ITO, New Delhi V. M/s Estate Management Unit , DRDO, Delhi

ITA 4129/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86925 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-03-2015
• Assessment Year: misc
• Appeal Filed On: 05-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. GEORGE GEORGE K. , JM ITA NO. 4126/DEL/2013 : ASSTT. YEAR : 200 7 - 08 ITA NO. 4127/DEL/2013 : ASSTT. YEAR : 200 8 - 09 I TA NO. 4128/DEL/2013 : ASSTT. YEAR : 200 9 - 10 & ITA NO. 4129/DEL/2013 : ASSTT. YEAR : 2010 - 11 INCOME TAX OFFICER, WARD - 49(4), NEW DELHI VS M/S ESTATE MANAGEMENT UNIT, DRDO, MINISTRY OF DEFENCE, DRDO RESIDENTIAL COMPLEX, LUCKNOW ROAD, TIMARPUR, DELHI (APPELLANT) (RESPONDENT) PAN NO. DELE04642B ASSESSEE BY : SH. SATYAJEET GOEL , CA REVENUE BY : SMT. PARWINDER KAUR , SR. DR DATE OF HEARING : 11 .03. 201 5 DATE OF PRONOUNCEMENT : 11 .03 .2015 ORDER PER N.K. SAINI, A.M . T HESE FOUR APPEALS BY THE DEPARTMENT ARE DIRECTED AGAINST THE COMMON ORDER DATED 10.04.2013 OF CIT(A) - XXX, NEW DELHI. 2. AN I DENTICAL ISSUE I S INVOLVED IN THESE APPEA LS WHICH WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. ITA NO S . 4126 TO 4129/DEL/2013 ESTATE MANAGEMENT UNIT, DRDO 2 3. THE COMMON GROUNDS RAISED IN THESE APPEALS READ AS UNDER: 1. 1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AS WELL AS IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING PE NALTY LEVIED U/S 272(A)(2)(K) OF THE I.T. ACT ON ACCOUNT OF LATE FILING OF TDS STATEMENT OF FINANCIAL YEARS 2007 - 08 TO 2010 - 11. 1.2 THE APPELLANT IS ESTABLISHED DEPARTMENT OPERATES UNDER THE MINISTRY OF DEFENCE AND HAVE SUFFICIENT FINANCIAL AND TECHNICAL SUPPORT. THEREFORE, THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THERE WAS REASONABLE CAUSE FOR FILING THE STATEMENT BELATEDLY DUE TO IN ADEQUATE TECHNICAL PERSON. 1 . 3 THAT THE APPELLANT CRAVES LEAVE TO ADD, AL TER OR AMEND ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 4 . FACTS OF THE CASE IN BRIEF ARE THAT THE AO FOUND THAT VARIOUS PERSONS WHILE FILING THEIR REGULAR RETURNS OF INCOME HAD QUOTED TAN NUMBER OF THE ASSESSEE AND THUS CLAIMED CREDIT FOR AMO UNT OF TDS DEDUCTED BY THE ASSESSEE WHILE MAKING PAYMENTS TO SUCH PERSONS. THE AO ALSO NOTED THAT THE ASSESSEE HAD NOT FULFILLED HIS OBLIGATION OF FILING E - TDS RETURNS OF THE CORRESPONDING PERIODS. THEREFORE, A SHOW CAUSE NOTICE WAS GENERATED AND SERVED ON THE ASSESSEE VIDE SPEED POST. IN RESPONSE TO ITA NO S . 4126 TO 4129/DEL/2013 ESTATE MANAGEMENT UNIT, DRDO 3 THE SAID NOTICE THE ASSESSEE FURNISHED THE ACKNOWLEDGEMENTS OF HAVING FILED E - TDS RETURNS OF QUARTER 1, 2, 3 AND 4 IN FORM 26Q FOR THE FINANCIAL YEARS 2009 - 10 AND 2010 - 11. THE AO NOTED THAT THE ASSESSEE HAD FIL ED THOSE RETURNS ONLY AFTER RECEIVING SHOW CAUSE NOTICE, THEREFORE, THE RETURNS WERE FILED BELATEDLY. THE AO OBSERVED THAT THE ASSESSEE HAD NOT SUBMITTED ANY DOCUMENT IN RESPECT OF THE PROOF OF FILING OF E - TDS RETURNS FOR THE FINANCIAL YEARS 2007 - 08 AND 20 08 - 09 AND THE RETURNS FOR THE FINANCIAL YEARS 2009 - 10 A ND 2010 - 11 WERE FILED BELATED. H E, THEREFOR E, LEVIED THE PENALTY U/S 272A (2)(K) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 5 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: THIS IS TO BRING TO YOUR NOTICE THAT THE ASSESSEE IS A GOVERNMENT DEPARTMENT WHICH OPERATES UNDER THE MINISTRY OF DEFENCE. THE SAID DEPARTMENT HAD PASSED BOOK ENTRIES OF THE TAX DEDUCTED BY THEM TOWARDS THE INCOME T AX DEPARTMENT FOR THE RELEVANT ASSESSMENT YEAR. THE BOOK ENTRIES HAVE BEEN DONE IN THE RESPECTIVE ASSESSMENT YEARS, HENCE, THE SAME SHALL BE ITA NO S . 4126 TO 4129/DEL/2013 ESTATE MANAGEMENT UNIT, DRDO 4 CONSIDERED AS TAXES PAID TOWARDS THE INCOME TAX DEPARTMENT. THE ASSESSEE BEING A DEFENCE ORGANIZATION HAS NOT BEE N COMPETENT AND HAS NOT HAD STAFF WHICH WAS COMPETENT ENOUGH TO FILE THE RETURNS AND OTHER FORMS OF TDS AND ALSO THERE HAD BEEN NO SOFTWARE AND TECHNICAL SUPPORT FOR THE SAME. ALSO, AS PER SECTION 234E OF THE INCOME TAX ACT, 1961, WHERE A PERSON FAILS TO FILE/SUBMIT THE TDS RETURN AS PRESCRIBED IN THE ACT, WITHIN THE TIME PRESCRIBED IN SUB - SECTION (3) OF SECTION 200 OR THE PROVISO TO SUB - SECTION (3) OF SECTION 206C, HE SHALL BE LIABLE TO PAY, BY WAY OF FEE, A SUM OF ONE HUNDRED RUPEES FOR EVERY DAY DURING WHICH THE FAILURE CONTINUES AND THE SAID AMOUNT SHALL NOT EXCEED THE AMOUNT OF TAX DEDUCTIBLE OR COLLECTIBLE, AS THE CASE MAY BE . WHILE, IN THE CASE OF THE ASSESSEE, THE TAX HAS BEEN DEDUCTED AND HAS BEEN PAID TO THE CREDIT OF THE INCOME TAX DEPARTMENT TH ROUGH RESPECTIVE BOOK ENTRIES, THEREFORE, THE AMOUNT OF TAX DEDUCTIBLE OR COLLECTIBLE IS NIL AND HENCE, THE PENALTY ON SUCH DELAY SHALL ALSO BE NIL. THEREFORE, THE NET LIABILITY OF THE ASSESSEE COMES OUT TO BE NIL. FURTHER, THE ASSESSEE, IN THIS REGARD H AD ALSO WRITTEN A LETTER TO THE LD. ASSESSING OFFICER STATING THE FACTS AND ABOUT THE INCOMPETENCY OF THE DEPARTMENT AND REQUESTING ADDITIONAL TIME FOR FILING THE RETURNS, THIS BEING AN EXCEPTIONAL CASE. BUT THE LD. ASSESSING OFFICER WITHOUT CONSIDERING ITA NO S . 4126 TO 4129/DEL/2013 ESTATE MANAGEMENT UNIT, DRDO 5 TH E PLEA OF THE ASSESSEE IMPOSED THE PENALTY, THOUGH THE ASSESSEE HAD FILED THE RETURNS FOR THE ASSESSMENT YEAR 2009 - 10 AND 2010 - 11 BY THEM. ALSO, THE ASSESSEE HAD LATER FILED THE RETURNS FOR THE ASSESSMENT YEAR 2007 - 08 AND 2008 - 09. THEREFORE, WE REQUEST YO U HONOUR TO KINDLY CONSIDER THE PLEA OF THE ASSESSEE AND ANNUL THE PENALTY PROCEEDINGS AND DO THE NEEDFUL AT THE EARLIEST AND OBLIGE. 6. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE PENALTY BY OBSERVING IN PARAS 3 & 4 OF THE IMPUGNED ORDER AS UNDER: 3. I HAVE PERUSED THE ASSESSMENT ORDER, WRITTEN SUBMISSIONS, AND GROUNDS OF APPEAL AND DISCUSSED THE MATTER WITH AR VERY CAREFULLY. SH. VAIBHAV BAJAJ, CA APPEARED FOR HEARING WITH WRITTEN SUBMISSION AND EVIDENCES. THE CASE I S HEARD AND DISCUSSED. THE APPELLANT DRDO (EMU) (ESTATE MANAGEMENT UNIT) HAD MADE BOOK ENTRY OF TDS IN THE SAME F.YS. 2007 - 08, 2008 - 09, 2009 - 10 AND 2010 - 11 AND PAID TAXES TO GOVT. A/C AS PER LAW. HOWEVER, THEY COULD NOT FILE STATEMENTS IN TIME DUE TO LACK OF TECHNICAL MAN POWER, NON - AVAILABILITY OF PANS AND SHORTAGE OF SOFTWARE TO FILE THE REQUIRED ST ATEMENTS. HOWEVER, SUBSEQUENTLY, THEY RECTIFIED THE STATEMENTS/MISTAKES AND FILED STATEMENTS PROPERLY. THEY ARE ADVISED TO MAINTAIN ACCOUNTS PROPERLY AND FILE THE STATEMENTS IN TIME. 4. IN THE RESULT, THIS APPEAL IS ALLOWED. ITA NO S . 4126 TO 4129/DEL/2013 ESTATE MANAGEMENT UNIT, DRDO 6 7 . NOW THE DEPARTMENT IS IN APPEAL. THE LD. SR. DR SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THE ASSESSEE DID NOT COMPLY WITH THE PROVISIONS OF THE ACT FOR FILING THE RETURNS IN FOR M NO. 26Q IN TIME. T HEREFORE, THE PENALTY U/S 272A (2)(K) WAS RIGHTLY LEVIED BY THE AO AND THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE SAME. 8 . IN HIS RIVAL SUBMISSIONS THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE DEDUCTED TDS AND DEPO SITED THE SAME WITHIN TIME TO THE CREDIT OF THE INCOME TAX DEPARTMENT AND WHEN THE DEPARTMENT POINTED OUT FOR NON - FILING OF THE E - TDS RETURNS , THOSE WERE FILED. THEREFORE, THE AO WAS NOT JUSTIFIED I N LEVYING THE PENALTY U/S 272A (2)( K) OF THE ACT AND THE LD . CIT(A) RIGHTLY DELETED THE SAME. 9 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE DEDUCTED THE TDS WHEREVER IT WAS RE QUIRED TO BE DEDUCTED AND DEPOSITED THE SAME WITH THE GOVERNMENT ACCOUNT EVEN BEFORE THE PRESCRIBED TIME WHICH IS EVIDENT FROM THE ANNEXURES ATT ACHED WITH THE IMPUGNED ORDER, THERE WAS NO DELAY IN DEPOSITING THE TAX ITA NO S . 4126 TO 4129/DEL/2013 ESTATE MANAGEMENT UNIT, DRDO 7 DEDUCTED AT SOURCE. THE AO LEVIED THE PE NALTY ONLY FOR THIS REASON THAT THE ASSESSEE DID NOT FILE E - TDS RETURNS IN TIME BUT THOSE WERE FILE D BELATED , THEREFORE, IF ANY FAULT WAS THERE ON THE PART OF THE ASSESSEE THAT WAS A TECHNICAL FAULT. 10 . ON A SIMILAR ISSUE THE HON BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL L TD. VS STATE OF ORISSA (1972) 83 ITR 26 HAS HELD AS UNDER: AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI - CRIMINAL PROCEEDING, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLES S THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY S HOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINI M UM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. ITA NO S . 4126 TO 4129/DEL/2013 ESTATE MANAGEMENT UNIT, DRDO 8 11 . IN THE PRESENT CASE ALSO THERE WAS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT BUT THERE WAS NO MALAFIDE INTENSION. THEREFORE, BY CONSIDERING THE TOTALITY OF THE FACTS OF THE PRESENT CASE AND THE RATIO LAID DOWN BY T HE HON BLE SUPREME COURT IN THE AFORESAID REFER RED TO CASE OF HINDUSTAN STEEL L TD. VS STATE OF ORISSA, WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS FULLY JUSTIFIED IN DELETING THE PENALTY. WE DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 12 . IN THE RESULT, APPEAL S OF THE DEPARTMENT ARE DISMISSED. ( ORDER PRON OUNCED IN THE OPEN COURT ON 11 /03 / 201 5 ) . SD/ - SD/ - ( GEORGE GEORGE K. ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 /03 /2 015 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR