Accounts Squadron Air Force, Ambala V. ITO (TDS), Panchkula

ITA 448/CHANDI/2012

• Counselvise Citation: 44821514 RSA 2012
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 20-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARKAMAL SOHI
• Assessee Lawyers: HARMOD KHANDUJA
• Keywords: Opportunity of being heard; Reasonable cause
• Section: 273B; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 448/CHD/2012 ASSESSMENT YEAR : 2008-09 THE ACCOUNTS SQUADRON VS THE ITO (TDS), AIR FORCE, PANCHKULA INDIAN AIR FORCE, AIR FORCE STATION, AMBALA CANTT. PAN NO. RTK03295F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARMOD KHANDUJA RESPONDENT BY : MS. HARKAMAL SOHI DATE OF HEARING : 21.06.2012 DATE OF PRONOUNCEMENT : 22.06.2012 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), ROHTAK DATED 09.02.2012 IN CONFIRMING THE PENALTY OF RS. 50,000/- IMPOSED U/S 272B OF THE INCOME TAX ACT, 1961 (IN SH ORT 'THE ACT') FOR FINANCIAL YEAR 2007-08. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE (TAX DEDUCTOR) IS THE HOLDER OF TAX DEDUCTION AND COLLECTION ACCOU NT NO. RTKA03295F. THE E.TDS QUARTERLY STATEMENT OF DEDUCTION OF TAX I N FORM NO.24Q FOR THE FINANCIAL YEAR 2007-08 AS REQUIRED UNDER SUB-SECTIO N (3) OF SECTION 200 OF THE 2 I.T. ACT, 1961 WAS FILED ON 15.01.2008. THE ITO (T DS), PANCHKULA WHILE GOING THROUGH THE QUARTERLY STATEMENT FILED BY THE ASSESSEE NOTED THAT THE TAX DEDUCTOR HAS QUOTED INVALID PAN IN FIVE CASES. THE ITO (TDS), PANCHKULA AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE HELD THAT THE ASSESSEE HAS COMMITTED DEFAULT U/S 139A (5B) OF THE ACT FOR WHICH PENALTY U/S 272B WAS LEVIABLE. HE, THEREFORE, LEVIED A PE NALTY OF RS. 50,000/- FOR THE FAILURE ON THE PART OF THE ASSESSEE (TAX DEDUCT OR) TO MAKE APPROPRIATE COMPLIANCE OF PROVISIONS OF SECTION 139 A OF THE AC T. 3. ON APPEAL, THE LD. CIT(A) CONFIRMED THE IMPUGNED PENALTY AND HENCE THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD SHRI HARMOD KHANDUJA, ADVOCATE, LD . COUNSEL FOR THE ASSESSEE AND MS. HARKAMAL SOHI, LD. DEPARTMENTAL RE PRESENTATIVE AT LENGTH. WE FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVOU R OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THIS BENCH O F THE TRIBUNAL DATED 19.9.2011 IN THE CASE OF ITO(TDS) PANCHKULA VS ORIE NTAL BANK OF COMMERCE, NARAINGARH, DISTT. AMBALA IN ITA NO. 773/ CHD/2011 RELEVANT TO AY 2009-10. IN THE ABOVE CASE, THE ITO(TDS) LEVIED A PENALTY OF RS. 7,70,000/- @ RS. 10,000 PER DEFAULT VIDE HIS ORDER DATED 28.7.2010. ON APPEAL, THE LD. CIT(A) CANCELLED THE PENALTY AND TH E REVENUE FILED APPEAL BEFORE THIS TRIBUNAL AGAINST THE ORDER OF THE LD. C IT(A). THIS BENCH OF THE TRIBUNAL VIDE ORDER DATED 19.9.2011 DISMISSED THE A PPEAL OF THE REVENUE OBSERVING AS UNDER:- 5. WE HAVE HEARD SHRI N.K. SAINI, DR FOR THE REVE NUE AT LENGTH AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD . IN THIS CASE THE 3 ASSESSEE QUOTED WRONG PANS FOR 77 DEDUCTEES WHICH W AS CORRECTED ON BEING POINTED OUT BY THE ITO(TDS). SECTION 273B OF THE ACT PROVIDES THAT NO PENALTY IS IMPOSABLE FOR A FAILURE U/S 272B , IF IT IS PROVED BY THE DEDUCTEES THAT THERE WAS REASONABLE CAUSE FOR T HE SAID FAILURE. IN THIS CASE THE ASSESSEE HAS EXPLAINED THAT FAILURE T O QUOTE RIGHT PAN WAS OCCURRED AS THE CONCERNED DEPOSITOR HAS HIMSELF MIS-QUOTED PAN. IT IS ALSO THE CASE OF THE ASSESSEE THAT THE PAN WA S CORRECTED AFTER ASCERTAINING THE SAME FROM RESPECTIVE DEDUCTEES. I N THE CASE OF THE FINANCIAL CO-OPERATIVE BANK LTD V. ITO (SUPRA) THE AHMEDABAD BENCH HAS HELD AS UNDER:- WE ARE, THEREFORE OF THE OPINION THAT SINCE THE F URNISHING OF INCOMPLETE DECLARATION BY THE CUSTOMER WAS A MIS TAKE COMMITTED BY THE CUSTOMER AND NOT BY THE BANK, THE FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 139A AS EN VISAGED IN SUB-SEC (1) OF SEC 272B OF THE ACT WAS OF THE CUSTO MER AND NOT OF THE BANK; MEANING THEREBY THAT THE PENALTY U NDER SEC 272B(1) OF THE ACT, IF ANY, IS TO BE IMPOSED, IT IS TO BE IMPOSED ON THE CUSTOMER AND NOT ON THE BANK. BANK CAN BE PENALIZED IF IT FAILS TO COMPLY WITH THE PROVISIONS OF SECTION 139A(6) OR RULE 114D(2) IS FOR FAILURE TO ENSURE TH AT PAN OR GIR NUMBER IS QUOTED BY THE CUSTOMER AND FOR FAILUR E IN FORWARDING THE COPIES OF FORM NO. 60, BUT NOT FOR A NY OTHER DEFAULT. 5.1 IN THE INSTANT CASE, IT IS APPARENT FROM THE RE CORD THAT THE ASSESSEE DEDUCTED TDS CORRECTLY AND REVISED THE PAN AND FILED REVISED STATEMENT IN FORM NO. 26Q, HENCE THERE WAS SUFFICIE NT COMPLIANCE OF THE PROVISIONS OF SECTION 139A OF THE ACT. EVEN OT HERWISE THE ASSESSEE DID NOT DERIVE ANY BENEFIT WHATSOEVER, BY FILING TH E WRONG PANS AND PAN WAS CORRECTED AFTER ASCERTAINING THE SAME FROM THE RESPECTIVE DEDUCTEES. IN OUR VIEW THE ASSESSEE HAS PROVED THA T THERE WAS REASONABLE CAUSE FOR ALLEGED FAILURE AND HENCE NO P ENALTY IS LEVIABLE. EVEN OTHERWISE ALSO NO PENALTY IS LEVIABLE WHEN THE RE IS A TECHNICAL OR VENIAL BREACH OF THE ACT. THE HON'BLE SUPREME COUR T IN THE CASE OF HINDUSTAN STEEL LTD V. STATE OF ORISSA (1972) 83 IT R 26 (S.C) HAS HELD AS UNDER:- AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMI NAL PROCEEDINGS, AND PENALTY WILL NOT ORDINARILY BE IMP OSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS A GUILTY OR CONDUCT CONTUMAC IOUS OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF IT S OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MEREL Y BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHO ULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATI ON IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERC ISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVA NT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS 4 PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PEN ALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FRO M A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 5.2 CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT NO PENALTY CAN BE VALIDLY LEVIED ON FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. WE, THEREFORE UPHOLD THE ORDER O F LD. CIT(A) IN CANCELING THE PENALTY. 6. IN THE INSTANT CASE, IT IS AN UNDISPUTED FACT TH AT THE AMOUNT OF TAX DEDUCTED AT SOURCE BY THE ASSESSEE WAS DEPOSITED WI THIN TIME ALLOWED UNDER THE RELEVANT PROVISIONS OF THE ACT. THERE WAS NO R EVENUE LOSS TO THE INCOME TAX DEPARTMENT. IT IS ALSO AN ADMITTED POSITION TH AT THE ASSESSEE ALSO SUBMITTED REVISED STATEMENT IN FORM NO. 24Q ON 16.0 9.2010. THE ASSESSEE DID NOT DERIVE ANY BENEFIT WHATSOEVER BY FILING INV ALID PAN AND PAN WAS CORRECTED AFTER ASCERTAINING THE SAME FROM THE RESP ECTIVE DEDUCTEES. EVEN OTHERWISE ALSO, NO PENALTY IS LEVIABLE WHEN THERE I S A TECHNICAL OR VENIAL BREACH OF THE ACT. 7. RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF ITO VS ORIENTAL BANK OF COMMERCE (SUPRA), WE ARE OF THE CO NSIDERED OPINION THAT NO PENALTY CAN BE VALIDLY LEVIED ON THE FACTS AND CIRC UMSTANCES OF THE PRESENT CASE. WE, THEREFORE, CANCEL THE PENALTY OF RS. 50,0 00/- IMPOSED BY THE ITO (TDS), PANCHKULA AND CONFIRMED BY THE CIT(A). 8. BEFORE PARTING WITH THIS CASE, WE MAY OBSERVE HE RE THAT ASSESSING OFFICER HAS EXCEEDED HIS JURISDICTION WHILE LEVYING THE PENALTY OF RS. 50,000/- IN THIS CASE. SECTION 272B OF THE ACT REA DS AS UNDER:- 5 PENALTY FOR FAILURE TO COMPLY WITH THE PROVISIONS O F SECTION 139A. 272B. (1) IF A PERSON FAILS TO COMPLY WITH THE PROVISIONS OF SECTION 139A, THE ASSESSING OFFICER MAY DIRECT THAT SUCH PERSON SHALL PAY, BY WAY OF PENALTY, A SUM OF TEN THOUSAND RUPEES . 9. FROM THE ABOVE SECTION, IT IS CLEAR THAT IF A PE RSON FAILS TO COMPLY WITH THE PROVISIONS OF SECTION 139A, THE ASSESSING OFFI CER HAS JURISDICTION TO LEVY A PENALTY OF RS. 10,000/-, NOT MORE THAN THAT, U/S 272B OF THE ACT. ON THIS COUNT, THE ORDER PASSED BY THE ASSESSING OFFICER IS BAD IN LAW. SECONDLY, WE ALSO OBSERVE HERE THAT THE ASSESSING OFFICER HAS PA SSED THE IMPUGNED PENALTY ORDER ON PRINTED PERFORMA WHEREIN CERTAIN BLANK COL UMNS HAVE BEEN FILLED. IN FACT, THE ASSESSING OFFICER HAS NOT APPLIED HIS MIN D WHILE PASSING IMPUGNED PENALTY ORDER. ON THIS SCORE ALSO, THE IMPUGNED OR DER IS BAD IN LAW. 10. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF JUNE, 2012. SD/- SD/- (MEHAR SINGH) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 22 ND JUNE, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR 6