M/s. BAFNA HOSPITAL & ORTHOPAEDIC RESEARCH CENTRE PVT. LTD., Indore V. THE COMMISSIONER OF INCOME TAX (OSD)-TDS, Indore

ITA 438/IND/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5862 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 09-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S GAUTAM
• Assessee Lawyers: ARPIT GAUR CAS
• Keywords: Reasonable cause; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A.NO.438/IND/2015 A.Y. : 2011-12. M/S. BAFNA HOSPITAL - & ORTHOPAEDIC RESEARCH CENTRE PRIVATE LIMITED, CIT (OSD)- TDS, INDORE VS. INDORE. APPELLANT RESPONDENT PAN NO. AHXPM3325Q APPELLANTS BY : SHRI ANIL KUMAR GARG AND SHRI ARPIT GAUR, CAS RESPONDENT BY : SHRI G.S.GAUTAM, DR O R D E R PER D.T.GARASIA, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-II, INDORE, DATED 31.10.2014, FOR THE ASS ESSMENT YEAR 2009-10. DATE OF HEARING : 12 .01.2016 DATE OF PRONOUNCEMENT : 12 .01.2016 M/S.BAFNA HOSPITAL & ORTHOPAEDIC RESEARCH CENTRE PR IVATE LIMITED , INDORE VS. CIT (OSD)-TDS, INDORE, .I.T.A.NO. 438 /IND/2015 A.Y.2011-12 2 2 2. THIS E SHORT FACTS OF THE CASE ARE AS UNDER. 3. THERE IS A DELAY OF 99 DAYS IN FILING THE APPEAL. T HE LD. COUNSEL FOR THE ASSESSEE SUBMITTED APPLICATION FOR CONDONATION OF DELAY STATING THAT THE NECESSARY DOC UMENTS GIVEN BY THE ASSESSEE WERE GOT MISPLACED, AS THE OF FICE SHIFTING WAS GOING ON FROM OLD BUILDING TO NEW BUILDING. SUB SEQUENTLY, THE PAPERS WERE GOT LATELY FOUND FROM THE OLD OFFIC E AND BECAUSE OF THIS THE ASSESSEE COULD NOT FILE THE APP EAL WITHIN THE PRESCRIBED TIME LIMIT OF 60 DAYS AND THE DELAY HAS OCCURRED. 4. WE HAVE GONE THROUGH THE APPLICATION SUBMITTED THE LD. COUNSEL FOR THE ASSESSEE AND WE FIND THAT THE D ELAY WAS OCCURRED DUE TO REASONABLE CAUSE. WE, THEREFORE, CO NDONE THE DELAY OF 99 DAYS. 5. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE : - 1. THAT THE LD. CIT(A) GROSSLY ERRED IN CONFIRMING THE PENALTY ORDER PASSED U/S 272A(2)(K) OF THE INCOME- TAX ACT, 1961, BY THE LD. CIT (OST)(TDS), INDORE, IMPOSING PENALTY OF RS. 49,400/-. M/S.BAFNA HOSPITAL & ORTHOPAEDIC RESEARCH CENTRE PR IVATE LIMITED , INDORE VS. CIT (OSD)-TDS, INDORE, .I.T.A.NO. 438 /IND/2015 A.Y.2011-12 3 3 2. THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A ) GROSSLY ERRED IN NOT CONSIDERING THE MATERIAL FACT THAT THERE WAS A REASONABLE CAUSE FOR THE APPELLANT FOR LATE SUBMISSION OF TDS STATEMENTS WITHIN THE TIME SPECIFIED IN SUB-SECTION (3) OF SECTION 200 OF THE INCOME-TAX ACT, 1961, AND CONSEQUENTLY, NO PENALTY WAS IMPOSABLE. 6. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE I S A PRIVATE LIMITED COMPANY DULY INCORPORATED UNDER THE COMPANIES ACT, 1956. THE ASSESSEE IS ENGAGED IN RUN NING AND MAINTAINING A HOSPITAL. THE ITO(TDS)-II HAS REPORTE D THAT THE ASSESSEE HAS WITHOUT REASONABLE CAUSE FAILED TO DEL IVER OR CAUSE TO BE DELIVERED A COPY OF E-FILED QUARTERLY S TATEMENTS 26Q WITHIN THE TIME SPECIFIED IN SECTION 200(3)/SEC TION 206(3) OF THE INCOME-TAX ACT, 1961, AS GIVEN BELOW :- F.Y. FORM QTR DUE DATE OF FILING RETURN ACTUAL DATE OF FILING RETURN DELAY IN DAYS AMOUNT OF TAX PENALTY U/S 272A @ RS. 100/- PER DAY 2010-11 26Q Q1 15.07.10 23.07.10 8 99371 800 2010-11 26Q Q2 15.10.10 05.07.11 264 168024 26400 2010-11 26Q Q3 15.01.11 05.07.11 171 170716 17100 2010-11 26Q Q4 15.05.11 05.07.11 51 312838 5100 TOTAL 49,400 M/S.BAFNA HOSPITAL & ORTHOPAEDIC RESEARCH CENTRE PR IVATE LIMITED , INDORE VS. CIT (OSD)-TDS, INDORE, .I.T.A.NO. 438 /IND/2015 A.Y.2011-12 4 4 7. THE AO HAS GIVEN SHOW CAUSE NOTICE. NOBODY ATTENDED . THEREFORE, THE AO WAS OF THE VIEW THAT THE ASSESSEE HAS COMMITTED DEFAULT WITHIN MEANING OF SECTION 200(3)/ 206 READ WITH SECTION 272A(2)(K) OF THE INCOME-TAX ACT, 196 1. THEREFORE, THE PENALTY OF RS. 49,400/- WAS LEVIED T O THE ASSESSEE. 8. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS DISMISSED THE APPEAL. 9. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT BEFORE IMPOSING THE PENALTY, THE AO HAS NOT AFFORDE D PROPER AND REASONABLE OPPORTUNITY OF HEARING TO THE ASSESS EE. THE ASSESSEE HAS GIVEN REPLY TO SHOW CAUSE NOTICE ON 29 .6.2012 AND AFTER GIVING REPLY, THE ASSESSEE WAS NOT HEARD PERSONALLY. THE LD. AUTHORIZED REPRESENTATIVE FURTHER SUBMITTED THAT THE ASSESSEE IS REGULARLY ASSESSED TO INCOME TAX AND HE HAS DEDUCTED THE TAX AT SOURCE AND TIMELY PAYMENT THERE OF WAS DEPOSITED TO CENTRAL GOVERNMENT. THE ASSESSEE HAD REASONABLE CAUSE FOR SUBMISSION OF TDS STATEMENT WI THIN THE TIME SPECIFIED U/S 200(3) OF THE INCOME-TAX ACT, 19 61. THE ASSESSEE COMPANY HAS PAID ENTIRE TAX DEDUCTED AT SO URCE TO M/S.BAFNA HOSPITAL & ORTHOPAEDIC RESEARCH CENTRE PR IVATE LIMITED , INDORE VS. CIT (OSD)-TDS, INDORE, .I.T.A.NO. 438 /IND/2015 A.Y.2011-12 5 5 THE CREDIT OF CENTRAL GOVERNMENT ALONGWITH THE INTE REST AS APPLICABLE U/S 201(1A) OF THE ACT. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE COMPANY WAS UNDER ACUTE PAUCITY OF FUNDS DUE TO WHICH THERE WAS DELAY IN PAYMENT OF TAX TO THE CREDIT OF CENTRAL GOVERNMENT. HOWEVER, SUBSEQUENTLY , THE ASSESSEE HAS PAID THE AMOUNT AND ALSO FILED TDS RET URN. AS PER SECTION 200(3) AFTER DEDUCTING THE TAX AT SOURC E AND CREDITED TO THE GOVERNMENT, THE ASSESSEE HAS PREPAR ED THE STATEMENT AS PRESCRIBED AND SUBMITTED TO CONCERNED AUTHORITY IN TIME. THE PENALTY UNDER SECTION 272A(2)(K) OF T HE INCOME- TAX ACT, 1961, HAS TO BE LEVIED FOR THE DELAY ONLY FROM THE DATE OF PAYMENT OF TAX TO THE CENTRAL GOVERNMENT. UNDER SECTION 272A(2)(K), THE PENALTY CAN BE LEVIED FOR THE PERIO D TILL PAYMENT OF TAX AND THE PENALTY CANNOT BE LEVIED FOR THE DEL AY FROM THE DATE OF PAYMENT OF TAXES BY THE ASSESSEE. THE LD. AUTHORIZED REPRESENTATIVE RELIED UPON THE ORDER OF I.T.A.T., M UMBAI, C BENCH IN THE CASE OF PORWAL CREATIVE VISION (P) LIM ITED VS. ADDITIONAL CIT, (21011) 55 DTR 241 (MUM). 10. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, M/S.BAFNA HOSPITAL & ORTHOPAEDIC RESEARCH CENTRE PR IVATE LIMITED , INDORE VS. CIT (OSD)-TDS, INDORE, .I.T.A.NO. 438 /IND/2015 A.Y.2011-12 6 6 WE FIND THAT THE SIMILAR ISSUE HAD COME UP BEFORE M UMBAI BENCH C, IN THE CASE OF PORWAL CREATIVE VISION ( P) LIMITED VS. ADDITIONAL CIT, (2011) 55 DTR 241 (MUM)., WHEREIN I T IS HELD THAT PENALTY U/S 272A(2(K) DELAY IN PAYMENT OF TAX DEDUCTED AT SOURCE CLAUSE (C) OF SECTION 272A(2) RELATES T O RETURN /STATEMENT U/S 133, 206 AND 1206C WHICH ARE UNRELAT ED TO TDS. THEREFORE, PENALTY U/S 272A(2)(C) WAS NOT LEVI ABLE FOR NON-SUBMISSION OF QUARTERLY RETURNS FOR TDS. AS PER PROVISIONS OF SECTION 200(3) READ WITH RULE 31A, A PERSON DEDUCTING TAX AT SOURCE IS REQUIRED TO PREPARE A ST ATEMENT IN THE PRESCRIBED FORM AND DELIVER THE SAME TO THE PRE SCRIBED IT AUTHORITIES AFTER PAYING THE TAX DEDUCTED AT SOURCE TO THE CREDIT OF CENTRAL GOVERNMENT. QUARTERLY RETURNS OF TDS REQUIRE FILING OF DATA RELATING TO PAYMENT OF TAXES AND, THUS, ASSESSEE CAN FILE THE QUARTERLY RETURNS ONLY AFTER PAYING THE TAX TO THE CENTRAL GOVERNMENT. THEREFORE, THE PENAL TY U/S 272A(2)(K) IS LEVIED FOR DELAY IN FILING THE RETURN FROM THE DATE OF PAYMENT OF TAX TO THE CENTRAL GOVERNMENT. PENALT Y IS LEVIED ONLY FOR THE DELAY FROM THE DATE OF PAYMENT OF TAXE S BY THE ASSESSEE. WE FIND THAT IN THIS CASE ASSESSEE EXPLAI NED BEFORE M/S.BAFNA HOSPITAL & ORTHOPAEDIC RESEARCH CENTRE PR IVATE LIMITED , INDORE VS. CIT (OSD)-TDS, INDORE, .I.T.A.NO. 438 /IND/2015 A.Y.2011-12 7 7 US THAT DUE TO INADVERTENT MISTAKE AND PAUCITY OF F UNDS, THE AMOUNT OF TDS COULD NOT BE DEPOSITED WELL IN TIME, W3HICH IN TURN RESULTED IN DELAY IN FILING OF THE RETURN. AS PER THE DECISION OF TRIBUNAL (SUPRA), THE ASSESSEE WAS NOT ABLE TO FILE THE RETURN AS THE ASSESSEE HAD NOT DEDUCTED THE TAX AT SOURCE AND CREDITED TO THE CENTRAL GOVERNMENT. THEREFORE, THE PENALTY IS LEVIED ONLY FOR THE DELAY FROM THE DATE OF PAYING THE TAXES BY THE ASSESSEE. AS PER THE ASSESSEE, PENALTY CAN BE LEVIED ONLY AT RS. 23,000/- AS PER THE TABLE, WHICH IS AS UNDER :- F.Y. FORM QTR DUE DATE OF FILING RETURN DATE OF TAX DEPOSITED ACTUAL DATE OF FILING RETURN DELAY IN DAYS FROM THE DATE OF PAYMENT OF TAX AMOUNT OF TAX INTEREST PAID U/S 201(1A) PENALTY U/S 272A(2)(K)@ RS. 100/- PER DAY 2010-11 26Q Q1 15.07.10 08.07.2010 23.07.10 8 99371 1217 800 2010-11 26Q Q2 15.10.10 30.06.2011 05.07.11 5 168024 19851 500 2010-11 26Q Q3 15.01.11 30.06.2011 05.07.11 5 170716 16351 500 2010-11 26Q Q4 15.05.11 30.06.2011 05.07.11 5 312838 21262 500 TOTAL 750949 58681 2300 11. WE FIND THAT SINCE THIS CALCULATION REQUIRES VERIFICATION AT THE END OF AO. THEREFORE, WE RESTOR E THIS ISSUE TO THE FILE OF AO TO CALCULATE THE PAYMENT AS PER THE DECISION OF MUMBAI BENCH AND WE CLARIFY THAT THE ASSESSEE IS LI ABLE TO PENALTY U/S 272A(2)(K) AS IS LEVIED ONLY FOR THE DE LAY FROM THE M/S.BAFNA HOSPITAL & ORTHOPAEDIC RESEARCH CENTRE PR IVATE LIMITED , INDORE VS. CIT (OSD)-TDS, INDORE, .I.T.A.NO. 438 /IND/2015 A.Y.2011-12 8 8 DATE OF PAYING THE TAXES BY THE ASSESSEE, WHICH IS SHOWN IN THE TABLE. THEREFORE, THE AO IS DIRECTED TO CALCULA TE THE PENALTY ACCORDINGLY. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 12 TH JANUARY, 2016. SD/- (B.C.MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 12 TH JANUARY, 2016. CPU*