M/s S.K. Glass Company, Ludhiana V. ITO, Ludhiana

ITA 290/CHANDI/2015

• Counselvise Citation: 29021514 RSA 2015
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 18-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Bonafide belief; Revised return
• Section: 273B; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 290/CHD/2015 (ASSESSMENT YEAR: 2007-08) S.K. GLASS COMPANY, VS. THE INCOME TAX OFFICER, CHOWK DHOLEWAL, WARD V(4), LUDHIANA. LUDHIANA. PAN NO. AADFS9765M (APPELLANT) (RESPONDENT) APPELLANT BY : NONE (WRITTEN SUBMISSION) RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 22.06.2015 DATE OF PRONOUNCEMENT : 22.06.2015 O R D E R PER H.L.KARWA, VP : THIS APPEAL FILED BY THE ASSESSEE IS DIR ECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-2, LUDHIANA DATED 14.1.2015 RELATING TO A SSESSMENT YEAR 2007-08 IN CONFIRMING THE PENALTY OF RS.15,200 /- LEVIED UNDER SECTION 271FB OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ORIGINAL RETURN DECLARING VALUE OF FRINGE BENEFITS OF RS.57,250/- WAS FILED BY THE ASSESSEE ON 31.3.2008. LATER 2 ON, NOTICE UNDER SECTION 115WH OF THE ACT WAS ISSUE D ON 4.12.2009. IN RESPONSE TO THE SAID NOTICE, THE AS SESSEE AGAIN SUBMITTED ITS RETURN OF FRINGE BENEFITS TAX ON 8.1 2.2009 DECLARING TOTAL VALUE OF FRINGE BENEFITS OF RS.57,2 50/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 115WE(3) OF THE ACT VIDE ORDER DATED 20.12.2010 AT TOTAL VALUE OF FRING E BENEFITS OF RS.57,250/-. THE ASSESSING OFFICER INITIATED PENALT Y PROCEEDINGS UNDER SECTION 271FB OF THE ACT AND ISSU ED A SHOW CAUSE NOTICE TO THE ASSESSEE ON 7.6.2011. IN RESP ONSE TO THE SAID NOTICE, THE ASSESSEE SUBMITTED ITS REPLY AND T HE RELEVANT PORTION OF THE SAME IS REPRODUCED AS UNDER : ' THAT THE RETURN OF FRINGE BENEFIT WAS FILED ON 31/0 3/2008 FOR THE ASSESSMENT YEAR 2007/08. WHEREAS THIS RETURN WAS REQUIRED TO BE FILED BY 30/11/2007. THAT THE DELAY IN FILING THE RETU RN WAS DO TO THE FACTS. THAT THE ASSESSEE WAS INVOLVED IN CIVIL LITIGAT ION IN THE COURT BECAUSE OF TIGHT FINANCIAL POSITION. HE COULD NOT DEPOS IT THE FRINGE BENEFIT TAX AMOUNTING OF RS. 23,120/-WITHIN TIME. AS S OON AS THE PAYMENT TO THE FRINGE BENEFIT TAX OF AMOUNTING RS. 23, 120/- WAS PAID ON 29/03/2008 IMMEDIATELY FILED THE RETURN OF FRINGE BENEFIT TAX ON 31/03/2008. THAT THE ASSESSEE ALSO FILE RETURN OF FR INGE BENEFIT TAX IN RESPONSE TO THE NOTICE U/S 115WH DATED 04/12/2009 O N 08/12/2009 DECLARING THE SAME INCOME WAS SHOWN IN THE ORIGINAL RETURN FILED ON 31/03/2008. SO IN VIEW THE ABOVE SAID FACTS IT IS VERY MUCH CLEAR THE ASSESSEE WAS PREVENTED BY REASONABLE AND SUFFICIENT CAUSE FOR NOT FILING THE RETURN OF FRINGE BENEFIT TAX WITH IN TIME. SO IT I S REQUESTED TO DROP THE PENALTY PROCEEDINGS UNDER SECTION 271FB OF THE INCO ME TAX ACT. 1961 FOR THE ASSESSMENT YEAR 2007/2008. AS THE ASSESSEE WAS PREVENTED BY REASONABLE AND SUFFICIENT CAUSE AND THE DELAY OF 4 MONTHS IN FILING THE FRINGE BENEFIT TAX RETURN MAY BE CONDONE.' 3. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSE E FILED ITS RETURN OF FBT ON 31.3.2008, WHICH WAS LA TE BY FIVE 3 MONTHS. HE FURTHER OBSERVED THAT ASSESSEES EXPL ANATION FOR DEFAULT WAS NOT SATISFACTORY AND THE PENALTY OF RS. 15,200/- (FOR THE PERIOD 11.7.2007 TO 31.3.2008) WAS IMPOSED . 4. ON APPEAL, THE LEARNED CIT (APPEALS) CONFIRMED THE PENALTY, AND HENCE THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. I HAVE PERUSED THE WRITTEN SUBMISSION FILED ON BEHALF OF THE ASSESSEE AND HAVE ALSO HEARD THE LEAR NED D.R FOR THE REVENUE AT LENGTH. THE MAIN CONTENTION OF THE ASSESSEE IS THAT THE AMOUNT OF FRINGE BENEFITS TAX AMOUNTING TO RS.23,120/- OF FRINGE BENEFITS OF RS.57,250/- WAS P AID ON 29.3.2008 AND THE CORRESPONDING DETAILS WERE SUBMI TTED THROUGH RETURN FILED ON 31.3.2008. IT IS ALSO ST ATED THAT, THE COPY OF THE RETURN FILED AT THAT TIME WAS NOT TRACEABLE AND SO THE DATA WAS SUBMITTED AGAIN IN RESPONSE TO NOTICE UNDER SECTION 115WH OF THE ACT ON 4.12.2009 ISSUED BY THE ASSESSING OFFICER ON 8.12.2009. THE PAYMENT OF TA X AND FILING OF FBT RETURN WAS REQUIRED TO BE MADE BEFO RE THE DUE DATE I.E. 30.11.2007. AS PER THE ASSESSEE, THE AS SESSING OFFICER KNOWING THAT THE ORIGINAL RETURN IS NOT TRA CEABLE BY THE ASSESSEE, STILL NOT BOTHERED TO EXAMINE THE REC ORDS AND RETURNS AVAILABLE WITH THE DEPARTMENT AND ACCESSIBL E TO HIM AND IMPOSED PENALTY OF RS.15,200/- UNDER SECTION 27 1FB OF THE ACT FOR DELAY IN FILING RETURN OF FBT, BY CONS IDERING THE RETURN FILED ON 31.3.2008 AS ORIGINAL FBT RETURN. THE ASSESSEE ALSO CONTENDED THAT THE RETURN FILED ON 3 1.3.2008 WAS REVISED RETURN . HOWEVER, THE ORIGINAL RETURN OF FBT AS 4 WELL AS INCOME TAX WAS ALREADY FILED WELL IN TIME O N 31.10.2007. THE RETURN OF INCOME TAX FILED BY TH E ASSESSEE ON 31.10.2007 WAS IN ITSELF THE RETURN OF FBT ALSO AS W.E.F. 2007-08, THE RETURN OF FRINGE BENEFITS TAX WAS MER GED IN THE RETURN OF INCOME TAX AND THERE WAS NO STATUTORY LI ABILITY FOR FILING SEPARATE FBT RETURN . AS THE RETURN OF IN COME TAX, WHICH WAS ALSO THE RETURN OF FBT WAS FILED ON 31.1 0.2007, WHICH IS BEFORE THE DUE DATE I.E. 30.11.2007, THERE FORE, THERE IS NO DELAY ON THE PART OF THE ASSESSEE IN FILING F BT RETURN AND SO PENALTY UNDER SECTION 271FB OF THE ACT SHOUL D NOT BE IMPOSED. ACCORDINGLY, THE ASSESSEES SUBMISSION IS THAT THE PENALTY LEVIED UNDER SECTION 271FB OF THE ACT MAY B E CANCELLED. THE PENALTY UNDER SECTION 271FB OF THE ACT IS LEVIABLE IF AN EMPLOYER, WHO IS REQUIRED TO FURNIS H A RETURN OF FRINGE BENEFITS, AS REQUIRED UNDER SUB-SECTION ( 1) OF SECTION 115WD OF THE ACT, FAILS TO FURNISH SUCH RETURN WIT HIN THE TIME PRESCRIBED UNDER THAT SUB-SECTION, THE ASSESSI NG OFFICER MAY DIRECT THAT SUCH EMPLOYER SHALL PAY, BY WAY OF PENALTY, A SUM OF RS.100/- FOR EVERY DAY DURING WHICH THE FAIL URE CONTINUES. IT IS RELEVANT TO OBSERVE HERE THAT W. E.F. ASSESSMENT YEAR 2007-08, THE RETURN OF FRINGE BENE FITS TAX WAS MERGED WITH THE RETURN OF INCOME TAX (ITR-6) AND THUS THE NECESSITY OF FILING SEPARATE RETURN WAS DONE A WAY FOR THE ASSESSES WHO WERE OBLIGED TO FILE RETURN OF FRINGE BENEFITS TAX. AS SUCH, THE PARTICULARS OF FRINGE BENEFITS WERE TO BE SUBMITTED IN THE RETURN OF INCOME TAX ITSELF. IT IS OBSERVED THAT THE FINANCIAL STATEMENTS OF THE ASSESSEE WERE AUDITED ON 30.10.2007 AND SUBSEQUENTLY, RETURN OF INCOME WAS E-FILED ON 5 31.10.2007. IT IS ALSO CLAIMED BY THE ASSESSEE TH AT THE VALUE OF FRINGE BENEFITS WAS DETERMINED AS PER LAW IN THE ANNEXURE- II TO THE AUDIT REPORT AT RS.57,251/-. HOWEVER, DU E TO MISTAKE, THE DETAILS WERE OMITTED IN THE RETURN OF INCOME E- FILED AND UPON REALIZATION OF MISTAKE; A RETURN DE CLARING FRINGE BENEFITS WAS SUBSEQUENTLY FILED ON 31.3.2008 . IN MY OPINION, THE PENALTY UNDER SECTION 271FB CANNOT BE LEVIED IN THIS CASE SINCE THE PENAL PROVISION IS FOR FAILURE TO FURNISH THE RETURN WITHIN TIME. HOWEVER, IN THE INSTANT CASE , THE RETURN WAS FILED WITHIN TIME. DUE TO MISTAKE, THE DETAIL S WERE OMITTED IN THE RETURN OF INCOME FILED AND UPON REAL IZATION OF MISTAKE; RETURN DECLARING FRINGE BENEFITS WAS SUBS EQUENTLY FILED ON 31.3.2008. CONSIDERING THE ENTIRE FACTS A ND CIRCUMSTANCES OF THE PRESENT CASE, I AM OF THE OPIN ION THAT THE PENALTY UNDER SECTION 271FB OF THE ACT CANNOT B E LEVIED. SECTION 273B OF THE ACT PROVIDES THAT NO PENALTY U NDER SECTION 271FB OF THE ACT SHALL BE IMPOSABLE ON THE PERSON OR THE ASSESSEE, AS THE CASE MAY BE, FOR ANY FAILURE R EFERRED TO IN THE ABOVE PROVISIONS IF HE PROVES THAT THERE WAS RE ASONABLE CAUSE FOR THE SAID FAILURE. AS I HAVE ALREADY OBS ERVED HEREINABOVE THAT W.E.F. 2007-08 RETURN OF FBT WAS MERGED WITH THE RETURN OF INCOME TAX (ITR-6) AND THEREFOR E, THERE WAS NO OBLIGATION OF FILING THE SEPARATE RETURN OF FRI NGE BENEFITS TAX. THE REQUIREMENT WAS THAT THE PARTICULARS OF FRINGE BENEFITS WERE TO BE SUBMITTED IN THE RETURN OF INCO ME TAX ITSELF. THE RETURN OF INCOME TAX WAS SUBMITTED WE LL WITHIN TIME AND, THEREFORE, THERE WAS NO DEFAULT ON THE PA RT OF THE ASSESSEE. IT IS ALSO WELL SETTLED LAW THAT NO PEN ALTY SHOULD 6 BE IMPOSED WHEN THERE IS A TECHNICAL AND VENIAL BRE ACH OF THE PROVISIONS OF ACT OR WHERE THE BREACH FLOWS FROM TH E BONAFIDE BELIEF THAT THE NO PENALTY IS LEVIABLE IN THE MANNER PRESCRIBED BY THE STATUTE. IN THE INSTANT CASE, AT THE MOST, THERE WAS A TECHNICAL OR MINOR BREACH OF THE PROVISIONS OF THE ACT BECAUSE THE ASSESSEE DUE TO MISTAKE, COULD NOT FURNISH THE DETAILS IN THE RETURN OF INCOME FILED AND UPON REALIZATION OF MISTAKE, A RETURN DECLARING FRINGE BENEFITS WAS SUBSEQUENTLY FILED ON 31.3.2008. IN MY OPINION, IN VIEW OF THE SETTLED LAW ALSO, NO PENALTY IS LEVIABLE EVEN IN THIS CASE. IN VIEW OF THE ABOVE, I CANCEL THE PENALTY OF RS.15,200/- IMPOSED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT (APPEALS) UNDER SECTION 271FB OF THE ACT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF JUNE, 2015. SD/- (H.L.KARWA) VICE PRESIDENT DATED : 22 ND JUNE, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 7