The Income Tax Officer, TDS, Valsad V. Bhagwat Wire Industries, Dadra

ITA 3161/AHD/2014

• Counselvise Citation: 316120514 RSA 2014
• Duration Of Justice: 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 01-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B L SHARMA
• Keywords: Reasonable cause; Competent authority; Ignorance of law
• Section: 273B; 133A; 194C; 201(1)

Judgement Text

ITA NO S . 3161 TO 3168 /AHD/ 20 1 4 ASSESSMENT YEAR S : 2006 - 07 TO 2 0 13 - 14 PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH , SMC , AHMEDABAD [CORAM: PRAMOD KUMAR AM ] ITA NO S . 3 161 TO 3168 / AHD / 2 0 1 4 ASSESSMENT YEAR S : 20 06 - 07 TO 20 13 - 14 IN COME TAX OFFICER (TDS), ....... .. . ..... APPELLANT VALSAD. VS. BHAGWAT WIRE INDUSTRIES, ............................RESPONDENT SURVEY NO.246/3/2, B/H DEMNI ROAD HIGH SCHOOL, DADRA. [PAN AAEFB 2671 M] APPEARANCES BY: HARDIK VORA FOR THE APPELLANT B.L. SHARMA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : SEPTEM BER 2 ND , 201 5 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 3 RD , 2015 O R D E R 1. THESE EIGHT APPEALS PERTAIN TO THE SAME ASSESSEE, INVOLVE COMMON ISSUE AND WERE HEARD TOG ET HER. AS A MATTER OF CONVENI EN CE, THEREFORE, ALL THESE EIGHT APPEALS ARE BEING DISPOS ED OF BY THIS CONSOLIDATED ORDER. 2. WHILE FACTS OF ALL THE EIGHT ASSESSMENT YEARS BEFORE US A RE MATERIALLY SIMILAR AND THE IMPUGNED ORDERS, THOUGH SEPARATE FOR EACH YEARS, ARE IDENTICALLY WORDED, I WILL TAKE UP ITA NO.3161/AHD/2014 AS THE LEAD APPEAL . TH IS APPEAL IS DIRECTED AGAINST LEARNED CIT (A) S ORDER DATED 26 TH SEPTEMBER, 2014, IN THE MATTER OF TAX WITHHOLDING DEMAND UNDER SECTION 201(1) AN D 201(1A) READ WITH SECTION 206C FOR T HE ASSESSMENT YEAR 2006 - 07, ON THE FOLLOWING GROUNDS: - ITA NO S . 3161 TO 3168 /AHD/ 20 1 4 ASSESSMENT YEAR S : 2006 - 07 TO 2 0 13 - 14 PAGE 2 OF 10 1(A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DEMAND RAISED U/S.201(1) R . W . S . 206C (6&6A) FOR NON COLLECTION OF TAX, WITHOUT APPRECIATING THE FACTS BROUGHT ON THE RECORD BY THE AO . 1(B) ON THE FACTS A ND CIRCUMSTANCES OF THE C A SE, THE LD. CIT ( A ) HAS FAILED TO APPRECIATE THE FACT THE THE ASSESSEE HAS FAILED ON ITS PART TO COLLECT T D S ON SALE OF SCRAP OR COLLECTION AND SUBMISSION OF FORM NO.27C TO THE OFFICE OF CIT ON TIME. THE ASSESSEE HAS FAILED TO FULFIL THESE TWO PRIMARY A ND IMPORTANT CONDITIONS THEREBY MAKING HIM AN ASSESSEE IN DEFAULT AS PER EXPLANATIONS (1A) & (1B) OF SEC. 206C(1) OF THE ACT. THEREFORE , THE A.O. WAS JUSTIFIED IN PASSING THE ORDER U/S. 201(1) A ND 201(1A) R . W . S . 206C (6&6A)/206C(7) OF THE ACT. 1(C) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT HAD T HE ASSESSEE S CASE NOT BEEN COVERED UNDER THE SURVEY ACTION, THE ASSESSEE COULD HAVE BEEN BENEFITED BY CONTRAVENING THE PROVISIONS OF ACTION 206C(1) R . W . S . EXP LANATION (1A) & (1B). THE ASSESSEE TOOK CHANCE WITH THE DE PARTMENT 3. THE RELEVANT MATERIAL FACTS ARE LIKE THIS. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING ENAMELLED COPPER WINDING WIRES AND BARE COPPER WIRES/ STRIPS . A SURVEY UND ER SECTION 133A OF THE ACT WAS CARRIED OUT, ON THE PREMISES OF THE ASSESSEE, ON 18 TH SEPTEMBER 2012 TO VERIFY COMPLIANCE WITH TAX COLLECTION AT SOURCE OBLIGATIONS UNDER SECTION 206C OF THE ACT IN RESPECT OF SALE OF SCRAP GENERATED DURING THE MANUFACTURING PROCESS. IT WAS NOTED THAT WHILE THE ASSESSEE HAS GENERATED AND SOLD SCRAP, AS P ER DETAILS IN THE T ABLE BELOW, NEITHER ANY TAX WAS COLLECTED AT SOURCE NOR FORM NO. 27C , IN RESPECT OF SCRAP SALES, WAS FILED WITH THE I NCOME T AX AUTHORITIES. THE ASSESSING OF FICER TOOK ON RECORD ASSESSEE S SUBMISSION THAT FORM NO.27C WAS DULY COLLECTED FROM BUYER OF THE SCARP , HE ALSO NOTED THE ASSESSEE S CONTENTION THAT THESE CERTIFICATES WERE NOT, DUE TO AN INADVERTENT ERROR, FILED WITH THE CIT (TDS). ON THESE FACTS, THE AS SESSING OFFICER RAISED DEMANDS UNDER SECTION 201(1) AND 201(1A ) R.W.S. 206C BY OBSERVING AS FOLLOWS : - ITA NO S . 3161 TO 3168 /AHD/ 20 1 4 ASSESSMENT YEAR S : 2006 - 07 TO 2 0 13 - 14 PAGE 3 OF 10 5. THE SUBMISSIONS MADE BY THE ASSESSEE HAVE BEEN PERUSED AND THEY ARE NOT ACCEPTABLE IN VIEW OF THE FOLLOWING FACTS: A. IT IS A FACT THAT NEITHER THE A SSESSEE HAS COLLECTED TAX ON THE SALE OF SCRAP A S A SELLER A S REQUIRED IN THE PROVISIONS OF SECTION 206(1) NOR HAS IT SUBMITTED THE DECLARATIONS RECEIVED FROM THE BUYERS IN THE OFFICE OF THE COMPETENT AUTHORITY WITHIN THE TIME LIMIT AS PROVIDED IN EXPLANAT ION (1B) TO SECTION 206C(1) OF THE I.T. ACT. B. NON COLLECTION OF TAX HAS BEEN ADMITTED BY THE ASSESSEE DURING THE COURSE OF SURVEY PROCEEDINGS AS WELL AS IN THE WRITTEN SUBMISSIONS FILED IN RESPONSE TO THE SUMMONS AND SHOW CAUSE NOTICE. SUCH ADMISSION WAS MADE BY THE ASSESSEE ONLY WHEN THE DEPARTMENT TOOK THE FACTS FINDING ACTION U/S 133A OF THE I.T. ACT, 1961 IN ITS CASE. HAD THE ASSESSEE S CASE NOT BEEN COVERED UNDER THE SURVEY ACTION, THE ASSESSEE COULD HAVE BEEN BENEFITED BY CONTRAVENING THE PROVIS IONS OF SECTION 206C(1) R.W. EXPLANATIONS (1A) & (1B). THE ASSESSEE TOOK CHANCE WITH THE DEPARTMENT. HAD THE REVENUE NOT DETECTED S UCH DEFAULT BY CONDUCTING THE ACTION U/S.133A , THE ASSES SE E COULD HAVE ENJOYED THE FRUITS OF NON COLLECTION OF TAX ON THE SALE OF SCRAP AND WOULD HAVE CAUSED LOSS TO THE REVEN UE. C. THE ASSESSEE CONTENTION IS NOT CORRECT THAT THE SUB SECTION [1B] OF SECTION 206C IS A SEPARATE PROVISION AND SUB SECTION [1A] EXEMPTING THE COLLECTION OF TAX IS AN INDEPENDENT PROVISION WHICH IS NOT DEPENDENT OR CONDITIONAL TO SUB SECTION [1B] MAKES IT ABUNDANTLY CLEAR THAT IT IS THE RESTRICTIVE CLAUSE FOR THE PROVISO (1A); (1B) THE PERSON RESPONSIBLE FOR COLLECTING TAX UNDER THIS SECTION SH A LL DELIVER OR CAUSE TO BE DELIVERED TO THE CHIEF COMMIS SIONER OF COMMISSIONER ONE COPY OF THE DECLARATIONS REFERRED TO IN SUB - SECTION (1A) ON OR BEFORE THE SEVENTH DAY OF THE MONTH NEXT FOLLOWING THE MONTH IN WHICH THE DECLARATION IS FURNISHED TO HIM. D. IT IS PERTINENT TO NOTE HERE THAT NOWHERE THE ASSESSEE HA S TRIED TO GIVE ANY RE AS ONABLE CAUSE FOR COMMITTING SUCH DEFAULT. S HELD BY THE HON BLE DELHI HIGH COURT IN THE CASE OF WOODWARD GOVERNOR INDIA (P) LTD. V. CIT [2002] 253 ITR 745 (DELHI), THE INITIAL BURDEN IS ON THE ASSESSEE TO SHOW THAT THERE EXISTED REASONABLE CAUSE WHICH WAS THE R E ASON FOR THE FAILURE REFERRED TO IN THE CONCERNED PROVISION. REASONABLE CAUSE AS APPLIED TO HUMAN ACTION IS THAT WHICH WOULD CONSTRAIN A PERSON OF AVERAGE INTELLIGENCE AND ORDINARY PRUDENCE. IT CAN BE DESCRIBED AS PROBABL E CAUSE. IT MEANS AN HONEST BELIEF FOUNDED UPON REASONABLE GROUNDS, OF THE EXISTENCE OF A STATE CIRCUMSTANCES, WHICH ASSUMING THEM TO BE TRUE, WOULD REASONABLY LEAD ANY ORDINARY PRUDENT AND CAUTIOUS MAN, PLACED IN THE POSITION OF THE PERSON CONCERNED, TO COME TO THE CONCLUSION THAT THE SAME WAS THE RIGHT THING TO DO. THE CAUSE SHOWN HAS TO BE CONSIDERED AND IF IT FOUND TO BE FRIVOLOUS, WITHOUT SUBSTANCE OR FOUNDATION, THE PRESCRIBED CONSEQUENCES FOLLOW. THE ASSESSEE HAS CONTRAVENED THE PROVISIONS OF SECT ION 206C(1) R.W. EXPLANATIONS (1A) AND (1B) THERETO WITHOUT A NY REASONABLE CAUSE AND THEREBY IT IS LIABLE FOR THE PENALTY U/S. 276CA OF THE I.T. ACT, 1961. ITA NO S . 3161 TO 3168 /AHD/ 20 1 4 ASSESSMENT YEAR S : 2006 - 07 TO 2 0 13 - 14 PAGE 4 OF 10 E. THE RATIO OF THE JUDGEMENT RELIED ON BY THE ASSESSEE WITH REGARD TO PRE - AMENDED PROVISIONS OF SEC TION 194C CANNOT BE APPLIED IN THE CASE OF THE ASSESSEE. THIS IS SO BECAUSE THE SAID JUDGEMENT IS RELATING TO TAX DEDUCTION AT SOURCE COVERED UNDER THE CHAPTER XVIIB WHEREAS THE ISSUE UNDER CONSIDERATION F A LLS UNDER THE CHAPTER XVIIBB WHICH IS FOR TAX COL LECTION AT SOURCE. EVEN OTHERWISE, THE PROVISIONS OF SECTION 194C STOOD BEFORE AMENDMENT BY THE FINANCE ACT, 2009 ARE NO MORE THERE IN THE STATUTE. IT IS PERTINENT TO NOTE HERE THAT THE PROVISIONS OF TAX COLLECTION AT S OURCE (TCS) WERE INTRODUCED IN THE S TATUTE THROUGH UNION BUDGET OF 1988. THE THEN FINANCE MINISTER HAD OBSERVED AS UNDER IN HIS BUDGET SPEECH REGARDING THE LEGISLATIVE INTENT OF HIS MEASURE: A S AN ANTI - EVA S ION ME A SURE , I PROPOSE TO PROVIDE FOR ASSE SS MENT OF INCOME OF PERSONS ENGAGED IN CER T AIN TRADES LIKE LIQUOR AND FOREST CONTRACTS, AT A REASONABLY FIXED PERCENTAGE OF THE AMOUNT PAYABLE BY THEM WHILE PURCHASING GOODS . THE TAX WILL BE COLLECTED AT SOURCE . AFTER THE INTRODUCTION OF SECTION 44AC AND 206C IN THE STATUTE, MANY CASES WERE FILE D IN VARIOUS HIGH COURTS ACROSS THE COUNTRY AND ALL THE HIGH COURT S E.G. KERALA, A.P. GUJARAT, PUNJAB & HARYANA, OR ISSA AND SUPREME COURT IN THE CA SE OF UNION OF INDIA V. A. SANYASI RAO (1996) 219 ITR 330 SC UPHELD THE CONSTITUTIONAL VALIDITY OF BOTH THES E SECTIONS. IN THIS REGARD, IN ORDER TO HAVE CLARITY, THE OBSERVATION OF APEX COURT IN THE CASE OF UNION OF INDIA V. A. SANYASI RAO (1996) 219 ITR 330SC IS ABSOLUTELY RELEVANT AND THE SAME IS A UNDER : CONSIDERED IN THE LIGHT OF THE PRACTICAL DIFFICULTIE S ENVISAGED BY THE REVENUE TO LOCATE PERSONS AND TO COLLECT THE TAX DUE IN CERTAIN TRADE , IF THE LEGISLATURE IN ITS WISDOM THOUGHT THAT IT WOULD FACILITATE THE COLLECTION OF TAX DUE FROM SUCH SPECIFIED TRADERS O N PRESUMPTIVE BASIS, THERE IS NOTHING IN THE S A ID LEGISLATIVE MEASURE TO OFFEND ARTICLE 14 OF THE CONSTITUTION. SECTION 44AC READ WITH SECTION 206C IS NOT HIT BY ARTICLE 14 OF THE CONSTITUTION. 6. IN VIEW OF THE FACTS AND CIRCUMSTANCES DISCUSSED ABOVE, I HOLD THAT THE ASSESSEE WITHOUT ANY REASONABL E CAUSE HAS FAILED TO COLLECT TCS U/S. 206C(1) @1% ON THE S A LE TO THE TUNE OF RS.91,51,953/ - A ND ALSO FAILED TO FURNISH THE DECLARATIONS IN FORM 27C AS REQUIRED UNDER THE EXPLANATION (1A) & (1B) TO SECTION 206C(1) OF THE I.T. A C T, 1961. THE TAX LIABILITY OF THE ASSESSEE INCLUDING INTEREST IS WORKED OUT AS FOLLOWS : NATURE OF PAYMENT/SECTION F. Y. SHORT COLLECTION AMOUNT RATE OF INTEREST/DEFAULT PERIOD U/S.201A R.W.S. U/S 206C(7) TOTAL DEMAND SCRAP SALE/206C 2005 - 06 RS.91,520 1% 96 MONTHS RS.87,859 RS.1,79, 379 ITA NO S . 3161 TO 3168 /AHD/ 20 1 4 ASSESSMENT YEAR S : 2006 - 07 TO 2 0 13 - 14 PAGE 5 OF 10 7. IN VIEW OF THE ABOVE, THE ASSESSEE HAS ALSO MADE ITSELF LIAB LE FOR PENALTY PROCEEDINGS U /S 276CA OF THE I.T. A CT , 1961 FOR FAILURE TO COLLECT TAX AT SOURCE U/S. 206C(1) AS DISCUSSED IN DETAIL ABOVE. ACCORDINGLY, THE ASSESSEE IS LIABLE TO PAY DEMA ND AS UNDER : A. DEMAND U/S. 201(1) R.W. SECTION 206C(6&6A) RS.91,520/ - B. DEMAND U/S. 201(1A) R .W. SECTION 206C(7) RS.87,859/ - TOTAL DEMAND RS.1,79,379/ - SAY . ....... .. RS.1,79,380/ - 4. AGGRIEVED BY THE DEMAND SO RAISED, THE ASSESSEE CARR IED THE MATTER IN APPAL BEFORE THE LD . CIT (A) WHO DELETED THE DEMAND UNDER SECTION 201(1) R.W.S. 206C BY OBSERVING AS FOLLOWS : I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS . THE ONLY ISSUE UNDER DISPUTE IS THAT NON SUBMISSION OF FORMS NO.27C TO THE OFFICE OF COMMISSIONER OF INCOME TAX WOULD C A LL FOR PENAL PROVISIONS OF THE ACT A S HELD BY THE ASSESSING OFFICER WHEREAS THE APPELLANT HAS PLEADED THAT IT IS ONLY A TECHNICAL DEFAULT OCCURRED THROUGH OVERSIGHT A ND THE APPELLANT CANNOT BE TREATED AS DEEMED ASSESSEE TO BE IN DEFAULT. REGARDING OTHER ASPECTS OF THE CASE THERE IS NO DISPUTE SUCH AS COLLECTING OF FORM NO.27C BY THE SELLER FROM THE BUYER, FILLING OF RELATED RETURNS IN TIME ETC. I N MY VIEW IN THIS CASE THE APPELLANT HAS BEEN COLLECTING ALL THE R EQUIRED 27C FORMS FROM THE BUYERS WHICH WERE FOUND DURING SURVEY BY THE DEPARTMENT. IT SHOWS THE ASSESSEE HAS BEEN HONEST AS REGARD TO THE DEDUCTION OF TAX/COLLECTION OF 27C FORM IN LIEU OF THAT. THE ONLY DEFAULT IS THE NON SUBMISSION OF THESE FORMS TO T HE OFFICE OF COMMISSIONER OF INCOME TAX. THE SUBMISSION OF THE APPELLANT THAT IT HAPPENED THROUGH OVERSIGHT CAN BE BELIEVED BECAUSE BY DOING THIS HE DOES NOT STAND TO GAIN ANYTHING. MOREOVER THE ASSESSING OFFICER COULD NOT BRING ANYTHING ON RECORD TO SHO W TH A T THE BUYER OF THE SCRAP HAS NOT DISCLOSED A LL THESE FACTS OF PURCHASE IN THEIR RETURN OF INCOME AND THUS EVADING THE TAX. THE APPELLANT CLAIMED THAT ALL THE TAXES DUE HAS BEEN PAID BY THE BUYERS IN THEIR RETURNS OF INCOME. THUS THERE IS NO LOSS OF REVENUE. REGARDING THE PLEA TAKEN BY THE APPELLANT THAT HIS CASE IS COVERED UNDER THE PROVISO TO SECTION 206C(6A) OF THE ACT C A N BE ADMITTED IN VIEW OF THE JUDGEMENT OF HON BLE I T AT, RAJKOT IN THE CASE OF M/S BHARTI AUTO PRODUCTS A S MENTIONED IN THE FOREG OING PARAGRAPHS. THE RATIO OF JUDGEMENT CAN BE SUMMARISED AS FOLLOWS : - FIRST PROVISO INSERTED N SUB SECTION (6A) OF SECTION 206C SEEKS TO ACHIEVE THREE FOLD OBJECTIVES. (1) ITA NO S . 3161 TO 3168 /AHD/ 20 1 4 ASSESSMENT YEAR S : 2006 - 07 TO 2 0 13 - 14 PAGE 6 OF 10 I. I SEEKS TO E NSURE THAT THERE IS NO LOSS TO THE REVENUE I.E. THE BUYER HAS FUR NISHED HIS RETURN OF INCOME U/S. 139. II. THE BUYER HAS TAKEN INTO ACCOUNT SUCH SUM ON WHICH TAX WAS REQUIR E D TO BE COLLECTED AT SOURCE U/S 206C FOR COMPUTING INCOME IN SUCH RETURN OF INCOME. III. THE BUYER HAS PAID THE TAX DUE ON THE INCOME DECLARED BY HI M IN SUCH A RETURN OF INCOME. IV. THE PAYER I.E. THE PERSON RESPONSIBLE FOR COLLECTING THE TAX AT SOURCE U/S 206C, HAS FURNISHED A CERTIFICATE IN FORM NO.27BA CONFIRMING THE AFORESAID. (2) RATIONALISED THE PROVISIONS RELATING TO COLLECTION OF TAX AT SOURCE . (3) PROVIDE RELIEF TO THE COLLECTOR OF TAX T SOURCE FROM THE CONSEQUENCES OF NON/SHORT DEDUCTION /COLLECTION OF TAX AT SOURCE AND TO THAT EXTENT IT IS A BENEFICIAL PROVISION. FURTHER AFTER CITING THE JUDGEMENTS OF CIT V/S CHANDULAL VENICHAND (1994) 209 IT R 7/73 TAXMAN 349 (GUJ) AND ALLIED MOTORS PVT . LTD . V/S. CIT (1997) 224 ITR 677/91 TAXMAN 205, THE HON BLE ITAT HELD THAT W E HAVE NO HESITATION TO HOLD THAT THE SAID PROVISO WOULD APPLY RETROSPECTIVELY. SIMILARLY HON BLE HIGH COURT OF KARNATAKA HAS ALSO HELD IN THE CASE OF SREE MANJUNATHA WINES V/S CIT REPORTED IN (2011) 15 TAXMAN.COM 6 THAT IF IN A GIVEN C A SE ASSESSEE HAS NOT COLLECTED T AX UNDER SECTION 206C FROM BUYER, BEFORE PROCEEDINGS AGAINST ASSESSEE IT IS NECESSARY TO FIND OUT WHETHER BUYER HAS PAI D TAX IN ACCORDANCE WITH PROVISIONS OF ACT AND ONLY IN EVENT BUYER HA S NOT PAID TAX THEN AUTHORITIES CAN PROCEED AGAINST ASSESSEE WHO WAS UNDER OBLIGATION TO COLLECT T A X AND REMIT TO GOVERNMENT. FROM THE FACTS AND CIRCUMSTANCES OF THE CASE AS NARRATED ABOV E AND KEEPING IN VIEW THE VARIOUS DECISIONS QUOTED AND RELIED UPON BY THE APPELLANT I AM OF THE CONSIDERED VIEW THAT THE DEFAULT OF THE APPELLANT IS ONLY TECHNICAL WHICH HAS NOT RESULTED INTO LOS S OF REVENUE. MOREOVER FOLLOWING THE JUDGEMENT OF HON BLE IT AT RAJKOT THE PROVISIONS OF SECTION 206C(6A) OF THE ACT ARE ALSO APPLICABLE TO THE CASE OF THE APPELLANT THEREFORE THE APPELLANT CANNOT BE TREATED AS DEEMED ASSESSEE IN DEFAULT SO FAR AS NON - DEDUCTION OF TAX IS CONCERNED. BUT THE APPELLANT IS LIABLE TO PA Y INTEREST U/S 201(1A) OF THE ACT. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 5. THE ASSESSING OFFICER IS AGGRIEVED OF THE RELIEF SO GRANTED BY THE LD . CIT ( A ) AND IS IN APPEAL BEFORE ME. LEARNED COUNSEL APPEARING BEFORE ME CONFIRMS THA T THE ASSESSEE IS NOT IN APPEAL. ITA NO S . 3161 TO 3168 /AHD/ 20 1 4 ASSESSMENT YEAR S : 2006 - 07 TO 2 0 13 - 14 PAGE 7 OF 10 6 . I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED THE FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 7. I HAVE NOTED THAT THE ASSESSEE S CONTENTION TO THE EFFECT THA T F ORM NO. 27C COULD NOT BE FILED DUE TO INADVERTENT MISTAKE REMAINS UNCONTROVERTED . LEARNED DEPARTMENTAL REPRESENTATIVE , HOWEVER, CONTENDS THAT FILING OF THESE FORMS WITH THE LD . CIT (TDS) IS A STATUTORY OBLIGATION OF THE ASSESSEE AND IGNORANCE OF THIS BI NDING STATUTORY OBLIGATION, OR CARELESSNESS IN COMPLYING WITH THE SAME, IS NOT A VALID EXCUSE . IN THIS REGARD, I MAY ONLY REFER TO THE FOLLOWING OBSERVATIONS OF A DIVISION BENCH OF THIS TRIBUNAL, IN THE CASE OF SUDHERSHAN AUTO & GENERAL FINANCE LT D. VS. CIT (60 ITD 177) : - 24. THE CONTENTION OF THE REVENUE THAT IGNORANCE OF LAW IS NOT A VALID EXCUSE IS ALSO NOT VALID. THE LEARNED D.R. WAS CONFRONTED WITH THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF MOTILAL PADAMPAT SUGAR MILLS CO. LTD. V. STA TE OF UP [1979] 118 ITR 326. HE COULD NOT GIVE ANY VALID EXPLANATION IN SUPPORT OF HIS CONTENTION THAT EVERYBODY IS SUPPOSED TO KNOW THE LAW AFTER GOING THROUGH THE SAID JUDGMENT. THE HON BLE SUPREME COURT IN THE AFORESAID CASE HAS, INTER ALIA, HELD AS UND ER AT PAGE 339 : 'MOREOVER, IT MUST BE REMEMBERED THAT THERE IS NO PRESUMPTION THAT EVERY PERSON KNOWS THE LAW. IT IS OFTEN SAID THAT EVERY ONE IS PRESUMED TO KNOW THE LAW, BUT THAT IS NOT A CORRECT STATEMENT : THERE IS NO SUCH MAXIM KNOWN TO THE LAW. OVER A HUNDRED AND THIRTY YEARS AGO, MAULA, J. POINTED OUT IN MARTINDALE V. FALKNER [1846] 2 CB 706 : THERE IS NO PRESUMPTION IN THIS COUNTRY THAT EVERY PERSON KNOWS THE LAW : IT WOULD BE CONTRARY TO COMMON SENSE AND REASON IF IT WERE SO. SCRUTTON, L.J. ALSO ONCE SAID : IT IS IMPOSSIBLE TO KNOW ALL THE STATUTORY LAW, AND NOT VERY POSSIBLE TO KNOW ALL THE COMMON LAW. BUT IT WAS LORD ATKIN WHO, AS IN SO MANY OTHER SPHERES, PUT THE POINT IN ITS PROPER CONTEXT WHEN HE SAID IN EVANS V. BARTLAM [1937] AC 473 : . ...... THE FACT IS THAT THERE IS NOT AND NEVER HAS BEEN A PRESUMPTION THAT EVERY ONE KNOWS THE LAW . THERE IS THE RULE THAT IGNORANCE OF THE LAW DOES NOT EXCUSE, A MAXIM OF VERY DIFFERENT SCOPE AND APPLICATION.' THE IGNORANCE OF THE LAW MAY OR MAY NOT CONS TITUTE A VALID EXCUSE FOR JUSTIFYING NON - COMPLIANCE WITH A PROVISION OF STATUTE. IT WILL DEPEND UPON THE NATURE OF THE DEFAULT. IF IT IS MERELY A TECHNICAL OR VENIAL BREACH, NO PENALTY WOULD BE IMPOSABLE BECAUSE THE LEVY OF PENALTY UNDER ANY STATUTORY PROV ISION NECESSARILY IMPLIES EXISTENCE OF SOME GUILTY INTENTION ON THE PART OF THE DEFAULTER OR THE OFFENDER. IN ORDER TO DETERMINE THE EXISTENCE OR ABSENCE OF ANY GUILTY INTENTION ON THE PART OF THE ASSESSEE, ONE WILL HAVE TO CONSIDER ALL THE SURROUNDING FAC TS AND CIRCUMSTANCES. WHETHER BY COMMITTING ANY DEFAULT OF NON - COMPLIANCE WITH A STATUTORY PROVISION OF LAW, AN ASSESSEE HAS DERIVED ANY BENEFIT, GAIN OR ADVANTAGE OR WHETHER BY SUCH A DEFAULT OR NON - COMPLIANCE THE ASSESSEE HAS DEFRAUDED THE REVENUE OR HAS CAUSED ANY LOSS TO THE REVENUE. THESE ARE ITA NO S . 3161 TO 3168 /AHD/ 20 1 4 ASSESSMENT YEAR S : 2006 - 07 TO 2 0 13 - 14 PAGE 8 OF 10 SOME OF THE FACTORS WHICH WILL HAVE TO BE SERIOUSLY CONSIDERED BEFORE CONSIDERING THE FACT AS TO WHETHER THE IGNORANCE ON THE PART OF THE ASSESSEE AND HIS CONSULTANT CAN CONSTITUTE A VALID EXCUSE OR A REASONABLE C AUSE FOR THE PURPOSES OF SECTION 273B IN RELATION TO THE ALLEGED DEFAULT SPECIFIED IN SECTION 272A(2)( F ). IN THE PRESENT CASE, THE ASSESSEE HAS NOT DERIVED ANY GAIN, BENEFIT OR ADVANTAGE BY DELAYED SUBMISSION OF FORM NO. 15H. THE REVENUE HAS ALSO NOT SUFFE RED ANY LOSS. THE GUILTY INTENTION ON THE PART OF THE ASSESSEE IS TOTALLY ABSENT BECAUSE THE ASSESSEE HAS FURNISHED COMPLETE DETAILS RELATING TO ALL THOSE 49 DEPOSITORS IN THE PRESCRIBED FORM NO. 27A WHICH WAS DULY FURNISHED WITHIN THE TIME PRESCRIBED UNDE R THE RELEVANT PROVISIONS OF LAW. THE REVENUE HAS BROUGHT NO MATERIAL ON RECORD TO PROVE THAT THE ASSESSEE HAD DELAYED THE FURNISHING OF THE COPY OF THEIR DECLARATION IN FORM NO. 15H WITH ANY ULTERIOR MOTIVE SUCH AS TO KEEP THE INFORMATION RELATING TO THEI R DEPOSIT, THEIR INTEREST INCOME SECRET FROM THE DEPARTMENT OR THAT THOSE 49 DEPOSITORS IN COLLUSION WITH THE ASSESSEE EVADED PAYMENT OF TAX ON THEIR INTEREST INCOME. THE CIT HAS NOT EVEN EXAMINED FEW OF THOSE 49 DEPOSITORS TO BRING ANY SUCH MATERIAL ON RE CORD. ON THE OTHER HAND, THE ASSESSEE HAS FURNISHED THE COMPLETE DETAILS RELATING TO NAME AND FULL ADDRESSES OF THOSE PERSONS TO WHOM INTEREST WAS CREDITED/PAID WITHOUT DEDUCTION OF TAX AT SOURCE, THE AMOUNT OF INTEREST CREDITED TO THEIR ACCOUNT DURING THE FINANCIAL YEAR 1993 - 94 AND THE DATE OF CREDIT OR PAYMENT AS REQUIRED IN THE PRESCRIBED FORM NO. 27A. THE DEPARTMENT COULD MAKE NECESSARY ENQUIRIES AGAINST THOSE DEPOSITORS ON THE BASIS OF SUCH ADEQUATE INFORMATION GIVEN IN THE FORM NO. 27A. THE DETAILS AN D FACTS STATED IN FORM NO. 27A VIRTUALLY CONTAINS ALL THE DETAILS WHICH ARE CONTAINED IN FORM NO. 15H. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAD FURNISHED SUCH A FORM NO. 27A FOR THE RELEVANT YEAR WITHIN THE TIME PRESCRIBED UNDER THE RELEVANT RULE AND THE PROVISION OF INCOME - TAX ACT, 1961. THIS FACT PROVES TOTAL ABSENCE OF ANY GUILTY INTENTION ON THE PART OF THE ASSESSEE. 25. IT WILL BE WORTHWHILE TO MAKE A USEFUL REFERENCE TO THE JUDGMENT OF HON BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. (S UPRA) : 'AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI - CRIMINAL PROCEEDING, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD 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 OBLIGATION IS A MATTER OF D ISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THE RE 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.' THE RATIO OF THE JUDGMENT OF HON BLE SUPREME COURT IN THE CAS E OF HINDUSTAN STEEL LTD. (SUPRA) IS FULLY APPLICABLE ON THE FACTS OF THE PRESENT CASE. 26. THE LEARNED COUNSEL FOR THE ASSESSEE HAD ALSO PLACED RELIANCE ON THE JUDGMENT OF HON BLE SUPREME COURT IN RAFIQ S CASE ( SUPRA ) AND HAD QUOTED THE FOLLOWING EXTRACTS FROM THE AFORESAID JUDGMENT IN HIS PETITION SUBMITTED BEFORE THE CIT : ITA NO S . 3161 TO 3168 /AHD/ 20 1 4 ASSESSMENT YEAR S : 2006 - 07 TO 2 0 13 - 14 PAGE 9 OF 10 '. . . A PARTY SHOULD NOT SUFFER FOR INACTION, DELIBERATE OMISSION OR MISDEMEANOUR OF HIS COUNSEL WHEN HE HAS SELECTED HIS COUNSEL, BRIEFED HIM AND PAID HIS FEE AND WAS ASSURED THAT H IS INTEREST WILL BE LOOKED AFTER. . .' THERE ARE SEVERAL OTHER DECISIONS IN WHICH IT HAS BEEN HELD THAT BONA FIDE OMISSIONS ON THE PART OF THE COUNSEL WOULD CONSTITUTE REASONABLE AND SUFFICIENT CAUSE JUSTIFYING CANCELLATION OF PENALTY UNDER DIFFERENT PROV ISIONS OF INCOME - TAX ACT. 27. IN VIEW OF THE AFORESAID FACTS, DISCUSSIONS AND THE ABOVE - REFERRED JUDGMENTS, WE ARE OF THE CONSIDERED OPINION THAT THE INNOCENT OMISSION ON THE PART OF THE ASSESSEE TO FURNISH THE COPIES OF DECLARATION IN PRESCRIBED FORM NO. 15H DUE TO BONA FIDE IGNORANCE ON THEIR PART AND DUE TO BONA FIDE IGNORANCE ON THE PART OF THEIR TAX CONSULTANT AS ADMITTED IN THE AFFIDAVIT FURNISHED BEFORE THE CIT WOULD ON THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE CONSTITUTE A REASONABLE CAUSE FO R THE FAILURE CONTEMPLATED IN SECTION 272A(2)( F ) WITHIN THE MEANING OF SECTION 273B. 8 . IN THE PRESENT CASE ALSO, THE LAPSE IS ONLY A TECHNICAL BREACH OF LAW AND IT IS NOT RESULTED IN ANY LOSS OF REVENUE. BEARING IN MIND THIS FACT, THE ABOVE DISCUSSIONS , AS ALSO ENTIRETY OF THE CASE, I UPHOLD THE RELIEF GRANTED BY THE LD . CIT ( A ) AND DECLINE TO INTERFERE IN THE MATTER. 9 . IN THE RESULT, ITA NO.3161/AHD/2014 IS DISMISSED. 10 . LEARNED REPRESENTATIVES FAIRLY AGREE THAT WHATEVER I DECIDE IN ITA NO.3161/AHD/20 14 WILL EQUALLY APPLY IN ALL OTHER APPEALS AS WELL, AS ALL THE MATERIAL FACTS, BARRING VARIATIONS IN AMOUNTS, ARE THE SAME. ACCORDINGLY, THESE SEVEN APP E ALS I.E. ITA NOS.3162, 3163, 3164, 3165, 3166, 3167 & 3168/AHD/2014 ARE ALSO DISMISSED. ORDER PRONOUN CED IN THE OPEN COURT ON THIS 3 RD DAY OF SEPTEMBER, 2015. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) AHMEDABAD, THE 3 RD DAY OF SEPTEMBER , 2015 PBN/* ITA NO S . 3161 TO 3168 /AHD/ 20 1 4 ASSESSMENT YEAR S : 2006 - 07 TO 2 0 13 - 14 PAGE 10 OF 10 COPIES TO: (1) THE APPELLANT (2 ) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD