Under Secretary & DDO, Bhubaneswar V. Addl.CIT, TDS, Bhubaneswar

ITA 441/CTK/2012

• Counselvise Citation: 44122114 RSA 2012
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 16-08-2012
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: SANTOSH KUMAR PATTNAIK
• Keywords: Principle of natural justice
• Section: 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO, JUDICIAL MEMBER / I.T.A.NO. 441/CTK/2012 / ASSESSMENT YEAR 2 010 - 11 UNDER SECRETARY & DDO, PANCHAYATI RAJ (GRAM PANCHAYAT) DEPARTMENT, BHUBANESWAR TAN: BBNPO 0229 F - - - VERSUS - ADDL.COMMISSIONER OF INCOME - TAX (TDS), BHUBANESWAR. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI SANTOSH KUMAR PATTNAIK, AR / FOR THE RESPONDENT: / SHRI S.C.MOHANTY, DR / DATE OF HEAR ING: 26.09.2012 / DATE OF PRONOUNCEMENT: 30.10.2012 / ORDER . . . , SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DT.28.12.2011 OF THE COMMISSIONER OF INCOME - T AX (APPEALS) CONFIRMING THE PENALTY OF 3,800 U/S.272A(2)(K) OF THE I.T.ACT, 1961 FOR THE ASSESSMENT YEAR 2010 - 11 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING ISSUES IN ITS APPEAL. 1. FOR THAT SINCE THE AMOUNT OF TDS WAS DEPOSITED IN SUE TIME THERE WAS NO L OSS OF REVENUE AND THE APPELLANT HAVING HANDED OVER THE RETURN TO THE AGENCY APPOINTED BY THE INCOME - TAX DEPARTMENT IN TIME THERE WAS NO DELIBERATE AND CONTUMACIOUS DEFAULT ON THE PART OF THE APPELLANT. THUS THE LEVY OF PENALTY WAS UNCALLED FOR IN VIEW OF THE PRINCIPLE DECIDED BY HONBLE SUPREME COURT IN CASE OF (HINDUSTAN STEEL LTD. V - STATE OF ORISSA) REPORTED IN AIR 1970 SC.253. 3. FOR THAT WHEN THE AGENCY APPOINTED BY THE INCOME - TAX DEPARTMENT ACCEPTED THE RETURN IN HARD COPY ON 11.06.2010 WITHOUT AN Y OBJECTION RATHER UNDERTOOK TO CONVERT THE SAME TO SOFT COPY FOR A CHARGE BUT DELAYED THE UPLOADING FOR 38 DAYS BEYOND 15.06.2010, THE APPELLANT CANNOT BE MADE LIABLE FOR SUCH I.T.A.NO. 441/CTK/2012 2 DELAY FOR WHICH HE WAS NEITHER RESPONSIBLE NOR INFORMED BY THE AGENCY. 4. FOR THAT THE EXPLANATION SUBMITTED BY THE APPELLANT SHOULD HAVE BEEN ACCEPTED AND PENALTY SHOULD NOT HAVE BEEN IMPOSED. 5. FOR THAT THE PRINCIPLE OF NATURAL JUSTICE WAS VIOLATED SINCE STATEMENT OF THE TIN FC BEFORE THE INSPECTOR OF INCOME TAX AND THE REPORT OF THE INSPECTOR WAS NEVER CONFRONTED TO THE APPELLANT BEFORE IMPOSING THE PENALTY FOR WHICH THE LEVY OF PENALTY IS VIOLATIVE OF THE ARTICLE 14 OF THE CONSTITUTION AND THE SAME IS LIABLE TO BE QUASHED. 6. FOR THAT THE ORDER OF THE ADDL. COMMISSIONER OF I NCOME TAX (TDS), BHUBANESWAR LEVYING PENALTY OF 3,800/ - IS LIABLE TO BE SET ASIDE. 3. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUES RAISED IN THE RESPECTIVE APPEALS AND THEIR LEGAL IMPLICATIONS. 4. ON CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL IN THE LIGHT OF THE SUBMISSI ONS OF BOTH THE PARTIES, THE UNDISPUTED FACTS RELATING TO THE ISSUES ARE THAT ON THE FINDING THAT THAT THERE WAS DELAY IN FILING THE QUARTERLY E - TDS RETURN FOR THE 4 TH QUARTER OF FY 2009 - 10 AS EVIDENT FROM DATABASE OF THE DEPARTMENT, THE ASSESSING OFFICER, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, LEVIED PENALTY OF 3,800 U/S.272A(2)(K) OF THE I.T.ACT,1961. ON APPEAL, THE LEARNED CIT(A) CONFIRMED THE SAME. 5. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS THE UNDER SECRETARY - CUM - D.D.O. OF PANCHAYATI RAJ (GRAM PANCHAYAT) DEPARTMENT OF GOVT. OF ODISHA RE SPONSIBLE FOR PAYING SALARY AND OTHER BILLS OF THE STAFF. HE WAS RESPONSIBLE FOR CAUSING DEDUCTION OF TDS OF INCOME - TAX FROM THE SALARY BILLS SO PAID AND DEPOSITS THE SAME IN EACH MONTH. NSDL HAD APPOINTED M/S B. S. SUBUDHI & SONS, BHUBANESWAR AS THE TIN F C AGENCY AUTHORISED TO ACCEPT THE QUARTERLY STATEMENT OF TDS DEPOSITED, FROM THE DEDUCTORS OF TAX. THE DUE DATE FOR SUBMISSION OF RETURN FOR THE 4 TH I.T.A.NO. 441/CTK/2012 3 QUARTER OF 2009 - 10 WAS 15.6.2010. THE TDS RETURN FOR THE 4 TH QUARTER WAS SUBMITTED WITH THE TIN FC, M/S B .S.SUBUDHI & CO ON 11.6.2010 I.E. BEFORE THE DUE DATE. THE TIN FC ACCEPTED THE RETURN IN HARD COPY AND UNDERTOOK TO E - FILE THE SAME BY CONVERTING THE SAME TO SOFT COPY FOR WHICH SERVICE HE ALSO RAISED BILL FOR RS.6601 - INCLUDING CONVERSION CHARGE, UPLOAD C HARGE AND STATIONERY CHARGE. BUT THE TIN FC FAILED TO UPLOAD THE RETURN IN E - SYSTEM BEFORE 15.6.2010. THE E - FILING WAS UPLOADED ON 23.7.2010 AFTER 38 DAYS OF THE DUE DATE. T HE TIN FC HAD NOT ASKED THE ASSESSEE ABOUT ANY CLARIFICATION / INFORMATION TO BE SUP PLIED ON THE CORRECTNESS OF THE DATA CONTAINED IN THE RETURN. FURTHER THE REASON OF THE DELAY CAUSED BY THE TIN FC WAS NOT INTIMATED TO THE ASSESSEE . IN VIEW OF THE ABOVE, THE LEARNED AR OF THE ASSESSEE VEHEMENTLY CONTENDED THAT THE ASSESSEE WAS NOT RESPON SIBLE IN ANY MANNER FOR THE DELAY CAUSED BY THE TIN FC I.E. THE AGENT APPOINTED BY NSDL. 5.1 . THE LEARNED AR OF THE ASSESSEE FURTHER CONTENDED THAT THERE WAS SUBSTANTIAL COMPLIANCE OF THE STATUTORY REQUIREMENT CONTAINED IN RULE - 31 - A OF THE INCOME - TAX RULES AS IT STOOD BEFORE ITS AMENDMENT W.E.F. 1.4.2010. THE ASSESSEE HAD ACTED IN A REASONABLE MANNER WHILE COMPLYING WITH THE STATUTORY REQUIREMENTS. HE POINTED OUT THAT AFTER HANDING OVER THE STATEMENT/RETURN TO THE TIN FC , THE ASSESSEE HAD NO FURTHER RESPONS IBILITY TO PURSUE HIM FOR UPLOADING THE SAME BY THE DUE DATE. MORE OVER WHEN THE AUTHORISED AGENCY OF THE INCOME TAX DEPARTMENT ACCEPTS THE RETURN IN HARD COPY ALONG WITH THE CONVERSION FEES, THE STATUTORY REQUIREMENT WAS DEEMED TO HAVE BEEN COMPLIED AND I T SHOULD BE PRESUMED THAT THE SUBMISSION OF RETUR N WAS DONE BEFORE THE DUE DATE. T HE FACT THAT THE RETURN FOR THE 4 TH QUARTER WAS SUBMITTED BEFORE THE TIN FC ON 11.06.2010 AND THE DELAY IN UPLOADING WAS CAUSED BY THE SAID AGENCY WAS EXPLAINED BEFORE THE A DDL. I.T.A.NO. 441/CTK/2012 4 COMMISSIONER, INCOME TAX (TDS), BHUBANESWAR IN THE EXPLANATION FILED BEFORE HIM ON 06.10.2010 IN WRITING. BUT THE LEARNED ADDI. COMMISSIONER TOOK A TECHNICAL VIEW OF THE MATTER THAT THE ASSESSEE SHOULD HAVE SUBMITTED THE QUARTERLY STATEMENT ON COMPUTE R MEDIA IN MB FLOPPY OR CD ROM AS REQUIRED IN THE PROVISO TO RULE 31 - A OF THE INCOME TAX RULES. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT RULE 31 - A ALSO PERMITS SUBMISSION OF QUARTERLY STATEMENT THROUGH HARD COPY AND IF THE TIN FC ACCEPTS THE HARD COPY BEFORE THE DUE DATE ON CHARGING CONVERSION CHARGE, THEN NO EXCEPTION SHOULD BE TAKEN THAT THE RETURN WAS NOT FILED BEFORE 15 JUNE, 2010. RULE 31 - A IS NOT A MANDATORY REQUIREMENT AS IT IS ONLY A MATTER OF PROCEDURE. SECTION 272 - A ( 2)(K) PROVIDES THAT PENAL TY @ 100 PER DAY MAY BE LEVIED IF THE PERSON RESPONSIBLE FAILS TO DELIVER COPY OF THE STATEMENT WITHIN THE TIME SPECIFIED. THE LEARNED AR OF THE ASSESSEE CONTENDED THAT THE PENALTY WOULD BE ATTRACTED IF THE SAME IS NOT SUBMITTED IN TIME. ONCE THE STATEMEN T IS SUBMITTED IN TIME, THE PENALTY W ILL NOT BE ATTRACTED FOR NOT FILING THE SAME IN SOFT COPY WHICH IS ONLY A MATTER OF FORM AND NOT MATTER OF SUBSTANCE. HE FURTHER CONTENDED THAT IT IS TRITE LAW THAT RULES OF PROCEDURE ARE HAND MAID OF JUSTICE AND PENALT Y WILL NOT BE LEVIED MERELY IT IS LAWFUL TO DO SO UNLESS THE ASSESSEE IS FOUND TO BE GUILTY OF CONTUMACIOUS CONDUCT AND HAD ACTED IN DELIBERATE DEFIANCE OF THE STATUTE AS HELD BY HONBLE SUPREME COURT IN A CASE REPORTED IN AIR 1970 SC 253 (HINDUSTAN STEELS LTD. V. SALES TAX OFFICER). THE DELAY IN UPLOADING WAS ON ACCOUNT OF THE TIN FC AGENCY AND THE ASSESSEE AFTER SUBMITTING THE STATEMENT BEFORE DUE TIME HAD NO RESPONSIBILITY TO UPLOAD THE SAME. THUS PENALTY U/S 272 - A(2)(K) COULD NOT HAVE BEEN LEVIED ON THE ASSESSEE FOR THE VENIAL BREACH OF THE RULE 31 - A OF THE INCOME TAX RULE. I.T.A.NO. 441/CTK/2012 5 5.2. HE FURTHER CONTENDED THAT ADDL. COMMISSIONER OF INCOME - TAX (TDS) CAUSED SOME INQUIRY THROUGH THE INSPECTOR OF INCOME TAX BY SENDING HIM TO THE TIN FC WITHOUT INTIMATING THE ASSESSE E . THE TIN FC M/S B.S. SUBUDHI & CO. GAVE SOME EXPLANATION TO SAVE HIS SKIN STATING THAT THE FVU FILE WAS GENERATED AFTER GETTING CORRECT DETAILS FOR WHICH DELAY WAS OCCASIONED. BUT THE REPORT OF THE INSPECTOR OR THE STATEMENT OF THE TIN FC WAS NOT CONFRON TED TO THE ASSESSEE AND THE DELAY CAUSED BY THE TIN FC WAS MADE THE BASIS FOR LEVYING THE PENALTY ON THE ASSESSEE . THE PRINCIPLE OF NATURAL JUSTICE WAS GROSSLY VIOLATED SINCE THE TIN FC HAS NEVER ASKED THE ASSESSEE FOR ANY CORRECT INFORMATION ON PAN NUMBER ETC. AS ALLEGED AND THIS FACT COULD HAVE BEEN EXPLAINED BEFORE THE LOWER AUTHORITY IF OPPORTUNITY WOULD HAVE BEEN GRANTED. 5.3. THE LEARNED AR OF THE ASSESSEE FURTHER SUBMITTED THAT BOTH THE AUTHORITIES FAILED TO APPRECIATE THAT THE TIN FC HAD SUFFICIENT TIME TO CONVERT THE STATEMENT INTO SOFT COPY AND UPLOAD THE SAME BY DUE TIME. THE SAID AGENCY COULD HAVE REFUSED TO RECEIVE THE HARD COPY OF THE STATEMENT AND SHOULD HAVE ASKED THE ASSESSEE TO SUBMIT SOFT COPY FOR WHICH THERE WAS SUFFICIENT TIME IN HAND. B UT SINCE THE TIN FC ACCEPTED THE RESPONSIBILITY OF CONVERSION FOR A CHARGE AND TO E - FILE THE STATEMENT IN TIME THE ASSESSEE WAS MISLEAD BY THE AGENCY APPOINTED BY THE DEPARTMENT, PENALTY COULD NOT HAVE IMPOSED ON THE ASSESSEE FOR THE FAILURE OF THE TIN FC TO DISCHARGE HIS RESPONSIBILITY. MOREOVER , THE TIN FC WAS ALSO ACCEPTING HARD COPIES FROM OTHER DEDUCTORS, NOT REQUIRED TO SUBMIT SOFT COPY, BY CONVERTING THEM TO SOFT COPIES FOR A CHARGE. 5.4. THE LEARNED AR OF THE ASSESSEE CONCLUDING HIS ARGUMENTS, POINT ED OUT THAT UNDER VERY MUCH SIMILAR CIRCUMSTANCES, THIS BENCH OF THE TRIBUNAL IN ITA NO.499/CTK/2011 DT.29.6.2012 IN ASSESSEES OWN CASE FOR THE I.T.A.NO. 441/CTK/2012 6 ASSESSMENT YEAR 2009 - 10 HAS DELETED THE PENALTY LEVIED U/S.282A(2)(K) OF THE I.T.ACT,1961. 5.5. IN VIEW OF THE ABOVE SUBMISSIONS, THE LEARNED AR OF THE ASSESSEE PRAYED FOR DELETION OF THE IMPUGNED PENALTY. 6. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE IMPUGNED OR DERS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. CONSIDERING SIMILAR SUCH FACTS AND CIRCUMSTANCES AS IN THE PRESENT CASE ON HAND, THIS BENCH OF THE TRIBUNAL IN ITA NO. OF THE CASE, ITA NO.499/CTK/2011 DT.29.6.2012 IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009 - 10 HAS D ELETED THE PENALTY LEVIED U/S.2 7 2A(2)(K) OF THE I.T.ACT,1961. THIS FACT WAS NOT DISPUTED BY THE LEARNED DR. THEREFORE, CONSISTENT WITH THE VIEW TAKEN THEREIN AND THE FACTS AND CIRCUMSTANCES BEING SIMILAR IN THE PRESENT CASE IN HAND, WE HAVE NO HESITATION TO CANCEL THE PENALTY OF 3,800 LEVIED U/S.272A(2)(K) OF THE I.T.ACT,1961 FOR THE YEAR UNDER CONSIDERATION. ACCORDINGLY, WE DELETE THE IMPUGNED PENALTY BY ALLOWING THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEA L OF THE ASSESSEE IS ALLOWED. SD/ - S D/ - ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER ( ) DATE: 30.10.2012 ( ), (H.K.PADHEE), SENIOR.PRIVATE SECRETARY. I.T.A.NO. 441/CTK/2012 7 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : UNDER SECRETARY & DDO, PANCHAYATI RAJ (GRAM PANCHAYAT) DEPARTMENT, BHUBANESWAR 2 / THE RESPO NDENT: ADDL.COMMISSIONER OF INCOME - TAX (TDS), BHUBANESWAR. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY OR DER, APPENDIX XVII SEAL TO BE AFFIXED ON THE ORDER SHEET BY THE SR. P.S./P.S. AFTER DICTATION IS GIVEN 1. DATE OF DICTATION 03.1 0.2012 . 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 04.10.2012 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFOR E THE DICTATING MEMBER FOR PRONOUNCEMENT.... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S . 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30.10.2012 7. DATE ON WHICH THE FILE GOES TO THE HEA D CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ................ 9. DATE OF DESPATCH OF THE ORDER ..