Appeal details
Counselvise Citation
[2018] 121 COUNSELVISE.COM (IT) 7336 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 20 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
11-05-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
Not Allotted
Assessment Year
2013-2014
Appeal Filed On
21-04-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NOS. 2916 TO 2918/MUM/2016 (ASSESSMENT YEAR: 2010-11) SHRI RAVIRAJ RELEMPADDU A-204, A-WING, 2ND FLOOR NIKITA HORIZON, PLOT NO.5 SECTOR-6, GHANSOLINAVI MUMBAI 400701 VS. DEPUTY COMMISSIONER OF INCOME TAX - 23(1) MUMBAI PAN AFDPR4214B APPELLANT RESPONDENT APPELLANT BY: SHRI DEVENDRA JAIN RESPONDENT BY: SHRI V. JANARDHANAN DATE OF HEARING: 04.05.2018 DATE OF PRONOUNCEMENT: 11.05.2018 O R D E R PER BENCH THESE ARE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)- 1, THANE FOR A.Y. 2010-11, IN THE MATTER OF ORDER P ASSED UNDER SECTION 272A(2)(K) OF THE INCOME TAX ACT (HEREINAFTER THE ACT). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED QUARTERLY STATEMENTS OF TDS UNDER SECTION 200(3) R.W. RULE 31 A OF THE I.T. RULES, 1962 AS UNDER- S. NO FORM NO. QRTR F.Y. RPRNO. DUE DATE DATE OF FILING DELAY TAX AMT. DEDUCTE D (IN RS.) MAX. PENALTY LEVIABLE (IN RS.) 1 26Q Q1 2009-10 30170200345106 15.07.09 14.07.11 729 61,562 61,562 2 26Q Q2 2009-10 30170200345110 15.10.09 14.07.11 637 46,861 46,861 3 26Q Q3 2009-10 30170200345121 15.01.10 14.07.11 545 36,449 36,449 4 26Q Q4 2009-10 30170200345132 15.06.10 14.07.11 394 73,919 39,400 TOTAL 1,84,272 AS THERE WAS DELAY IN FILING THE TDS STATEMENTS FOR THE ABOVE FOUR QUARTERS FOR THE YEAR UNDER CONSIDERATION THE AO ISSUED SHOW CAUSE NOTICE TO THE ITA NOS. 2916 TO 2918/MUM/2016 SHRI RAVIRAJ RELEMPADDU 2 ASSESSEE ASKING IT TO EXPLAIN WHY PENALTY U/S. 272A (2)(K) OF THE I.T. ACT SHOULD NOT BE IMPOSED IN HIS CASE. BEING NOT SATISF IED WITH THE REPLY OF THE ASSESSEE, THE AO IMPOSED PENALTY UNDER SECTION 272A (2)(K) OF ACT AMOUNTING TO ` 61,562/- FOR Q1 I.E. APPEAL NO. 789 DUE TO DELAY I N FILING THE TDS STATEMENT. BY THE IMPUGNED ORDER THE CIT(A) HAS CON FIRMED THE PENALTY SO IMPOSED BY THE AO, AGAINST WHICH THE ASSESSEE IS FU RTHER IN APPEAL BEFORE US. 3. AT THE OUTSET THE LEARNED A.R. PLACED ON RECORD THE ORDER OF THE TRIBUNAL IN THE CASE OF GULAM MUSTAFA KHAN DATED 12 TH APRIL, 2017 FOR ASSESSMENT YEARS 2009-10 AND 2010-11 WHEREIN UNDER SIMILAR FACTS AND CIRCUMSTANCES PENALTY SO LEVIED WAS DELETED BY THE TRIBUNAL. IT WAS CONTENDED BY THE LEARNED A.R. THAT THE FACTS AND CI RCUMSTANCES DURING THE YEAR UNDER CONSIDERATION ARE SAME AS HAS BEEN DEALT WITH BY THE TRIBUNAL IN ITS ORDER IN THE CASE OF GULAM MUSTAFA KHAN DATE D 12.04.2017. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT SUBMISSIONS OF ASSESSEE BEFORE THE LOWER AUTHORITIE S WERE AS UNDER: - '2.1. THE APPELLANT'S BUSINESS IS MANAGED BY LOW Q UALIFIED STAFF. DURING THE COURSE OF AUDIT ONLY, IT WAS NOTICED THA T NO TAX WAS DEDUCTED. APPELLANT IMMEDIATELY PAID THE TAX. 2.2. HOWEVER, AFTER PAYMENT OF TAX, IT BECAME VER Y DIFFICULT FOR THE APPELLANT TO COLLATE THE DATE FOR PAST YEAR. 2.3. YOU WILL ALSO APPRECIATE THAT THE DELAY WAS O NLY PROCEDURAL AND DEFAULT IF ANY, WAS NOT DELIBERATE AND INTENTIONAL. THERE COULD BE NO DELIBERATE INTENTION OF DELAYING THE SUBMISSI ON OF TDS RETURNS. 2.4 LATE FILING OF TDS RETURNS IS A TECHNICAL DEFAULT. ONE SHOULD NOT BE PENALIZED FOR TECHNICAL DEFAULT. THIS VIEW HAS BEEN TAKEN BY VARIOUS TRIBUNALS AND COURTS. IN VIEW OF THE FOREGOING AND THE FACT THAT PENALTY PROVISIONS BEEN AMENDED IN BUDGET 2012 BY INCORPORATING NEW SECTION 234E TO LEVY FEE OF RS. 2 00 PER DAY FOR DELAY IN FILING TDS RETURN INDICATING THEREBY P ENALTY SHOULD NOT BE LEVIED IN A CASE WHERE TAXES WERE PAID IN TI ME AND THERE IS NO LOSS TO REVENUE. 2.5. THE LD. AO HAS LEVIED THE PENALTY STATING TH AT 'DUE TO DELAY IN FILING THE TDS RETURNS BY THE DEDUCTORS, THE DEDUCT EE HAVE TO SUFFER A LOT AS THEY DO NOT GET CREDIT OF TDS TILL THE TIME TDS STATEMENTS ARE UPLOADED BY THE DEDUCTORS'. IN THIS RESPECT WE WISH TO STATE AS FOLLOWS :- ITA NOS. 2916 TO 2918/MUM/2016 SHRI RAVIRAJ RELEMPADDU 3 A. DEDUCTEES CLAIM CREDIT FOR TDS ONLY ON FILING O F THEIR RETURN OF INCOME. RETURN CAN BE FILED ONLY AFTER RELEASE O F FORMS / RETURNS. THE FIRST DUE DATE OF FILING RETURN FOR F. Y. 2008-09 I.E. A. Y. 2009-10 WAS 31.07.2009. B. THE CREDIT CAN ALSO BE CLAIMED BY THE DEDUCTEES WITHOUT TDS CREDIT BEING REFLECTED IN THEIR 26AS. C. AFTER FILING THE TDS RETURNS, IT IS REFLECTED A ND CREDIT IS ALLOWED. D. THEREFORE, LEVY OF PENALTY UPTO RELEASE OF FORM S THROUGH WHICH CREDIT CAN BE CLAIMED, MAY BE DELETED. 2.6. WE WISH TO DRAW YOUR ATTENTION TO CBDT NO.07/2 014 DTD. 04.03.2014 IN CONTEXT OF LEVY OF LATE FEE U/S. 234E OF RS. 200/- PER DAY. IT EXTENDED THE DUE DATE OF FILING TDS RET URNS OF GOVERNMENT DEDUCTEES FOR F.Y. 2012-13 AND FIRST THR EE QUARTERS OF F.Y. 2013-14 TO 31.03.2014. INSPITE OF THE GOVER NMENT DEPARTMENTS HAVING MACHINERY AND MANPOWER FOR COMPL IANCES, THE BLANKET EXTENTION IS AWARDED CITING SOME TECHNI CAL ISSUES ONLY TO GOVERNMENT DEDUCTEES. THIS IS SHEER DISCRIM INATION AS THE SMALL DEDUCTORS LIKE ASSESSEE CAN ALSO FACE LOT OF ADMINISTRATIVE PROBLEMS. 2.7. IN SUPPORT OF OUR CLAIM WE HAVE RELIED ON FO LLOWING DECISIONS - A) CIT V. ARK CORPN. (2008) 172 TAXMAN 339 (DELHI) WHERE IT WAS HELD THAT REVENUE WAS SEEKING TO LEVY PENALTY O NLY BECAUSE IT HAD POWER TO DO SO WITHOUT EXERCISING TH E DISCRETION. IN SUCH TECHNICAL DEFAULTS, THERE IS HA RDLY ANY REASON TO LEVY PENALTY. B) BRANCH MANAGER, PUNJAB NATIONAL BANK V. ADDL CI T (2011) 140 TTJ 622/16 IAXMAN.COM 318 (LUCKNOW) WHERE I T WAS HELD NON-FILING OF QUARTERLY STATEMENTS DOES NO T INVOLVE ANY REVENUE LOSS & IS A MERE TECHNICAL DEFAULT. E VEN OTHERWISE, THERE WAS ONLY A TECHNICAL & VENIAL BREA CH OF THE PROVISION CONTAINED IN RULE 31A OF INCOME TAX RULES , 1962 REQUIRING THE ASSESSEE TO SUBMIT QUARTERLY STATEMEN TS OF DEDUCTION OF TAX UNDER SEC. 200(3) WITHIN THE TIME PRESCRIBED. SUCH DELAY HAD NOT CAUSED ANY LOSS TO T HE REVNUE. C) RAJATHAN TRIBAL AREA DEVELOPMENT CO-OPERATIVE FE DERATION LTD. VS. ITO (60 TTJ 427 JP TRIB) WHERE IT WAS HELD THAT FOR MERE FAILURE TO FURNISH TDS RETURNS, PENALTY WAS NO T JUSTIFIED AS THERE WAS NO DEFAULT IN DEDUCTING TAX AT SOURCE OR IN DEPOSITING THE TAX IN GOVERNMENT TREASURY. 5. WE HAVE GONE THROUGH THE ORDER OF THE TRIBUNAL DAT ED 12.04.2017 WHEREIN THE PENALTY IMPOSED UNDER SECTION 272A(2)(K ) HAS BEEN DELETED AFTER HAVING THE FOLLOWING OBSERVATION: - ITA NOS. 2916 TO 2918/MUM/2016 SHRI RAVIRAJ RELEMPADDU 4 3. THE LD. COUNSEL FOR ASSESSEE [AR] RAISING SIMIL AR CONTENTIONS PLEADED THAT THE ASSESSEE WAS AN INDIVIDUAL TRANSPO RT OPERATOR WORKING IN THE UNORGANIZED SECTOR AND WAS NOT FULLY CONVERSANT WITH THE COMPLEX TDS PROVISIONS AND COMPLIANCES THEREOF. HE WAS FULLY DEPENDENT UPON THE TAX CONSULTANT TO COMPLY WITH TH ESE TDS PROVISIONS AND DEDUCTED / DEPOSITED TDS AS PER THE INSTRUCTIONS OF THE CONSULTANTS FROM TIME TO TIME AND THEREFORE THE RE WAS NO DELIBERATE DEFAULT ON THE PART OF THE ASSESSEE SO A S TO ATTRACT THE PENALTY. FURTHER, IT TOOK SOME TIME FOR THE ASSESSE E TO CONVINCE THE PETTY TRANSPORTERS ABOUT TDS PROVISIONS. MOREOVER, THE ASSESSEE DEPOSITED THE DUE TDS ALONG-WITH APPLICABLE INTERES T, WHICH DO NOT JUSTIFY THE PENALTY. RELIANCE WAS PLACED ON THE ORD ER OF RAJKOT TRIBUNAL (SMC) IN BHARAT KUMAR MANILAL VS. JCIT [12 1 TAXMAN 361ORDER DATED 1/11/2001]. PER CONTRA, LD. DR, DR. ANUPAMA SINGLA, DREW OUR ATTENTION TO THE EXPRESS PENAL PROVISIONS AS CONTAINED IN SECTION 272A TO CONTEND THAT THE LATE FILING OF TDS RETURNS WOULD CERTAINLY ENTAIL IMPOSITION OF PENALTY AT PRESCRIBE D RATES. FURTHER, THE ASSESSEE INCURRED THE SAME DEFAULT OVER SEVERAL YEA RS, WHICH DO NOT JUSTIFY DELETION OF PENALTY. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD WHICH PRIMA FACIE REVEALS THAT T HE ASSESSEE HAS DEPOSITED THE TDS WITH INTEREST AS APPLICABLE FROM TIME TO TIME. WE FIND SOME STRENGTH IN THE ARGUMENTS OF THE LD. AR T HAT ASSESSEE WAS AN INDIVIDUAL WORKING IN THE UNORGANIZED SECTOR AND THEREFORE, NOT FULLY CONVERSANT WITH THE COMPLEX TDS PROVISIONS AN D HAD TO DEPEND UPON SOME EXPERTS TO COMPLY WITH THESE PROVISIONS A S TDS PROVISIONS CERTAINLY REQUIRE CERTAIN HIGHER DEGREE OF UNDERSTA NDING OF TDS PROVISIONS AND MANNER OF COMPLIANCES THEREOF. WE AL SO NOTE THE FACT THAT THE TDS COMPLIANCES HAVE UNDERGONE FREQUENT CH ANGES OVER THE LAST DECADE IN TERMS OF DEDUCTION, DEPOSIT, E-FILIN G OF TDS RETURNS AND GENERATION OF TDS CERTIFICATES ETC. THEREFORE, WITH OUT DELVING MUCH DEEPER INTO THE ISSUE ON MERIT, WE ARE INCLINED TO DELETE THE SAID PENALTY ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND ACCORDINGLY, ALLOW ASSESSEES APPEAL. 5. NOW WE TAKE UP ITA NO.4207/M/2016 FOR AY 2010-11 WHERE THE ASSESSEE IS SADDLED WITH A PENALTY OF RS. 58,200/- IN SIMILAR MANNER FOR LATE FILING OF QUARTERLY TDS RETURN FOR ALL QUA RTERS OF IMPUGNED AY AND THE SAME HAS BEEN ASSAILED BEFORE US. THERE BEI NG NO CHANGE IN THE FACTS AND CIRCUMSTANCES EXCEPT FOR DATES / FIGU RES AND MINOR VARIATIONS, TAKING THE SAME STAND, WE DELETE THE IM PUGNED PENALTY AND ALLOW ASSESSEES APPEAL. 6. THE FACTS AND CIRCUMSTANCES DURING THE YEAR UNDER C ONSIDERATION ARE EXACTLY THE SAME, THEREFORE, RESPECTFULLY FOLLO WING THE ORDER OF THE TRIBUNAL CITED ABOVE WE FIND NO MERIT FOR THE PENAL TY LEVIED UNDER SECTION 272A(2)(K) OF THE ACT. ITA NOS. 2916 TO 2918/MUM/2016 SHRI RAVIRAJ RELEMPADDU 5 7. IN THE RESULT, ALL THE THREE APPEALS FILED BY THE A SSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH MAY, 2018. SD/ - SD/ - (RAVISH SOOD) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 11 TH MAY, 2018 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -1, THANE 4. THE CIT - (TDS), PUNE 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.
