DCIT 14(1)(1), MUMBAI V. BLUE BERRY TRADING CO P.LTD, MUMBAI

ITA 3568/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9013 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 23-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 133A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NOS.3568 TO 3570/MUM/2016 ASSESSMENT YEARS: 2007-08 TO 2009-10 M/S MIDAS EVENTS PVT. LTD. 84, S.V. P. NAGAR, MHADA, ANDERI (WEST), MUMBAI-400053 / VS. ADDL. CIT(TDS), RANGE-2, 701, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD (W), MUMBAI-400002 ( ! /ASSESSEE) ( ' / REVENUE) PAN. NO. AADCM8984F ! / ASSESSEE BY NONE ' / REVENUE BY SHRI SUMAN KUMAR-DR # '$ % ! & / DATE OF HEARING : 10/01/2017 % ! & / DATE OF ORDER: 10/01/2017 ITA NO.3568 TO 3570/MUM/2014 M/S MIDAS EVENTS PVT. LTD. 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THESE THREE APPEALS ARE BY THE ASSESSEE AGAINST TH E IMPUGNED ORDERS DATED 03/03/2014 AND 11/02/2014 OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI, CHALLENGING LEVYING PENALTY OF RS.38,500/-, RS.41,900/- AND RS.41,900/- RESPECTIVELY IMPOSED U/S 272A(2)(G) OF THE INCOME T AX ACT, 1961 (HEREINAFTER THE ACT) FOR DELAY IN ISSUING TDS CERTIFICATE OF ALL THE FOUR QUARTERS OF FINANCIAL YEARS. 2. DURING HEARING OF THESE APPEALS , NONE WAS PRESENT FOR THE ASSESSEE, IN SPITE OF THE FACT THAT THE REG ISTERED AD NOTICES WERE SENT TO THE ASSESSEE. THE ASSESSEE NEI THER PRESENTED ITSELF NOR MOVED ANY ADJOURNMENT PETITION . UNDER THESE CIRCUMSTANCES, WE HAVE NO OPTION BUT TO PROCE ED EX- PARTE, QUA THE ASSESSEE AND TEND TO DISPOSE OFF THE SE APPEALS ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE LD. DR, SHRI SUMAN KUMAR , DEFENDED THE IMPOSITION OF PENALTY. 2.1. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT SURVEY U/S 133A OF THE ACT WAS CARRIED OUT AT OFFICE PREMISES NO.1/22 SVP NAGAR MHADA, VERSOVA, ANDHERI (W), ON 25/02/2009. IT WAS OBSERVED FROM THE DETAILS GAT HERED DURING THE SURVEY AND SUBSEQUENT PROCEEDINGS U/S 20 1(1) OF THE ACT THAT THE DEDUCTOR ASSESSEE HAS NOT FILED TD S RETURNS, WITHIN THE SPECIFIED TIME PRESCRIBED IN SECTION 206 OF THE ACT. ACCORDINGLY, THE INCOME TAX OFFICER TDS PASSED ORDE R U/S ITA NO.3568 TO 3570/MUM/2014 M/S MIDAS EVENTS PVT. LTD. 3 201(1)/201(1A) OF THE ACT ON 18/11/2009 RAISING THE DEMANDS. THE CASE WAS REFERRED TO THE INCOME TAX O FFICER (TDS) VIDE LETTER DATED 06/05/2007 FOR DETERMINING THE PENALTY U/S 272A(2)(K) AND 272A(2)(G) OF THE ACT. A S PER THE REVENUE, SINCE, THE ASSESSEE FAILED TO FILE THE TDS RETURN, BEFORE DUE DATES AND ALSO FAIL TO FURNISH THE CERTI FICATE, AS REQUIRED U/S 203 OF THE ACT, INITIATED PENALTY PROC EEDINGS BY ISSUING A SHOW CAUSE NOTICE DATED 21/02/2010. THE ASSESSEE VIDE COMMUNICATION/SUBMISSIONS DATED 24/06/2010, CLAIMED/EXPLAINED THAT THE ASSESSEE SUFFERED HUGE L OSSES DUE TO DELAYED DEFAULT IN PAYMENTS BY THE CUSTOMERS, TH US, DUE TO FINANCIAL CRUNCH, THERE WAS DELAY TO DEPOSIT THE TD S AND TO ISSUE TDS CERTIFICATE FOR FILING TDS RETURNS. SUCH LAPSES WERE EXPLAINED TO BE BEYOND THE CONTROL OF THE ASSESSEE DUE TO LIQUIDITY CRISIS, WHICH LED TO THE CLOSURE OF BUSIN ESS. IT WAS ALSO CLAIMED THAT THE LAPSES WERE NOT DELIBERATE FO R INTENTIONAL AND FURTHER LEVY OF PENALTY WILL ENHANCE THE CRISIS . HOWEVER, THE LD. ASSESSING OFFICER LEVIED THE PENALTY. 2.2. ON APPEAL BEFORE THE LD. COMMISSIONER OF INCO ME TAX (APPEAL), THE ASSESSEE PLEADED THAT DUE TO FINA NCIAL CRUNCH/HEAVY LOSSES, THE ASSESSEE COULD NOT DO THE NEEDFUL AND FURTHER CLAIMED THAT THE ASSESSEE PAID ALL THE AMOUNTS ALONG WITH INTEREST VIDE CHALLAN DATED 26/02/2010, FILED TDS RETURNS AND ISSUED TDS CERTIFICATES. RELIANCE WAS A LSO PLACED UPON THE DECISION IN HINDUSTANT STEELS LTD. VS STAT E OF ORISSA 83 ITR 26(ORI), CIT VS GENERAL ENGINEERING WORKS 31 1 ITR 208 (DEL.), CIT VS SRIRAM MEMORIAL EDUCATION PROMOTION SOCIETY ITA NO.3568 TO 3570/MUM/2014 M/S MIDAS EVENTS PVT. LTD. 4 287 ITR 155 (ALL.) AND PORWAL CREATIVE REASONS PVT. LTD. VS ACIT 139 TTJ 1 (MUM.). HOWEVER, THE LD. COMMISSION ER OF INCOME TAX (APPEAL), RESTRICTED THE PENALTY TO THE IMPUGNED AMOUNTS MENTIONED IN THE RESPECTIVE APPEAL. THE ASS ESSEE HAS PREFERRED FURTHER APPEAL BEFORE THIS TRIBUNAL. 2.3. UNDER THE FACTS AVAILABLE ON RECORD AND IN TH E LIGHT OF THE FOREGOING DISCUSSION, THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE SUFFERED HUGE LOSSES AND DUE TO FINANC IAL CRUNCH, THE DEFAULT WAS CAUSED. AT THE SAME TIME, TO ESTAB LISH ITS BONA-FIDE, THE ASSESSEE PAID ALL THE PENDING AMOUNT S ALONG WITH INTEREST, FILED TDS RETURNS AND ISSUED TDS CER TIFICATES. THE LD. COMMISSIONER OF INCOME TAX (APPEAL) RESTRIC TED THE PENALTY ON THE PLEA THAT NO REASONABLE CAUSE HAS BE EN DEMONSTRATED FOR ISSUING THE CERTIFICATE AFTER THE DEPOSIT OF TAX. AS MENTIONED EARLIER THAT THE ASSESSEE WAS HAVING H UGE OUTSTANDING DEMANDS BUT DUE TO NON-PAYMENT BY THE RESPECTIVE PARTY SUFFERED HUGE LOSSES, WHICH CAUSED THE DELAY. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REV ENUE. CONSIDERING THE TOTALITY OF FACTS AND THE CIRCUMSTA NCES AVAILABLE ON RECORD, WE ARE OF THE CONSIDERED OPINI ON THAT A LENIENT VIEW IS REQUIRED MORE SPECIFICALLY WHEN IN SPITE OF HUGE LOSSES, THE ASSESSEE PAID ALL THE PENDING AMOUNTS A LONG WITH INTEREST, FILED TDS RETURNS AND ISSUED TDS CERTIFIC ATES, THEREFORE, WE DELETE THE PENALTY, RESTRICTED BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL) IN THE RESPECTI VE APPEAL. HOWEVER, WE ARE MAKING IT CLEAR THAT OUR VIEW, IN D ELETING THE PENALTY, IS BASED UPON THE PECULIAR FATS IN THE PRE SENT ITA NO.3568 TO 3570/MUM/2014 M/S MIDAS EVENTS PVT. LTD. 5 APPEALS, THEREFORE, MAY NOT BE QUOTED FOR FUTURE RE FERENCES. THE APPEALS OF THE ASSESSEE ARE ALLOWED. FINALLY, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWE D. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. DR AT THE CONCLUSION OF THE HEARING ON 10/01/2017. SD/- SD/- ( ASHWANI TANEJA ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; ' DATED :10/01/2017 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. )*+, / THE APPELLANT 2. -.+, / THE RESPONDENT. 3. / / # 0! ( )* ) / THE CIT, MUMBAI. 4. / / # 0! / CIT(A)- , MUMBAI 5. 2'3 -! , / )*& ) 4 , # $ / DR, ITAT, MUMBAI 6. 5 6$ / GUARD FILE. / BY ORDER, .2*! -! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI