THE ACIT, CIRCLE - 3(1),(TDS), Vijayawada V. The Project Director, Khammam

ITA 432/VIZ/2014

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9907 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 30-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: M.K. SETHI
• Keywords: Bonafide belief; TDS
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 133A

Judgement Text

ITA NO.431&432/VIZAG/2014 THE PROJECT DIRECTOR, A.P. STATE HOUSING CORPN., KH AMMAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.431&432/VIZAG/2014 ( / ASSESSMENT YEAR: 2009-10 & 2011-12) ACIT, CIRCLE - 3(1)(TDS) VIJAYAWADA VS. THE PROJECT DIRECTOR, A.P. STATE HOUSING CORPORATION, KHAMMAM [PAN: HYDDO1540A ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI M.K. SETHI, DR / DATE OF HEARING : 17.08.2016 / DATE OF PRONOUNCEMENT : 26.08.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THESE APPEALS PREFERRED BY THE REVENUE ARE DIRECTE D AGAINST THE ORDER OF CIT(A), VIJAYAWADA DATED 24.3.2014 FOR THE ASSESSMENT YEARS 2009-10 & 2011-12. ITA NO.431&432/VIZAG/2014 THE PROJECT DIRECTOR, A.P. STATE HOUSING CORPN., KH AMMAM 2 2. FACTS ARE IN BRIEF THAT ASSESSEE IS A STATE GOVE RNMENT ORGANIZATION WHICH HAS UNDERTAKEN CONSTRUCTION OF HOUSES FOR WEA KER SECTIONS AS PER THE ADVICE OF THE GOVERNMENT OF ANDHRA PRADESH. A SURVEY OPERATION U/S 133A OF THE INCOME TAX ACT, 1961 (HEREINAFTER C ALLED AS 'THE ACT') WAS CONDUCTED ON 4.11.2011. DURING THE COURSE OF S URVEY, IT WAS NOTICED BY THE A.O. THAT THE ASSESSEE HAS FAILED TO FILE TDS QUARTERLY STATEMENTS/RETURNS U/S 200(3) OF THE ACT IN RESPECT OF 4 QUARTERS IN FORM NOS.24Q & 26Q. ACCORDINGLY, PENALTY U/S 272A(2)(K) OF THE ACT WAS INITIATED AND PENALTY WAS IMPOSED. 3. THE ASSESSEE CARRIED MATTER IN APPEAL BEFORE THE LD. CIT(A) AND HE HAS MADE A DETAILED SUBMISSION BEFORE THE LD. CI T(A). LD. CIT(A) AFTER CONSIDERING THE DETAILED EXPLANATION FILED BY THE ASSESSEE, HE HAS DELETED THE PENALTY IMPOSED BY THE A.O. 4. ON BEING AGGRIEVED, REVENUE CARRIED MATTER IN AP PEAL BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE DEFAULT COMMITTED BY THE ASSESSEE IS UNINTENTIONAL AND OCCU RRED FOR THE FIRST TIME AND THEREAFTER ASSESSEE IS FILING QUARTERLY RE TURNS REGULARLY, THEREFORE, NO PENALTY CAN BE LEVIED. IT IS ALSO SU BMITTED THAT IT IS A BONAFIDE BELIEF OF THE ASSESSEE THAT NO QUARTERLY T DS RETURNS HAVE TO BE ITA NO.431&432/VIZAG/2014 THE PROJECT DIRECTOR, A.P. STATE HOUSING CORPN., KH AMMAM 3 FILED, THEREFORE, THE ASSESSEE HAS FAILED TO COMPLY THE TDS PROVISIONS AND PRAYED THAT ORDER OF LD. CIT(A) MAY BE UPHELD. 5. ON THE OTHER HAND, THE LD. D.R. HAS RELIED ON TH E ORDER PASSED BY THE A.O. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT THE ASSESSEE HAS FILED A DETAILED SUBMISS ION BEFORE THE LD. CIT(A). LD. CIT(A) BY CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, PENALTY LEVIED BY THE A.O. IS DELETED. I T IS THE SUBMISSION OF THE ASSESSEE BEFORE THE CIT(A) AND EVEN BEFORE US T HAT IT IS A BONAFIDE BELIEF OF THE ASSESSEE THAT NO TDS QUARTERLY RETURN S HAVE TO BE FILED. THAT IS THE REASON HE HAS FAILED TO COMPLY WITH THE TDS PROVISIONS. IT IS ALSO SUBMITTED THAT IT IS THE FIRST TIME HAPPENED F OR NON-COMPLIANCE OF TDS RETURNS, WHICH IS UNINTENTIONAL AND SUBMITTED T HAT PENALTY MAY BE DELETED. LD. CIT(A) BY CONSIDERING THE ABOVE SUBMI SSIONS DELETED THE PENALTY. THE RELEVANT ORDER IS EXTRACTED AS UNDER: I HAVE SEEN THE SUBMISSIONS MADE BY THE APPELLANT, GONE THROUGH THE ORDER MADE UNDER SECTION 272A(2)(K) OF THE ACT BESIDES PERUSING ALL OTHER MATERIAL AVAILABLE ON RECORD. THE REASONS PU T FORTH FOR NON-FILING OF TDS RETURNS APPEAR TO BE REASONABLE AND IN MY HUMBL E OPINION THE APPELLANTS CASE WOULD NOT ATTRACT THE IMPUGNED PEN ALTY UNDER SECTION 272A(2)(K) OF THE ACT SINCE THE DEFAULT WAS UNINTEN TIONAL AND ALSO OCCURRED FOR THE FIRST TIME. THE APPELLANT WAS UND ER THE BONAFIDE IMPRESSION THAT THERE IS NO TDS LIABILITY ON ITS PA RT WHICH IS EVIDENT FROM ITA NO.431&432/VIZAG/2014 THE PROJECT DIRECTOR, A.P. STATE HOUSING CORPN., KH AMMAM 4 ITS SUBMISSIONS. IT IS WELL-SETTLED LAW THAT AN OR DER IMPOSING PENALTY IS A RESULT OF QUASI-CRIMINAL PROCEEDINGS AND PENALTY SH OULD NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIB ERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT, CONTUMACIOUS OR DISHO NEST, OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. NO PENALTY SHOULD BE IMPOSED IF THE APPELLANT WAS ACTING IN HONEST AND GENUINE BELIEF I N A PARTICULAR MANNER. AS HELD BY THE SUPREME COURT IN HINDUSTAN STEEL LIM ITED V STATE OF ORISSA, REPORTED IN (1972) 83 ITR 26, PENALTY SHOUL D NOT BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENA LTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON CONSIDE RATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCR IBED, THE AUTHORITY COMPETENT TO IMPOSE PENALTY WILL BE JUSTIFIED IN RE FUSING TO IMPOSE THE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHEN THE BREACH FLOWS FROM A BONA FIDE BELIE F THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE S TATUTE. IN THE CIRCUMSTANCES, I AM OF THE VIEW THAT THE A.O. WAS NO T JUSTIFIED IN LEVYING PENALTY U/S 272A(2)(K) OF THE ACT AND ACCORDINGLY H E IS DIRECTED TO DELETE THE DEMAND RAISED. 7. WE FIND THAT THE LD. CIT(A) AFTER CONSIDERING THE DETAILED EXPLANATION GIVEN BY THE ASSESSEE, DELETED THE PENA LTY LEVIED BY THE A.O. WE HAVE ALSO CONSIDERED THE EXPLANATION GIVEN BY THE ASSESSEE AND ALSO FACTS AND CIRCUMSTANCES OF THE CASE. IN O UR OPINION, THE BONAFIDE BELIEF OF THE ASSESSEE FOR NON-FILING OF T HE TDS QUARTERLY RETURNS CANNOT BE DOUBTED. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, BY CONSIDERING THE ORDER PASSED BY THE LD. CIT(A), WE FIND NO INFIRMITY IN THE ORDER OF THE LD . CIT(A). THUS, THIS APPEAL FILED BY THE REVENUE IS DISMISSED. ITA NO.431&432/VIZAG/2014 THE PROJECT DIRECTOR, A.P. STATE HOUSING CORPN., KH AMMAM 5 8. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 26 TH AUG16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 26.08.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ACIT, CIRCLE-3(1)(TDS), D.NO .40-06-15, 2 ND FLOOR, SVR PLAZA, SIDDHARTHA PUBLIC SCHOOL ROAD, MOGHALRAJ PURAM, VIJAYAWADA 2. / THE RESPONDENT THE PROJECT DIRECTOR, ANDHRAPRA DESH STATE HOUSING CORPORATION LTD., 10-6-180/2, BURHANPURAM, KHAMMAM. 3. ) / THE CIT(TDS), HYDERABAD 4. ) ( ) / THE CIT(A), VIJAYAWADA 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM