The Land Acquisition Collector, U.T. OF DADRA & NAGAR HAVELI V. The Addl.CIT, TDS Range, Surat

ITA 2812/AHD/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9613 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-12-2015
• Assessment Year: 2012-2013
• Appeal Filed On: 20-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Non-deduction of tax; Ignorance of law
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA K. YADAV, JUDICIAL MEMBER ./ ITA NOS. 2811 & 2812/AHD/2014 / ASSESSMENT YEAR: 2009-10 & 2012-13 THE LAND ACQUISITION COLLECTOR, NEAR CHURCH, SAILY ROAD, SILVASSA, U.T. OF DAADRA & NAGAR HAVELI .. APPELL ANT PAN : ACCPD 6345 H VS ADDL. CIT, TDS RANGE, SURAT .. RESPONDENT ASSESSEE(S) BY : SHRI HARDIK VORA, CA REVENUE BY : SHRI DILEEP KUMAR , SR - DR / DATE OF HEARING 17/12/2015 /DATE OF PRONOUNCEMENT 03/02/2016 / O R D E R THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE A GAINST SEPARATE ORDERS OF THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS), VALSAD, BOTH DATED 20.08.2014 FOR ASSESS MENT YEARS 2009-10 & 2012-13. SINCE THE ISSUE INVOLVES IN BOT H THESE APPEALS IS SIMILAR, THESE WERE HEARD TOGETHER AND A RE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. (SMC) ITA NOS. 2811 & 2812/AHD/2014 THE LAND ACQUISITION COLLECTOR VS. ACIT AYS: 2009-10 & 2012-13 2 ITA NO. 2811/AHD/2014 : AY 2009-10 2. IN THIS APPEAL, THE SOLE GROUND RAISED BY THE ASSESSEE READS AS UNDER:- ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WE LL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS) HAS ERRED IN CONFIRMING THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271C OF RS.1,68,588/- 3. IN THIS CASE, THE ASSESSING OFFICER LEVIED PENAL TY OF RS.1,68,588/- U/S 271C OF THE ACT, BY OBSERVING AS UNDER: FACT OF THE CASE IS THAT A VERIFICATION WAS CARRIE D OUT IN THE OFFICE OF THE DEDUCTOR ASSESSEE ON 23.01.2012. IT WAS OBSERVED FROM THE DETAILS SUBMITTED THAT THE DEDUCT OR ASSESSEE HAS MADE PAYMENTS TO CERTAIN LAND OWNERS DURING THE YEAR UNDER CONSIDERATION, IN THE FORM OF CONSIDERATION AGAINST COMPULSORY ACQUISITION OF NON-AGRICULTURAL LAND. SINCE THE PAYMENTS/CONSIDERA TIONS WERE AGAINST COMPULSORY ACQUISITION OF NON AGRICULT URAL LAND, THE DEDUCTOR ASSESSEE WAS REQUIRED TO DEDUCT TAX AT SOURCE AS PER THE PROVISIONS OF SECTION 194LA OF TH E I.T. ACT. IT WAS SEEN THAT THE LAND ACQUISITION COLLECTO R, SILVASSA HAD FAILED TO COMPLY WITH THE SAID PROVISI ONS OF SECTION 194LA OF THE I.T. ACT, THEREBY COMMITTING D EFAULT UNDER THIS SECTION. ACCORDINGLY ORDER U/S 201(1) AN D 201(1A) OF THE ACT WAS PASSED AND AN AMOUNT OF RS.52,810/- WAS RAISED AS DEMAND U/S 201(1) OR NOT DEDUCTING TAX AS PER SECTION 194LA ON THE PAYMENT M ADE TO (I) M/S ALOK TEXTILE LTD, (II) M/S GULF 0IL CORPORATION LTD (III) M/S BLUE BLENDS (INDIA) LTD (IV) SHRI YASHWANTRAO R KAPTI (V) KUM. CHANDANBEN S DELKAR (VI) SHRI RAKESHSINH M CHAUHAN (SMC) ITA NOS. 2811 & 2812/AHD/2014 THE LAND ACQUISITION COLLECTOR VS. ACIT AYS: 2009-10 & 2012-13 3 (VII) SHRI NATWARSINH R RATHOD (VIII) SHRI SANDEEP N CHAUHAN PENALTY U/S 271C OF THE I.T. ACT WAS INITIATED FOR CONTRAVENING THE PROVISION OF SECTION 194LA OF THE ACT FOR NO DEDUCTION OF TAX. ACCORDINGLY, SHOW CAUSE NOTICES WERE ISSUED TO THE DEDUCTOR ASSESSES TO SHOW CAUSE AS TO WHY PENALTY U /S 271C SHOULD NOT BE LEVIED FOR NO-DEDUCTION OF TAX O N THE AFORESAID PAYMENT. THE DETAILS OF DEFAULT COMMITTED BY THE DEDUCTED ASSESSEE GIVEN IN THE SHOW CAUSE NOTICES W ERE AS UNDER: NAME OF THE EXPENDITURE RELEVANT SECTON AMOUNT OF EXPENDITURE LIABLE TO TDS TAX DEDUCTIBLE INTEREST AMOUNT DEDUCTED NON- DEDUCTION OF TAX PAYMENT FOR COMPULSORY ACQUISITION OF L.A. LAND 194LA 16,85,883 1,68,588 54,923 NIL 1,68,588 IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE HAS NEITHER AVAILED THE OPPORTUNITY OF PERSONAL HEARING NOR FILED ANY WRITTEN SUBMISSION. AS THE DEDUCTOR ASSESSEE HAS NOT COMPILED THE SHOW CAUSE NOTICE, THE ASSESSEE IS CONSIDERED AS ASSESSEE IN D EFAULT FOR THE FOLLOWING REASONS: I) THE DEDUCTOR ASSESSEE IS AN ASSESSEE IN DEFAULT AS IT HAS CONTRAVENED THE PROVISION OF SECTION 194LA OF THE I .T. ACT, 1961 AS ALREADY PROVED IN THE ORDER U/S 201(1) AND 201(1A) OF THE ACT PASSED BY THE AO. II) NO COMPLIANCE HAS BEEN MADE TO THE ORDER PASS ED U/S 201(1) AND 201(1A) OF THE IT ACT WHICH PROVES THAT THE INTENTION OF THE ASSESSEE IS NOT GENUINE. III) HAD THE VERIFICATION NOT TAKEN PLACE, THE MATT ER WOULD NOT HAVE BEEN UNEARTHED. EVEN AFTER POINTING OUT TH E EXACT CONTENTS OF THIS CASE AND AFTER A LAPSE OF SU CH A LONG PERIOD THE TAX HAS NOT BEEN DEDUCTED/COLLECTED AND PAID (SMC) ITA NOS. 2811 & 2812/AHD/2014 THE LAND ACQUISITION COLLECTOR VS. ACIT AYS: 2009-10 & 2012-13 4 INTO THE CENTRAL GOVT ACCOUNT WHICH CAUSED LOSS TO THE GOVT. EXCHEQUER. ACCORDING TO THE ASSESSING OFFICER IN VIEW OF THE A BOVE, THE ASSESSEE FAILED TO DISCHARGE ITS INITIAL BURDEN CAS T UPON IT U/S 194LA OF THE ACT AND THEREBY BECAME LIABLE FOR PENALTY AND THE PENALTY OF RS.168588/- BEING AN AMO UNT EQUAL TO THE AMOUNT OF NON-DEDUCTION OF TAX AT SOUR CE U/S 194LA OF THE ACT WAS LEVIED. 3.1 ON APPEAL, THE LD. CIT(A) CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271C OF THE ACT. 3.2 AS PER ASSESSING OFFICER, THE DEDUCTOR WAS REQU IRED TO DEDUCT TDS U/S 194LA OF THE ACT ON THE AMOUNT OF COMPENSATION DISBURSED TO THE VARIOUS OWNERS OF NON - AGRICULTURAL LAND WHICH WAS ACQUIRED BY THE GOVERNM ENT. HOWEVER, AT THE TIME OF DISBURSEMENT OF COMPENSATIO N NO TDS WAS DEDUCTED AS REQUIRED UNDER THE ACT. ALL THESE FACTS CAME INTO NOTICE DURING THE VISIT OF CONCERNED ITO WHILE CONDUCTING VERIFICATION IN THE OFFICE OF THE DEDUCTOR, I.E., T HE LAND ACQUISITION COLLECTOR ON 23.1.2012. SUBSEQUENTLY, A N ORDER U/S 201(1) AND 201(1)A OF THE ACT WAS PASSED AND A DEMA ND OF RS.1,68,588/- WAS RAISED U/S 201(1) FOR NOT DEDUCTI NG TAX AS PER SECTION 194LA OF THE ACT, ALONGWITH PENALTY U/S 271C OF THE ACT. IN THIS REGARD, THE STAND OF THE ASSESSEE HAS BEEN THAT ALL THIS HAPPENED DUE TO IGNORANCE OF LAW. THE ASSESSEE SUBMITTED (SMC) ITA NOS. 2811 & 2812/AHD/2014 THE LAND ACQUISITION COLLECTOR VS. ACIT AYS: 2009-10 & 2012-13 5 THAT THERE WAS NO INTENTION TO VIOLATE THE PROVISI ONS OF INCOME TAX ACT WHICH IN THIS CASE - SECTION 194LA OF THE A CT. AS SOON AS THE VIOLATION OF LAW WAS BROUGHT INTO ASSESSEES NOTICE, THE ASSESSEE COLLECTED THE AMOUNT OF TDS FROM SOME DEDU CTEES. IN CASE OF OTHERS THE REQUISITE DETAILS OF TDS TO BE D EDUCTED WAS COLLECTED BUT BY THAT TIME THOSE DEDUCTEES FILED TH EIR INCOME TAX RETURN AND MADE THE PAYMENT OF TAX DUE. THE PRO OF OF SUCH PAYMENTS MADE WAS ALSO COLLECTED. DURING THE APPELL ATE PROCEEDINGS, ALL THOSE DETAILS COLLECTED BY THE DED UCTOR WERE FILED AND THE ASSESSEE PLEADED BEFORE THE CIT(A) TH AT THE WHOLE TAX DUE HAS BEEN DEPOSITED INTO THE GOVT ACCOUNT AN D THEREFORE, THERE IS NO REVENUE LOSS. IN THIS BACKGR OUND, IT WAS SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 194 LA OF THE ACT, THE ASSESSEE WAS REQUIRED TO DEDUCT TAX FROM T HE PAYMENT MADE TOWARDS THE COMPULSORY ACQUISITION OF NON-AGRI CULTURAL LAND IN THE UNION TERRITORY OF DADRA & NAGAR HAVELI , BEING UNAWARE OF SUCH TDS PROVISIONS THE ASSESSEE HAD MAD E FULL PAYMENT TO THE LAND OWNERS. WHEN THE TEAM OF INCOM E TAX OFFICER (TDS), VALSAD VISITED THE OFFICE OF THE ASS ESSEE, THEN ONLY THE OFFICE OF THE ASSESSEE CAME TO KNOW ABOUT ITS T DS OBLIGATION AND THEREAFTER IT HAD TAKEN STEPS TO RECOVER THE TD S AMOUNT FROM THE LAND OWNERS AND APPLIED FOR TAN. (SMC) ITA NOS. 2811 & 2812/AHD/2014 THE LAND ACQUISITION COLLECTOR VS. ACIT AYS: 2009-10 & 2012-13 6 3.3 AS STATED ABOVE, THE ASSESSEE HAD PAID COMPENSA TION TO THE LAND OWNERS AMOUNTING TO RS.16,85,883/- BUT HAS NOT DEDUCTED THE TAX U/S 194LA OF THE ACT FROM SUCH PA YMENTS AS THE ASSESSEE WAS UNDER BONA FIDE BELIEF THAT HE WAS NOT UNDER ANY OBLIGATION TO DEDUCT THE TAX U/S 194LA OF THE A CT. THE OMISSION ON THE PART OF THE ASSESSEE WAS INADVERTEN T AND THERE WAS NO MALA FIDE INTENTION. AFTER BEING MADE AWARE ABOUT ASSESSEES TDS PROVISIONS, IT HAD RECOVERED THE TDS FROM THE CONCERNED OWNERS OF THE LAND AND THEREAFTER DEPOSIT ED THE SUM OF RS.84,099/- AND ALONGWITH INTEREST OF RS.33,480/ - TO THE CREDIT OF CENTRAL GOVT. AS STATED ABOVE, CERTAIN P ARTIES TO WHOM THE ASSESSEE HAD PAID THE COMPENSATION HAD PAID DUE TAXES ON THEIR TOTAL INCOME. FOR NON-DEDUCTION OF TDS AND D ELAY IN FILING THE TDS, THE ASSESSEE HAD PAID INTEREST OF RS.33,48 0/- AND ALSO PAID INTEREST OF RS.54,923/- DETERMINED TO BE PAYAB LE U/S 201(1A) OF THE ACT BY ITO(TDS), VALSAD. THUS, THERE IS NO LOSS TO THE REVENUE. THEREFORE, I AM OF THE VIEW THAT THERE IS NO MALA FIDE INTENTION ON ASSESSEES PART, IN 1 ST LAPSE ON ITS PART, AS IT SEEMS THAT THERE IS NO LOSS TO THE REVENUE. IN THIS REGARD, THE AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE RELIED U PON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. (SMC) ITA NOS. 2811 & 2812/AHD/2014 THE LAND ACQUISITION COLLECTOR VS. ACIT AYS: 2009-10 & 2012-13 7 CADBURY INDIA LIMITED IN ITA NOS. 1397/2008, 1398/ 2008 AND 429/2009, DATED 28.03.2011; WHEREIN THE HONBLE HIG H COURT HELD THAT PENALTY U/S 271C FOR NON-DEDUCTION OF TD S NOT LEVIABLE IF THERE WAS NO MALA FIDE INTENTION OR DELIBERATE DEFIANCE OF LAW. IT WAS ALSO OBSERVED BY THE HON BLE DELHI HIGH COURT IN THE AFORESAID JUDGMENT THAT THE LEVY OF PENALTY U/S 271C IS NOT AUTOMATIC. THEREFORE, IN THE PRESE NT CASE, I AM OF THE CONSIDERED VIEW THAT THERE WAS NO MALA FIDE INTENTION ON THE PART OF THE ASSESSEE FOR NON-DEDUCTION OF TDS S INCE IT HAD RECOVERED THE TDS FROM THE CONCERNED AS SOON AS THE VIOLATION OF LAW WAS BROUGHT INTO ASSESSEES NOTICE, AS DISCU SSED ABOVE. THEREFORE, IN THE FACT AND CIRCUMSTANCES OF THE CAS E, I HEREBY DELETE THE PENALTY OF RS.1,68,588/- LEVIED BY THE A SSESSING OFFICER U/S 271C OF THE ACT. ITA NO. 2812/AHD/2014 : AY 2012-13 4. SIMILAR ISSUE AROSE IN THIS APPEAL ALSO FILED BY THE ASSESSEE FOR AY 2012-13. FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASONING AS DISCUSSED ABOVE IN THE CASE OF IT A NO.2811/AHD/2014 (SUPRA), I DELETE THE PENALTY OF R S.52,810/- (SMC) ITA NOS. 2811 & 2812/AHD/2014 THE LAND ACQUISITION COLLECTOR VS. ACIT AYS: 2009-10 & 2012-13 8 LEVIED BY THE ASSESSING OFFICER U/S 271C OF THE ACT FOR ASSESSMENT YEAR 2012-13 AS WELL. 5. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 3RD FEBRUARY, 2016 AT AHMEDABAD. SD/- ( SHAILENDRA K. YADAV ) JUDICIAL MEMBER AHMEDABAD; DATED 03/02/2016 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