The ITO,TDS-3, Ahmedabad V. Kataria Transport Company Ltd., Ahmedabad

ITA 3263/AHD/2010

• Counselvise Citation: 326320514 RSA 2010
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 10-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: TUSHAR HEMUM
• Keywords: Reasonable cause; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.3263 / AHD/2010 (ASSESSMENT YEAR 2007-08) ITO, WARD TDS-3, AHMEDABAD VS. KATARIA TRANSPORT CO. LTD., KATARIYA PREMISES, INSIDE PREM DARWAJA, DARAIPUR, AHMEDABAD PAN/GIR NO. : AACCK2539B (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI SAMIR TEKRIWAL, SR. DR RESPONDENT BY: SHRI TUSHAR HEMUM, AR DATE OF HEARING: 18.11.2011 DATE OF PRONOUNCEMENT: 25.11.2011 O R D E R PER SHRI A. K. GARODIA, AM:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) XXI, AHMEDABAD DATED 29.09.2010 FOR THE ASSE SSMENT YEAR 2007- 08. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1. THE LD.CIT(A) HAS ERRED IN CONDONING THE DELAY IN FILING OF APPEAL BY 529 DAYS WITHOUT ANY REASONABLE CAUSE AND WITHOUT GIVING ANY OPPORTUNITY TO A.O. 2. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS ON FA CTS OF THE CASE IN DELETING THE PENALTY U/S,.272A(2)(K) OF THE I.T. ACT OF RS.3,10,200/- FOR A.Y. 2007-08 BY THE A.O. EVEN THO UGH ASSESSEE HAD FILED FORM NO.26Q LATE BY 3101 DAYS. (3360 DAYS -AS ACTUAL DATE OF FILING IS 20.09.2010) I.T.A.NO. 3263 /AHD/2010 2 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASS ESSING OFFICER. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER AN Y GROUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. 5. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.CIT(A) MAY BE CANCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EFFECT. 2. REGARDING GROUND NO.1, IT WAS SUBMITTED BY THE L D. D.R. THAT NO REASON HAS BEEN GIVEN BY LD. CIT(A) FOR CONDONING T HE DELAY OF 529 DAYS FOR FILING THE APPEAL BEFORE HIM AND HENCE, HIS ORD ER ON THIS ASPECT SHOULD BE REVERSED. AS AGAINST THIS, IT WAS SUBMITTED BY THE LD. A.R. THAT LD. CIT(A) WAS SATISFIED REGARDING THE REASONS FOR DELA Y AND HENCE, HIS ORDER ON THIS ISSUE SHOULD BE UPHELD. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDER OF LD. CIT(A ). THE REASON GIVEN BY THE ASSESSEE BEFORE LD. CIT(A) IS THAT DUE TO SH IFTING OF THE ACCOUNTS DEPARTMENT, THE ORDER COULD NOT BE RECEIVED BY THE DIRECTOR AND WHEN DEMAND WAS RAISED, THEN THE ASSESSEE CAME TO KNOW F ROM THE A.O. REGARDING THE ORDER PASSED BY THE A.O. WE ALSO FIN D THAT THE REASONING WAS GIVEN BY ASSESSEE FOR CONDONATION OF DELAY BEFO RE LD. CIT(A) AND IT WAS HIS DISCRETION TO CONDONE THE DELAY WHICH HAS B EEN EXERCISED BY HIM BY GIVING REASONS AND HENCE, NO INTERFERENCE IS CAL LED FOR IN HIS ORDER ON THIS ASPECT. THE GROUND NO.1 OF THE REVENUE IS REJ ECTED. 4. REGARDING MERITS, LD. D.R. SUPPORTED THE PENALTY ORDER AND SUBMITTED THAT EVEN NO REPLY WAS GIVEN BY THE ASSES SEE TO THE A.O. IN THE COURSE OF PENALTY PROCEEDINGS AND THE LD. CIT(A) HA D DELETED THE PENALTY WITHOUT GIVING ANY REASON FOR THE DELAY AND HENCE, THE ORDER OF LD. I.T.A.NO. 3263 /AHD/2010 3 CIT(A) SHOULD BE REVERSED ON THIS ASPECT AND THAT O F THE A.O. SHOULD BE RESTORED. 5. AS AGAINST THIS, IT WAS SUBMITTED BY THE LD. A.R . THAT FOR FILING THE QUARTERLY RETURN IN FORM 26Q, PAN OF DEDUCTEES ARE TO BE PROVIDED AND BECAUSE THE ASSESSEE IS IN THE BUSINESS OF TRANSPOR TATION, THE TDS WAS DEDUCTED FROM SMALL TRUCK OPERATORS AND THEIR PAN W AS NOT AVAILABLE AND THIS WAS THE REASON FOR DELAY IN FILING FORM 26Q WH ICH IS A REASONABLE CAUSE AND HENCE, PENALTY IS NOT JUSTIFIED. THE SEC OND CONTENTION RAISED BY HIM IS THAT IT IS A TECHNICAL AND VENIAL BREACH AND HENCE, PENALTY IS NOT JUSTIFIED AND IN SUPPORT OF THIS CONTENTION, RELIAN CE WAS PLACED ON THE JUDGEMENT OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF CIT VS HARSIDDH CONSTRUCTION PVT. LTD. AS REPORTED IN 244 ITR 417. HE ALSO PLACED RELIANCE ON THE TRIBUNAL DECISION IN THE CAS E OF ADDL. CIT (TDS), LUCKNOW VS SMT. SUSHMA TIWARI IN I.T.A.NO. 54/LKO/2 011 DATED 06.04.2011 AND SUBMITTED A COPY OF THE TRIBUNAL DEC ISION. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHO RITIES BELOW AND THE JUDGEMENTS CITED BY THE LD. A.R. WE FIND THAT IN TH IS CASE, FROM 26Q WAS REQUIRED TO BE FILED BY THE ASSESSEE ON 15.07.2006. , 15.10.2006, 15.1.2007 AND ON 15.04.2007 AND IT IS NOTED BY THE LD. CIT(A) IN PARA 9 OF HIS ORDER THAT ALL THESE QUARTERLY RETURNS WERE FILED BY THE ASSESSEE ON 20.09.2010 WHEREAS PENALTY ORDER WAS PASSED BY THE A.O. ON 28.01.2009. IN THE COURSE OF PENALTY PROCEEDINGS, NONE APPEARED ON BEHALF OF THE ASSESSEE BEFORE THE A.O. AND NO SUBMISSION WAS MADE BEFORE HIM REGARDING THE REASONS FOR NOT FILING THE QUARTERLY RETURNS IN FORM 26Q. IN THE LIGHT OF THESE FACTS, NOW WE EXAMINE THE APPLIC ABILITY OF THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF HARSID DH CONSTRUCTION PVT. I.T.A.NO. 3263 /AHD/2010 4 LTD. (SUPRA). WE FIND THAT IN THAT CASE, THE PENAL TY WAS NOT IMPOSED ON ACCOUNT OF LATE FILING OF QUARTERLY RETURNS BUT IT WAS IMPOSED ON ACCOUNT OF LATE SUBMITTING OF TDS CERTIFICATES BY THE DEDUC TOR TO THE DEDUCTEES. IT IS ALSO NOTED BY THE HONBLE GUJARAT HIGH COURT IN THAT CASE THAT THERE WAS NO LOSS OF REVENUE AND THE TRIBUNAL HAD ARRIVED AT A CONCLUSION THAT IT WAS A BONA FIDE MISTAKE. IN THE PRESENT CASE, THE FACTS ARE DIFFERENT. IN THIS CASE, THE PENALTY IMPOSED ON ACCOUNT OF NON FI LING/LATE FILING OF QUARTERLY RETURNS OF TDS. IT HAS TO BE ACCEPTED T HAT THIS REQUIREMENT OF FILING QUARTERLY RETURNS OF TDS IS FOR A PURPOSE I .E. THE DEPARTMENT CAN EXAMINE THE CASE OF THE DEDUCTEES ON THE BASIS OF T HESE QUARTERLY RETURNS AS TO WHETHER THEY HAVE FILED THEIR RETURNS OR NOT AND WHETHER THEY HAVE PAID THE TAXES OR NOT AND IN THE ABSENCE OF FILING QUARTERLY RETURNS BY THE ASSESSEE DEDUCTOR, THERE MAY BE LOSS OF REVENUE BEC AUSE IN THE ABSENCE OF SUCH QUARTERLY RETURNS, THE DEPARTMENT CANNOT PROCE ED AGAINST THE DEDUCTEE EVEN IF NO RETURN IS FILED BY THEM OR EVEN IF PORTION OF INCOME IS NOT DECLARED BY THEM. HENCE THIS REASON GIVEN BY T HE HONBLE GUJARAT HIGH COURT THAT THERE IS NO LOSS OF REVENUE IS NOT PRESENT IN THE PRESENT CASE. 7. THE SECOND REASON GIVEN BY THE HONBLE GUJARAT H IGH COURT IS THAT THE TRIBUNAL HAS ARRIVED AT A CONCLUSION THAT IT WA S A BONA FIDE MISTAKE. IN THE PRESENT CASE, NO SUCH EVIDENCE HAS BEEN PLAC ED BEFORE US TO SATISFY US THAT IT WAS A BONA FIDE MISTAKE. IN FACT, EVEN AFTER THE PASSING OF PENALTY ORDER IN THE MONTH OF JAN 2009, THESE QUART ERLY RETURNS WERE FILED ONLY IN SEP 2010 AS HAS BEEN NOTED BY LD. CIT(A) I N PARA 9 OF HIS ORDER. REGARDING THIS ARGUMENT THAT PAN OF THE DEDUCTEES W ERE NOT AVAILABLE WITH THE ASSESSEE, NO EVIDENCE HAS BEEN BROUGHT BEF ORE US TO SHOW THAT THERE WAS CORRESPONDENCE WITH THE DEUDCTEES FOR OBT AINING PAN AND THE I.T.A.NO. 3263 /AHD/2010 5 PAN WERE OBTAINED AFTERWARDS IN THE YEAR 2010, WHEN QUARTERLY RETURNS WERE FILED. HENCE, THIS ARGUMENT OF THE ASSESSEE I S ALSO WITHOUT ANY CORROBORATING OR COGENT EVIDENCE. THE ASSESSEE HAS NOT APPEARED BEFORE THE A.O. IN THE COURSE OF PENALTY PROCEEDINGS AND N O SUBMISSIONS WAS MADE BEFORE HIM REGARDING REASON FOR NON-FILING OF QUARTERLY RETURN AND THIS IS NOT THE CASE OF THE ASSESSEE THAT THE SHOW CAUSE NOTICE ISSUED BY THE A.O. ON 24.07.2008 AND 15.12.2008 WERE NOT SERV ED ON THE ASSESSEE. HENCE, THIS JUDGMENT OF HONBLE GUJARAT HIGH COURT IS NOT APPLICABLE IN THE PRESENT CASE BECAUSE BOTH THE REASONING GIVEN B Y THE HONBLE GUJARAT HIGH COURT ARE NOT PRESENT IN THE PRESENT CASE. NO W, WE CONSIDER THE APPLICABILITY OF THE TRIBUNAL DECISION RENDERED IN THE CASE OF SMT. SUSHMA TIWARI (SUPRA). IN THAT CASE, THE ASSESSMENT YEAR INVOLVED WAS 2008-09 AND IT IS NOTED BY THE TRIBUNAL IN PARA 4 OF THE TR IBUNAL ORDER THAT ON RECEIPT OF THE NOTICE, QUARTERLY STATEMENTS WERE FI LED ON 19.03.2009. IT WAS ALSO NOTED BY THE TRIBUNAL IN THAT CASE THAT QU ARTERLY STATEMENTS COULD NOT BE FILED EARLIER BECAUSE OF LACK OF KNOWLEDGE A ND IT WAS NOT INTENTIONAL OR WILLFUL. IN THE PRESENT CASE, THE ASSESSMENT YEAR INVOLVED IS 2007-08 AND THE QUARTERLY RETURNS WERE FILED ON 20.09.2010 EVEN AFTER FILING OF APPEAL BEFORE LD. CIT(A) WHICH WAS FILED BEFORE CIT(A) ON 09.09.2010. NO ONE APPEARED BEFORE THE A.O. IN THE COURSE OF PENALTY PROCEEDINGS AND NO SUBMISSION WAS MADE FOR THE REAS ON ABOUT NON FILING OF QUARTERLY RETURNS IN FORM 26Q. BEFORE CIT(A), T HIS SUBMISSIONS WAS MADE THAT IT COULD NOT BE FILED BECAUSE THE ASSESSE E WAS NOT HAVING PAN OF THE DEDUCTEES BUT NO EVIDENCE HAS BEEN BROUGHT O N RECORD TO SHOW THAT PAN OF THE DEDUCTEES WERE OBTAINED IN 2010 JUSTIFYI NG THE DELAY IN FILING QUARTERLY RETURNS IN FORM 26Q. HENCE, EITHER THE Q UARTERLY RETURNS WERE FILED IN SEP 2010 ALSO WITHOUT PAN OF THE DEDUCTEES AND HENCE, THE SAME I.T.A.NO. 3263 /AHD/2010 6 COULD HAVE BEEN FILED IN TIME ALSO OR THE ASSESSEE WAS HAVING PAN OF THE DEDUCTEES EARLIER ALSO IN THE ABSENCE OF ANY EVIDEN CE HAVING BEEN BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT THESE PAN OF THE DEDUCTEES WERE OBTAINED IN THE YEAR 2010. HENCE, THE DELAY IN FIL ING THE QUARTERLY RETURNS CANNOT BE ACCEPTED AS BONA FIDE AND, THEREFORE, THI S TRIBUNAL DECISION IS ALSO OF NO HELP TO THE ASSESSEE IN THE PRESENT CASE BECAUSE THE FACTS ARE DIFFERENT BECAUSE IN THE PRESENT CASE, EVEN WHEN TH E DEFAULT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE, ASSESSEE NEITHER FIL ED THE QUARTERLY RETURNS NOR APPEARED BEFORE THE A.O. IN PENALTY PROCEEDINGS AND EVEN NO SUBMISSION WAS MADE BEFORE HIM. IN VIEW OF ABOVE DISCUSSION, WE FIND THAT THE PENALTY WAS DELETED BY LD. CIT(A) WITHOUT ANY VALID BASIS OR VALID REASONING AND HENCE, WE ARE INCLINED TO REVER SE THE ORDER OF LD. CIT(A) AND RESTORE THE PENALTY ORDER. WE ORDER ACC ORDINGLY. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS PART LY ALLOWED. 9. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (G. C. GUPTA) (A. K. GARODIA) VICE PRESIDENT ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD I.T.A.NO. 3263 /AHD/2010 7 1. DATE OF DICTATION 21/11 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 22/11 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 24/11 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 25/11 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.25/11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25/11/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..