A REAS ONABLE CAUSE FOR LATE FILING THE QUARTERLY STATEMENTS IN F ORM NOS. 24Q & 26Q AS THIS STATEMENT CAN ONLY BE FILED AFTER THE PAYMENTS OF TAXES. SINCE, FULL AMOUNT OF TDS ALONG WITH INTEREST HAS BEEN PAID BY THE ASSESSEE AND THEREFOR E, NO LOSS IS CAUSED TO THE REVENUE AND THE LATE FILING O F QUARTERLY STATEMENT IS TECHNICAL AND VENIAL BREACH OF (SMC) ITA NO. 2733/AHD/2015 SHRI KIRI INDUSTRIES LTD VS. ACIT AYS : 2011-12 3 PROVISION OF THE ACT. IN CASE OF THE ORIENTAL INSUR ANCE CO. LTD. (SUPRA), IT HAS BEEN HELD AS UNDER: 5. WE HAVE HEARD THE RIVAL PARTIES AND PERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE IMPUGNED PENAL TY. HE HAS GIVEN COGENT REASONS WHILE DELETING THE PENALTY. THERE IS NO DISPUTE ABOUT THE FACT THAT TH E APPELLANT HAS DEPOSITED MOST OF AMOUNT OF THE TAX DEDUCTED AT SOURCE UNDER THE PROVISIONS OF THE ACT WITH THE GOVERNMENT WITHIN STIPULATED TIME. HOWEVER, WHERE THERE IS DELAY IN SUCH DEPOSITS, SAM E HAS BEEN DEPOSITED WITH INTEREST. FURTHER, THE TAX DEDUCTED AT SOURCE FOR THE RELEVANT PERIOD WAS DEPOSITED BY THE APPELLANT ALONG WITH CHARGEABLE INTEREST BEFORE THE ISSUE OF SHOW CAUSE NOTICE FOR THE PENALTY UNDER REFERENCE. THE DEFAULT FOR WHICH PENALTY HAS BEEN LEVIED BY THE AO RELATES TO LATE SUBMISSION OF FORM NO.24Q AND 26Q OF THE IT RULES. THE ASSESSEE'S BELIEF CONSTITUTES A REASONABLE CAUS E WITHIN THE MEANING OF SEC.273B OF THE ACT. SEC.273B OF THE ACT LAYS DOWN THAT THE PENALTY SHALL NOT BE IMPOSED IN RESPECT OF A DEFAULT RELATING TO THE PROVISIONS MENTIONED THEREIN IF THE PERSON OR THE ASSESSEE CONCERNED CAN SHOW THAT THERE WAS A REASONABLE CAUSE FOR DEFAULT IN QUESTION. SECTION 272A(2)(K) FALLS WITHIN THE AMBIT OF SEC.273B OF TH E ACT. IT IS OBSERVED THAT THE AO HAS LEVIED THE PENA LTY IN A ROUTINE MANNER WITHOUT BRINGING THE FACTS ON RECORD TO ESTABLISH THAT THE APPELLANT COMMITTED TH E DEFAULT WITHOUT A REASONABLE CAUSE. THE LD. CIT(A) HAS RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF OR ISSA (SUPRA) AND HON'BLE GUJARAT HIGH COURT IN THE CASE OF HARSIDDH CONSTRUCTION (P) LTD. VS. CIT WHICH ARE SQUARELY APPLICABLE TO THE FACTS OF ASSESSEE'S CASE . WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A) AND UP HOLD THE SAME. THE GROUND RAISED BY THE REVENUE IS DISMISSED. (SMC) ITA NO. 2733/AHD/2015 SHRI KIRI INDUSTRIES LTD VS. ACIT AYS : 2011-12 4 IN CASE OF CIT(A) ELI LILLY AND CO. (INDIA) P. LTD. (SUPRA), IT HAS BEEN HELD AS UNDER: S.273B PROVIDES THAT IN CASE REASONABLE CAUSE IS SHOWN, PENALTY U/S 272A(2) MUST NOT BE LEVIED. APPELLANT COULDN'T FILE TDS RETURNS IN TIME SINCE T DS WAS DEPOSITED LATE ON ACCOUNT OF ACUTE SHORTAGE OF FUNDS. SINCE THE SAME IS A REASONABLE CAUSE, PENALT Y CANNOT BE LEVIED. IN CASE OF CIT VS. HARSIDDH CONSTRUCTION PVT. LTD.( SUPRA), IT HAS BEEN HELD AS UNDER: FURTHER, APPELLANT HAS DEPOSITED TDS ALONG WITH INTEREST. THUS, IT HAS COMPENSATED GOVT. FOR LATE PAYMENT OF TDS ENSURING NO LOSS TO THE REVENUE. IN CASE THERE IS NO LOSS TO THE REVENUE, THEN PENALTY U/S 272A(2) CANNOT BE LEVIED. IN CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISA (SUPRA), IT HAS BEEN HELD AS UNDER: IN ANY CASE, LATE FILING OF TDS RETURNS IS MERELY A TECHNICAL OR VENIAL BREACH WHICH DOESN'T WARRANT LE VY OF PENALTY U/S 272A(K). IN VIEW OF ABOVE FACTS, WE ARE OF THE VIEW THAT THE RE WAS A REASONABLE CAUSE FOR NOT FILING THE QUARTERLY STATE MENT IN TIME WITHIN THE MEANING OF 273B OF THE ACT, WE, THE REFORE, DELETE THE PENALTY BY ALLOWING THE APPEALS OF THE A SSESSEE. 4. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE ON BEHALF OF THE REVENUE. FACTS BEING SIMILAR, SO FOLLOWING T HE SAME REASONING I AM NOT INCLINED TO CONCUR WITH THE FIND INGS OF THE (SMC) ITA NO. 2733/AHD/2015 SHRI KIRI INDUSTRIES LTD VS. ACIT AYS : 2011-12 5 LD. CIT(A); THEREFORE, RESPECTFULLY FOLLOWING THE D ECISION OF CO- ORDINATE BENCH IN THE CASE OF GTPL INFONET PVT LTD (SUPRA), I ALLOW THIS APPEAL FILED BY THE ASSESSEE AND DELETE THE PENALTY OF RS.54,200/- LEVIED BY THE ASSESSING OFFICER U/S 272 A(2)(K) OF THE ACT. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 1ST JANUARY, 2016 AT AHMEDABAD. SD/- ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER AHMEDABAD; DATED 01/01/2016 BIJU T., PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' ' # / CONCERNED CIT 4. ' ' # ( ) / THE CIT(A) 5. &'( ! , ' ! , / DR, ITAT, AHMEDABAD 6. (- . / GUARD FILE. / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) !', / ITAT, AHMEDABAD