JCIT, Coimbatore V. Selma Memoiral Trust, The Nilgiris

ITA 3378/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4449 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-03-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 16-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: NITHYA SANKARAN CA
• Keywords: Non-deduction of tax; Reasonable cause

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , .. ' #$, & '( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.3378/MDS/2016 * +* / ASSESSMENT YEAR : 2013-14 THE JOINT COMMISSIONER OF INCOME TAX, TDS RANGE, COIMBATORE. V. M/S SELMA MEMORIAL TRUST, PROP: RIVERSIDE PUBLIC SCHOOL, SAN-TRI-MOO, P.B. NO.34, KOTAGIRI, THE NILGIRIS 643 217. PAN : AADTS 8376 E (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : SHRI A.V. SREEKANTH, JCIT /0-. 1 2 / RESPONDENT BY : SMT. NITHYA SANKARAN, CA ' 1 3& / DATE OF HEARING : 08.03.2017 45+ 1 3& / DATE OF PRONOUNCEMENT : 31.05.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 2, COIMB ATORE, DATED 30.09.2016 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2. SHRI A.V. SREEKANTH, THE LD. DEPARTMENTAL REPRES ENTATIVE, SUBMITTED THAT JOINT COMMISSIONER OF INCOME TAX, TD S RANGE, COIMBATORE, LEVIED PENALTY OF ` 10,70,242/- UNDER SECTION 271C OF 2 I.T.A. NO.3378/MDS/16 THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FOR N ON-DEDUCTION OF TAX AT SOURCE. ACCORDING TO THE LD. D.R., THE ASSESSEE -TRUST ESTABLISHED EDUCATIONAL INSTITUTION IN THE NAME AND STYLE OF R IVERSIDE PUBLIC SCHOOL DURING THE COURSE OF INSPECTION, IT WAS FOU ND THAT THE ASSESSEE INCURRED EXPENSES TOWARDS SALARY, RENT, CO NSULTANCY CHARGES, INTEREST ON SECURITIES, ETC. THE ASSESSEE WAS EXPECTED TO DEDUCT TAX UNDER SECTION 192B OF THE ACT IN RESPECT OF SALARY AND UNDER SECTION 194-I OF THE ACT IN RESPECT OF RENT. IN RESPECT OF CONSULTANCY CHARGES, THE ASSESSEE WAS EXPECTED TO D EDUCT TAX UNDER SECTION 194J OF THE ACT AND THE ASSESSEE WAS ALSO EXPECTED TO DEDUCT TAX TOWARDS INTEREST ON SECURITIES UNDER SECTION 194A OF THE ACT. HOWEVER, THE ASSESSEE FAILED TO DEDUCT TA X, THEREFORE, ACCORDING TO THE LD. D.R., THE JOINT COMMISSIONER O F INCOME TAX HAS RIGHTLY LEVIED PENALTY UNDER SECTION 271C OF TH E ACT. 3. ON THE CONTRARY, SMT. NITHYA SANKARAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE HAS NOT DEDUCTED THE TAX, HOWEVER, PAID THE SAME TO THE GOVERNMENT ACCOUNT. DURING THE COURSE OF INSPECTION, THE REVE NUE AUTHORITIES FOUND THAT TAX WAS NOT DEDUCTED. ADMITTEDLY, THE A SSESSEE PAID THE TAX TO THE GOVERNMENT ACCOUNT. ACCORDING TO THE LD . REPRESENTATIVE, THERE WAS NO NEGLIGENCE OR DELIBERA TE INTENTION ON 3 I.T.A. NO.3378/MDS/16 THE PART OF THE ASSESSEE FOR NON-DEDUCTION OF TAX. THERE WAS A GENUINE MISUNDERSTANDING WITH REGARD TO TAX DEDUCTI ON. THE MISTAKE POINTED OUT BY THE REVENUE AUTHORITIES DURI NG THE COURSE OF INSPECTION HAD BEEN CORRECTED. ADMITTELY, THE TAX WAS PAID TO THE GOVERNMENT ACCOUNT AND THERE WAS NO LOSS TO THE REV ENUE. 4. REFERRING TO THE JUDGMENT OF APEX COURT IN CIT V BANK OF NOVA SCOTIA (2016) 66 TAXMANN.COM 175, THE LD. REPR ESENTATIVE FOR THE ASSESSEE SUBMITTED THAT SINCE THE ASSESSEE HAS ALREADY PAID THE TAX, PENALTY NEED NOT BE LEVIED. ACCORDING TO THE LD. REPRESENTATIVE, THERE WAS A REASONABLE CAUSE ON THE PART OF THE ASSESSEE, THEREFORE, LEVY OF PENALTY UNDER SECTION 271C OF THE ACT IS NOT FAIR. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. NO DOUBT, DURING THE COURSE OF INSPECTION, THE REVENUE AUTHORITIES F OUND THAT TAX WAS NOT DEDUCTED AS REQUIRED UNDER SECTION 194A, 194-I, 194J AND 192B OF THE ACT. FROM THE MATERIAL AVAILABLE ON RE CORD IT APPEARS THAT DEDUCTEE HAS PAID THE TAXES. THE ASSESSEE ALS O ADMITTEDLY, AFTER THE INSPECTION, PAID THE ENTIRE TAX. THE ASS ESSEE APPEARS TO HAVE EXPLAINED BEFORE THE JOINT COMMISSIONER OF INC OME TAX THAT DUE TO IGNORANCE OF ACCOUNTANT, TAX WAS NOT DEDUCTE D. HOWEVER, IT 4 I.T.A. NO.3378/MDS/16 WAS PAID IMMEDIATELY AFTER IT WAS POINTED OUT. IN RESPECT OF PAYMENT OF RENT, THERE WAS A SHORT DEDUCTION OF TAX AND IT WAS NOT THE CASE OF NON-DEDUCTION. BY TAKING INTO CONSIDER ATION OF THE FACT THAT THE ASSESSEE PAID THE TAX TO THE GOVERNMENT AC COUNT IMMEDIATELY AFTER THE MISTAKE WAS POINTED OUT AND T HE OMISSION OF ACCOUNTANT TO DEDUCT TAX, THIS TRIBUNAL IS OF THE C ONSIDERED OPINION THAT THERE WAS A REASONABLE CAUSE ON THE PART OF TH E ASSESSEE FOR NON-DEDUCTION OF TAX. THEREFORE, THE CIT(APPEALS) HAS RIGHTLY DELETED THE PENALTY LEVIED BY THE JOINT COMMISSIONE R OF INCOME TAX. THIS TRIBUNAL DO NOT FIND ANY REASON TO INTER FERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON 31 ST MAY, 2017 AT CHENNAI. SD/- SD/- ( . . ' #$ ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 31 ST MAY, 2017. KRI. 5 I.T.A. NO.3378/MDS/16 1 /3#8 98+3 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. ' :3 () /CIT(A)-2, COIMBATORE 4. ' :3 /CIT-TDS, COIMBATORE 5. 8; /3 /DR 6. * < /GF.