The Chief Agriculture Officer, Hoshiarpur V. The Joint Commissioner of Income Tax(TDS), Ludhiana

ITA 360/ASR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0659 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 06-07-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKER
• Assessee Lawyers: DINESH SARNA
• Keywords: Bonafide belief; Retrospective amendment; Reasonable cause
• Section: 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. (CAMP AT JALANDHAR) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.360(ASR)/2015 ASSESSMENT YEAR:2011-12 PAN: JLDCOO535D CHIEF AGRICULTURE OFFICER, VS. JOINT COMMR. OF INCO ME TAX, AGRICULTURE DEPARTMENT, (TDS), LUDHIANA. HOSHIARPUR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. DINESH SARNA, ADV. RESPONDENT BY: SH. BHAWANI SHANKER, DR DATE OF HEARING: 22/06/2016 DATE OF PRONOUNCEMENT: 23/06/2016 ORDER PER A.D. JAIN, JM; THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT YE AR 2011-12 AGAINST THE ORDER DATED 19.05.2015, PASSED BY TH E LD. CIT(A)-I, JALANDHAR. 2. THE BRIEF FACTS OF THE CASES ARE THAT THE ASSESS EE IS A PERSON RESPONSIBLE AND HAD DEDUCTED TAX AT SOURCE ON VARIOUS PAYMENTS BUT HAD FAILED TO FILE QUARTERLY TDS RETURNS WITHIN THE PRESCRIBED PERIOD OF TIME, THEREFORE, ASSESSING OFFICER IMPOSED PENALTY U/S 272A(2)(K) OF THE ACT @ OF RS.100 PER DAY FOR EACH DAY OF DEFAULT. 2 ITA NO.360(ASR)/2015 A.Y. 2011-12 4. AGGRIEVED WITH THE ORDER THE ASSESSEE FILED APPE ALS BEFORE LD. CIT(A) AND SUBMITTED THAT THE RETURNS COULD NOT BE FILED WITHI N THE PRESCRIBED PERIOD AS THE ASSESSEE WAS NOT HAVING TECHNICAL STAFF AND IT WAS DEPENDENT UPON OUTSIDE AGENCY TO FILE THE RETURNS AND THEREFORE, THERE WAS A REASONABLE CAUSE FOR LATE FILING OF THE RETURNS. THE ASSESSEE ALSO RELIED UPO N VARIOUS CASE LAWS BEFORE THE LD. CIT(A) BUT LD. CIT(A) DID NOT AGREE WITH THE CO NTENTIONS OF ASSESSEE AND UPHELD THE ACTION OF ASSESSING OFFICER. 5. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD. AR, AT THE OUTSET, SUBMITTED THAT ASSESS EE WAS A RESPONSIBLE PERSON AND DUE TO LACK OF TECHNICAL STAFF IT WAS DE PENDENT UPON THE OUTSIDE AGENCY FOR THE PREPARATION AND FILING OF RETURNS. T HE LD. AR SUBMITTED THAT TDS WAS PAID WITHIN PRESCRIBED PERIOD AND THEREFORE, NO LOSS HAD OCCURRED TO THE REVENUE AND THE DELAY IN FILING OF RETURNS WAS A TE CHNICAL BREACH OF LAW. THE LD. AR IN THIS RESPECT RELIED UPON THE CASE LAWS RELIED BEFORE THE LD. CIT(A) AND IT WAS PRAYED THAT THE PENALTY SUSTAINED BY LD. CIT(A) BE DELETED. 7. THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORD ERS OF AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT A.O HAS IMPOSED PENA LTIES FOR DEFAULTS IN LATE FILING OF TDS RETURNS IN VARIOUS QUARTERS FOR THE A SSESSMENT YEAR 2011-12. THE CONTENTION OF THE ASSESSEE THAT IT WAS NOT HAVING T ECHNICAL STAFF AND WAS DEPENDENT UPON THE OUTSIDE AGENCY FOR FILING OF RET URNS WAS NOT ACCEPTED BY THE LD. CIT(A). WE FIND THAT ASSESSEE HAD DEDUCTED THE TAX AT SOURCE AND HAD DEPOSITED THE SAME WITH CENTRAL GOVT. WITHIN THE ST IPULATED PERIOD AND NEITHER 3 ITA NO.360(ASR)/2015 A.Y. 2011-12 THE GOVT., NOR THE PAYEE SUFFERED ANY LOSS. THE MIS TAKE COMMITTED BY ASSESSEE IS A TECHNICAL ONE AND MOREOVER THE ASSESSEE BEING A PERSON RESPONSIBLE DOES FACE PROBLEMS DUE TO LACK OF TECHNICAL STAFF TO DEA L WITH THE FILING OF TDS RETURNS. THE PENALTY U/S 272A(2)(K) IS NOT A MANDAT ORY PENALTY AND BEFORE IMPOSING OF PENALTY THE REVENUE AUTHORITIES MUST EX AMINE THE FACTS AND CIRCUMSTANCES FOR COMMITTING THE MISTAKE. WE FURTHE R FIND THAT VIDE FINANCE ACT, 2012 W.E.F., 01.07.2012, THE LEGISLATURE ITSEL F HAS REMOVED THIS PENALTY PROVISION BY ADDING A PROVISO TO SECTION 272A(2)(K) . THE PENAL PROVISIONS ALONG WITH AMENDMENT PROVISIONS W.E.F., 1.07.2012 ARE RE PRODUCED HEREUNDER: SECTION 272A (2) (K) (2) IF ANY PERSON FAILS- (A) TO COMPLY WITH A NOTICE ISSUED UNDER SUB-SECTION (6 ) OF SECTION 94; OR (B) TO GIVE THE NOTICE OF DISCONTINUANCE OF HIS BUS INESS OR PROFESSION AS REQUIRED BY SUB-SECTION (3) OF SECTION 176; OR (C) TO FURNISH IN DUE TIME ANY OF THE RETURNS, STAT EMENTS OR PARTICULARS MENTIONED IN SECTION 133 OR SECTION 206 [.] [FOR S ECTION 206C] OR SECTION 285B; OR (D) TO ALLOW INSPECTION OF ANY REGISTER REFERRED TO IN SECTION 134 OR OF ANY ENTRY IN SUCH REGISTER OR TO ALLOW COPIES OF SUCH R EGISTERED OR OF ANY ENTRY THEREIN TO BE TAKEN; OR (E) TO FURNISH THE RETURN OF INCOME WHICH HE IS REQ UIRED TO FURNISH UNDER SUB-SECTION (4A) OR SUB-SECTION (4C) OR SECTION 139 OR TO FURNISH IT WITHIN THE TIME ALLOWED AND IN THE MANNER REQUIRED THOSE SUB-S ECTION; OR (F) TO DELIVER OR CAUSE TO BE DELIVERED IN DUE TIME A COPY OF THE DECLARATION MENTIONED IN SECTION 197A; OR (G) TO FURNISH A CERTIFICATE AS REQUIRED BY SECTION 203 [OR SECTION 206C] OR (H) TO DEDUCT AND PAY TAX AS REQUIRED BY SUB-SECTIO N (2) OF SECTION 226; (I) TO FURNISH A STATEMENT AS REQUIRED BY SUB-SECTI ON (2C) OF SECTION 192;] [(J) TO DELIVER OR CAUSE TO BE DELIVERED IN DUE TIM E A COPY OF THE DECLARATION REFERRED TO IN SUB-SECTION (1A) OF SECTION 206C;] ([(K) TO DELIVER OR CAUSE TO BE DELIVERED A COPY OF THE STATEMENT WITHIN THE TIME SPECIFIED IN SUB SECTION (3) OF SECTION 200 OR THE PROVISO TO SUB-SECTION (3) OF SECTION 206C;] [ PROVIDED FURTHER THAT NO PENALTY SHALL BE LEVIED UNDER THIS SECTION FOR THE FAILURE REFERRED TO IN CLAUSE (K), IF SUCH FAILURE RELATES TO A STATEMENT REFERRED TO IN SUB-SECTION (3) OF SECTION 200 OR TH E PROVISO TO SUB-SECTION (3) 4 ITA NO.360(ASR)/2015 A.Y. 2011-12 OF SECTION 206C WHICH IS TO BE DELIVERED OR CAUSED TO BE DELIVERED FOR TAX DEDUCTED AT SOURCE OR TAX COLLECTED AT SOURCE, AS T HE CASE MAY BE, ON OR AFTER THE 1 ST DAY OF JULY, 2012.] 9. FROM THE ABOVE PROVIDED AMENDMENT W.E.F., 1.7.20 12, WE FIND THAT FINDING THIS PROVISION HARSH THE LEGISLATURE ITSELF HAS REMOVED THIS PENALTY. THE REMOVAL OF THIS PENALTY BEING BENEFICIAL TO THE ASS ESSEE, IT CAN BE HELD TO BE APPLICABLE WITH RETROSPECTIVE EFFECT AND THEREFORE, THE PENALTY FOR THE YEAR UNDER CONSIDERATION IS NOT IMPOSABLE. FURTHER, WE FIND TH AT PENALTY IS NOT AUTOMATIC AND IS NOT MANDATORY. FOR EVERY TECHNICAL BREACH OF PROVISIONS, PENALTY CANNOT BE IMPOSED. 10. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF HINDUSTAN STEEL LTD. (1972) 83 ITR 26 HAS HELD 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 DELIB ERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHON EST, OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENAL TY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSI DERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY I S PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE J USTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FRO M A BONAFIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRE SCRIBED BY THE STATUS. IN VIEW OF THE ABOVE DISCUSSION, IT IS CLEAR THAT T HE DELAY IN FILING THE RETURN WAS SUPPORTED BY REASONABLE CAUSE AND IN ANY CASE W AS ONLY A TECHNICAL AND VENIAL BREACH OF THE PROVISIONS OF LAW. UNDER T HESE CIRCUMSTANCES WE HUMBLY REQUEST YOUR GOODSELF TO CANCEL THE PENALTY LEVIED OF RS.12,900/- U/S 272A(2)(K) OF THE ACT. 5 ITA NO.360(ASR)/2015 A.Y. 2011-12 11. IN VIEW OF THE FACTS AND CIRCUMSTANCES AND IN V IEW OF THE ABOVE JUDICIAL PRECEDENTS, WE DO NOT HAVE ANY HESITATION IN DELETI NG THE PENALTY CONFIRMED BY LEARNED CIT(A). 12. IN VIEW OF THE ABOVE, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23RD JUNE, 2016. SD/- SD/- (T. S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23/06/2016. /SKR/ COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE:CHIEF AGRICULTURE OFFICER, HOS HIARPUR. (2) THE JCIT (TDS), HOSHIARPUR. (3) THE CIT(A), JLR (4) THE CIT,, JLR (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.