M/s.Lakshadweep Development Corporation Ltd, Cochin V. The ADCIT(TDS), Cochin

ITA 309/COCH/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96722 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-10-2015
• Assessment Year: 2012-2013
• Appeal Filed On: 27-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K P GOPAKUMAR
• Keywords: Reasonable cause
• Section: 273B; 27

Judgement Text

ITA NOS 308 & 309/C/2015 1 IN THE INCOME TAX APPEL L A TE T R IBUNAL COCHIN BENCH , COCHIN BEFORE S/SH RI B P JAIN , A M & G EORGE GEORGE.K , J M ITA NO S . 308 & 309/COCH/2015 (ASST YEAR S 2009 - 10 & 2012 - 13 ) LAKS H ADWEEP DEVELOPMENT CORPN LTD G 406 PANAMPILLY NAGAR KOCHI 682 036 VS THE ADDL COMMR OF INCOME TAX (TDS) KOCHI ( APPELLANT) (RESPONDENT) PAN NO. AAACL6164H ASSESSEE BY NONE REVENUE BY SH K P GOPAKUMAR, SR DR DATE OF HEARING 15 TH OCT 2015 DATE OF PRONOUNCEMENT 15 TH OCT 2015 OR D ER PER GEORGE GEORGE. K. J M: THESE TWO APPEALS AT THE INSTANCE OF THE ASSESSEE ARE DIRECTED AGAINST SEPARATE ORDERS OF THE CIT(A), BOTH DATED 25.3. 2015. THE RELEVANT ASSESSMENT YEARS ARE 2009 - 10 AND 2012 - 13. 2 SINCE COMMON ISSUE IS INVOLVED IN THESE APPEALS, THEY WERE HEARD TOGETHER AND DISPOSE OFF BY T HIS CONSOLIDATED ORDER. 3 THE SOLITARY ISSUE THAT ARISES FOR OUR CONSIDERATION IS WHETHER THE CIT(A) IS JUSTIFIED IN CONFIRMING THE PENALTY IMPOSED U/S 271C OF THE ACT 1961. ITA NOS 308 & 309/C/2015 2 4 THE BRIEF FACTS RELATING TO THE ISSUE ARE AS FOLLOWS : THE ASSESSEE IS A CENTRAL GOVERNMENT OWNED COMPANY . FOR THE RELEVANT ASSESSMENT YEARS , THE ASSESSEE HAD DEDUCTED TAX AT SOURCE AND DEPOSITED THE SAME TO THE GOVERNMENT ACCOUNT BELATEDLY. THE ADDITIONAL COMMISSIONER OF INCOME TAX (TDS) INITIATED PENALTY P ROCEEDINGS AND LEVIED PENALTY U/S 271C OF THE ACT FOR A SUM OF RS. 1,32,034/ - AND RS.15,02859/ - FOR THE AYS 2009 - 10 AND 2012 - 13 RESPECTIVELY. 5 AGGRIEVED BY THE PENALTY IMPOSED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. THE CIT(A) DISMISSED THE APPEALS OF THE ASSESSEE AND CONFIRMED THE PENALTY IMPOSED U/S 271C OF THE ACT. THE CIT(A) WAS OF THE VIEW THAT THE REASONS STATED BY THE ASSESSEE FOR BELATED DEPOSIT OF TAX DEDUCTED AT SOURCE ARE NOT A REASONABLE CAUSE AS MENTIONED U/ S 273B OF THE ACT. THE CIT(A) HELD THAT WHEN THE TAX HAS BEEN DEDUCTED BY THE ASSESSE E AND THE S AME HAS BEEN PAID BELATEDLY TO THE CENTRAL GOVERNMENT ACCOUNT , THE REASONABLE CAUSE MENTIONED U/S 273B OF THE ACT FOR WAIVER OR REDUCTION OF PENALTY , IS NOT APPLICABLE. FOR THE ABOVE PROPOSITION , THE CIT(A) RELIED ON THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S US TECHNOLOGIES INTERNATIONAL (P) LTD REPORTED IN195 TAXMAN 323 AND ALSO THE ORDER OF THE COCHIN BENCH OF THE TRIBUNAL IN THE CASE OF M/ S CLASSIC CONCEPT HOME INDIA (P) LTD IN ITA NO. 469 TO 472/COCH/2014 . ITA NOS 308 & 309/C/2015 3 6 THE ASSESSEE BEING AGGRIEVED IS IN APPEALS BEFORE US. AT THE TIME OF HEARING OF THESE APPEALS, NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. THE LD DR PRESENT WAS DULY HEARD. THE LD DR SUBMITTED THAT THE ISSUE IN QUESTION IS SQUAREL Y COVERED BY THE RECENT JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CLASSIC CONCEPTS HOME INDIA LTD IN ITA NO. 90 OF 2015 (JUDGMENT DATED 21.5.2015). 7 WE HAVE HEARD THE LD DR AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, IN THE IN STANT CASE IT IS A SITUATION WHERE THE ASSESSEE HAD DEDUCTED TAX AT SOURCE AND FAILED TO REMIT THE SAME TO THE CENTRAL GOVERNMENT ACCOUNT IN TIME. THE REASON S STATED FOR BELATED PAYMENT OF TAX DEDUCTED AT SOURCE ARE MENTIONED BY THE CIT(A) AT PARA 6 OF HIS ORDER, WHICH IS REPRODUCED HEREUNDER FOR READY REFERENCE: 6 ENTRIES WERE PASSED ON THE CONTRACTORS ACCOUNTS ON COURSE OF AUDIT EVEN PAST TDS DUE DATE. ADDITIONAL DELAY OCCURRED ON ACCOUNT OF ACCOUNTS FINALIZATION PROCEDURES. SINCE THE COMPANY IS COVERED BY STATUTORY AUDIT APPOINTED BY THE CAG AS WELL AS CA G AUDIT, THE ADDITIONAL DAYS FOR ACCOUNTS FINALIZATION IS QUITE UNAVOIDABLE IN THE CASE OF ASSESSEE STAND ANY ENTRIES MADE ADDITIONALLY HAVING T DS IMPACT WILL CAUSE DELAY IN T DS REMITTANCE. 8 THE ABOV E REASON S FOR BELATED PAYMENT OF T AX ARE NOT A REASONABLE CAUSE FOR WAIVER OR REDUCTION OF PENALTY IMPOSED U/S 271C OF THE ACT. AS RIGHTLY POINTED OUT BY THE LD CIT (A), THE TAX DEDUCTED IS THE MONEY DUE TO THE CENTRAL GOVERNMENT AND THE DEDUCTOR DOES N OT HAVE ANY AUTHORITY TO RETAIN THE ITA NOS 308 & 309/C/2015 4 MONEY. IT IS THE DUTY OF THE DEDUCTOR TO REMIT THE TAX DEDUCTED AT SOURCE TO THE GOVERNMENT ACCOUNT WITHIN THE PRESCRIBED TIME AND REASONS STATED BY THE ASSESSEE IS NO GROUND FOR WAIVER OR REDUCTION OF PENALTY IMPOSED U /S 271C. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CLASSIC CONCEPTS HOME INDIA PVT LTD (SUPRA) HAD CATEGORICALLY HELD THAT IN A CASE WHERE TAX HAS BEEN DEDUCTED BUT NOT PAID WITHIN THE TIME LIMIT PRESCRIBED UNDER THE LAW, REASONABLE CAUSE MENTIO NED U/S 27 3 B WOULD NOT COME TO THE RESCUE OF THE ASSESSEE. IN THE LIGHT OF THE ABOVE FACTUAL MATRIX AND THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT, CITED SUPRA, WE HOLD THAT THE CIT(A) IS JUSTIFIED IN CONFIRMING THE PENALTY IMPOSED U/S 271C OF THE ACT. IT IS ORDERED ACCORDINGLY. 9 IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF OCT 2015 . SD/ - SD/ - ( B P JAIN ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN: D ATED 15 TH , OCT 2015 RAJ* ITA NOS 308 & 309/C/2015 5 COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT , 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN