HEMANT GUPTA, Jaipur V. JCIT, Jaipur

ITA 500/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5144 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 06-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Opportunity of being heard; Reasonable cause
• Section: 273B

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH ,-MH- TSU U;KF;D LNL; DS LE{K BEFORE: SHRI A.D. JAIN, JUDICIAL MEMBER VK;DJ VIHY LA- @ ITA NO. 500/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2011-12 HEMANT GUPTA, B-16, SHREEJI NAGAR, DURGAPURA, JAIPUR. CUKE VS. JOINT COMMISSIONER OF INCOME TAX (TDS), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/TAN NO.: JPRH 02327 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MANISH AGARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 05/09/2016 MN?KKS'K .KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 06/09/2016 VKNS'K@ ORDER PER: A.D. JAIN, J.M. THIS IS ASSESSEES APPEAL FOR A.Y. 2011-12 FILED AG AINST THE ORDER DATED 23/02/2016 PASSED BY THE LD. CIT(A)-III, JAIPU R. THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN THE APP EAL. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN UPHOLDING THE PENALTY OF RS. 1,14,600/- IMPOSED BY LD. JCIT (TDS), WITHOUT CONSIDERING THE SUBMISSIONS MADE AND EVIDENCES ITA 500/JP/2016_ HEMANT GUPTA VS. JCIT (TDS) 2 ADDUCED, HENCE THE PENALTY SO LEVIED DESERVES TO BE DELETED. 1.1 THAT THE LD. CIT(A) HAS FURTHER ERRED IS NOT CONS IDERING THE REASONABLE CAUSE IN DELAY IN FILING THE TDS RETU RNS, THUS THE PENALTY LEVIED U/S 272A(2)(K) DESERVES TO BE DELETED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, LD. CIT(A) ERRED IN CONFIRMING THE PENALTY AT RS. 1,14,600/- IGNORING THE FACT THAT CALCULATION OF PE NALTY WAS FACTUALLY INCORRECT, CORRECT AMOUNT OF PENALTY, IF ANY HAS TO BE IMPOSED COMES TO RS. 28,050/-. THUS, APPELLANT PRAYS PENALTY MAY PLEASE BE RESTRICTED TO RS. 28,050/-. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE HAS STATED AT THE BAR THAT GROUND NOS. 1 AND 1.1 ARE NOT PRESSED. REJ ECTED AS NOT PRESSED. 3. APROPOS GROUND NO. 2, VIDE ORDER DATED 29/04/201 3, THE LD ASSESSING OFFICER WORKED OUT THE ASSESSEES DEFAULT IN FILING QUARTERLY RETURNS AS FOLLOWS:- FORM NO. QUARTER DELAY OF FILING OF E-TDS RETURN TDS AMOUNT TOTAL PENALTY AMOUNT 26Q 1 ST 442 DAYS RS. 40000/- RS. 40000/- 2 ND 350 DAYS RS. 40000/- RS. 35000/- 3 RD 258 DAYS RS. 40000/- RS. 25800/- 4 TH 138 DAYS RS. 40000/- RS. 13800/- 1188 DAYS RS. 114600/- 4. AS PER THE LD COUNSEL FOR THE ASSESSEE, THE CORR ECT CALCULATION IS AS UNDER:- ITA 500/JP/2016_ HEMANT GUPTA VS. JCIT (TDS) 3 QUARTER TDS AMOUNT TDS DEPOSITED DELAY IN FILING MAXIMUM PENALTY (LEAST OF RS. 100/- PER DAY AND TDS DEDUCTE D ) I 400/- 400/- 442/- DAYS 400/- II 250/- 250/- 350 DAYS 250/- III 13,600/- 13,600/- 258 DAYS 13,600/- IV 25,750/- 25,750/- 138 DAYS 13,800/- 5. THE LD. COUNSEL FOR THE ASSESSEE STATES THAT THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE ABOVE CORRECT CALCULAT ION. 6. ON THE OTHER HAND, THE LD. DR HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. 7. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE LD CIT(A) HAS CONFIRMED THE PENALTY BY OBSERVING AS FOLLOWS:- 4.3 THE PENALTY HAS BEEN IMPOSED BY THE AO U/S 272 A(2)(K) OF THE ACT. IN FY 2010-11, FILING OF E-TDS RETURN QUAR TERLY WAS INTRODUCED AND THERE WAS A CHANGE FROM FILING ANNUAL RETURNS TO QUARTERLY RETURNS. IN THE CASE OF THE AP PELLANT THE NUMBER OF DELAY IS OF 1188 DAYS. THE VERY FACT THAT IN THE CASE OF THE APPELLANT, THE DELAY IN NOT OF ONE OR T WO DAYS BUT HAS BEEN OF 1188 DAYS IN FY 2010-11, DOES REVEA L A WILLFUL ATTEMPT ON PART OF THE APPELLANT FOR NON-COM PLIANCE OF STATUTORY PROVISION. WHAT IS TO BE SEEN IS THAT WHETHER THERE WAS A REASONABLE CAUSE OR JUSTIFICATION FOR NO T FILING ITA 500/JP/2016_ HEMANT GUPTA VS. JCIT (TDS) 4 THE REQUISITE RETURN WITHIN THE PRESCRIBED TIME LIMI T. THE INTENTION OF THE LEGISLATURE BEHIND INTRODUCTION OF QUARTERLY FILING OF TDS RETURN IS TO ENSURE COMPLIANCE TO TAX PROVISIONS AND TO ENSURE TAX COLLECTION, WHICH EARLIER IN MOST CASES USED TO GO UNNOTICED, REFERENCE IS MADE TO THE PROV ISIONS OF SECTION 272A(2)(K) WHICH READS AS UNDER: (2) IF ANY PERSON FAILS- (K) TO DELIVER OR CAUSE TO BE DELIVERED A COPY OF THE STATEMENT WITHIN THE TIME SPECIFIED IN SUB-SECTION (3) OF SEC TION 200 OR THE PROVISO TO SUB-SECTION (3) OF SECTION 206C; HE SHALL PAY, BE WAY OF PENALTY, A SUM [OF ONE HUN DRED RUPEES] FOR EVERY DAY DURING WITH THE FAILURE CONTINUES: [PROVIDED THAT THE AMOUNT OF PENALTY FOR FAILURE I N RELATION TO [A DECLARATION MENTIONED IN SECTION 197A, A CERTIFICAT E AS REQUIRED BY SECTION 203 AND] RETURNS UNDER SECTIONS 206 AND 206C [AND STATEMENT UNDER SUB-SECTION (3) OF SECTION 200 OR T HE PROVISO TO SUB-SECTION (3) OF SECTION 206C] SHALL NOT EXCEED T HE AMOUNT OF TAX DEDUCTIBLE OR COLLECTIBLE, AS THE CASE MAY BE:] [PROVIDED FURTHER THAT NO PENALTY SHALL BE LEVIED UNDER THIS SECTION FOR THE FAILURE REFERRED TO IN CLAUSE (K), IF SUCH FAILURE RELATES TO A STATEMENT REFERRED TO IN SUB- SECTION (3) OF SECTION 200 OR THE PROVISO TO SUB-SECTION 930 OF SECTION 20 6C WHICH IS TO BE DELIVERED OR CAUSED TO BE DELIVERED FOR TAX DEDU CTED AT SOURCE OR TAX COLLECTED AT SOURCE, AS THE CASE MAY BE, ON OR AFTER THE 1 ST DAY OF JULY, 2012] ITA 500/JP/2016_ HEMANT GUPTA VS. JCIT (TDS) 5 IT MAY BE NOTED THAT IN THE PROVISIONS OF SECTION 272A(2)(K) OF IT ACT THE WORD SHALL' IS MENTIONED INDICATING T HAT IF THERE IS VIOLATION OF THESE PROVISIONS, THE IMPOSIT ION OF PENALTY IS MANDATORY. HOWEVER THE ONLY EXCEPTION IS THE PROVISIONS OF SECTION 273B WHICH PROVIDES THAT THE P ENALTY MAY NOT BE IMPOSED ON THE PERSON OR THE ASSESSEE FO R SUCH FAILURE IF IT IS PROVED THAT THERE WAS REASONABLE CA USE FOR SUCH FAILURE. THE REASON FOR DELAY IN FILING OF APPE AL AS STATED BY THE APPELLANT IS THAT THE ASSESSEE DID NOT RECEIVED ANY NOTICE FROM THE DEPARTMENT THEREFORE COULD NOT ATTEND THE PROCEEDINGS. THE PENALTY ORDER HAS BEEN PASSED WITH OUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE HENCE THE PENALTY ORDER HAS BEEN PASSED EX-PARTE. HOWEVER THE REASON STATED BY THE APPELLANT CANNOT BE GRANTED AS THE RESPONSIBILITY TO FILE THE TDS RETURN IN TIME WAS OF THE APPELLANT. THE ABOVE FACTS INDICATES THAT THE APPELLANT WAS NOT HAVING ANY GENUINE GROUND OR THE COMPELLING CIRCUMSTANCES FOR NOT FILING OF TDS RETURN IN TIME AND IN THESE CIRCUMSTAN CES IMPOSITION OF PENALTY U/S 272A(2)(K) OF IT ACT WAS JU STIFIED THE FACT THAT IN THE ABSENCE OF ANY REASONABLE CAUSE , PENALTY U/S 272A(2)(K) CAN BE IMPOSED IS SUPPORTED BY THE FOLLOWING DECISIONS: 1. SHALIMAR TRANSPORT CORPORATION VS. ITO (2000) 11 1 TAXMAN 84 (CAL) 2. SHAH TRADERS VS. DCIT, 56 ITD 33 (1996) ITA 500/JP/2016_ HEMANT GUPTA VS. JCIT (TDS) 6 3. VEENA THEATER VS. CIT, 322 ITR 260. 4. ACME CONSTRUCTION COMPANY VS. DCIT, 68 ITD 1(1999) THE STATUTORY PROVISION WAS INTRODUCED TO ENSURE THA T EMPLOYERS / DEDUCTORS, DO DEDUCT TAXES AND SUBMIT I T TO THE GOVT, ACCOUNT WITHIN TIME SO THAT THE DEDUCTEE CAN T AKE CREDIT FOR THE TAXES IT HAS ALREADY PAID. THE GROUN DS RAISED BY THE APPELLANT DO NOT APPEAR TO BE REASONABLE, HE NCE IS DISMISSED. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES DISCUSS ED ABOVE THE PENALTY IMPOSED BY THE AO AMOUNTING TO RS . 114600/- U/S 272A(2)(K) IS CONFIRMED. 8. ACCORDING TO THE ASSESSEE, THE LD ASSESSING OFFI CER ERRED IN IMPOSING PENALTY WRONGLY AT RS. 1,14,600/-, WHEREAS T HE MAXIMUM PENALTY, IF ANY, AS PER THE CORRECT CALCULATION, CO ULD HAVE BEEN IMPOSED ONLY AT RS. 28,050/-. AS PATENT FROM THE RECORD AND AS ALSO CORRECTLY CONTENDED BEFORE THIS BENCH, THE TOTAL AMOUNT OF TD S DEDUCTED BY THE ASSESSEE DURING ALL THE QUARTERS OF F.Y. 2010-11, R ELEVANT TO THE YEAR UNDER CONSIDERATION, IS RS. 40,000/-, COLLECTIVELY. THIS IS AVAILABLE FROM THE COPY OF FORM NO. 27A FILED BEFORE THE BENCH. AS PER THIS FORM, THE TDS AMOUNT FOR THE 1 ST QUARTER WAS RS. 400/-, FOR THE 2 ND QUARTER, IT WAS RS. 250/-, FOR THE 3 RD QUARTER, IT WAS RS. 13,600/- AND FOR THE 4 TH QUARTER, ITA 500/JP/2016_ HEMANT GUPTA VS. JCIT (TDS) 7 IT WAS RS. 25,750/-. THE AGGREGATE AMOUNT OF TDS WAS, THUS, RS. 40,000/- ONLY. HOWEVER, THE LD ASSESSING OFFICER ERR ONEOUSLY CONSIDERED THIS AMOUNT AT RS. 1,60,000/-, I.E., RS. 40,000/- F OR EACH QUARTER AND WRONGLY LEVIED THE PENALTY OF RS. 1,14,600/-. THE SA ME, ON THE OTHER HAND, OUGHT TO HAVE BEEN RESTRICTED AT RS. 28,050/- . 9. THE LD CIT(A) HAS ERRED IN NOT TAKING INTO CONSID ERATION THE ABOVE FACTS AND CALCULATION, THOUGH, THE SAME WERE CATEGOR ICALLY STATED BEFORE HIM. 10. IN VIEW OF THE ABOVE, FINDING THE GRIEVANCE OF T HE ASSESSEE BY WAY OF GROUND NO. 2 TO BE JUSTIFIED, THE SAME IS ACCEPT ED. THE PENALTY LEVIED IS SCALED DOWN FROM RS. 1,14,600/- TO RS. 28,050/-. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/09/2016. SD/- , - MH TSU (A.D. JAIN) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 06 TH SEPTEMBER, 2016 * RANJAN VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI HEMANT GUPTA, JAIPUR. ITA 500/JP/2016_ HEMANT GUPTA VS. JCIT (TDS) 8 2. IZR;FKHZ@ THE RESPONDENT- THE JCIT (TDS), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 500/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR