ITO (TDS), Dehradun V. Khara Project Construction Division-I, Haridwar

ITA 3051/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9701 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 02-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA
• Assessee Lawyers: SUDHIR S SIRWAL
• Keywords: Initiation of penalty proceedings; Reasonable cause; TDS

Judgement Text

ITA NOS. 3051&3052/DEL/2009 A.Y. 2005-06 & 2006-07 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 3051 & 3052/DEL/2009 A.Y. 2005-06 & 2006-07 ADDL. C.I.T. (TDS) VS. M/S KHARA PROJECT CONST RUCTION, DEHRADUN DIVISION-1, REHABILITATION, SHIVALIK RANGE-1, NAGAR, BHEL, HARDWAR (TAN : MRTK00635F) [APPELLANT] (RESPONDENT) APPELLANT BY : SHRI A.K. MONGA, DR RESPONDENT BY : SH. SUDHIR S. SIRWAL ORDER PER SHAMIM YAHYA, AM THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE CIT(A) FOR THE CONCERNED ASSESSMENT YEARS. THE ISS UE INVOLVED THEREIN ARE COMMON. THEREFORE, THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. 2. THE COMMON ISSUE RAISED PERTAIN TO DELETION OF P ENALTY UNDER SECTION 272A(2)(G) OF THE IT ACT. 3. IN THIS CASE THE ASSESSING OFFICER NOTED THAT I TO(TDS) HAS MADE A REFERENCE TO HIM FOR INITIATION OF PENALTY PROCEEDINGS UNDER SEC TION 272A(2)(G) OF THE IT ACT FOR THE FINANCIAL YEAR 2004-05 AND 2005-06 FOR ASSESSEE TAX D EDUCTORS FAILURE TO ISSUE THE CERTIFICATES TO THE PAYEE WITHIN THE PRESCRIBED TIM E LIMITS. AS THE REASONABLE CAUSE FOR ITA NOS. 3051&3052/DEL/2009 A.Y. 2005-06 & 2006-07 2 DELAY THE ASSESSEE SUBMITTED THAT THE SAME WAS DUE TO SHORTAGE OF STAFF. THE ASSESSING OFFICER WAS NOT CONVINCED AND HE IMPOSED THE PENALT Y. 4. UPON ASSESSES APPEAL THE LD. CIT(A) NOTED THAT THIS DELAY HAS OCCURRED FOR THE FIRST TIME AND BECAUSE OF SHORTAGE OF STAFF AND LAR GE NUMBER OF TDS CERTIFICATES WERE REQUIRED TO BE ISSUED. MOREOVER, IN ALL CASES THE TDS CERTIFICATES WERE ISSUED BEFORE THE DUE DATE FOR FURNISHING THE RETURN OF INCOME OF THE DEDUCTEES. IN THIS CIRCUMSTANCES, THE LD. CIT(A) DELETED THE IMPOSITION OF PENALTY. 5. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE FIND THAT THE REASONS ACCEPTED BY THE LD. CIT(A) AS REASONABLE CA USE FOR DELAY ARE COGENT ENOUGH AND DO NOT NEED OF ANY INTERFERENCE ON OUR PART. IN T HIS CONNECTION, IT WILL BE GAIN FUL TO REFER THE APEX COURT DECISION RENDERED BY A LARGE BENCH COMPRISING OF THREE OF THEIR LORDSHIPS IN THE CASE OF HINDUSTAN STEEL VS. STATE OF ORISSA IN 83 ITR 26 HELD THAT AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A S TATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDINGS, AND PENALTY WILL NOT ORD INARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LA W OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DI SREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATI ON IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSI DERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCR IBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT, OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 6. IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT, WE CONFIRM THE ORDER OF THE CIT(A) DELETING THE LEVY OF PENALTY. ITA NOS. 3051&3052/DEL/2009 A.Y. 2005-06 & 2006-07 3 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE R EVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH SEPTEMBER, 2009. SD/- SD/- [R.P. TOLANI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 4 TH SEPTEMBER, 2009 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES