ITO, WD-2(2), KOLKATA, Kolkata V. M/s Liver Foundation, Kolkata

ITA 459/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1011 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 16-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHTTACHARJEE
• Keywords: Non-deduction of tax
• Section: 194C

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.459/KOL/2016 ASSESSMENT YEAR:2010-11 INCOME TAX OFFICER, WARD-2(2)/TDS/KOLKATA, 10B, MIDDLETON ROW, 7 TH FLOOR, KOLKATA-71 / V/S . M/S LIVER FOUNDATION, 12, DR. M. ISHAQUE ROAD, (KYD STREET), KOLKATA-16 [ PAN CALLO 23274 B ] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI ARINDAM BHTTACHARJEE, ADDL. CIT-DR /BY RESPONDENT NONE /DATE OF HEARING 01-11-2017 /DATE OF PRONOUNCEMENT 15-11-2017 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-24, KOLKATA DATED 30.12.2015. ASSESSMENT WAS FRAMED BY ITO WARD-58(3)/TDS, KOLKATA U/S 201(1)/201(1A) OF THE I NCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ER DATED 26.12.2009 FOR ASSESSMENT YEAR 2009-10. PENALTY LEVIED BY JCIT(TDS), RANGE-5 8, KOLKATA U/S 271C OF THE ACT. 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F ASSESSEE THOUGH NOTICE OF HEARING WAS SENT TO ASSESSEE THROUGH RPAD. SO WE DE CIDED TO HEAR THE PRESENT APPEAL WITHOUT APPEARANCE OF ASSESSEE OR BY LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AND AFTER HEARING LD. DR. 3. THE ONLY ISSUE RAISED BY THE REVENUE IN THIS APP EAL IS THAT LD CIT(A) ERRED IN CONFIRMING THE PENALTY IMPOSED BY THE AO FOR RS. 26 ,52,615.00 U/S 271C OF THE ACT ITA NO.459/KOL/2016 A.Y 2010-11 ITO WD-2(2)/TDS/KOL VS. M/S LIVER F OUNDATION PAGE 2 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A CHARITABLE ORGANIZATION AND ENGAGED IN THE DEVELOPMENT OF EDUCATION, HEALTH, ME DICAL TECHNOLOGIES AND PHARMACEUTICALS RELATED TO LIVER DISEASES. THE ASSE SSING DURING THE YEAR HAS INCURRED SEVERAL EXPENSES WHICH WERE LIABLE FOR TDS PROVISIO NS U/S 194J / 194C OF THE ACT BUT IT FAILED TO COMPLY THE SAME. THEREFORE, THE PENALT Y PROCEEDINGS U/S 271C OF THE ACT WAS INITIATED BY THE AO. HOWEVER, THE ASSESSEE DURI NG PENALTY PROCEEDINGS BEFORE THE AO SUBMITTED THAT SUBSEQUENTLY IT HAS DEDUCTED THE AMOUNT OF TDS AND DEPOSITED THE SAME TO THE GOVERNMENT EXCHEQUER. BUT IN THIS PROCE SS THE DELAY OCCURRED DUE TO NEGLIGENCE AND UNAWARENESS OF THE PROVISION OF LAW. HOWEVER, THE AO DISREGARDED THE CONTENTION OF THE ASSESSEE AND LEVIED THE PENALTY F OR RS. 26,52,615.00 U/S 271C OF THE ACT. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LD CI T(A) WHO DELETED THE PENALTY BY OBSERVING AS UNDER:- 4. THERE IS NO DISPUTE ABOUT THE DEDUCTION OF TAX DEDUCTION AT SOURCE S IS APPARENT FROM THE ORDER U/S 271C DT. 27.04.2015 AND THE ORDER U/S. 20 1(1)/(1A) OF THE INCOME TAX ACT, 1961, DT. 26.03.2012. THE ONLY POINT FOR WHICH THE PENALTY WA S LEVIED IS THE DELAY OF FEW MONTHS IN PAYMENT OF TAXES DEDUCTED AT SOURCE. SINCE NO DEFAU LT OF DEDUCTION HAS BEEN RECORDED IN THE ORDER U/S. 201()/(1A) AND ORDER U/S 271C, DT.27.04. 2015 THE QUESTION TO BE SEEN IS WHETHER PENALTY CAN BE LEVIED ON LATE PAYMENT OF TAXES. SEC . 271C IS REPRODUCED AS UNDER:- PENALTY FOR FAILURE TO DEDUCT TAX AT SOURCE 271C . [(1) IF ANY PERSON FAILS TO: (A) DEDUCT THE WHOLE OR ANY PART OF THE TAX AS REQUIRED BY OR UNDER THE PROVISIONS OF CHAPTER XVII-B: OR (B) PAY THE WHOLE OR ANY PART OF THE TAX AS REQUIRED BY OR UNDER:- (I) SUB-SECTION (2) OF SECTION 115-O; OR (II) THE SECOND PROVISION TO SECTION 194B THEN, SUCH PERSONS SHALL BE LIABLE TO PAY, BY WAY O F PENALTY, A SUM EQUAL TO THE AMOUNT OF TAX WHICH SUCH PERSON FAILED TO DEDUCT OR PAY AS AFORESAID]. [(2) ANY PENALTY IMPOSABLE UNDER SUB-SECTION (1), S HALL BE IMPOSED BY THE [JOINT] COMMISSIONER FROM THE ABOVE IT IS APPARENT THAT THE PENALTY U/S 271C CAN BE LEVIED ONLY FOR NON-DEDUCTION. IN CASE OF FAILURE TO PAY THE TAX AS REQUIRED U/S. 115-O(2) AND SECOND PROVISO SEC. 194B THE PENALTY U/S. 271C CAN ALSO BE IMPOSED. IN THE APPEL LANTS CASE THE AO HAS ONLY OBJECTED TO THE LATE PAYMENT OF DEDUCTIONS. DEPOSITS U/S 115-O( 2) AND SEC. 194B ONLY ARE HIT BY SEC.271C. FROM THE ABOVE IT THUS BECOMES APPARENT T HAT THE AO IS NOT EMPOWERED TO LEVY PENALTY. THE PENALTY THEREFORE CANNOT BE SUSTAINED AND IS THEREFORE CANCELLED. THE REVENUE, BEING AGGRIEVED, IS IN APPEAL BEFORE U S. 6. THE LD DR BEFORE US VEHEMENTLY SUPPORTED THE ORD ER OF AO AND HE LEFT THE ISSUE TO THE DISCRETION OF THE BENCH. ITA NO.459/KOL/2016 A.Y 2010-11 ITO WD-2(2)/TDS/KOL VS. M/S LIVER F OUNDATION PAGE 3 7. WE HAVE HEARD THE LD DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE PENALTY WAS LEVIED BY THE AO U/S 271C OF THE ACT ON THE GROUND THAT THE ASSESSEE FAILED TO DEDUCT THE TDS UNDER THE PROVISIONS OF SE CTION 194J AND 194C OF THE ACT. HOWEVER, THE LD CIT(A) REVERSED THE ORDER OF AO BY OBSERVING THAT THE ASSESSEE HAS DEPOSITED THE AMOUNT OF TDS IN THE ACCOUNT OF GOVER NMENT EXCHEQUER WITH THE DELAY OF FEW MONTHS, THEREFORE THERE WAS NO DEFAULT ON TH E PART OF THE ASSESSEE UNDER THE PROVISIONS OF TDS. FROM THE ABOVE DISCUSSION, IT I S CLEAR THAT THE ASSESSEE HAS DEPOSITED THE AMOUNT OF TDS WITH THE DELAY OF FEW M ONTHS. THEREFORE, IT CANNOT BE CONCLUDED THAT THE ASSESSEE HAS DEFAULTED THE PROVI SIONS OF TDS. THUS, IN OUR CONSIDERED VIEW THE PENALTY U/S 271C OF THE ACT CAN NOT BE LEVIED FOR THE DELAYED DEDUCTION OF TDS AMOUNT. THUS, WE FIND NO REASON TO INTERFERE WITH THE FINDINGS ARRIVED BY THE LD. CIT(A). WE HOLD ACCORDINGLY. CON SEQUENTLY, REVENUES APPEAL IS DISMISSED. 8. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 15/11/2017 SD/- SD/- ( % ') ( ') (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP, SR.P.S ) - 15/11/2017 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ITO WARD-2(2)/TDS/KOL 10B, MIDDLETON ROW , 7 TH FL.KOL-71 2. /RESPONDENT-M/S LIVER FOUNDATION, 12, DR. M. ISHAQU E RD (KYD ST) KOL-16 3. , - / CONCERNED CIT 4. - - / CIT (A) 5. . %%, , , / DR, ITAT, KOLKATA 6. 2 / GUARD FILE. /TRUE COPY/ B Y ORDER/ , SR. PRIVATE SECRETARY HEAD OF OFFICE/DDO ,,