LAKE CITY SUPER SPECIALITY HEALTHCARE PVT. LTD., THANE V. ADDL. CIT (TDS), THANE

ITA 2922/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8939 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: misc
• Appeal Filed On: 21-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Assessee Lawyers: DEVKI SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI , BEFORE SHRI RAJENDRA, A.M. AND SHRI PAWAN SINGH,J.M . ./ ITA NO.2922/MUM/2016 / ASSESSMENT YEAR: 2009-10 ./ ITA NO.2923/MUM/2016 / ASSESSMENT YEAR: 2009-10 ./ ITA NO.2924/MUM/2016 / ASSESSMENT YEAR: 2009-10 ./ ITA NO.2925/MUM/2016 / ASSESSMENT YEAR: 2009-10 LAKE CITY SUPER SPECIALITY HEALTHCARE PVT. LTD. SHOP NP.5 & 6, SANSKAR TOWER DHARMAVEER ROAD, NEAR SHREE IMAGINE, PANCHPAKHADI THANE (W)-400 602. PAN: AAACL 8805 F VS. ACIT-TDS-RANGE THANE. ( / // / APPELLANT ) ( / RESPONDENT ) REVENUE BY: MS. BEENA SANTOSH -DR ASSESSEE BY: MS. DEVKI SHAH / // / DATE OF HEARING: 11.01.2017 / DATE OF PRONOUNCEMENT: 11.01.2017 , ,, , 1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER BENCH: CHALLENGING THE ORDERS,DATED 20/01/2016,OF THE CIT( A)-1,THANE,THE ASSESSEE HAS FILED THE PRESENT APPEALS.THE EFFECTIVE GROUND OF APPEAL IS A BOUT LEVY OF PENALTY U/S.272(2A)(K)OF THE ACT. WHILE PASSING THE PENALTY ORDER,THE ASSESSING OFFIC ER (AO) OBSERVED THAT THE ASSESSEE HAD FILED QUARTERLY RETURNS OF TEXT DEDUCTED AT SOU RCE(TDS)BELATEDLY.HE ISSUED NOTICE U/S.272(2A)(K)/ 274 R.W.S.200 (3) OF THE ACT TO SHOW CAUSE AS TO WH Y AND ORDER IMPOSING PENALTY FOR LATE FILING OF QUARTERLY TDS RETURNS SH OULD NOT BE PASSED. IN ITS RESPONSE TO THE SHOW CAUSE NOTICE,THE ASSESSEE STATED THAT DELAY IN FILING THE TDS-RETURNS WAS CAUSED DUE TO OUTSOURCING OF THE FILING OF RETURNS, THAT IT HAD A SKED AN OUTSIDE-AGENCY TO FILE THE QUARTERLY RETURNS, THAT THE OUTSIDE AGENCY DID NOT FILE THE R ETURNS IN TIME.THE ASSESSEE RELIED UPON CERTAIN CASE-LAWS IN ITS SUPPORT. 2. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, T HE AO HELD THAT IT HAD NOT FURNISHED ANY EVIDENCE TO SHOW THAT IT WAS PREVENTED BY SUFFICIEN T CAUSE FOR DELAY IN FILING THE TEXT DIRECTED AT SOURCE STATEMENT. HE LEVIED A PENALTY OF RS. 1.2 6 LAKHS U/S.272(2A)(K) OF THE ACT. 2922-25/M/12;LAKE CITY 2 3. AGGRIEVED BY THE PENALTY ORDER OF THE AO,THE ASSESS EE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).BEFORE HIM,IT MADE ELABORA TE SUBMISSIONS ABOUT LATE FILING OF THE TDS STATEMENTS.AFTER CONSIDERING THE ASSESSMENT ORD ER AND THE SUBMISSIONS OF THE ASSESSEE,HE HELD THAT THE ASSESSEE HAD NOT FILED TH E QUARTERLY STATEMENTS IN TIME,THAT THE NUMBERS OF DAYS OF DEFAULT IN RESPECT OF EACH QUART ER HAD BEEN CALCULATED BY THE AO, THAT NOTHING WAS BROUGHT ON RECORD BY THE ASSESSEE TO SH OW AS TO WHY THE OUTSIDE AGENCY HAD FILED THE TDS-STATEMENTS LATE, THAT IT HAD ENGAGED PROFESSIONALS FOR SPECIFIC JOB, THAT THERE SHOULD NOT HAVE BEEN ANY DELAY IN FILING THE STATEMENTS,TH AT NO EVIDENCE WAS FURNISHED TO SHOW THAT EFFORTS WERE MADE TO OBTAIN PAN.S OF THE DIRECTORS, THAT THE ASSESSEE HAD FAILED TO ESTABLISH REASONABLE AND SUFFICIENT CAUSE FOR DELAY IN FILING THE TDS STATEMENTS.FINALLY,HE UPHELD THE ORDER OF THE AO IMPOSING PENALTY. 4. DURING THE COURSE OF HEARING BEFORE US,THE AUTHORIS ED REPRESENTATIVE (AR) CONTENDED THAT THE ASSESSEE HAD NOT MADE ANY DEFAULT IN DEDUCTING THE TAX ON VARIOUS PAYMENTS MADE,THAT IT HAD DEPOSITED TAX WITH IN TIME PERIOD IN ALL THE QU ARTERS FOR THE YEAR UNDER APPEAL,THAT ALL THE DIRECTORS OF THE COMPANY WERE DOCTORS BY PROFESSION ,THAT THE WORK OF FILING STATEMENTS WAS OUTSOURCED TO AN AGENCY,THAT THAT ASSESSEE RELIED ENTIRELY ON THE AGENCY FOR TDS JOB, THAT ASSESSEE HAD BEEN REGULARLY IN FILING ITS TDS-RETUR NS IN OTHER ASSESSMENT YEARS, THAT THE DELAY WAS ONLY PROCEDURAL AND THE DEFAULT WAS NOT DELIBER ATE OR INTENTIONAL, THAT THE LATE FILING OF THE RETURNS WAS A TECHNICAL BREACH,THAT AY.2009-10 WAS THE FIRST YEAR OF INTRODUCTION OF 26AS.SHE RELIED UPON THE CASES OF ARK CORPORATION (172 TAXMAN 339) ROYAL METAL PRINTERS (P.) LTD. (37SOT139) RAJASTHAN TRIBAL AREA DEVELOPM ENT CO-OPERATIVE FEDERATION LTD (60TTJ427).THE DEPARTMENTAL REPRESENTATIVE (DR) SUP PORTED THE ORDER OF THE AO AND THE FAA. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US WE FIND THAT THE ASSESSEE HAD NOT MADE ANY DEFAULT IN DEPOSITING THE TAX DIRECTED AT SOURCE WITHIN PRESCRIBED TIME PERIOD IN ALL THE MONTHS FOR THE YEAR UNDER CO NSIDERATION EXCEPT FOR THE MONTH OF JULY, 2008. THERE WAS DELAY OF SIX DAYS IN DEPOSITING THE TAX FOR THAT MONTH.IT IS A FACT THAT THE ONLY DEFAULT COMMITTED BY THE ASSESSEE WAS NOT FILING TH E STATEMENTS OF TDS IN TIME.WE FIND THAT THE ASSESSEE HAD ARGUED THAT IT HAD HIRED AN OUTSID E AGENCY TO CARRY OUT THE JOB OF FILING STATEMENTS OF TDS AND THE AGENCY DID NOT FILE THE R ETURNS IN TIME.IN OUR OPINION,THE EXPLANATION FILED BY THE ASSESSEE CAN BE CONSIDERED AS ONE OF THE POSSIBLE CAUSE FOR FILING BELATED RETURNS.IT IS ALSO TO BE REMEMBER -ED THAT THE COMPANY IS RUN BY DOCTORS.SECTION 273 B 2922-25/M/12;LAKE CITY 3 OF THE ACT STIPULATES THAT PENALTY SHOULD NOT BE LE VIED IF THE ASSESSEE OFFERS SOME REASONABLE AND SUFFICIENT CAUSE FOR ANY DEFAULT. WE HAVE TAKEN NOTE OF THE FACT THAT THIS WAS THE FIRST YEAR WHEN THE NEW PROCEDURE(AS-26)WAS ADOPTED BY THE DEP ARTMENT.THE AO/FAA HAVE NOT CHALLENGED THE FINDING THAT THE TAX WAS DIRECTED AN D DEPOSITED IN TIME-EXCEPT FOR ONE MONTH WHEN THERE WAS DELAY OF SIX DAYS ONLY. WE FIND THAT IN SIMILAR CIRCUMSTANCES THE TRIBUNAL,IN THE CASE OF RAJASTHAN TRIBAL AREA DEVELOPMENT CO-OP ERA -TIVE FEDERATION LTD.(SUPRA)DELETED THE PENALTY LEVIED BY THE AO U/S. 272(2A)(K) OF THE ACT.WE WOULD LIKE TO REPRODUCE THE RELEVANT PORTION OF THE SAID ORDER OF THE TRIBUNAL AND IT READS AS UNDER- WE HAVE NOTICE THAT THERE IS NO DEFAULT ON PART OF THE APPELLANT EITHER IN DEDUCTING THE TAX AT SOURCE OR IN DEPOSITING THE SA ME INTO GOVERNMENT ACCOUNT. THIS FACT HAS NOT BEEN DISPUTED EVEN BY THE LEARNED DEP ARTMENTAL REPRESENTATIVE. THE ONLY DEFAULT IS IN FURNISHING STATEMENTS OF TDS IN FORM NO. 26 WHICH IN VIEW OF THE APPELLANTS EXPLANATION, IS ONLY A TECHNICAL DEFAUL T, FOR WHICH WE ARE OF THE OPINION THAT SUCH A PENAL ACTION IS NOT JUSTIFIED, BECAUSE THE APPELLANT BEFORE IS PURELY OF A TECHNICAL OR VENIAL NATURE. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE TRIBU NAL,WE DECIDE THE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE AND ALLOW ALL APPE ALS FILED BY THE ASSESSEE I.E.ITA.S./2922- 25/MUM/ 2016. AS A RESULT,APPEALS APPEAL,FILED BY THE ASSESSEE,ST AND ALLOWED. !'# ' $% . ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH , JANUARY 2017. & '! 11 , 2017 SD/- SD/- ( ( $ /PAWAN SINGH) ( ')&* / RAJENDRA) & + / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; '! DATED : 11 .01.2017 . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.