Divyajivan Infrastructure Pvt. Ltd., Ahmedabad V. The Addl.CIT, TDS Range, Ahmedabad

ITA 3632/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1099 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-06-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 28-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: P M MEHTA
• Keywords: Reasonable cause

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.3632 AND 3633/AHD/2015 / ASSTT. YEAR: 2011-12 AND 2012-2013 DIVYAJIVAN INFRASTRUCTURE P.LTD. ACCOUNT OFFICE, DIVYAJIVAN CITY OPP: SWAMINARAYAN PARK NR. HARIDARSHAN CROSS ROAD NARODA AHMEDABAD 382 330. PAN : AHMDO 4993 C VS ACIT, TDS - RANGE AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI P.M. MEHTA, AR REVENUE BY : SHRI DINESH SINGH, SR.DR / DATE OF HEARING : 23/06/2016 / DATE OF PRONOUNCEMENT: 20/07/2016 $%/ O R D E R THE PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANC E OF THE ASSESSEE AGAINST COMMON ORDER OF THE LD.CIT(A) DATED 19.10.2 015 PASSED FOR THE ASSTT.YEAR 2011-12 AND 2012-13 RESPECTIVELY. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.1,16,700/- AND RS.1,96 ,700/- IMPOSED UNDER SECTION 272(A)(2)(K) OF THE INCOME TAX ACT, 1961 IN THE ASSTT.YEARS 2011-12 AND 2012-13 RESPECTIVELY. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-CO MPANY IS ENGAGED IN THE BUSINESS OF CONSTRUCTION AND DEVELOPMENT OF RESIDEN TIAL AND COMMERCIAL PROJECTS. A TDS SURVEY WAS CONDUCTED AT THE BUSINE SS PREMISES OF THE ITA NO.3632 AND 3633/AHD/2015 2 ASSESSEE ON 26.12.2013. DURING THE SURVEY PROCEEDI NGS IT CAME TO THE NOTICE OF THE DEPARTMENT THAT TDS RETURN IN FORM NO.24Q AN D 26Q WERE NOT SUBMITTED BY THE ASSESSEE ON DUE DATE. THE LD.AO H AS WORKED OUT DELAY OF 1167 DAYS IN THE ASSTT.YEAR 2011-12 AND 1960 DAYS I N THE ASSTT.YEAR 2012- 13. THESE DELAY PERTAIN TO QUARTER NO.1, 2, 3 AND 4 FOR SUBMISSION OF BOTH THESE FORMS I.E. 24Q AND 26Q WHICH RELATE TO SALARY TDS AND NON-SALARY TDS. THE LD.AO HAS IMPOSED PENALTY OF RS.1,16,700/- AND RS.1,96,000/- AT THE RATE OF RS.100/- PER DAY. APPEAL TO THE LD.CIT(A) DID N OT BRING ANY RELIEF TO THE ASSESSEE. 4. THE LD.CIT(A) HAS CONFIRMED THE PENALTY ON THE G ROUND THAT THE ASSESSEE FAILED TO DEMONSTRATE ANY PLAUSIBLE REASON WHICH PROHIBITED IT FROM SUBMITTING THESE FORMS WELL IN TIME. ACCORDING T O THE LD.CIT(A), THE ASSESSEE TOOK A PLEA THAT ON ACCOUNT OF FINANCIAL C ONSTRAINS IT COULD NOT MAKE PAYMENT OF TDS AND NON-PAYMENT OF TDS IN TIME PROHI BITED IT TO SUBMIT THE FORMS. ACCORDING TO THE CIT(A) ASSESSEE DID NOT FI LE DETAILS OF MAJOR PAYMENT MADE BY IT FOR THE PURPOSE OF BUSINESS DURI NG THIS PERIOD. IN OTHER WORDS, THE LD.CIT(A) COULD NOT VERIFY THE FACTS ON THE ALLEGED FINANCIAL CRISIS. 5. BEFORE ME, IT WAS CONTENDED BY THE ASSESSEE THAT SUB-CLAUSE (K) OF SECTION 272A(1) EMPOWERS THE AO TO VISIT ANY ASSESS EE WITH PENALTY AT THE RATE OF RS.100/- PER DAY FOR COMMITTING A DEFAULT I N SUBMISSION OF FORM NO.24Q AND 26Q AS REQUIRED UNDER SUB-SECTION (3) OF SECTION 200 OF THE INCOME TAX ACT. WITH EFFECT FROM 1.7.2012 THIS PRO VISION HAS BEEN DELETED. HE POINTED OUT THAT LOTS OF PROBLEMS WERE FACED BY THE TAX PAYER FOR COMPLYING WITH THE DIRECTIONS, BECAUSE MOST OF THE TIME SERVER OF THE DEPARTMENT WAS NOT WORKING AND TAKING COGNIZANCE OF THIS ASPECT, THIS ITA NO.3632 AND 3633/AHD/2015 3 PROVISION HAS BEEN DELETED. HE FURTHER CONTENDED T HAT THE ISSUE REGARDING PAYMENT OF TDS BEING LOOKED INTO BY THE STAFF, WHO ON ACCOUNT OF THEIR INEXPERIENCE DID NOT COMPLY WITH THIS PROCEDURAL AS PECT WELL IN TIME. OTHERWISE, THERE IS NO BAD INTENTION AT THE END OF THE ASSESSEE. THERE WAS DELAY IN MAKING PAYMENT OF TDS, BUT THE ASSESSEE HA S PAID ALONG WITH INTEREST, AND THERE WAS NO LOSS TO THE REVENUE. HE FURTHER CONTENDED THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEE L LTD. VS. STATE OF ORISSA, REPORTED IN 83 ITR 27 HAS HELD THAT PENALTY FOR TECHNICAL BREACH OF PROCEDURAL LAW OUGHT NOT TO BE IMPOSED MERELY ON CO MMITTING OF SUCH OFFENCE. THERE SHOULD BE A DELIBERATE DEFIANCE OF LAW FOR VISITING THE ASSESSEE WITH PENALTY. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 6. I HAVE CONSIDERED RIVAL CONTENTION AND GONE THRO UGH THE RECORD. IN ORDER TO DEMONSTRATE REASONABLE CAUSE FOR NON-SUBMI TTING TDS STATEMENT IN TIME, THE ASSESSEE HAS PLEADED THAT TDS PAYMENTS WE RE HANDLED BY CLERICAL STAFF IN THE COMPANY, WHO WERE NOT AWARE OF THE SIG NIFICANCE OF THE PROVISIONS OF TIMELY PAYMENT OF TDS AND FILING OF TDS RETURNS. AS FAR AS THE DELAY IN PAYMENT OF TDS IS CONCERNED, THE ASSESSEE HAS ALREA DY SUFFERED PENALTY IN THE SHAPE OF INTEREST, AND THERE WAS NO LOSS TO THE REV ENUE. I FIND THAT THOUGH THERE WAS A DELAY IN SUBMITTING TDS STATEMENTS, BUT ULTIMATELY, THE ASSESSEE HAS SUBMITTED SUCH STATEMENTS. THIS DELAY ON THE P ART OF THE ASSESSEE HAS NOT CREATED ANY HINDRANCE TO THE INVESTIGATION ETC., IF REQUIRED TO BE CARRIED OUT BY THE REVENUE OFFICIALS. PROVISION FROM THE STATUTE BOOK HAS ALREADY BEEN DELETED, THOUGH W.E.F. 1.7.2012, BUT IT MUST HAVE B EEN FELT THAT IT WAS AN UNWORTHY PROVISION. IF I PERUSE THE FACTS IN LIGH T OF THESE DEVELOPMENT, THEN IT WOULD REVEAL THAT THE ASSESSEE HAS NOT DELIBERAT ELY DELAYED THE SUBMISSIONS ITA NO.3632 AND 3633/AHD/2015 4 OF THE TDS RETURN, RATHER, IT WAS HAPPENED ON ACCOU NT OF BONA FIDE MISTAKE OF HIS CLERICAL STAFF. THEREFORE, I ALLOW BOTH THE AP PEALS, AND DELETE PENALTY. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 20 TH JULY, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER