ITO (TDS), WARD-1(2), Akola V. THE EXECUTIVE ENGINEER, Buldhana

ITA 340/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1639 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 20-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Reasonable cause; Tax effect

Judgement Text

1 ITA NO. 340/NAG/2014 . IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 340 /NAG/2014 ASSESSMENT YEAR : 2006 - 07. THE INCOME - TAX OFFICER (TDS), THE EXECUTIVE ENGINEER, WARD - 1(2), AKOLA. VS. P.W.D., BULDANA, NEAR BUS STAND, BULDANA. TAN NGPPO2047D APPELLANT. RESPONDENT. APPELLANT BY : SHRI NARENDRA KANE.. RESPONDENT BY : NONE. DATE OF HEARING : 07 - 09 - 2015 DATE OF PRONOUNCEMENT : 11 TH SEPT., 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. . THIS IS AN APPEAL FILED BY THE R EVENUE DEPARTMENT ARISING FROM THE ORDER OF LEARNED CIT(APPEALS) - III, NAGPUR DATED 25 - 03 - 2024 AND THE GROUNDS RAISED ARE AS FOLLOWS: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS JUSTIFIED IN DELETING THE PENALTY U/S 272A(2)(K) OF THE INCOME - TAX ACT? 2. WHETHER ON THE FACTS AND CIRCUMST ANCES OF THE CASE THE LD. CIT(A) IS JUSTIFIED IN HOLDING THAT THE DEDUCTOR WAS PREVENTED BY A REASONABLE CAUSE IN FILING TDS STATEMENTS? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS JUSTIFIED IN HOLDING THAT THE DEFAULT OF DELAY IN FILING TDS STATEMENTS IS A MERE TECHNICAL OR VENIAL NATURE? 2 ITA NO. 340/NAG/2014 . 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS JUSTIFIED IN COMPLETELY IGNORING THE FACT THAT DELAY IN FILING TDS STATEMENT ON THE PART OF DEDUCTOR HAS CAUSED GRAVE INJUSTICE TO ITS DEDUCTEES ? IN FACT, W.E.F. 1.7.2012, SECTION 234E HAS BEEN INTRODUCED IN THE STATUTE WHICH LAYS DOWN MANDATORY FEES OF ` 200/ - PER DAY FOR LEGISLATURE WAS NEVER TO TREAT THIS DEFAULT OF DELAY IN FILING TDS STATEMENT AS MERELY TECHNICAL IN NATURE. 2. THE IMPUGNED PENALTY U/S 272A(2)(K) READ WITH SECTION 200(3) WAS IMPOSED VIDE AN ORDER DATED 30 TH OF MARCH, 2011 WHEREIN IT WAS MENTIONED THAT THE STATEMENTS OF TDS IN FORM NO. 26Q WERE NOT FILED WITHIN THE PRESCRIBED TIME FOR THE FINANCIAL YEAR 2005 - 06. THE AO HAS MENTIONED THAT THERE WAS DELAY RANGING FROM 985 DAYS TO 655 DAYS, THEREFORE, BECAUSE O F THE DEFAULT FOR NOT FILING THE PRESCRIBED STATEMENTS OF TDS WITHIN TIME, THE AO HAS IMPOSED PENALTY AT THE RATE OF ` 100/ - PER DAY IN THE FOLLOWING MANNER : S. NO. RETURN FOR QTR. ENDED/PERIOD DUE DATE OF FILING RETURN. DATE OF FILING RETURN. AMOUNT OF T DS DELAY IN NO. OF DAYS. PENALTY @ ` 100/ - PER DAY. 1. JUNE2005 - 1 ST QTR. 15.07.2005 28.03.2008 339970 985 98500 2. SEPT.2005 - 2 ND QTR. 15.10.2005 28.03.2008 418027 895 89500 3. DEC.2005 - 3 RD QTR. 15.01.2006 28.03.2008 640115 805 80500 4. MARCH2006 - 4 TH QTR. 15.06.2006 28.03.2008 336487 655 65500 TOTAL 3,34,000/ - 3. AT THE OUTSET IT WAS NOTED THAT THE QUANTUM INVOLVED IN THIS APPEAL OF THE REVENUE WAS LESS THAN THE PRESCRIBED LIMIT OF ` 4 LAKHS FOR THE PURPOSE OF FILING OF 3 ITA NO. 340/NAG/2014 . APPEAL BEFORE THE TRIBUNAL. HOWEVER, FROM THE SIDE OF THE R EVENUE, LEARNED D.R. MR. NARENDRA KANE HAS STATED THAT THIS ISSUE HAS BECOME CONTROVERSIAL DUE TO LATEST DECISION OF HONBLE SUPREME COURT PRONOUNCED IN THE CASE OF CIT VS. SUMAN DDHANVIJE (CIVIL APPEAL NOS. 4919 - 4920 OF 2015, ARISING FROM SLP(C) NO.S 31042 - 31043/2013 ORDER DATED 1 ST JULY, 2015, WHEREIN THE HONBLE COURT HAS HELD THAT THE INSTRUCTION DATED 09 - 02 - 2011 HAS CLARIFIED VIDE PARA 11 THAT THE SAME S HALL NOT GOVERN CASES WHICH HAVE BEEN FILED BEFORE 2011 AND THAT THE SAME SHALL GOVERN ONLY SUCH CASES WHICH ARE FILED AFTER THE ISSUANCE OF THE SAID INSTRUCTION DATED 09 - 02 - 2011. WE HAVE NOTED THAT ALTHOUGH THIS APPEAL OF THE REVENUE HAS BEEN FILED ON 2 0 - 06 - 2014 BUT CONSIDERING THE TRIFLE NATURE OF THE DISPUTE , LET THIS APPEAL BE DECIDED ON MERITS. 4. NO ONE IS PRESENT FROM THE SIDE OF THE RESPONDENT - ASSESSEE. CONSIDERING THE TRIFLE NATURE OF THE DISPUTE, WE HAVE DECIDED TO PROCEED EXPARTE QUA THE ASSESSEE. ON MERITS LEARNED D.R. HAS SUPPORTED THE PENALTY ORDER. 5. INSTEAD OF REJECTING THIS APPEAL OF THE R EVENUE IN LIMINE ON THE GROUND OF LESS TAX EFFECT , WE THOUGHT IT PROPER TO DECIDE ON MERITS BEING COVERED BY A PRECEDENT . THE UNDISPUTED FACT IS THAT THE TDS WAS DEDUCTED AND PAID IN TIME. THERE WAS NO DELAY ON THE PART OF THE DEDUCTOR (ASSESSEE) TO DEDUCT THE TDS AND DEPOSIT WITH THE GOVERNMENT. AFTER RECORDING THIS FINDING, LEARNED CIT(APPEALS) HAS CITED FEW DECISIONS AND HELD THAT THE LEVY OF PE NALTY WAS NOT JUSTIFIED IN THE FOLLOWING MANNER: 7. T HE AFORESAID SUBMISSIONS HAVE BEEN CONSIDERED AND I FIND CONSIDERABLE FORCE IN THE SAME . IN THIS CASE , THE UNDISPUTED FACT IS THAT THE ASSESSEE H AD DULY DEDUCTED THE TOS AN D DEPOS I TED T HE SA M E IN TIM E . THE APPELLANT HAS CLAIMED THAT THE QUARTER L Y RETURNS HAVE BEEN FIL E D BY HIM WITHOUT HAVING RECEIVED ANY NOT I CE FROM THE DEPARTMENT FOR THE DE L AY WH I CH SHOW S TH E BONAFIDE INTENT I ONS OF THE APPELLANT . HOWEVER , DUE TO NON RECE I PT OF I NSTRUCT I ONS AND NO N AWARENESS OF THE PROVISION OF IT ACT , THERE WAS DELAY IN FILING THE 4 ITA NO. 340/NAG/2014 . QUARTERLY RETURNS. IN THIS REGARD , THE APPELLANT HAS RELIED UPON THE VAR I OUS CASE LAWS E . G . 1. HINDUSTAN STEEL LTD VS.STATE OF OR I SSA (1972) 83 ITR 26 (SC) . 2. COMMISS I ONER OF INCOME TAX VS SUPERINTENDING ENGINEER PWD 260 ITR 641 'I 3. COMMISSIONER OF INCOME TAX VS EXECUTIVE ENGINEER 320 ITR 494 HIGH COURT OF PUNJAB & HARYANA 4. IN THE CASE OF HINDUSTAN STEEL LTD VS . STATE OF ' ORISSA (1972) 83 ITR 26 (SC) , : TC 49R . 330 , THE HON'BLE APEX COURT HAS HELD THAT THE PENALTY IS NOT LEVIABLE WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE I T ACT . IN THE CASE OF SHAKUNTA L A OEVI JAIN VS . KUNTAL KUMAR I AIR 1969 (SC) 575 , THE APEX COURT HAS A L SO HE L D THA T ' WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE P I TTED AGAINST EACH OTHER , THE CAUSE OF SUBSTANTIAL JUSTICE DESERVED TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHTS IN INJUSTICE BEING DONE BECAUSE OF NON - DELIBERATE DELAY . TH IS I S MISTAKE OF A COUNSE L AND H I S ASSOCIATES AND I S A VALID GROUND FOR CONDONING THE DELAY . ' IN THE CASE OF M I S ROYA L METAL PRINTERS P LTD VS . ADDL , CIT (TOS) , MUMBAI , (ITAT MUMBA I ) , THE HON ' BLE ITAT MUMBAI VIDE ITS ORDER DATED 29/1/10 HAS HELD THAT PENALTY U/S.272A(2)(K) CANNOT BE SUSTA I NED WHERE THERE IS A ' REASONABLE ' CAUSE FOR DE L AY IN F IL ING THE TOS RETU R N . . . CONS I DERING THE AFORESAID LEGAL AS WELL AS FACTUAL POSITION , IT I S HEREBY HELD THAT THERE WAS A ' REASONABLE ' CAUSE FOR DELAY IN FILING THE TOS RETURN AND ACCORDINGLY , THE PENALTY LEVIED OF RS.3,34,OOO/ IS NOT JUSTIFIED AND THE SAME IS DIRECTED TO BE DELETED . 5. CONSIDERING THE FACTS OF THE CASE AND THE TOTALITY OF THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF EXECUTIVE ENGINEER 320 ITR 494 HAS HELD THAT IN A SITUATION WHEN THE TDS WAS DEDUCTED AND PAID TO THE GO VERNMENT HENCE THERE WAS NO LOSS TO THE R EVENUE AS FAR AS THE PAYMENT OF T A X IS CONCERNED. THE TECHNICAL DEFAULT OF NOT FILING THE TDS RETURN COULD BE ATTRIBUTABLE TO SHEER NEGLIGENCE BUT NO MALAFIDE COULD BE ATTACHED TO THIS TECHNICAL DEFAULT. MOREOVER A REASONABLE CAUSE HAS ALSO BEEN EXPLAINED AS 5 ITA NO. 340/NAG/2014 . HELD BY LEARNED CIT(APPEALS). WE, THEREFORE, AFFIRM THE FINDING OF LEARNED CIT(APPEALS) AND DISMISS THIS GROUND OF THE REVENUE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED I N THE OPEN COURT ON THIS 11 TH DAY OF SEPT., 2015. SD/ SD/ (SHAMIM YAHYA) (MUKUL K. SHRAWAT) (ACCOUNTANT MEMBER. JUDICIAL MEMBER NAGPUR, DATED: 11 TH SEPT. 2015. COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4 . THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR WAKODE