WEATHERGUARD AIRCON P. LTD, NAVI MUMBAI V. ADDL CIT (TDS) RG 3, MUMBAI

ITA 3174/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2729 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 05-05-2014
• Court: TRIBUNAL
• Department Lawyers: HARSHAD VENGURLEKAR
• Keywords: Reasonable cause
• Section: 273B; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO. 3174/MUM./2014 ( ASSESSMENT YEAR : 20 10 11 ) M/S. WEATHERGUARD AIRCON PVT. LTD. SHOP NO.12, KRISHNA TOWER PLO T NO.17, SECTOR 14 KOPERKHAIRNE, NAVI MUMBAI 400 709 PAN AAACW6192L .. APPELLANT V/S ADDL. COMMISSIONER OF INCOME TAX RANGE 3, MUMBAI .... RESPONDENT ASSESSEE BY : SHRI M.P. CHHAJED A/S SHRI PIYUSH CHHAJED REVEN UE BY : SHRI HARSHAD VENGURLEKAR DATE OF HEARING 2 8 . 10 .2015 DATE OF ORDER 06.11.2015 O R D E R PER SAKTIJIT DEY , J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 17 TH FEBRUARY 2014 , OF LEARNED COMMISSIONER (APPEALS) 14, MUMBAI, FO R THE ASSESSMENT YEAR 2010 11. 2. THE ASSESSEE IS BASICALLY AGGRIEVED WITH THE CONFIRMATION OF PENALTY OF ` 3 LAKH, IMPOSED UNDER SECTION 272A(2)(K) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). M/S. WEATHERGUARD AIRCON PVT. LTD. 2 3. BRIEFLY STATED THE FACTS ARE, THE ASSESSEE IS A PRIVATE LIMITED COMPANY. THE ASSESSING OFFICER, ON EXAMINATION OF RECORDS PERTAINING TO THE ASSESSEE, FOUND THAT ASSESSEE HAD NOT FILED THE QUARTERLY TDS STATEMENT FOR THE FINANCIAL YEAR 2009 10, WITHIN THE DUE DATE AS PROVIDED UNDER SECTION 206 / 206C OF THE ACT R/W RULE 37 OF THE INCOME TAX RULES, 1962. HE OBSERVED THAT AS PER THE PROVISIONS CONTAINED UNDER SECTION 200(3) R/W RULE 31A, THE ASSESSEE BEING A DEDUCTOR IS REQUIRED TO FILE THE QUARTERLY TDS STATEMENT FOR EACH QUARTER BY 15 TH JULY, 15 TH OCTOBER, 15 TH J ANUARY AND 15 TH JUNE OF THE YEAR. AS THE ASSESSEE HAS NOT FILED THE QUARTERLY STATEMENT WITHIN THE AFORESAID PRESCRIBED DATE, THE ASSESSING OFFICER ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE TO EXPLAIN WHY PENALTY UNDER SECTION 27 2 A(2)(K) SHOULD NOT BE IMP OSED. IN RESPONSE TO THE SHOW CAUSE NOTICE, AS STATED BY THE ASSESSING OFFICER , THOUGH THE ASSESSEE ADMITTED THE DEFAULT COMMITTED IN FILING THE TDS STATEMENT BUT REQUESTED FOR NOT IMPOSING PENALTY. THE ASSESSING OFFICER, AFTER EXAMINING THE EXPLANATION OF THE ASSESSEE, WAS OF THE VIEW THAT ASSESSEE HAS NOT MADE OUT A CASE THAT THE DEFAULT WAS DUE TO REASONABLE CAUSE. HE, THEREFORE, PROCEEDED TO PASS AN ORDER IMPOSING PENALTY UNDER SECTION 272A(2)(K) FOR ` 3,00,858. BEING AGGRIEVED OF M/S. WEATHERGUARD AIRCON PVT. LTD. 3 THE PENALTY ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE EXPLAINING THE CAUSE OF DELAY IN FILING THE TDS STATEMENT SUBMITTED THAT DUE TO OVERSIGHT OF HIS STAFF, TDS STATEMENT COULD NOT BE FILED IN TIME. THE LEARNED COMMISSIONER (APPEALS), HOWEVER, WAS NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE. HE OBSERVED THAT THE PROVISIONS CONTAINED UNDER SECTION 203 R/W RULE 31A REQUIRE STRICT COMPLIANCE. THEREFORE, THE PLEA OF LACK OF STAFF, IGNORANCE OF TDS PROVISIONS WOULD NOT CONSTITUTE REASONABLE CAUSE. ACCORDINGLY, HE CONFIRMED LEVY OF PENALTY. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US, THOUGH , THERE IS A DELAY IN FILING THE TDS STATEMENTS FOR DIFFERENT QUARTERS WITHIN THE PRESCRIB ED TIME BUT THE DELAY WAS NOT DUE TO DELIBERATE LATCHES OR NEGLIGENCE OF THE ASSESSEE BUT ON ACCOUNT OF OVERSIGHT BY THE CONCERNED STAFF WHO WAS IN CHARGE OF FILING TDS STATEMENT. THE LEARNED COUNSEL SUBMITTED EVEN THOUGH THERE IS DELAY IN FILING TDS STATE MENT BUT THEY WERE FILED MUCH BEFORE THE ISSUANCE OF SHOW CAUSE NOTICE BY THE ASSESSING OFFICER AND MUCH BEFORE THE FILING OF TDS STATEMENT S , ASSESSEE HAS REMITTED TDS AMOUNT TO GOVERNMENT ACCOUNT ALONG WITH THE STATUTORY INTEREST IN THOSE CASES WHERE REMI TTANCE WAS DELAYED. THUS, THE LEARNED COUNSEL FOR THE ASSESSEE M/S. WEATHERGUARD AIRCON PVT. LTD. 4 SUBMITTED WHEN THERE IS NO LOSS TO THE REVENUE FOR A MERE TECHNICAL BREACH, PENALTY SHOULD NOT BE LEVIED. IT WAS FURTHER SUBMITTED THAT WHEN THE ASSESSEE HAD DEPOSITED THE TDS AMOUNT TO THE GOV ERNMENT ACCOUNT, THE ASSESSEE HAS TO BE TREATED AS A LAW ABIDING CITIZEN AND THE DELAY IN FILING THE TDS STATEMENT SHOULD NOT BE ATTRIBUTED AS A NEGLIGENCE OF THE ASSESSEE. IN SUPPORT OF SUCH CONTENTION, HE RELIED UPON THE FOLLOWING CASE LAWS: I) ROYAL META L PRINTERS PVT. LTD. V/S ACIT, [2010] 131 TTJ 59 (MUM.); II) STATE BANK OF BIKANER & JAIPUR V/S CIT, [2015] 38 ITR (T) 535 . 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED BEFORE US AS PER THE PROVISIONS OF SECTION 272A(2)(K), THERE IS NO OPTION LEFT TO THE ASSESSING OFFICER IN THE MATTER OF LEVY OF PENALTY AS THE WORD USED IS SHALL . FURTHER, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED WHAT CONSTITUTES REASONABLE CAUSE WOULD DEPEND UPON THE FACT OF EACH CASE AND IT WOULD MEAN A REASONABLE CAUSE WH ICH WOULD CONSTRAIN A PERSON OF AVERAGE INTELLIGENCE AND ORDINARY PRECEDENCE. HE SUBMITTED THAT IN THE PRESENT CASE, THE ASSESSEE WAS NEGLIGENT IN CARRYING OUT THE STATUTORY MANDATE AND THE PLEA THAT IT WAS DUE TO OVERSIGHT OF STAFF IS NOT ACCEPTABLE. FOR THIS PROPOSITION, HE RELIED UPON THE FOLLOWING DECISIONS: M/S. WEATHERGUARD AIRCON PVT. LTD. 5 I) HTSL COMMUNITY SERVICE TRUST V/S JDIT (E), [2012] 52 SOT 144 (BOM.) (UR); II) CIT V/S GENERAL ENGINEERING WORKS, [2009] 7. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL AV AILABLE ON RECORD. UNDISPUTEDLY, IT IS A FACT ON RECORD THAT THERE IS A DELAY IN FILING TDS STATEMENTS IN RESPECT OF ALL THE FOUR QUARTERS AS FAR AS FORM NO.24Q IS CONCERNED AND AS FAR AS STATEMENTS IN FORM NO.26Q IS CONCERNED, THERE IS A DELAY IN FILING T HE TDS STATEMENT IN RESPECT OF QUARTER 2, 3 AND 4. ON A PERUSAL OF THE DETAILS OF FILING OF TDS STATEMENT, IT IS SEEN THAT THE DELAY IS SUBSTANTIAL RANGING FROM ALMOST ONE YEAR TO ABOUT TWO YEARS. IT IS ALSO RELEVANT TO NOTE THAT ON A SPECIFIC QUERY FROM T HE BENCH IT WAS SUBMITTED BY THE LEARNED COUNSEL THAT IN RESPECT OF SOME OF THE QUARTERS TDS AMOUNT WAS REMITTED TO THE GOVERNMENT ACCOUNT BEYOND THE PRESCRIBED D ATE. THUS, KEEPING IN VIEW THE AFORESAID FACTUAL DECISION, IT IS TO BE DECIDED WHETHER THERE I S A REASONABLE CAUSE FOR NOT IMPOSING PENALTY. AS COULD BE SEEN, IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE HAS SUBMITTED ITS EXPLANATION BY STATING THAT THE DEDUCTEE IS THE DIRECTOR OF THE COMPANY TO WHOM RENT / PROFESSIONAL FEE WAS PAID AND SALAR Y WAS PAID TO THE FAMILY MEMBERS OF THE COMPANY, HENCE, THERE IS NO WILLFUL INTENTION TO DELAY OR DEPRIVE ANY DEDUCTEE OF THE TDS CREDIT. M/S. WEATHERGUARD AIRCON PVT. LTD. 6 HOWEVER, BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE HAS TAKEN A COMPLETE LY DIFFERENT STAND BY STATING THAT DUE TO OVERSIGHT OF THE STAFF, TDS STATEMENT COULD NOT BE FILED. WHEN THE LEARNED COUNSEL WAS SPECIFICALLY ASKED BY THE BENCH WHY THIS STAND TAKEN BEFORE THE FIRST APPELLATE AUTHORITY WAS NOT TAKEN BEFORE THE ASSESSING OFFICER, HE SUBMITTED THAT DUE TO VERY S HORT TIME GIVEN BY THE ASSESSING OFFICER FOR SUBMITTING THE REPLY, THE ASSESSEE COULD NOT TAKE SUCH STAND. HOWEVER, WE ARE NOT CONVINCED WITH THE AFORESAID SUBMISSIONS OF THE ASSESSEE. IT IS RELEVANT TO NOTE THAT IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER, THE ASSESSEE DID SUBMIT ITS REPLY. THEREFORE, THE ASSESSEE COULD VERY WELL HAVE TAKEN THE STAND WHICH WAS TAKEN BEFORE THE FIRST APPELLATE AUTHORITY. THEREFORE, AS IT APPEARS, THE ASSESSEE HAS TAKEN A COMPLETELY NEW STAND BEFORE THE FIRST APPELLATE AUTHORITY WHICH IS NOT AVAILABLE BEFORE THE ASSESSING OFFICER. MOREOVER, THE PLEA REGARDING OVERSIGHT BY THE STAFF IS VERY GENERAL IN NATURE, HENCE, CANNOT BE ACCEPTED. NEITHER THE ASSESSEE HAS IDENTIFIED THE CONCERNED EMPLOYEE NOR FURN ISHED ANY AFFIDAVIT OF THE EMPLOYEE ADMITTING SUCH FACT. FURTHER, CONSIDERING THE PERIOD OF DELAY, THE PLEA OF OVERSIGHT BY STAFF IS NOT ACCEPTABLE. THOUGH, WE ACCEPT THE FACT THAT IMPOSITION OF PENALTY UNDER SECTION 272A(2)(K) IS NOT MANDATORY AS THE PROV ISIONS OF SECTION 273B IS ALSO APPLICABLE IN CASE OF IMPOSITION OF PENALTY UNDER SECTION 272A(2)(K) , BUT , AT THE M/S. WEATHERGUARD AIRCON PVT. LTD. 7 SAME TIME, THE ASSESSEE HAS TO SHOW REASONABLE CAUSE FOR THE DEFAULT. AS FAR AS THE DECISION RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSE E, WE FIND THEM TO BE FACTUAL LY DISTINGUISHABLE. W HAT CONSTITUTES REASONABLE CAUSE WOULD VARY FROM CASE TO CASE. T HE RATIO LAID DOWN IN A PARTICULAR DECISION WILL NOT APPLY UNLESS THE FACTS ARE IDENTICAL. IN CASE OF STATE BANK OF BIKANER & JAIPUR (SUPRA), TH E ASSESSEE HAD PAID THE TDS AMOUNT IN TIME. MOREOVER, IT WAS EXPLAINED BY THE ASSESSEE THAT AFTER CENTRALIZATION OF THE TAXATION SYSTEM, THE BRANCH WAS NOT AWARE WHERE TO FILE THE TDS RETURN. CONSIDERING THE AFORESAID FACT, THE TRIBUNAL DELETED THE PENALTY BY HOLDING THAT THERE WAS A REASONABLE CAUSE. WHEREAS IN CASE OF THE ASSESSEE, NOT ONLY ON FIVE OCCASIONS, TDS AMOUNTS WERE REMITTED BEYOND THE PRESCRIBED DATE BUT THERE IS INORDINATE DELAY IN FILING THE TDS STATEMENT. FURTHER, THE ASSESSEE IS NOT CONSIST ENT WITH ITS STAND WHILE EXPLAINING THE CAUSE OF DELAY. SIMILARLY, IN CASE OF ROYAL METAL PRINTERS PVT. LTD. (SUPRA), THE TAX AMOUNT WAS DEPOSITED WITHIN THE STIPULATED TIME. WHEREAS, THE ASSESSEE AS PER ITS OWN ADMISSION ON MORE OCCASION S HAS DEFAULTED IN REMITTING THE TDS AMOUNT TO THE GOVERNMENT ACCOUNT WITHIN THE PRESCRIBED TIME. THUS, ASSESSEE HAS NOT ONLY DEFAULTED IN REMITTING TDS AMOUNTS BUT THE DEFAULT IS REPEATED IN CASE OF SUBMISSION OF TDS STATEMENT. THEREFORE, FACTUALLY, THE RATIO LAID DOWN IN THIS DECISION WILL NOT APPLY THE PRESENT CASE. THEREFORE, IN OUR VIEW, THE ASSESSEE M/S. WEATHERGUARD AIRCON PVT. LTD. 8 HAVING NOT MADE OUT A CASE OF REASONABLE CAUSE FOR DELAY IN FILING THE TDS STATEMENT, PENALTY IMP OSED IS JUSTIFIED. H ENCE, THE ORDER OF THE FIRST APPELLATE AUTHORITY IS U PHELD. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 8. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06.11.2015 SD/ - ASHWANI TA N E JA ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED : 06.11.2015 CO PY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. RE GISTRAR) ITAT, MUMBAI M/S. WEATHERGUARD AIRCON PVT. LTD. 9 DATE INITIAL ORIGINAL DICTATION PAD IS ENCLOSED AT THE END OF FILE 1. DRAFT DICTATED ON 30 . 10 .2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 3 . 1 1 .2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 19 . 1 1 .2015 SR.PS 6. DATE OF PRONOUNCEMENT 19 .1 1 .2015 SR.PS 7. FILE SENT TO THE BENCH CLERK3 19 . 1 1 .2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER , / / 19997 98 2000 01 / / / / / / / / / /