Addl. CIT (TDS), Dehradun V. Executive Engineer, Uttrakhand

ITA 4337/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8185 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-02-2010
• Assessment Year: misc
• Appeal Filed On: 12-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISH GUPTA
• Assessee Lawyers: S D
• Keywords: Bonafide belief; Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : B NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMEBR AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER I.T.A NO. 4337/DEL/09 FINANCIAL YEAR 2006-07 ADDL. COMMISSIONER OF INCOME TAX (TDS), DEHRADUN VS. EXECUTIVE ENGINEER, IRRIGATION DIVISION, CHAMOLI, UTTRAKHAND (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI MANISH GUPTA, DR RESPONDENT BY: SHRI S.D. PANDEY, ADVOCATE ORDER PER RAJPAL YADAV, JM: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LD. CIT (A) DATED 28 TH AUGUST, 2009 PASSED FOR FINANCIAL YEAR 2006-07. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS. 2,07,900/- IMPOSED U /S 272A (2)(K) OF THE INCOME TAX ACT BY THE AO FOR NOT FILING QUARTERLY E ,TDS RETURN IN FORM NO. 26Q AND 24Q FOR F.Y. 2006-07. ITA NO. 4337/DEL/09 ASSTT. YEAR 2006-07 2 THE BRIEF FACTS OF THE CASE ARE THAT AO FOUND THAT ASSESSEE HAS FAILED TO SUBMIT QUARTERLY STATEMENT OF TDS IN FORM NO. 26Q AND 24Q FOR F.Y. 2006-07. HE NOTICED THE PERIOD OF DELAY IN A T ABULAR FORM IN THE IMPUGNED ORDER. LD. AO INVITED THE EXPLANATION OF A SSESSEE AS TO WHY PENALTY U/S 272A(2)(K) SHOULD NOT BE IMPOSED UPON H IM FOR SUBMITTING THE TDS RETURN ELECTRONICALLY, BELATEDLY. IT WAS CO NTENDED BY THE ASSESSEE THAT HIS OFFICE IS SITUATED AT KOTHIYALSA IN, DISTTT. CHAMOLI WHICH IS A BACKWARD REMOTE HILL TOWN WHERE EXPERT LEGAL A DVICE IS NOT AVAILABLE AND THE ASSESSEES STAFF WAS NOT AWARE OF THE LEGA L INTRICACIES OF THE INCOME TAX ACT. IT WAS ALSO CONTENDED THAT FILING O F TDS RETURN ELECTRONICALLY WAS A NEW PROVISION AND THE STAFF IN HIS OFFICE WAS NOT WELL ACQUAINTED WITH THIS NEW PROCEDURE. IT WAS ALSO POI NTED OUT THAT ASSESSEE HAS DEDUCTED THE TDS AND PAID IT TO THE G OVT. ACCOUNT WELL IN TIME. THE ONLY FAILURE IS IN RESPECT OF ELECTRONICA LLY SUBMISSION OF TDS DETAILS. IT WAS ALSO POINTED OUT THAT PAN OF SOME O F DEDUCTEES, CONTRACTORS WERE NOT AVAILABLE BY SEPTEMBER, 2007 W HICH ALSO DELAYED THE RETURN. THE AO AS NOT SATISFIED WITH THE EXPLAN ATION OF ASSESSEE AND IMPOSED A PENALTY OF RS. 2,07,900/-. ITA NO. 4337/DEL/09 ASSTT. YEAR 2006-07 3 BEFORE LD. CIT(A) ASSESSEE AGAIN REITERATED THE SU BMISSION AS WERE RAISED BEFORE THE AO. HE ALSO RELIED UPON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD, V S. STATE OF ORISSA 83 ITR 26 WHEREIN IT HAS BEEN HELD THAT PENALTY SHO ULD NOT BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. THE IMPOSITIO N OF PENALTY FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DI SCRETION OF THE AUTHORITY EMPOWERED TO IMPOSE SUCH PENALTY AND THE DISCRETION INFUSED IN THE AUTHORITY SHOULD BE EXERCISED JUDICIALLY, ON CONSID ERATION OF ALL THE RELEVANT CIRCUMSTANCES, EVEN IF A MINIMUM PENALTY I S PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE PENALTY WILL BE JUSTI FIED IN REFUSING TO IMPOSE THE PENALTY WHEN THERE IS A TECHNICAL OR VEN IAL BREACH OF THE PROVISIONS OF THE ACT. ON THE STRENGTH OF THIS DEC ISION IT WAS CONTENDED THAT WHEN A BREACH FLOWS FROM A BONAFIDE BELIEF THA T THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATU TE THEN THE AO MAY BE JUSTIFIED IN NOT IMPOSING THE PENALTY. LD. CIT(A) H AS GONE THROUGH THE RECORD CAREFULLY AND WAS CONVINCED WITH THE EXPLAN ATION OF THE ASSESSEE. HE DELETED THE PENALTY BY FOLLOWING THE D ECISION OF HONBLE SUPREME COURT AND KEEPING IN VIEW THE EXPLANATION P UT FORWARD BY THE ASSESSEE. ITA NO. 4337/DEL/09 ASSTT. YEAR 2006-07 4 WITH THE ASSISTANCE OF LD. REPRESENTATIVE WE HAVE GONE THROUGH THE RECORD CAREFULLY. SECTION 273B PROVIDE THAT IF AN ASSESSEE IS ABLE TO DEMONSTRATE REASONABLE CAUSE FOR NOT COMPLYING WITH THE STATUTORY PROVISION, FOR WHICH HE IS LIABLE TO BE VISITED WIT H PENALTY THEN ON THE BASIS OF SUCH REASONABLE CAUSE PENALTY MAY NOT BE I MPOSED UPON THE ASSESSEE. THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LIMITED VS. STATE OF ORISSA SUPRA HAS ALSO HELD THA T PENALTY SHOULD NOT BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO, IF AN ASSESSEE DEMONSTRATE HIS BONAFIDE BELIEF AND THE FACTS AND C IRCUMSTANCES INDICATE THAT LAPSE COMMITTED BY THE ASSESSEE WAS N OT DELIBERATE RATHER IT WAS BEYOND HIS CONTROL THEN IN SUCH SITUATION PE NALTY U/S 272A (2) MAY NOT BE IMPOSED. IN THE PRESENT CASE ALSO ASSESSEE H AS DEMONSTRATED THAT HIS OFFICE IS SITUATED IN A FAR FLUNG AREA OF HILLS WHICH IS BACKWARD ONE AND HE HAS NO ASSISTANCE OF LEGAL EXPERT. HE HAS CO MPLIED WITH THE PROVISIONS AS FAR AS DEDUCTION OF TAX AND ITS PAY MENT TO THE GOVT. AMOUNT IN TIME ARE CONCERNED. HE ALSO FILED THE TDS RETURN, HIS FAILURE IS TO SUBMIT TDS RETURN ELECTRONICALLY IN TIME. KEEPIN G IN VIEW HIS EXPLANATION AS CONSIDERED BY THE LD. CIT(A) IN THE IMPUGNED ORDER WE DO NOT SEE ANY REASON TO INTERFERE IN THE ORDER OF LD. FIRST APPELLATE AUTHORITY. ITA NO. 4337/DEL/09 ASSTT. YEAR 2006-07 5 IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.2.2010. [R.C. SHARMA] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER VEENA DATED: COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT