ITO TDS 3(3), MUMBAI V. SYNCOM FORMULATIONS (INDIA ) LTD, MUMBAI

ITA 3913/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9019 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 29-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI , BEFORE SHRI RAJENDRA, A.M. AND SHRI PAWAN SINGH,J.M . ./ ITA NO.3913/MUM/2014 / ASSESSMENT YEAR: 2007-08 INCOME TAX OFFICER(TDS)-3(3) 1010, 10 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BLDG., CHARNI ROAD(W) MUMBAI-400 002. VS. M/S. SYNCOM FORMULATIONS (INDIA) LTD. GALA-7, NIRAJ INDUSTRIAL ESTATE OFF, MAHAKALI CAVES ROAD, ANDHERI(E) MUMBAI-400 093. PAN: AAFCS 6794 R ( / // / APPELLANT ) ( / RESPONDENT ) REVENUE BY: MS. BEENA SANTOSH ASS ESSEE BY: NONE / // / DATE OF HEARING: 10.01.2017 / DATE OF PRONOUNCEMENT: 10.01.2017 , ,, , 1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) , / PER RAJENDRA A.M. - CHALLENGING THE ORDER,DATED 10/03/2014,OF THE CIT ( A)-14,MUMBAI THE ASSESSING OFFICER(AO) HAS FILED THE PRESENT APPEAL. WHILE EXAMINING THE RECORDS OF THE ASSESSEE, HE FOUND THAT THE ASSESSEE HAD FIL ED THE TDS RETURNS AFTER THE DUE DATES THAT WERE REQUIRED TO BE FILED AT THE END OF EVERY QUARTER UNDER THE PROVISIONS OF SECTION 200(3) READ WITH RULE 31A OF THE INCOME TAX RULES,1962 (RULES).HE FURTHER FOUND THAT THE QUARTERLY STATEME NT OF TDS IN FORM NUMBER 24Q AND 26Q WAS REQUIRED TO BE FILED ON ITS SPECIFI ED DATES WERE ALSO NOT FILED.HE COMPILED THE DELAY IN SUBMISSION THE TDS R ETURNS FOR THE AY.2007-08 AS UNDER: QUARTER NO. OF DAYS DELAY TDS AMOUNT PENALTY AMOUNT (IN RS.) 24-Q1 976 22000 22000 3913/M/14-SYNCOM F(I)L 2 24-Q2 884 42000 42000 24-Q3 792 20000 20000 24-Q4 641 792427 64100 148100 26-Q1 976 439828 97600 26-Q2 884 359155 88400 26-Q3 792 398188 79200 26-Q4 641 123962 64100 329300 TOTAL 477400 2. HE ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ASKIN G IT TO EXPLAIN AS TO WHY PENALTY U/S. 272A(2)(K)OF THE ACT SHOULD NOT BE LEV IED.IN RESPONSE TO THE NOTICE, THE ASSESSEE ADMITTED THAT THERE WERE OCCASIONAL DE LAYS IN FILING TDS RETURNS, THAT THERE WERE NO MAJOR DEFAULTS IN DEDUCTION AND PAYMENTS OF THE TAXES. THE AO OBSERVED THAT REASONS GIVEN BY THE ASSESSEE DID NOT SATISFY THE REQUIREMENT OF ESTABLISHING REASONABLE CAUSE FOR NOT FULFILLING STATED THE OBLIGATIONS UNDER THE ACT. FINALLY, HE IMPOSED A PENALTY OF RS. 4.77 LAKHS INVOKING THE PROVISIONS OF SECTION 272A(2)(K) OF THE ACT. 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA). BEFORE HIM, IT WAS ARGUED THAT THE COMPANY DID NOT FILE E-TDS RETURN IN TIME DUE TO UNAWARENES S OF KNOWLEDGE, NON- AVAILABILITY OF PARTIES PAN.S, OUTSOURCING OF THE W ORK OF FILING THE RETURNS, THAT THERE WAS NO INTIMATION THAT NONFILING OF RETURNS O N DUE DATES WOULD ATTRACT HUGE PENALTIES. THE FAA ASKED THE ASSESSEE TO FILE DETAI LS OF DEPOSITS OF TDS. 3913/M/14-SYNCOM F(I)L 3 ACCORDINGLY A CHART-SHOWING THE DETAILS OF TAX DIRE CTED AT SOURCE AND PAID ALONG WITH THE DELAY IN FILING THE RETURN FROM THE DATE O F PAYMENT AND THE ACKNOWLEDGEMENTS OF THE RETURNS FOR ALL THE FOUR QU ARTERS-WAS FILED BEFORE THE FAA. 4. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AN D THE PENALTY ORDER PASSED BY THE AO,THE FAA HELD THAT CLAUSE (K)OF THE SECTIO N REQUIRED THE ASSESSEE IS TO DELIVER OR CAUSE TO BE DELIVERED A COPY OF THE STAT EMENT WITHIN THE TIME SPECIFIED U/S. 200 (3) OF THE ACT, THAT THE ASSESSEE IS WERE REQUIRED TO PREPARE A STATEMENT IN PRESCRIBED FORM AND TO DELIVER THE SAME TO PRESC RIBED AUTHORITY, THAT THERE WAS DELAY IN PAYMENT OF TAXES AND FILING OF RETURNS OF TDS, THAT THE ASSESSEE HAD PAID TAXES ALONG WITH THE INTEREST, THAT STATEM ENT COULD BE FILED ONLY AFTER TAXES WERE PAID BY AN ASSESSEE, THAT FOR DELAY IN P AYMENT OF TAXES THE ASSESSEE HAD TO PAY INTEREST U/S. 201 (1A) OF THE ACT.THE FA A REFERRED TO THE CASE OF M/S. PORWAL CREATION DELIVERED BY THE MUMBAI TRIBUN AL WHEREIN IT WAS HELD THAT PENALTY FOR LATE FILING OF RETURN SHOULD BE CA LCULATED FROM THE DATE OF PAYMENT OF TAXES AS THE ASSESSEE COULD NOT HAVE FIL ED BEFORE THE TAXES WERE PAID.FOLLOWING THE ORDER OF THE TRIBUNAL THE FAA DI RECTED THE AO TO MODIFY THE ORDER OF PENALTY BY RE-COMPUTING THE PENALTY FROM T HE DATE OF PAYMENT OF TAXES TO THE DATE OF FILING OF THE RETURN. 5. DURING THE COURSE OF HEARING BEFORE US, THE DEPARTM ENTAL REPRESENTATIVE (DR) STATED THAT MATTER COULD BE DECIDED ON MERITS. AS N OTED EARLIER, NONE APPEARED 3913/M/14-SYNCOM F(I)L 4 ON BEHALF OF THE ASSESSEE NOR ANY APPLICATION FOR A DJOURNING THE MATTER WAS FILED. SO, WE ARE DECIDING THE ISSUE ON THE BASIS O F AVAILABLE MATERIAL. WE FIND THAT THE FAA HAD CALLED FOR THE DETAILS OF DELAY AN D FILING OF TDS RETURNS, THAT SHE HAD FOLLOWED THE ORDER OF THE TRIBUNAL AND HAD DIRECTED THE AO TO RECALCULATE THE PENALTY AMOUNT FROM THE DATE OF PAY MENT OF TAXES TO THE DATE OF FILING OF RETURNS. IN OUR OPINION, THERE IS NO LEGA L FACTUAL INFIRMITY IS IN HER ORDER. THEREFORE, CONFIRMING HER ORDER WE DECIDE THE EFFEC TIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT,APPEAL FILED BY THE AO STANDS DISMISSED . !' ! #$ . ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH ,JANUARY 2017. % & ' 10 , 2017 SD/- SD/- ( ( # /PAWAN SINGH) ( !)%* / RAJENDRA) % + / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; ' DATED : 10 .01.2017 . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.