The Manager, State Bank of India, Kanpur V. Jt. DIT (I & CI), Kanpur

ITA 38/LKW/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1145 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 11-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Non compliance
• Section: 133(6)

Judgement Text

I.T.A. NO.38/LKW/2017 ASSESSMENT YEAR:2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO.38/LKW/2017 ASSESSMENT YEAR:2012-13 THE MANAGER, STATE BANK OF INDIA, YADHODANAGAR BRANCH, KANPUR. TAN:KNPSO 3345 G VS. JT. DIT (I&CI), KANPUR. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 30/06/2016 RELATING TO ASSESSMENT YEAR 2012-1 3. 2. THE ONLY GROUND TAKEN BY ASSESSEE IS THE CONFIRM ATION OF PENALTY WHICH THE ASSESSING OFFICER HAD IMPOSED U/S 272A(2) (C) OF THE ACT. THE ASSESSING OFFICER HAS IMPOSED THIS PENALTY FOR DEFA ULT IN COMPLIANCE TO THE NOTICE ISSUED U/S 133(6) OF THE ACT. 3. AT THE OUTSET, LEARNED A. R. SUBMITTED THAT THE ASSESSEE IS A BANKING COMPANY AND DURING THE YEAR UNDER CONSIDERATION THE ASSESSING OFFICER WANTED CERTAIN INFORMATION FROM THE BRANCH FOR WHIC H HE ISSUED NOTICE U/S 133(6) OF THE ACT. IT WAS SUBMITTED THAT THE ASSES SEE HAD TAKEN FIRST ADJOURNMENT FOR PREPARING THE REQUIRED INFORMATION AND AFTER THAT AGAIN THE APPELLANT BY SHRI SUDHIR KUMAR PANDEY, ADVOCATE RESPONDENT BY SHRI AMIT NIGAM, D. R. DATE OF HEARING 31 / 01 /201 8 DATE OF PRONOUNCEMENT 31 / 01 /201 8 I.T.A. NO.38/LKW/2017 ASSESSMENT YEAR:2012-13 2 ASSESSING OFFICER ISSUED NOTICE ON 08/12/2014 AND T HE ASSESSEE HAD FILED THE REQUIRED INFORMATION ON 01/12/2014 AND THEREFOR E, THERE WAS NO DEFAULT IN COMPLYING WITH THE NOTICE U/S 133(6) OF THE ACT. IT WAS SUBMITTED THAT THERE WAS CERTAINLY A DELAY IN SUBMITTING THE INFOR MATION WHICH HAD OCCURRED DUE TO CERTAIN UNFORESEEN CIRCUMSTANCES AS THE INTE RNAL AUDIT OF THE BRANCH WAS IN PROGRESS. IT WAS SUBMITTED THAT THERE WAS N O MALAFIDE INTENTION TO DELAY THE INFORMATION DEMANDED BY THE ASSESSING OFF ICER THEREFORE, IT WAS PRAYED THAT THE PENALTY CONFIRMED BY LEARNED CIT(A) MAY BE DELETED. 4. LEARNED D. R., ON THE OTHER HAND, HEAVILY OPPOSE D THE ARGUMENTS OF LEARNED A. R. AND SUBMITTED THAT THE BANKING AUTHOR ITIES ARE RELUCTANT TO SUBMIT THE REQUIRED INFORMATION AND DUE TO DELAY IN SUBMISSION OF INFORMATION THE REVENUE SOMETIMES FAILS TO COLLECT THE DUE TAXES FROM THE TAX PAYERS THEREFORE, IT WAS ARGUED THAT THE PENALT Y CONFIRMED BY LEARNED CIT(A) BE UPHELD. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSESSING OFFIC ER VIDE NOTICE DATED 24/05/2013 U/S 133(6) WANTED CERTAIN INFORMATION WH ICH WAS NOT PROVIDED TO THE ASSESSING OFFICER ON TIME THEREFORE, FOR NON COMPLIANCE OF THE NOTICE U/S 133(6), THE ASSESSING OFFICER IMPOSED THE PENAL TY OF RS.100/- PER DAY FOR THE DELAY. FOR CALCULATION OF THE PENALTY AMOU NT THE ASSESSING OFFICER WORKED OUT A DEFAULT OF 541 DAYS AND DEFAULT WAS CA LCULATED FROM THE DATE OF ISSUE OF NOTICE I.E. 24/05/2013. HOWEVER, HE HA S IGNORED VARIOUS ADJOURNMENTS GRANTED BY HIM AND ULTIMATELY THE INFO RMATION WAS ALSO FILED ON 01/12/2014. THIS FACT OF HAVING FILED THE INFOR MATION BY THE ASSESSEE IS RECORDED BY THE ASSESSING OFFICER ON THE LAST PAGE OF HIS ORDER. WE FURTHER OBSERVE THAT BANK BRANCHES ARE SUBJECT TO VARIOUS K INDS OF AUDIT SUCH AS INTERNAL AUDIT, TAX AUDIT AND STATUTORY AUDIT. BES IDES THE ABOVE AUDIT THE BANK IS ALWAYS ENGAGED IN DAY TO DAY ACTIVITIES IN SERVICE OF ITS CUSTOMERS I.T.A. NO.38/LKW/2017 ASSESSMENT YEAR:2012-13 3 AND THEREFORE, KEEPING IN VIEW THESE FACTS AND CIRC UMSTANCES, THE DELAY IN FILING OF NECESSARY INFORMATION SHOULD NOT HAVE INV ITED PENALTY FOR DEFAULT IN COMPLYING THE PROVISIONS OF SECTION 133(6). HON'BL E SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA [1 972] 83 ITR 26 (SC) HAS HELD AS UNDER: AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEE DING, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE P ARTY 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 MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENAL TY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATI ON IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDI CIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EV EN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPET ENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE P ROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELI EF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRI BED BY THE STATUTE. WE, THEREFORE, SET ASIDE THE ORDER OF CIT(A) AND DE LETE THE PENALTY LEVIED U/S 271A(2)(C) OF THE ACT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 31/01/2018) SD/. SD/. (PARTHA SARATHI CHAUDHURY) ( T. S. KAPOOR ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:31/01/2018 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW