Sona Alloys Pvt. Ltd., Ahmedabad V. The Addl. CIT, TDS Range, Ahmedabad

ITA 42/AHD/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1424 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-06-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 06-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B P K
• Keywords: Reasonable cause; Corroborative evidences
• Section: 273B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , , BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.42/AHD/2016 ( / ASSESSMENT YEAR : 2012-13) SONA ALLOYS PVT.LTD. 4 TH FLOOR, MEDIMAX HOUSE OPP. KARNAVATI HOSPITAL ELLISBRIDGE, AHMEDABAD / VS. THE ADDL. CIT TDS RANGE AHMEDABAD $ ./ ./ PAN/GIR NO. : AAKCS 5706 L ( $& / APPELLANT ) .. ( '($& / RESPONDENT ) $&) / APPELLANT BY : MR.ASEEM THAKKAR, AR '($&*) / RESPONDENT BY : MR. B.P.K.PANDA, SR.DR +* / DATE OF HEARING 01/06/2016 ,-./* / DATE OF PRONOUNCEMENT 08/06/2016 / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-8, AHMEDABAD DATED 03/11/2015 FOR THE ASSESSMENT YEAR 2012-13. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- ITA NO. 42/AHD/ 2016 SONA ALLOYS PVT.LTD. VS. ADDL.CIT ASST.YEAR 2012-13 - 2 - 2.1. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING OF STEEL PRODUCTS. A SURVEY WAS CARR IED OUT AT THE BUSINESS PREMISES ON 12/12/2013, WHEREIN IT WAS NOTICED THAT ASSESSEE HAD NOT FILED TDS RETURNS IN FORM NOS.24Q AND 26Q ON THE DU E DATES. ASSESSING OFFICER (AO) THEREFORE SHOW-CAUSED TO THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY U/S.271A(2)(K) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') BE NOT LEVIED. AO NOTED THAT ASS ESSEE DID NOT RESPOND TO THE NOTICE. HE THEREFORE VIDE ORDER DATED 23/07/20 14 COMPUTED THE DEFAULT OF DAYS IN FILING THE TDS RETURN AND WORKED OUT THE NUMBER OF DAYS DEFAULT AT 1060 DAYS AND ON IT BY APPLYING THE RATE OF PENALTY @ RS.1000/- PER DAY COMPUTED THE TOTAL PENALTY U/S.27 2A(2)(K) OF THE ACT AT RS.1,06,000/-. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A), WHO VIDE ORDER DATED 03/11/2015 (IN APPEAL NO. CIT(A)-8/229/14-15) DISMISSED THE APPE AL BY HOLDING AS UNDER:- 5. APPELLATE FINDING: GROUND NO.2 RAISED BY THE APPELLANT IS DISMISSED AS THE ADDL.CIT IS THE AUTHORITY TO IMPOSE THE PENALTY U/S .272A(2)(K) WHEN IT IS REFERRED BY THE DCIT/ACIT/ITO(TDS). AFTER PASSING THE PENALTY ORDER, FOR ALL OTHER PROCEDURAL MATTERS THE DCIT/ACIT/ITO (TDS) ARE RESPONSIBLE. IT IS PROCEDURALLY CORRECT IF THE DCI T HAS SIGNED THE DEMAND NOTIE. HENCE, THIS GROUND OF APPEAL IS DISM ISSED. GROUND NO.3 : THE AO HAS WRONGLY POINTED OUT THAT THE SECTION 272A(2)(K) IS NOT COVERED BY THE PROVISION OF 237B. THE SECTION 273B ITA NO. 42/AHD/ 2016 SONA ALLOYS PVT.LTD. VS. ADDL.CIT ASST.YEAR 2012-13 - 3 - CLEARLY INCLUDES SECTION 272A AND THE APPELLANT IS ELIGIBLE TO GET RELIEF FROM PENALTY IF THERE IS A REASONABLE CAUSE FOR DEL AY. IN HIS SUBMISSION THE AR MENTIONED THAT THE DELAY W AS DUE TO DELAY IN GENERATION OF ACKNOWLEDGMENT NO. FROM CPC AND THE RELEVANT SOFTWARE WAS ALSO NOT AVAILABLE WITH THE FRANCHISE OUTSOURCE BY THE DEPARTMENT OR NSDL, THE APEX NODAL AGENCY FOR THIS WORK. THE AR RELIED UPON THE DECISION OF ITAT CUTTACK IN CASE OF SBI V. JCIT (TDS) (2015) 68 SOT 370 (AS STATED ABOVE IN PARA NO.4) WH ICH SUPPORTS THE REASON GIVEN BY THE BANK, I.E. DIFFICULTY IN GENERA TION OF ACKNOWLEDGMENT NUMBER, TO BE THE REASONABLE CAUSE B EYOND CONTROL OF THE ASSESSEE. THE PRESENT CASE OF THE APPELLANT IS FOR THE A.Y. 2 012-13 I.E. THE YEAR SUBSEQUENT TO THE PERIOD COVERED BY THE ABOVE MENTIONED DECISION OF ITAT. THE PERIOD COVERED BY THE ITAT IS THE AY 2010-11 & 2011-12. THE AR HAS WRONGLY STATED IN HIS WRITTEN SUBMISSION THAT THE A.Y. AS REFERRED IN THE QUOTED CASE IS THE SAME AS OF THE A PPELLANT. HIS CONTENTION THAT, EVEN IN THE CASE OF THE APPELLANT THE YEARS OF APPEAL INVOLVED ARE A.Y. 2011-12 WHICH IS THE SAME ASST.YE ARS AS REFERRED ABOVE, IS CORRECT. THE A.Y. UNDER CONSIDERATION IS 2012-13 AND THERE IS NO RECORD AVAILABLE THAT THE DIFFICULTY AS MENTI ONED BY THE AR WAS STILL CONTINUING IN THE CURRENT ASSESSMENT YEAR. T HE PROCEDURE AND THE SOFTWARE IMPROVED A LOT DURING THE RELEVANT PERIOD. THE AR HAS TAKEN SUPPORT OF ABOVE MENTIONED DECISION OF ITAT, CUTTAC K JUST FOR THE SAKE OF DEFENDING HIS CASE. IN THE APPELLANTS OWN CASE FOR THE A.Y. 2011-12 THE PLEA TAKEN BY THE AR BASED ON THE DECISION OF I TAT CUTTACK COVERING THE SAME PERIOD OF TIME IS WELL ACCEPTED I N MY ORDER IN APPEAL NO.228. TUT THE SAME DEFENCE WITHOUT ANY BASE AND SUPPORTING EVIDENCE CANNOT BE ACCEPTED IN THIS CURRENT YEAR. IN VIEW OF THE ABOVE FACTS AND DISCUSSION, THE PENA LTY IMPOSED BY THE AO IS JUSTIFIED AND IS CONFIRMED. ACCORDINGLY, THE APPEAL IS DISMISSED ON THIS GROUND. ITA NO. 42/AHD/ 2016 SONA ALLOYS PVT.LTD. VS. ADDL.CIT ASST.YEAR 2012-13 - 4 - 3. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), ASSESSE E IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUNDS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CONFIRMING THE PENALTY OF RS.1,06,000/- LEVIED BY T HE ADDL. COMM. OF INCOME TAX, TDS RANGE, AHMEDABAD U/S.272A(2)(K) OF THE INCOME TAX ACT, 1961 FOR THE ALLEGED LATE FILING OF STATEM ENTS IN FORM NO.24Q & 26Q FOR F.YR.2011-12. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) OUGHT TO HAVE CONSIDERED THE FACT THAT THE DELAY IN FILING OF AFO RE SAID STATEMENTS WAS BONA FIDE AND UNINTENTIONAL. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN DISMISSING THE GROUND OF APPEAL AT SR.NO.1 FILED BE FORE HIM BY THE APPELLANT STATING THAT THE PENALTY ORDER IS ILLEGAL AND BAD IN LAW HENCE THE SAME SHOULD BE CANCELLED. 4. THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) HAS ERRED IN DISMISSING THE GROUND OF APPEAL AT SR.NO.2 FILED BE FORE HIM BY THE APPELLANT STATING THAT THE PENALTY ORDER HAS BEEN P ASSED AND SIGNED BY ADDL. COMM. OF INCOME TAX, TDS RANGE AND THE DEMAND NOTICE SIGNED BY THE DY. COMM. OF INCOME TAX, TDS CIRCLE, AHMEDABAD. HENCE THE ORDER/DEMAND NOTICE SO PASSED SUFFERS FROM GROSS ER ROR OF LAW AND THEREFORE THE SAME SHOULD BE QUASHED. 4. BEFORE US, LD.AR SUBMITTED THAT THOUGH ASSESSEE HAS RAISED SEVERAL GROUNDS, BUT THE SOLITARY ISSUE IS WITH RESPECT TO LEVY OF PENALTY U/S.271A(2)(K) OF THE ACT. BEFORE US, LD.AR REITER ATED THE SUBMISSIONS MADE BEFORE THE AO AND LD.CIT(A) AND FURTHER SUBMIT TED THAT THE DELAY IN FILING OF TDS STATEMENT WAS ON ACCOUNT OF DELAY IN GENERATION OF NUMBER (ACKNOWLEDGMENT) FOR FILING THE STATEMENTS A ND FOR WHICH THE ASSESSEE HAD TO DEPEND UPON NSDL, THE APEX NODAL AG ENCY. HE FURTHER ITA NO. 42/AHD/ 2016 SONA ALLOYS PVT.LTD. VS. ADDL.CIT ASST.YEAR 2012-13 - 5 - SUBMITTED THAT AS FAR AS DEPOSIT OF TDS IS CONCERNE D, THERE IS NO DELAY AND, THEREFORE, NO LOSS TO GOVERNMENT AND THAT THE DELAY IN SUBMITTED RETURNS WAS NOT ON ACCOUNT OF ANY MALA FIDE INTENTI ON ON PART OF THE ASSESSEE AND THE BREACH BEING IN TECHNICAL IN NATUR E, THE PENALTY BE DELETED. HE FURTHER SUBMITTED THAT ON IDENTICAL FA CTS IN ASSESSEES OWN CASE FOR AY 2011-12 SIMILAR PENALTY WHICH WAS LEVIE D BY AO WAS DELETED BY THE LD.CIT(A). HE THEREFORE SUBMITTED T HAT THE PENALTY BE DELETED. THE LD.DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AO AND LD.CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO LE VY OF PENALTY U/S.272A(2)(K) OF THE ACT ON ACCOUNT DELAYED FILING OF TDS RETURNS. 5.1. BEFORE US, IT IS ASSESSEES SUBMISSION THAT TH E DELAY OCCURRED AS THERE WAS DELAY IN GENERATING THE NUMBERS AND THE R EQUIRED NUMBERS AT THE END OF NSDL AND WITHOUT THOSE NUMBERS, THE RETU RNS COULD NOT BE FILED. THE AFORESAID SUBMISSION OF THE ASSESSEE H AS NOT BEEN FOUND UNTRUE. WE FURTHER FIND THAT ON SIMILAR FACTS, THE LD.CIT(A) IN ASSESSEES OWN CASE FOR AY 2011-12 HAD DELETED THE PENALTY. N O DISTINCTIVE FEATURE HAS BEEN PLACED ON RECORD BY THE REVENUE BETWEEN TH E AY 2011-12 AND AY 2012-13. FURTHER, IT IS NOT A CASE WHERE THE TA X HAS NOT BEEN ITA NO. 42/AHD/ 2016 SONA ALLOYS PVT.LTD. VS. ADDL.CIT ASST.YEAR 2012-13 - 6 - DEPOSITED BY THE ASSESSEE RESULTING INTO LOSS OF RE VENUE TO THE DEPARTMENT. WE FURTHER FIND THAT LD.CIT(A) WHILE CO NFIRMING THE PENALTY THOUGH HAS NOTED THAT THE PROCEDURES AND SOFTWARE F OR FILING THE RETURNS IMPROVED A LOT DURING THE PERIOD, BUT HAS NOT GIVEN A FINDING THAT THE SUBMISSION OF THE ASSESSEE OF THERE BEING DELAY ON THE PART OF GENERATION OF REQUIRED NUMBER AT THE END OF NSDL WAS NOT CORRE CT. IN SUCH A SITUATION, WE ARE OF THE VIEW THAT THE DEFAULT OF T HE ASSESSEE CAN BE CONSIDERED TO BE A TECHNICAL BREACH AND AFTER RELYI NG ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. REPORTED AT (1972) 83 ITR 26(SC), WHEREIN IT HAS BEEN HELD T HAT A BONA FIDE BREACH CANNOT LEAD TO PENALTY, WE ARE OF THE VIEW THAT NO CASE FOR LEVYING OF PENALTY HAS BEEN MADE OUT BY THE REVENUE. WE, THUS DIRECT TO DELETE THE PENALTY. THUS, GROUNDS OF ASSESSEES APPEAL ARE AL LOWED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 08/06/2016 SD/- SD/- () () (RAJPAL YADAV) ( ANIL CHATURVEDI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 08/ 06 /2016 3..,.../ T.C. NAIR, SR. PS ITA NO. 42/AHD/ 2016 SONA ALLOYS PVT.LTD. VS. ADDL.CIT ASST.YEAR 2012-13 - 7 - !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. '($& / THE RESPONDENT. 3. 456 7 / CONCERNED CIT 4. 7 ( ) / THE CIT(A)-8, AHMEDABAD 5. 89:'56 , 56/ , 4 / DR, ITAT, AHMEDABAD 6. :<=+ / GUARD FILE. / BY ORDER, (8' //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 1.6.16 (DICTATION-PAD 8- P AGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 7.6.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.8.6.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8.6.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER