ICFS PRIVATE LIMITED (FORMERLY KNOW AS INDIAN CORPORATE FINANCIAL SERVICES LIMITED), MUMBAI V. ADDITIONAL COMMISSIONER OF INCOME TAX(TDS)-RANGE-2, MUMBAI

ITA 4807/MUM/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4274 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 06-07-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence; Non-deduction of tax; Reasonable cause; Corroborative evidences; Competent authority; TDS
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI RAVISH SOOD, JM ITA NO.4807/MUM/2017 (ASSESSMENT YEAR: 2009-10) ICFS PRIVATE LIMITED ( FORMERLY KNOWN AS INDIAN CORPORATE FINANCIAL SERVICES LTD.) 51, POPATWADI, SUITE NO.14 2 ND FLOOR, KALBADEVI ROAD MUMBAI-400 002 VS. ADDL. CIT (TDS) - RANGE 2 ROOM NO.701 SMT. K.G.MITTAL AYURVEDIC HOSPITAL, CHARNI ROAD MUMBAI-400 002 PAN/GIR NO. AAAC I1968E ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : NONE RESPONDENT BY : SHRI. ABI RAMA KARTHIKEYAN DATE OF HEARING : 27.12.2018 DATE OF PRONOUNCEMENT : 13 .03.2019 O R D E R PER SHAMIM YAHYA, A. M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-59, MU MBAI (LD.CIT(A) FOR SHORT) DATED 25.04.2017 AND PERTAINS TO THE ASSESSM ENT YEAR (A.Y.) 2009- 10. 2. THE GROUNDS OF APPEAL READ AS UNDER: TDS PENALTY U/S 272 (A)(K) STARTS ONCE TDS IS PAID: UNDER THE FACTS AND THE CIRCUMSTANCES OF CASE AND I N LAW, THE LD. CIT(A) ERRED IN UNDERSTANDING THAT AS PER SECTION 200(3) O F THE INCOME TAX ACT, 1961 IS APPLICABLE FROM THE DATE OF PAYMENT OF TDS. IT IS ONLY AFTER PAYMENT OF TDS, ASSESSEE CAN FILE RETURN. THE SAID PRINCIPLE WAS UPHELD IN PORWAL CREATIVE VI SION P.LTD VS ACIT (TDS) I.T.A. NOS. 5556 & 5557/MUM/2009. 2 ITA NO. 4807/MUM/2017 ICFS PVT. LTD. RESTRICTING TDS PENALTY TILL FILING OF ORIGINAL RET URNS UNDER THE FACTS AND THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN NOT RESTRICTING PENALTY U/S 272 (A)(2)(K) TILL FILING OF ORIGINAL RETURN/STATEMENT AS STATED IN SECTION 200(3) OF THE INCOME TAX ACT, 1961. APPEAL CRAVES TO AMEND, MODIFY, ADD, DELETE OR ALTE R GROUNDS. 3. BRIEF FACTS OF THE CASE ARE THAT LOPES ENTERPRIS ES TRUST (HEREINAFTER, THE TRUST) FILED A COMPLAINT THAT THE APPELLANT-D EDUCTOR HAD FAILED TO FURNISH THE 16A CERTIFICATE AS PER RULE 31 FOR THE TDS MADE UNDER SECTION 194-I OF THE ACT IN RESPECT OF RENTAL PAYMENTS FOR E PERIOD 01/04/2008 TO 31/03/2009. THE MATTER WAS TAKEN COGNIZANCE OF BY T HE TDS WING. EVENTUALLY, THE APPELLANT-DEDUCTOR, VIDE A LETTER D ATED 18/01/2011, PRODUCED A PHOTOCOPY OF TDS CERTIFICATE IN FORM 16A ISSUED ON 06/01/2011 IN FAVOUR OF THE TRUST FOR RS.5,55,170/- FOR THE AFORESAID PERIOD. IT WAS NOTED THAT NO INTEREST HAD BEEN PAID FOR THE DELAY IN THE DEDUCTION OF TAX. THE TDS STATEMENT (FORM NO. 26Q) FOR ALL THE FOUR QUARTERS OF THE SAID FINANCIAL YEAR WERE FILED AS L ATE AS 11/01/20121, WHEREAS, THEY OUGHT TO HAVE BEEN FILED BY THE 15 TH OF THE SUCCEEDING MONTH ENDING THE QUARTER. THIS LED TO THE INITIATION OF P ROCEEDINGS UNDER SECTION 272A(2)(K) OF THE ACT. 3.1 IN RESPONSE TO THE SHOW-CAUSE NOTICE, THE APPEL LANT-DEDUCTOR RESPONDED VIDE LETTER DATED 04/03/2011 STATING THAT THE DELAY WAS ATTRIBUTABLE TO A DISPUTE WITH THE DEDUCTEE-TRUST REGARDING THE RENTAL. SINCE, NO DOCUMENTS/SUPPORTING EVIDENCES WERE FILED , ANOTHER 3 ITA NO. 4807/MUM/2017 ICFS PVT. LTD. OPPORTUNITY, WAS AFFORDED BY WAY OF LETTER DATED 24 /08/2011 REQUIRING THE APPELLANT TO PRODUCE A COPY OF THE RELEVANT RENTAL AGREEMENT COPY OF BANK ACCOUNT ALONG WITH COPY OF AUDITED FINAL ACCOUNTS F OR SAID PERIOD. HOWEVER, A COPY OF THE RENTAL AGREEMENT WAS NOT FILED. FROM THE RELEVANT PROFIT & LOSS ACCOUNT, IT WAS NOTED THAT THE APPELLANT HAD M ADE A CLAIM OF RENTAL EXPENSE OF RS. 33,79,260/- (SCHEDULE J). IN OTHER WORDS, WHILE THE APPELLANT HAD CLAIMED RENTAL EXPENDITURE THE TAX DE DUCTED AT SOURCE HAD REMAINED UNPAID. FROM THE COPY OF THE BANK ACCOUNT, IT WAS NOTED THAT THE NET RENTAL DUES, HE, AFTER THE DEDUCTION OF HAS , WAS BEING REMITTED TO THE TRUST THE TABULAR DETAILS WITH ALL THE AFOREMEN TIONED FACTS ARE INCORPORATED IN THE IMPUGNED PENALTY ORDER. 3.2 AFTER EXAMINING THE DETAILS, DOCUMENTS AND RE SPONSES OF THE APPELLANT, THE ASSESSING OFFICER CONCLUDED THAT THE AVERMENT OF THE DEFAULTER THAT IT WAS NOT IN A POSITION TO CORRECTL Y ASCERTAIN THE RENTAL, WAS INCORRECT. THE APPELLANT HAD CLAIMED THE RENT AS A TAX EXPRESSES ADD HAD PAID SHE FRONT THIS NET AMOUNT. THE TDS OFFICER OBS ERVED THAT EVEN IF FOR THE SAKE 01 ARGUMENT, IT WAS TO HE ASSUMED THAT THE RE WAS INDEED A 'DISPUTE', THE APPELLANT WAS NOT JUSTIFIED IN LAW I N NOT FILING THE QUARTERLY TDS STATEMENTS TIMELY, SINCE THE ALLEGED DISPUTE, I F ANY, AROSE ONLY IN THE LATER PART OF THE YEAR - AS WAS DEMONSTRATED BY THE REGULAR RENTAL PAYMENTS BEING MADE TO THE TRUST (THE TABULAR REPRESENTATION HAS BEEN INCORPORATED IN THE BODY OF THE PENALTY ORDER). THUS, SHE CONCLU DED, THE NONPAYMENT OF 4 ITA NO. 4807/MUM/2017 ICFS PVT. LTD. TAX DEDUCTED TO THE EXCHEQUER AND THE DELAY IN FILI NG TDS STATEMENTS WERE DELIBERATE AND UTTER DISREGARD TO THE STATUTE, WITH OUT ANY JUSTIFIABLE CAUSE. IN OTHER WORDS, TAX WITHHELD BY THE APPELLANT-DEDUC TOR IN A FIDUCIARY CAPACITY OUGHT TO HAVE BEEN DEPOSITED, IN THE GOVER NMENT ACCOUNT TIMELY. RATHER, IT CHOSE NOT DO SO, AND, BUT FOR COMPLAINT FILED BY THE TRUST, WOULD HAVE CAUTIONED WITH THE DEFAULT. SHE NOTED THAT EVE N AFTER BEING ASKED TO COMPLY WITH THE PROVISIONS OF LAW, THE DEDUCTOR HAD CAUSED A DELAY OF ONE YEAR BEFORE IT EVENTUALLY RELENTED BY DEPOSITING TH E TDS AMOUNT AND FILING THE QUARTERLY STATEMENTS BELATEDLY. 3.3 THE TDS OFFICER ANALYZED THE BANK STATEMENTS FOR THE RELEVANT PERIOD TO FIND THAT LIQUIDITY WAS NEVER A PROBLEM FOR THE APPELLANT, WHICH WAS THE POSSESSION OF FUNDS RUNNING INTO CRORES RECEIVED DU RING THE SAID YEAR. ON THESE FACTS, IT WAS HELD THAT THERE WAS NO REASONA BLE FOR THE DEFAULT. THE AGGREGATE DELAY WAS DETERMINED AT 3025 DAYS AND PEN ALTY WAS CALCULATED AT RS.100/- PER DAY. THE ACTUAL DATE OF FILING OF T HE TDS STATEMENTS WAS 11/01/2011 FOR THE FOUR QUARTERS OF THE FINANCIAL Y EAR 2008-09. IN THIS, MANNER, PENALTY FOR RS.3,02,500/- WAS LEVIED UNDER SECTION 272A(2)(K) OF THE ACT ON AN AGGREGATE TDS DEFAULT AMOUNT OF RS.5, 55,170/- 5 ITA NO. 4807/MUM/2017 ICFS PVT. LTD. 4. UPON ASSESSEES APPEAL LD. CIT(A) NOTED THE SUBM ISSIONS OF THE ASSESSEE. HE ALSO OBTAINED REMAND FROM THE AO. THER EAFTER LD. CIT(A) CONFIRMED THE ORDER OF AO BY AN ELABORATE ORDER AS UNDER: 2.9 FIRST, THE ISSUE OF THE SO CALLED ADDITIONAL EV IDENCE IS TAKEN UP. THE APPELLANT HAS CLAIMED THAT IT HAD ALREADY SUBMITTED THE TDS STATEMENT AS REQUIRED UNDER SECTION 200(3) OF THE ACT QUITE BEFO RE THE COMPLAINT FILED BY THE TRUST. SOME INDISTINCT PHOTOCOPIES HAVE BEEN FI LED AND IT HAS BEEN STATED THAT THE ORIGINAL DOCUMENTS, EXCEPT FOR ONE, ARE UN AVAILABLE. PHOTOCOPIES OF TIN-NSDL STATEMENTS HAVE BEEN FILED FOR SHOWING THA T THE TDS RETURN FOR THE FOUR QUARTERS WERE FILED ON 13.06.2009 FOR THE FIRST THREE QUARTERS AND ON 15.06.2009 FOR THE LAST QUARTER (PROVISIONAL REC EIPTS). INCIDENTALLY, THE TIN-NSDL STATEMENTS A1SO INDICATE THAT THE SUBSEQUE NT TDS RETURNS FOR ALL THE FOUR QUARTERS WAS FILED ON 11.01.2011 AS STATED ABOVE. HOWEVER, EVEN IF THE VERIFICATION OF THE ADDITIONAL EVIDENCE IS K EPT ASIDE, IT IS AT ONCE APPARENT THAT THESE DOCUMENTS ABSOLUTELY FAIL TO AD VANCE THE CASE OF THE APPELLANT. THIS IS BECAUSE THE TDS STATEMENTS FILED IN 2009 DID NOT INCLUDE THE TDS ON RENTAL DISBURSEMENTS TO THE TRUST. THIS FACT IS ACCEPTED BY THE APPELLANT. HENCE, THERE IS NO RELEVANCE OF THE TDS STATEMENTS CLAIMED TO BE FILED EARLIER WHICH HAVE NOTHING TO DO WITH THE INS TANT CONTROVERSY. THERE IS NO QUESTION OF REVISING THE TDS STATEMENT WHEN NOT EVEN A SINGLE RUPEE WAS INCLUDED IN THE TDS RETURN FILED IN 2009, AS IT SHO ULD HAVE BEEN. IT DOES APPEAR THAT USING THE WORDS ORIGINAL AND REVISED TDS STATEMENTS VIS-- VIS DEDUCTION OF TAX ON RENT PAID/PAYABLE TO THE TR UST IS USING A WRONG NOMENCLATURE AND SEMANTICS. THE TDS STATEMENT FILED IN THE YEAR 2011 WAS THE FIRST AND THE ONLY TDS STATEMENT APROPOS THE RE LEVANT RENTALS. IN THIS LIGHT, THERE IS NO ROLE OR RELEVANCE OF THE EARLIER TDS STATEMENTS. THE FACTS THAT ARE GERMANE TO THE LEVY OF PENALTY IS THAT TDS AMOUNTING TO RS.5,55,170/- FOR THE FINANCIAL YEAR 2008-09 WAS D EPOSITED BELATEDLY ON 06.01.2011 FOR WHICH THE CORRESPONDING TDS STATEMEN TS WERE FILED SIMULTANEOUSLY ON 11.01.2011. THESE ARE THE DATES T HAT ARE TO BE CONSIDERED, AS HAS BEEN CORRECTLY DONE IN THE PENAL TY ORDER. AS A RESULT, THE PRAYER OF THE APPELLANT TO TAKE INTO ACCOUNT THE EA RLIER TDS STATEMENTS FILED IS TO BE CHARACTERIZED AS EXTRANEOUS, IRRELEVANT AN D LACKING ANY NEXUS TO THE DEFAULT AND IS, ACCORDINGLY REJECTED. 2.10. NEXT, THE EXISTENCE OR THE ABSENCE OF A REAS ONABLE CAUSE AS PER SECTION 273B OF THE ACT IS TO BE ASCERTAINED. IT IS WELL-SETTLED THAT THE BURDEN IS ENTIRELY ON THE APPELLANT TO DEMONSTRATE THAT TH IS LARGE DELAY, WAS FOR REASONS BEYOND ITS CONTROL. IN OTHER WORDS A REASO NABLE CAUSE SHOULD BE SUCH THAT WOULD HAVE PREVENTED A MAN OF ORDINARY PR UDENCE ACTING UNDER NORMAL CIRCUMSTANCES, WITHOUT NEGLIGENCE OR INACTIO N OR WANT OF BONA FIDES, FROM FILING OF THE TDS STATEMENTS TIMELY. THE ABSOL UTE LIABILITY TO SUFFER THE PENALTY CAN BE SOFTENED ONLY WHEN A REASONABLE CAU SE CAN BE SUCCESSFULLY 6 ITA NO. 4807/MUM/2017 ICFS PVT. LTD. ACCOMPANIES BY A CREDIBLE STANDARD OF PROOF. THESE PRINCIPLES HAVE BEEN LAID DOWN BY THE HONBLE JHARKHAND HIGH COURT IN OM EC ENGINEERS VS CIT[2008] REPORTED IN 217 CTR 144. IN IT SUBMISSION DATED 22.03.2017, THE APPELLANT HAS STATED THAT THERE WAS A DISPUTE BETWE EN IT AND THE TRUST. HOWEVER, NOTHING HAS BEEN FILED TO DEMONSTRATE THAT THERE WAS A DISPUTE AND MORE IMPORTANTLY, TO SHOW THAT THERE WAS A DISP UTE OF SUCH NATURE THAT IT BECAME LEGALLY IMPOSSIBLE TO PERFORM ITS TDS OBL IGATIONS. NO DOCUMENTS/EVIDENCES IN THIS REGARD WERE FILED BEFOR E THE TDS OFFICER AS EXPLICITLY MENTIONED AT PARA (6) OF THE IMPUGNED OR DER, DESPITE ADEQUATE OPPORTUNITIES AFFORDED FOR DOING SO. THAT APART, A DEDUCTOR CANNOT UNILATERALLY DECIDE TO STOP DEDUCTING/DEPOSITING TA X MERELY BECAUSE THE LANDLORD PRESUMABLY WANTED RENTAL HIKE. THERE IS NO THING IN LAW TO JUSTIFY THIS. THE APPELLANT WAS STATUTORILY OBLIGED TO DEDU CT TAX AT SOURCE AT THE TIME OF CREDIT OF THE ACCOUNT OF THE TRUST OR AT TH E TIME OF MAKING THE RENTAL PAYMENT TO THE TRUST, WHICHEVER WAS EARLIER. THIS W OULD BE DE HORS OF ANY DEMAND FOR HIGHER RENT, DEMAND FOR MORE PARKING, DE MAND FOR CLEANLINESS OF PREMISES, ETC. IF THE POSITION CANVASSED BY THE APPELLANT WERE TO BE ACCEPTED, THEN IN AN OVERWHELMING NUMBER OF CASES, THE LIABILITY TO DEDUCT TAX AT SOURCE WOULD BECOME DEFERRED INDEFINITELY. 2.11 IN PAN (7) OF THE IMPUGNED ORDER, THE MS OFFI CER CORRECTLY POINTS OUT THAT THE APPELLANT HAD CLAIMED A DEDUCTION OF RS. 3 3,79,260/- TOWARDS RENT UNDER THE HEAD ADMINISTRATIVE EXPENSES' IN SCHEDULE - J TO THE ACCOUNTS. THIS HAS NOT BEEN CONTROVERTED. INSTEAD IT HAS STAT ED IN THE GROUNDS OF APPEAL THAT THE SAID RENTAL EXPENSES WERE DISALLOWE D IN COMPUTATION OF INCOME DUE TO NON-DEDUCTION OF TAX AT SOURCE. THIS LOGIC IS MISCONCEIVED. WHILE THIS MAY INDEED BE SO, THE POINT BEING VALIDL Y MADE BY THE TDS OFFICER IS THAT THERE WAS NO DIFFICULTY FACED BY THE APPELL ANT IN QUANTIFYING THE RENTAL EXPENSES. THAT IS TO SAY, WHEN THE RENTAL EXPENDITU RE QUANTIFIED BY THE APPELLANT THERE SHOULD HAVE BEEN NO DIFFICULTY IN D EDUCTING TAX THEREUPON AT APPLICABLE RATES. THE CLAIM THAT THE SAID RENTAL EX PENSE WAS SUBSEQUENTLY DISALLOWED HAS NO BEARING TO THE ISSUE AT HAND. 2.12 IN THE GROUNDS OF APPEAL, THE APPELLANT HAS AL SO STATED THAT THERE WAS A DISPUTE AS OTHER PARTY HAD INCREASED THE RENT WIT H EFFECT FROM APRIL, 2009, WHICH WAS NOT ACCEPTABLE TO THE APPELLANT. ON THE O THER HAND, VIDE PARA (8) OF THE IMPUGNED ORDER, THE TDS OFFICER HAS CLEARLY STATED THAT THE NET RENTAL EXPENSES OF RS.1,94,530/-(AFTER DEDUCTING TAX AT SO URCE) WAS REGULARLY REMITTED TO THE TRUST FROM APRIL, 2008 TO OCTOBER 2 008 THIS UNDENIED FACT, DERIVED FROM THE BANK STATEMENT, IS AT VARIANCE TO THE APPELLANTS CLAIM OF A 'DISPUTE ON RENTALS FROM APRIL, 2008, ONWARDS. 2.13 AN ASPECT THAT CANNOT BE LOST SIGHT OF IS TH AT THE DELAY IN FILING THE TDS RETURN IS NOT TRIVIAL BUT AGGREGATES 3025 DAYS. HENCE, THERE IS CONSIDERABLE FORCE IN THE CONCLUDING OBSERVATION OF THE TDS OFFICER THAT THE DELAY WAS DELIBERATE, AND IN DISREGARD TO THE REQUI REMENTS OF THE STATUTE. AFTER ALL, THE LAW DOES NOT COMPEL A DEDUCTOR TO DE DUCT TAX ON RENT AT THE 7 ITA NO. 4807/MUM/2017 ICFS PVT. LTD. ENHANCED AMOUNT THAT MAY PERHAPS BE DEMANDED BY A L ANDLORD, BUT ONLY ON THE AMOUNT CREDITED OR ACTUALLY PAID BY A TENANT TO THE LANDLORD, WHICHEVER IS EARLIER. IT IS NOT AS IF THE TRUST PRE VENTED IT FLOOR AND DEPOSITING THE TAX ON THE USUAL RENT. THERE WAS NO MAY GRANTED BY A COURT OF LAW OR ANY OTHER COMPETENT AUTHORITY. IT IS ALSO NOT THE C ASE OF THE APPELLANT THAT IT WAS NOT AWARE OF THE PROVISIONS OF LAW FOR FILING T HE TDS RETURNS WITHIN THE PRESCRIBED TIME. IF IN THE FUTURE. THE APPELLANT WA S TO PAY A HIGHER RENT, THEN THE FACTUM OF TAX DEDUCTION THEREUPON WOULD ARISE T HAN ON THE BASIS OF CREDIT OF SUCH HIGHER RENT OR PAYMENT. THERE WAS NO DIFFIC ULTY IN DEDUCTING TAX AND ISSUING A CERTIFICATE TO THE DEDUCTEE. AS IS WELL K NOWN IN THE ABSENCE OF SUCH A CERTIFICATE, THE DEDUCTEES OFTEN FACED DIFFICULTI ES IN CLAIMING CREDIT FOR TDS WHICH PROMPTED THE TRUST TO LODGE A COMPLAINT. THUS , ONE WOULD HAVE TO AGREE WITH THE TDS OFFICER THAT THERE WAS NO REASON ABLE CAUSE' FOR THE INORDINATE DELAY. 2.14 ADVERTING TO THE DECISION RELIED UPON BY THE APPELLANT I.E. M/S PORWAL CREATIVE VISION PVT.LTD VS ADDL. CIT(TDS), RANGE-2, MUMBAI [2012] REPORTED IN 50 SOT 148 (URO), IT IS NOTED THAT THE LD. APPEL LATE TRIBUNAL, MUMBAI, ACCEPTED THE DELAY IN PAYMENT OF TAX FOR MASONS THA T WERE DECLARED TO BE SATISFACTORY, SINCE FINANCIAL DIFFICULTIES WERE A R EASONABLE CAUSE FOR DEFAULT IN PAYMENT OF TAX. IT WAS HELD AS UNDER (EMPHASIS S UPPLIED): THEREFORE IN OUR VIEW THE PERIOD FOR LEVYING THE P ENALTY HAS TO BE COUNTED FROM THE DATE OF PAYMENT OF TAX BECAUSE THE DELAY I N FILING THE RETURN TILL THE DATE OF PAYMENT OF TAX IS ALREADY EXPLAINED ON THE GROUND THAT THE ASSESSEE COULD NOT PAY THE TAXES FOR WHICH SEPARATE PENAL PR OVISIONS EXIST. THE ASSESSEE HAS ALSO EXPLAINED THE REASONS FOR RADIATI NG THE TAX TO THE CENTRAL GOVERNMENT IN LIME WHICH WAS BECAUSE OF FINANCIAL D IFFICULTIES. THE ASSESSEE HAS FILED THE COPIES OF P & L ACCOUNT AND BALANCE SHOT TO SUBSTANTIATE THE CLAIM THAT IT WAS INCURRING LOSSES AND WERE SUBSTANTIAL LIABILITIES ON ACCOUNT OF CREDITORS. THE ASSESSEE H AS PLACED RELIANCE ON SOME DECISIONS OF THE TRIBUNAL IN WHICH FINANCIAL DIFFIC ULTIES HAVE BEEN ACCEPTED AS REASONABLE CAUSE FOR DEFAULT IN PAYMENT OF TAX. THE MADRAS BENCH OF THE TRIBUNAL IN CASE OF R. KARUPPASWAMY VS 2 ND ITO (9 TT) 442) HAD CANCELLED THE PENALTY LEVIED FOR DEFAULT IN PAYMENT OF SELF-A SSESSMENT TAX ON THE GROUND PAUCITY OF FUNDS. SIMILARLY THE BOMBAY BENCH OF THE TRIBUNAL IN CASE OF 3 RD ITO VS. BOMBAY CABLE CO. PVT.LTD (11 TT) 386) HAD UPHELD THE DROPPING OF PENALTY PROCEEDING AND DELETION OF INTE REST LEVIED UNDER SECTION 201(1A) FOR FAILURE TO DEPOSIT THE TDS WITH CENTRAL GOVERNMENT ON THE GROUND OF FINANCIAL DIFFICULTIES. ONCE THE DELAY IN PAYMENT OF TAX IS EXPLAINED SATISFACTORILY, PENALTY UNDER SECTION 272 A(2)(K) FOR THE PERIOD TILL PAYMENT OF TAXES, CANNOT BE LEVIED IN O UR OPINION. THIS DECISION WAS NOTICED BY THE LD. APPELLATE TRIB UNAL, CUTTACK, IN N.K. MEDIA VENTURES (P) LTD. VS. JCIT (TDS), BHUBANESWAR [2015] REPORTED IN 59 TAXMANN.COM 365. THE LD. ITAT HELD AND OBSERVED AS UNDER (EMPHASIS SUPPLIED): 8 ITA NO. 4807/MUM/2017 ICFS PVT. LTD. THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION O F MUMBAI TRIBUNAL IN WHICH FINANCIAL HITCHES HAVE BEEN ACCEPTED AS REASO NABLE CAUSE FOR DEFAULT IN PAYMENT OF TAX. ONCE THE DELAY IN PAYMENT OF TAX IS EXPLAINED SATISFACTORILY, PENALTY U/S 272A(2)(K) OF THE ACT C ANNOT BE LEVIED FOR THE PERIOD TILL PAYMENT OF TAX. HENCE, WE MODIFY THE ORDER OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECTE D TO LEVY THE PENALTY U/S 272A(2)(K) OF THE ACT ONLY FOR THE DELAY IN PAYMENT OF TAX BY THE ASSESSEE. 2.15 THE POSITION EMERGING FROM THE AFOREMENTIONE D DECISIONS IS THAT THE PERIOD OF DEFAULT CAN BE SHORTENED ONLY IF THE DELA Y IN FILING THE RETURN TILL THE DATE OF PAYMENT OF TAX, IS SATISFACTORILY EXPLAINED . ON THE CONTRARY IN THE APPEAL UNDER CONSIDERATION, THIS IS NOT SO. IT HAS ALREADY BEEN HELD THAT THERE IS NO REASONABLE CAUSE FOR THE ABNORMAL DELAY IN, BOTH, THE PAYMENT OF TAXES TO THE CREDIT OF THE GOVERNMENT AND FOR TH E BELATED FILING OF THE QUARTERLY TDS STATEMENT. 2.16 THE LD. APPELLATE TRIBUNAL, CHANDIGARH, IN CEN TRAL SCIENTIFIC INSTRUMENTS ORGANIZATION VS JCIT (TDS), CHANDIGARH [2015] REPORTED IN 59 TAXMANN.273, WAS SIZED OF AN IDENTICAL CASE WHERE T HE DEDUCTOR HAD FILED QUARTERLY TDS RETURNS IN FORM NO. 26Q MUCH AFTER (6 463 DAYS DELAY) THE RESPECTIVE DUE DATES IN RESPECT OF ALL THE QUARTERS FOR THREE ASSESSMENT YEARS. THE ASSESSING OFFICER LEVIED PENALTY UNDER S ECTION 272A(2)(K) OF THE ACT. THE LD. APPELLATE TRIBUNAL HELD AS UNDER (IN P ARA-11, EMPHASIS SUPPLIED): IT MAY ALSO BE NOTED HERE THAT ON CONSIDERATION TH E ABOVE PROVISIONS, IT IS CLEAR THAT THE QUESTION OF DIRECT LOSS OF REVENUE CAN NEVER OCCUR IF THE SPECIFIED STATEMENT IS NOT FILED WITHIN THE PRESCRI BED TIME. IF THE EXPLANATION OF THE ASSESSEE IS ACCEPTED THAT THERE IS NO LOSS T O THE REVENUE, NO PENALTY WOULD BE IMPOSED ON ANY PERSON AND IT WOULD GO AGAI NST THE INTENTION OF THE LEGISLATURE AND THE RELEVANT PROVISIONS WOULD A LSO GO REDUNDANT. WE MAY ALSO NOTE HERE THAT THE ASSESSEE IN THE STATEME NT OF FACTS FILED WITH APPEAL STATED THAT GRIEVANCE LETTER WAS RECEIVED FR OM SHRI ASHOK GULATI BY THE DEPARTMENT ALLEGING THAT THE ASSESSEE HAD DEDUC TED TAX AT SOURCE BUT THAT WAS NOT REFLECTED IN THE 26AS STATEMENT. IT WO ULD, THEREFORE, PROVE THAT IN CASE OF NON-FILING OF THE TDS RETURNS, THE PERSO NS ON WHOSE BEHALF TAXES HAVE BEEN DEDUCTED WOULD ALSO SUFFER FOR NO FAULT OF THEM BECAUSE THEY WOULD NOT GET BENEFIT OF TAXES AT SOURCE. THE APPELLANTS CASE IS AT AN INFERIOR FOOTING SINC E THE TAXES WERE ALSO NOT DEPOSITED TIMELY. RATHER, THE TDS AMOUNT OF RS.5,55 ,170/-, RELATING TO FY 2008-09, WAS DEPOSITED AS LATE AS ON 06.01.2011 AND THE QUARTERLY TDS STATEMENTS WERE FILED EVEN LATER. 3.0 HAVING CONSIDERED THE SUBMISSIONS MADE IN THE F OREGOING PARAGRAPHS, THERE IS NO REASONS TO INTERFERE WITH THE ORDER DAT ED 30.08.2011 LEVYING A PENALTY OF RS.3,02,500/- UNDER SECTION 272(A)(K) OF THE AC, WHICH IS JUSTIFIED AND NOT INFIRM FROM ANY PERSPECTIVE. THE PENALTY OR DER IS UPHELD. CONSEQUENTLY, ALL THE GROUNDS, INCLUDING THE ADDITI ONAL GROUNDS OF APPEAL, FAIL AND RARE, THEREFORE, DISMISSED. 9 ITA NO. 4807/MUM/2017 ICFS PVT. LTD. 5. AGAINST THE ABOVE ORDER ASSESSEE IS IN APPEAL BE FORE US. 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE NOTICE. HENCE WE PROCEED TO ADJUDICATE THE ISSUE AFTER HEARING THE LD. DR AND PERUSING THE RECORDS. 7. UPON CAREFUL CONSIDERATION WE NOTE THAT ASSESSEE HAS FAILED TO SUBMIT THE TAX DEDUCTED TO THE GOVERNMENT ACCOUNT. HE HAS ALSO FAILED TO SUBMIT THE TDS RETURN IN TIME. 8. THE REASONABLE CAUSE ATTRIBUTED BY THE ASSESSEE FOR NOT DEDUCTING THE TAX DEDUCTION AT SOURCE FROM THE RENT PAYMENT I S THAT THERE WERE SOME DISPUTE WITH THE PAYEES. HOWEVER, NO COGENT EVIDENC E IN THIS REGARD HAS BEEN PRODUCED. AUTHORITIES BELOW HAVE CLEARLY NOTED THAT THE RENT HAVE BEEN DULY PAID IN THE TIME. HENCE, THE SUBMISSION OF THE ASSESSEE IS TOTALLY SELF-SERVING STATEMENT WITHOUT ANY BASIS. IN THESE CIRCUMSTANCES WE DO NOT FIND ANY INFIRMITY IN THE ORDERS OF AUTHORITIE S BELOW. 9. ACCORDINGLY, WE UPHOLD THE SAME. 10. IN THE RESULT, THIS APPEAL BY THE ASSESSEE STAN DS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH MARCH, 2019. SD/- SD/- (RAVISH SOOD) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 13. 03.2019 THIRUMALESH , SR. PS 10 ITA NO. 4807/MUM/2017 ICFS PVT. LTD. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI