HAVISTHA STEEL FAB P.LTD, MUMBAI V. TRO (TDS) RG 1, MUMBAI

ITA 341/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1665 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 23-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 13-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR SONI
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Reasonable cause
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH J, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.341/M/2015 ASSESSMENT YEAR: 2010-11 M/S. HAVISTHA STEEL FAB P. LTD., 302, OXFORD, SWAPANA NAGARI, YOGI HILLS, MULUND, MUMBAI - 400080 PAN: AAACH6987Q VS. ADDL. COMMISSIONER OF IT (TDS), RANGE-1, MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI M. SUBRAMANIAN, A.R. REVENUE BY : SHRI VIJAY KUMAR SONI, D.R. DATE OF HEARING : 06.09.2016 DATE OF PRONOUNCEMENT : 30.11.2016 O R D E R PER C.N. PRASAD, JUDICIAL MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-14, MUMBAI [(H EREINAFTER REFERRED TO AS THE CIT(A)] DATED 03.11.2014 FOR THE ASSESSMENT YEAR 2010-11 IN SUSTAINING THE PENALTY OF RS.99,796/- LEVIED UNDER SECTION 272 A(2)(K) OF THE INCOME TAX ACT. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE F OR THE FINANCIAL YEARS 2009- 10 FILED TDS STATEMENTS IN FORM NO.24Q AND 26Q BEYO ND THE STIPULATED TIME LIMIT. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY SHOULD NOT BE LEVIED FOR THE DELAY IN FILING THE TD S STATEMENTS. IN RESPONSE TO THE NOTICE THE ASSESSEE SUBMITTED THAT IT HAS PAID ALL THE TDS AMOUNT DEDUCTED DURING THE YEAR 2009-10, INTO GOVERNMENT ACCOUNT WI THIN TIME. HOWEVER THE FILING OF TDS RETURNS HAS BEEN DELAYED DUE TO DELAY IN RECEIPT OF PAN DETAILS ITA NO.341/M/2015 M/S. HAVISTHA STEEL FAB P. LTD. 2 FROM THE DEDUCTEES WITHOUT WHICH TDS RETURNS CANNOT BE FILED. THEREFORE THE ASSESSEE SUBMITTED THAT DELAY IN FILING THE TDS RET URNS IS NOT WILLFUL AND IT IS ONLY A TECHNICAL FAULT AND REQUESTED TO DROP THE PE NALTY PROCEEDINGS. HOWEVER, THE ASSESSING OFFICER PASSED ORDER UNDER SECTION 27 2A(2)(K) OF THE ACT LEVYING PENALTY OF RS.99,796/- FOR DELAY IN FILING RETURN I N FORM NO.26Q STATING THAT ASSESSEE HAD COMMITTED DEFAULT WITHOUT ANY REASONAB LE CAUSE. 3. ON APPEAL, THE LD. CIT(A) SUSTAINED THE ORDER OF THE ASSESSING OFFICER IN LEVYING PENALTY OBSERVING THAT NON AVAILABILITY OF PAN DOES NOT CONSTITUTE REASONABLE CAUSE. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT TH E ASSESSEE HAS REMITTED IN TIME THE TDS DEDUCTED INTO GOVERNMENT ACCOUNT AN D THERE IS NO DELAY IN DEPOSITING THE TDS. THE LD. COUNSEL FOR THE ASSESS EE SUBMITS THAT THERE IS A DELAY IN FILING TDS RETURNS BECAUSE OF THE FACT THA T ASSESSEE COULD NOT COLLECT THE PAN DETAILS FROM THE DEDUCTEES. THE LD. COUNSE L SUBMITS THAT THERE IS NO LOSS TO THE REVENUE AS THE TDS WAS REMITTED IN TIME INTO GOVERNMENT ACCOUNT. THE DELAY IN FURNISHING THE TDS RETURNS IS ONLY A V ENIAL BREACH FOR WHICH THERE SHOULD NOT BE ANY PENALTY. FOR THIS PROPOSITION HE PLACES RELIANCE ON THE FOLLOWING DECISIONS: 1) PUNJAB NATIONAL BANK VS. ADDL. CIT [59 DTR 381 (LUCKNOW)] 2) STATE BANK OF INDIA VS. JCIT (68 SOT 370) (CUTT ACK) 3) RAJASTHAN TRIBAL AREA DEVELOPMENT COOPERATIVE F EDERATION LTD. VS. ITO 60 TTJ (JP) 427. 5. THE LD. D.R. SUPPORTS THE ORDER OF THE LD. CIT(A ). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IT IS AN ADMITTED FACT THAT THE ASSESSEE HAS REMITTED THE TDS IN TIME TO THE GOVERNMENT ACCOUNT AND THERE IS NO L OSS TO THE REVENUE. THERE IS DELAY IN FILING TDS RETURNS FOR THE REASON THAT THE ASSESSEE COULD NOT COLLECT PAN DETAILS FROM THE DEDUCTEES WHICH IS A REASONABL E CAUSE FOR THE DELAY IN FILING THE TDS RETURNS. ON AN IDENTICAL SITUATION THE PENALTY WAS DELETED IN THE ITA NO.341/M/2015 M/S. HAVISTHA STEEL FAB P. LTD. 3 CASE OF RAJASTHAN TRIBAL AREA DEVELOPMENT COOPERATI VE FEDERATION LTD. (SUPRA) BY FOLLOWING THE DECISION OF THE HONBLE SU PREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA (83 ITR 26 ) HOLDING AS UNDER: 4. AFTER CONSIDERING THE SUBMISSION FROM BOTH THE SIDES, AND HAVING GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES, WE HAV E NOTICED THAT THERE IS NO DEFAULT ON THE PART OF THE APPELLANT EITHER IN DEDU CTING THE TAX AT SOURCE OR IN DEPOSITING THE SAME INTO GOVT. ACCOUNT. THIS FACT HAS NOT BEEN DISPUTED EVEN BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. THE ONLY DEFAULT IS IN FURNISHING STATEMENT OF TDS IN FORM NO.26 WHICH IN VIEW OF APP ELLANTS EXPLANATION, IS ONLY A TECHNICAL DEFAULT, FOR WHICH WE ARE OF THE OPINION THAT SUCH A PENAL ACTION IS NOT JUSTIFIED, BECAUSE THE APPELLANT DEFAULT IS PURELY OF A TECHNICAL OR VENIAL NATURE. IN SUPPORT OF THIS CONCLUSION, WE RELY ON THE OBSERVAT IONS OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA (1972) 83 ITR 26 (SC), WHICH ARE REPRODUCED AS UNDER: AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OU T A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDING, AND PENA LTY 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 CONS CIOUS DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MEREL Y BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PE RFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERC ISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. E VEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE P ENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE THE PENALTY, WHEN THERE IS A TEC HNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FRO M A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRI BED BY THE STATUTE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE C ANCEL THE PENALTY UNDER APPEAL AND THE ASSESSEES APPEAL IS ALLOWED. 7. RESPECTFULLY FOLLOWING THE SAID DECISION, WE DEL ETE THE PENALTY LEVIED FOR DELAY IN FILING RETURNS. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.11.2016. SD/- SD/- (ASHWANI TANEJA) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 30.11.2016. * KISHORE, SR. P.S. ITA NO.341/M/2015 M/S. HAVISTHA STEEL FAB P. LTD. 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.