The Executive Engineer, Hoshiarpur V. The Joint Commissioner of Income Tax,(TDS), Ludhiana

ITA 382/ASR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0552 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 13-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKER
• 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 NOS.382 TO 384(ASR)/2015 ASSESSMENT YEARS: 2007-08, 2008-09 & 2009-10 PAN: JLDPO-0273A THE EXECUTIVE ENGINEER VS. JT. COMMR. OF INCOME T AX (TDS) WATER SUPPLY AND SANITATION LUDHIANA. DIVISION, GARHSHABNKER. (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SH. BHAWANI SHANKER, DR DATE OF HEARING: 23/06/2016 DATE OF PRONOUNCEMENT: 24/06/2016 ORDER PER A.D. JAIN, JM; THESE THREE APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST THE SEPARATE ORDERS, EACH DATED 05.05.2015, PASSED BY T HE LD. CIT(A)-I, JALANDHAR, FOR THE ASSESSMENT YEARS 2007-08, 2008-09 AND 2009- 10, RESPECTIVELY, AGAINST THE CONFIRMATION OF PENALTIES LEVIED BY THE AO UNDE R SECTION 272(2)K) OF THE INCOME TAX ACT ( IN SHORT, THE ACT), 1961. 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, THE 2 ITA NOS. 382 TO 384/ASR/2015 A.YS.2007-08 TO 2009-10 ASSESSING OFFICER IMPOSED PENALTY U/S 272A(2)(K) OF THE ACT @ OF RS.100/- PER DAY FOR EACH DAY OF DEFAULT. 4. AGGRIEVED WITH THE ORDER THE ASSESSEE FILED APPE ALS BEFORE THE LD. CIT(A) AND SUBMITTED THAT THE RETURNS COULD NOT BE FILED W ITHIN THE PRESCRIBED PERIOD, AS THE ASSESSEE WAS NOT HAVING TECHNICAL STAFF AND IT WAS DEPENDENT UPON OUTSIDE AGENCY TO FILE THE RETURNS AND THEREFORE, T HERE WAS A REASONABLE CAUSE FOR LATE FILING OF THE RETURNS. THE ASSESSEE ALSO R ELIED UPON VARIOUS CASE LAWS BEFORE THE LD. CIT(A), BUT THE LD. CIT(A) DID NOT A GREE WITH THE CONTENTIONS OF THE ASSESSEE AND UPHELD THE ACTION OF ASSESSING OFFICER . 5. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 6. NOBODY APPEARED ON BEHALF OF THE ASSESSEE, DESPI TE THE FACT THAT NOTICE WAS SENT FOR HEARING ON 23.06.2016 BY RPAD. HOWEVER , FINDING THAT THE MATTER CAN BE PROCEEDED WITH IN THE ABSENCE OF THE ASSESSE E, WE ARE DOING SO. 7. THE LD. DR, RELIED ON THE ORDERS OF THE AUTHORIT IES BELOW. 8. HAVING HEARD THE LD. DR AND HAVING PERUSED THE R ELEVANT MATERIAL ON RECORD, WE FIND THAT THE A.O HAS IMPOSED PENALTIES FOR DEFAULTS IN LATE FILING OF TDS RETURNS IN VARIOUS QUARTERS FOR THE ASSESSMENT YEARS 2007-08, 2008-09 & 2009-10, RESPECTIVELY. THE ASSESSEE HAS CONTENDED IN THE GROUNDS TAKEN BEFORE THIS BENCH, THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE AND REASON FOR NOT FILING TDS RETURNS, WHICH WERE BEYON D THE CONTROL OF THE ASSESSEE AND THERE WAS NO INTENTIONAL OR WILLFUL MI STAKE FOR DELAY IN FILING THE TDS RETURNS. IT WAS DUE TO NON AVAILABILITY OF PANS OF THE DEDUCTEES, LACK OF KNOWLEDGE OF THE PROVISIONS AND NON-AVAILABILITY O F PROFESSIONALS, ETC., THAT THE 3 ITA NOS. 382 TO 384/ASR/2015 A.YS.2007-08 TO 2009-10 DEFAULT OCCURRED. HOWEVER, THE TAX DEDUCTED HAS BEE N TRANSFERRED ON THE DATE OF DEDUCTION TO THE CENTRAL GOVT. ACCOUNT. IN VI EW OF THE ABOVE, WE FIND THAT THE ASSESSEE HAD DEDUCTED THE TAX AT SOURCE AND HAD DEPOSITED THE SAME WITH CENTRAL GOVT. WITHIN THE STIPULATED PERIOD AND NEIT HER THE GOVT., NOR THE PAYEE SUFFERED ANY LOSS. THE MISTAKE COMMITTED BY ASSESSE E IS A TECHNICAL ONE AND MOREOVER, THE ASSESSEE BEING A PERSON RESPONSIBLE, DOES FACE PROBLEMS DUE TO LACK OF TECHNICAL STAFF TO DEAL WITH THE FILING OF TDS RETURNS. THE PENALTY U/S 272A(2)(K) IS NOT A MANDATORY PENALTY AND BEFORE IM POSING OF PENALTY THE REVENUE AUTHORITIES MUST EXAMINE THE FACTS AND CIRC UMSTANCES OF THE ASSESSEE LEADING TO THE COMMISSION OF THE MISTAKE. WE FURT HER 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;] 4 ITA NOS. 382 TO 384/ASR/2015 A.YS.2007-08 TO 2009-10 [(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) 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, IT IS EVIDENT THAT FINDING THIS PROVISION HARSH, THE LEGISLATURE ITSEL F 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 YEARS UNDER CONSIDERATION IS NOT IMPOSABLE. FURTHER, WE F IND THAT LEVY OF PENALTY IS NOT AUTOMATIC AND IS NOT MANDATORY. FOR EVERY TECHN ICAL BREACH OF LEGAL PROVISIONS, PENALTY CANNOT BE IMPOSED. 10. THE HONBLE SUPREME COURT OF INDIA, IN THE CASE OF HINDUSTAN STEEL LTD., 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 5 ITA NOS. 382 TO 384/ASR/2015 A.YS.2007-08 TO 2009-10 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. 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 PENALTIES CONFIRMED BY LEARNED CIT(A) FOR THE ASSESSMENT YEARS UNDER AP PEAL. 12. IN VIEW OF THE ABOVE, ALL THE THREE APPEALS AR E ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24TH JUNE, 2016. SD/- SD/- (T. S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 24/06/2016. /SKR/ COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE:THE EXECUTIVE ENGINEER, WATER SUP PLY AND SANITATION, GARHSHANKAR. (2) THE JCIT (TDS), LUDHIANA. (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.