ARGUS GOLDEN TRADES INDIA LTD., Jaipur V. JCIT, Jaipur

ITA 522/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2088 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 13-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA JHA J CIT DHK
• Keywords: Reasonable cause; Non compliance
• Section: 273B; 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO.522/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 M/S ARGUS GOLDEN TRADES INDIA LTD., 36-C, GOVIND PURI, BEHIND CHAMBAL POWER HOUSE, RAM NAGAR SODALA, JAIPUR CUKE VS. THE JCIT, TDS, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAHCA8927A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRHDH VKSJ LS@ ASSESSEE BY : SHRI RAJEEV SOGANI (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA JHA (J CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/05/2017 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT: 24/05/2017. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A) - III, JAIPUR DATED 19.02.2016 FOR A.Y. 2011-12 WHERE IN THE ASSESSEE HAS CHALLENGED THE LEVY PENALTY OF RS. 1,02,400/- U/S 272A(2)(K) OF THE ACT. 2. THE LD. AO IMPOSED PENALTY U/S 272A(2)(K) OF T HE ACT HOLDING THAT THE ASSESSEE COMPANY HAS DELAYED IN FILING QUARTERLY E-TDS RETURN WITHIN THE STIPULATED TIME FRAME AS PER DETAILS BELOW: FORM NO. QUARTER DELAY IN FILING OF E-TDS RETURN PENALTY AMOUNT (RS) ITA NO. 522/JP/16 M/S ARGUS GOLDEN TRADE INDIA LTD. VS. JCIT TDS, JAIPUR 2 26Q 1 ST 401 DAYS 40,100 2 ND 309 DAYS 30,900 3 RD 217 DAYS 21,700 4TH 97 DAYS 9,700 TOTAL 1024 1,02,400 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT (A) WHO UPHELD THE LEVY OF PENALTY AND OBSE RVED THAT THE DELAY WAS NOT OF ONE OR TWO DAYS BUT THERE WAS DELAY OF 1024 DAYS, HENCE, IT REVEALS A WILFULL ATTEMPT FOR NON COMPLIANCE OF STATUTORY PRO VISIONS. IN THE PROVISIONS OF SECTION 272A(2)(K), THE WORD SHALL IS MENTIONED I NDICATING THAT IF THERE IS VIOLATION OF THESE PROVISIONS, THE IMPOSITION OF PE NALTY IS MANDATORY. AS PER SECTION 273B, PENALTY MAY NOT BE IMPOSED IF THE ASS ESSEE PROVES THAT THERE WAS A REASONABLE CAUSE FOR SUCH FAILURE. THE ASSESS EE WAS NOT HAVING ANY GENUINE GROUND OR THE COMPELLING CIRCUMSTANCES FOR NOT FILING OF TDS RETURN IN TIME. THE STATUTORY PROVISIONS WERE INTRODUCED SO T HAT THE DEDUCTEE CAN TAKE CREDIT FOR THE TAXES IT HAS ALREADY PAID. AGAINST T HE ORDER OF LD CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 4. DURING THE COURSE OF HEARING, THE LD. AR SUBMITTED THAT LD. CIT(A) AT PAGE 3 & 4 OF HER ORDER HAS CORRECTLY HELD THAT IN FY 2010-11, THERE WAS A CHANGE IN FILING OF E-TDS RETURN. IN THIS REGARD, I T IS SUBMITTED THAT CBDT VIDE NOTIFICATION DATED 31.5.2010 HAD NOTIFIED CHANGES I N DATA STRUCTURE AND VALIDATIONS FOR FILING E-TDS STATEMENT FOR FY 2 010-11. OUT OF MANY CHANGES, ONE OF THE CHANGE WAS THAT 100% VALID PANS WERE TO BE MENTIONED IN THE TDS RETURN BEING FORM 26Q. HENCE, DUE TO CHA NGE IN LAW, THE ASSESSEE WAS COMPELLED TO ARRANGE 100% PANS OF THE DEDUCTEES. THE TASK BECAME MORE DIFFICULT FOR THE ASSESSEE SINCE IT WAS 2 ND YEAR OF HIS INCORPORATION AND THERE WERE A LARGE NO OF DEDUCTEE S, FEW BEING COMMON IN EVERY QUARTER. ITA NO. 522/JP/16 M/S ARGUS GOLDEN TRADE INDIA LTD. VS. JCIT TDS, JAIPUR 3 4.1 IT WAS FURTHER SUBMITTED THAT THERE WERE LARGE NUMBER OF SMALL DEDUCTEES TO WHOM PAYMENTS WERE MADE BY THE COMPANY AND THESE WERE SCATTERED THROUGHOUT THE COUNTRY. IT TOOK GREAT EFF ORTS IN COLLECTING PAN OF ALL THE DEDUCTEES AND THE LD. CIT(A) HAS NOT DISPUTED T HE NUMBER OF THE DEDUCTEES AS PER DETAILS BELOW: QUARTER NUMBER OF DEDUCTEES Q1 1438 Q2 1440 Q3 1329 Q4 653 4.2 THE LD. CIT(A) HAS ERRED IN OBSERVING THAT DEL AY OF 1024 DAYS DOES REVEAL A WILLFUL ATTEMPT ON PART OF APPELLANT FOR N ON COMPLIANCE OF THE SAID PROVISIONS. IN THIS REGARD, IT IS SUBMITTED THAT VA RIOUS BENCHES OF HONBLE ITAT HAVE ACCEPTED DELAY OF EQUIVALENT DAYS OR MORE AS A REASONABLE CAUSE AND PENALTY HAS BEEN DELETED. DETAILS OF THE SAME ARE A S UNDER: S.NO CASE A.Y. NO. OF DAYS OF DELAY IN FURNISHING TDS RETURN 1. BRANCH MANAGER, STATE BANK OF INDIA V. ACIT [2014] 41 TAXMANN.COM 268 (CUTTACK - TRIB.) 2009-10 2781 DAYS 2. COLLECTOR LAND ACQUISITION VS ACIT [2012] 21 TAXMANN.COM 22 (CHD.) 2007-08 TO 2010-11 6116 DAYS 4.3 THE LD. AO AT PAGE 5 OF HIS ORDER OBSERVED THAT THE AMOUNT DEDUCTED BY DEDUCTOR CAN POSSIBLY BE USED FOR HIS COMMERCIAL / INDIVIDUAL PURPOSES. FURTHER, LD. CIT(A) ALSO HELD THAT ASSESSEE WILLFUL LY DID NOT SUBMIT THE TDS RETURN WITHIN THE STIPULATED TIME. HOWEVER, LD. CIT (A) FAILED TO BRING ON RECORD ANY EVIDENCE TO SUPPORT HER FINDING AND ESTABLISH T HAT MENS REA WAS INVOLVED ITA NO. 522/JP/16 M/S ARGUS GOLDEN TRADE INDIA LTD. VS. JCIT TDS, JAIPUR 4 IN NON SUBMISSION OF THE SAME. FROM THE TABLE AS ST ATED BELOW, IT IS EVIDENT THAT ALTHOUGH THERE WAS DELAY IN FILING THE E-TDS R ETURNS BUT THE TDS WAS DEDUCTED AT THE RATES PRESCRIBED BY THE INCOME TAX DEPARTMENT AND WAS ALSO DEPOSITED IN THE GOVERNMENT TREASURY WITH THE DELAY OF FEW DAYS BUT WELL BEFORE THE FILING OF TDS RETURNS. THUS, THERE WAS N O LOSS TO DEPARTMENT BECAUSE LATE DEPOSITION OF TDS WAS COMPENSATED BY W AY OF PAYMENT OF INTEREST ON THE SAME, AS PER THE PROVISION OF THE A CT. HENCE, THERE WAS NO MALA FIDE INTENTION INVOLVED. S.NO QUARTER ( IN FORM NO.26Q) AMOUNT OF TDS DEDUCTION DUE DATE OF TDS DEPOSITION DATE ON WHICH TDS DEPOSITED 1 APRIL - JUNE 1,64,651. - 07 TH OF THE FOLLOWING MONTH 26.07.2010 07.08.2010 2 JULY - SEP 4,28,232. - 07 TH OF THE FOLLOWING MONTH 07.10.2010 16.11.2010 3 OCT - DEC 17,497. - 07 TH OF THE FOLLOWING MONTH 10.01.2011 4 JAN - MARCH 5,550. - 07 TH OF THE FOLLOWING MONTH 25.05.2011 4.4 IT WAS FURTHER SUBMITTED LD. CIT(A) ERRED IN OB SERVING THAT THE ASSESSEE WAS NOT HAVING ANY GENUINE GROUND OR THE COMPELLING CIRCUMSTANCES FOR NOT FILING OF TDS RETURN IN TIME. PRACTICALLY IT IS A D IFFICULT TASK TO ARRANGE THE PAN OF SO MANY DEDUCTEES WHO ARE SCATTERED THROUGHOUT T HE COUNTY. THEREFORE THE SAME SHOULD HAVE BEEN ACCEPTED AS REASONABLE CA USE. IN THIS REGARD, THE ATTENTION IS DRAWN TOWARDS THE DECISION OF HONBLE ITAT JAIPUR BENCH IN THE CASE OF SHRI GANESHAM ELECTRONICS VS. ACIT (TDS) IT A NO. 181/JP/2014 WHEREIN NON AVAILABILITY OF PAN WAS ACKNOWLEDGED AN D TREATED AS REASONABLE CAUSE. THE RELEVANT EXTRACT IS SET OUT HERE FOR THE SAKE CONVENIENCE. ..2.1 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. IT IS OBSERVED THAT THE ISSUE IN QUESTION IS SQUARELY ITA NO. 522/JP/16 M/S ARGUS GOLDEN TRADE INDIA LTD. VS. JCIT TDS, JAIPUR 5 COVERED BY THE DECISION DATED 6-11-2015 OF ITAT JAI PUR (SMC) BENCH IN THE CASE OF M/S. KALER ELECTRICALS (P) LTD. VS. ACI T, CIRCLE- SIKAR (ITA NO. 283/JP/2015 FOR THE ASSESSMENT YEAR 2010-11) WHEREI N IT HAS BEEN OBSERVED AS UNDER:- 3. AFTER HEARING THE LD DR AND CAREFULLY CONSIDER ED HIS SUBMISSION ALONGWITH ORDERS OF THE TAX AUTHORITIES BELOW, I NO TED THAT THE ASSESSEE HAS SUBMITTED AN EXPLANATION BEFORE THE ASSESSING O FFICER WHY THE RETURN FOR THE F.Y. 2009-10 WERE FILED LATE. THE AS SESSEE SUBMITTED THAT THE EMPLOYEE OF THE ASSESSEE LOOKING AFTER TDS COUL D NOT DO THE WORK BECAUSE OF ILL HEALTH AND MENTAL STRESS AND THIS CA ME TO THE KNOWLEDGE OF THE DIRECTOR VERY LATE. THE DIRECTOR WAS BUSY IN THE EXPANSION OF THE BUSINESS AND INSTALLATION OF A NEW PLANT AT PALSANA AND THEREFORE, THERE WAS NO WILLFUL INTENTION NOT TO COMPLY WITH THE PRO VISION. IT WAS ALSO SUBMITTED THAT CITING OF THE PAN WAS MANDATORY VIDE CIRCULAR DATED 12/2/2008 AND THEREFORE, THE GDS RETURN WERE NOT AC CEPTED BY THE COMPUTER. THE PAN WAS RECEIVED VERY LATE IN THE CAS E OF SAI ADVERTISING AGENCY. THE FACTS WERE NOT DENIED BY THE LD DR, IN MY OPINION, THE DEFAULT WAS MERE A TECHNICAL BREACH. IT IS A CASE O F ASSESSEE THAT HE HAS DULY DEDUCTED THE TAX AND PAID THE TAX. THE PRO VISION OF SECTION 273B OF THE ACT MANDATES THAT IF THE ASSESSEE WAS P REVENTED BY THE REASONABLE CAUSE, THEREFORE, NO PENALTY SHOULD BE L EVIED. THIS PROVISION INCLUDES WITHIN ITS FAULT SECTION 272A(2), I, THERE FORE, SET ASIDE THE ORDER OF THE LD CIT(A) AND DELETE THE PENALTY IMPOS ED. MY AFORESAID VIEW IS DULY SUPPORTED BY THE DECISION OF HONBLE R AJASTHAN HIGH COURT IN THE CASE OF CIT VS. SUPERINTENDING ENGINEER (200 3) 131 TAXMAN 596 (RAJ.) 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 2.2 RESPECTFULLY FOLLOWING THE DECISION OF ITAT JAI PUR BENCH (SUPRA),THE APPEAL OF THE ASSESSEE IS ALLOWED... 4.5 RELIANCE IS FURTHER PLACED ON THE FOLLOWING JUD GMENTS WHEREIN IT HAS BEEN HELD THAT NON-AVAILABILITY OF PAN OF PAYEE WAS A REASONABLE CAUSE FOR BELATED FILING OF TDS RETURN. RELEVANT EXTRACT HAS BEEN SET OUT HERE FOR THE SAKE OF CONVENIENCE. ITA NO. 522/JP/16 M/S ARGUS GOLDEN TRADE INDIA LTD. VS. JCIT TDS, JAIPUR 6 A) COLLECTOR LAND ACQUISITION V. ACIT (2012) TAXMA NN.COM 22(CHD.): HOWEVER, IT IS ALSO EXPLAINED THAT AS THE PAN NUMBE RS WERE NOT PROVIDED BY THE DUDUCTEES, SO THE E-TDS RETURNS COULD NOT BE FI LED IN TIME. IN OUR VIEW, THE ASSESSEE HAS SATISFACTORILY EXPLAINED THE REASO NS REGARDING NON FILING OF TDS RETURNS IN TIME, THEREFORE, NO PENALTY SHOULD B E LEVIED IN THESE CASES. EVEN OTHERWISE ALSO, THE ASSESSEE DID NOT DERIVE AN Y BENEFIT WHATSOEVER BY NOT FILING THE E-TDS RETURNS IN TIME, AS THE AMOUNT OF TDS WAS DULY DEPOSITED IN THE GOVERNMENT TREASURY WITHIN PRESCRIBED TIME. SUCH DELAY HAS NOT CAUSED ANY LOSS TO THE REVENUE/INCOME TAX DEPARTMENT B) CIT BRANCH MANAGER (TDS), UCO BANK VS. ACIT [201 3] 35 TAXMANN.COM 45 (CUTTACK - TRIB.): HEAD NOTE - SECTION 272A OF THE INCOME-TAX ACT, 19 61 - PENALTY - FOR FAILURE TO ANSWER QUESTION, SIGN STATEMENTS, FURNISH RETURN S OR STATEMENTS, ETC. [REASONABLE CAUSE] - ASSESSMENT YEAR 2009-10 - ASSE SSEE-BANK FAILED TO FILE RETURN OF TAX DEDUCTED AT SOURCE WITHIN SPECIFIED T IME - IT WAS EXPLAINED THAT DUE TO SHORTAGE OF STAFF AND HEAVY PRESSURE OF WORK THEN MANAGERS WERE UNABLE TO FILE RETURN WITHIN DUE DATE - IT WAS ALSO EXPLAINED THAT DUE TO LACK OF INFORMATION OF PAN OF DEDUCTEES, FILING OF RETURN W AS DELAYED - ASSISTANT COMMISSIONER, HOWEVER, REJECTED EXPLANATION OF ASSE SSEE AND IMPOSED PENALTY UNDER SECTION 272A(2)(K) - WHETHER SINCE TH ERE WAS NEITHER ANY WILFUL NEGLIGENCE NOR ANY MALA FIDE ON PART OF ASSESSEES I N MATTER OF COMPLIANCE AND DELAY WAS DUE TO REASONABLE CAUSE, IMPUGNED ORD ER OF PENALTY WAS TO BE CANCELLED - HELD, YES [PARAS 9 & 10] [IN FAVOUR OF ASSESSEE]. C) BRANCH MANAGER, STATE BANK OF INDIA V. ACIT [201 4] 41 TAXMANN.COM 268 (CUTTACK - TRIB.): HEAD NOTE ..SECTION 272A OF THE INCOME-TAX ACT, 19 61 - PENALTY - FOR FAILURE TO ANSWER QUESTION, SIGN STATEMENTS, ETC. [DELAY IN FILING E-TDS RETURN] - ASSESSMENT YEAR 2009-10 - THERE WAS A DELAY OF 848 DAYS IN FIRST QUARTER, 756 DAYS IN SECOND QUARTER, 664 DAYS IN THIRD QUART ER AND 513 DAYS IN FOURTH QUARTER OF FINANCIAL YEAR 2008-09 ON PART OF ASSESS EE-BANK IN FILING E-TDS RETURN - ASSESSING OFFICER IMPOSED PENALTY UPON ASS ESSEE - ASSESSEE EXPLAINED THAT SECTION 272A(2)(K) BEING A NEW PROVI SION, BRANCH MANAGER WAS NOT KNOWN TO ITS TECHNICAL FORMALITIES; THAT THEREA FTER, BANK ENGAGED AN ADVOCATE FOR PREPARING STATEMENT, WHO FOUND DIFFICU LTY IN COMPLETING DETAILED ITA NO. 522/JP/16 M/S ARGUS GOLDEN TRADE INDIA LTD. VS. JCIT TDS, JAIPUR 7 STATEMENT IN ABSENCE OF PAN OF ALL CUSTOMERS AND TH AT, THEREFORE, THERE WAS DELAY IN FILING E-TDS RETURN - WHETHER ASSESSEE HAD REASONABLE CAUSE FOR NON- FILING OF RETURN IN TIME AND, THEREFORE, PENALTY IM POSED BY ASSESSING OFFICER WAS TO BE DELETED - HELD, YES [IN FAVOUR OF ASSESSEE].. 4.6 FURTHER, ATTENTION IS DRAWN TO PAGE 5 OF ORDER OF LD. AO, WHEREIN IT HAS BEEN HELD AS UNDER: IT IS IMPORTANT TO NOTE THAT THE DELAY IN FILING TH E TDS RETURN BY THE DEDUCTOR, DOES NOT PROVIDE THE TDS CREDIT WITH THE ACCOUNT OF DEDUCTEE AND DELAYS THE REFUND PROCESS TOO. THE DED UCTEE BEING UNAWARE OF THE DELAY IN THE RETURN FILING EXPECTS T HE CREDIT OF THE SAME BY THE DEPARTMENT ON THE SPECIFIED DATE. AS THIS CA NNOT BE DONE, DUE TO THE NEGLIGENCE/INTENTIONAL MISCONDUCT OF THE DED UCTOR, THE DEDUCTEE IS STRESSED. BESIDE, THE PAPER WORK OF THE DEPARTME NT INCREASES IN VERIFYING THE DEMAND FOR PROCESSING THE REFUND AND MANPOWER IS ALSO EMPLOYED FOR THE WORK WHICH WAS REALLY NOT REQUIRED IN THIS REGARD, IT IS SUBMITTED THAT THE DELAY IN F ILING TDS RETURN IS NOT BECAUSE OF FAULT OF ASSESSEE BUT BECAUSE OF DEDUCTEES THEMS ELVES. THE DEDUCTEES WERE RELUCTANT TO PROVIDE THEIR PAN TO THE ASSESSEE WHICH RESULTED INTO NON FILING TDS RETURN IN THE STIPULATED TIME FRAME. THE REFORE, THE CONTENTION OF LD. AO THAT THE DEDUCTEES BEING UNAWARE OF DELAY IN RET URN FILING, EXPECT THE CREDIT OF THE SAME BY THE DEPARTMENT ON THE SPECIFI ED DATE DOES NOT HOLD GOOD. THE DEDUCTEES WERE WELL AWARE OF THE FACT THA T UNTIL PAN IS PROVIDED TO THE ASSESSEE THE TDS RETURN CANNOT BE FILED BY THE ASSESSEE AND CONSEQUENTLY TDS CREDIT CANNOT BE CLAIMED. THE CONTENTION OF AO THAT THE DEDUCTEES ARE STRESSE D HAS NO MERIT BECAUSE THEY THEMSELVES WERE PREVENTING THE ASSESSEE TO FIL E THE TDS RETURN IN TIME. NEEDLESS TO MENTION THAT INSTEAD OF DEDUCTEES BEING STRESSED THE LD. AO SHOULD MENTION THE DEDUCTOR WAS STRESSED BECAUSE OF THAT REPETITIVE EFFORTS MADE BY HIM TO COLLECT THE PAN FROM THE DEDUCTEE. ITA NO. 522/JP/16 M/S ARGUS GOLDEN TRADE INDIA LTD. VS. JCIT TDS, JAIPUR 8 4.7 THE LD. AO AS WELL AS LD. CIT(A) MISPLACED THEI R RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS, BECAUSE THE FACT S OF THE CASES RELIED UPON AND THE FACTS OF THE ASSESSEES CASE ARE DIFFERENT AS SUBMITTED BELOW: S.NO FACTS OF SHAH TRADERS V. DCIT(PATNA BENCH) [1996] 56 ITD 33 (PAT.) CASE OF ASSESSEE 1. PENALTY U/S 272A(2)(C) PENALTY U/S 272A(2)(K) 2. IN THE CASE RETURN WAS NOT FURNISHED EVEN AFTER ISSUING SHOW CAUSE NOTICE. IN THE CASE RETURN WAS FURNISHED BEFORE ISSUING SHOW CAUSE NOTICE. 3. THE ASSESSEE FURTHER DID NOT FILE RETURN TILL THE DATE OF PENALTY ORDER. THE ASSESSEE FILED ITS TDS RETURN WELL BEFORE THE PENALTY ORDER DATED 29.04.2013. 4. NO REASONABLE CAUSE OF DELAY WAS PUT FORWARD TO THE CIT(A) BY THE ASSESSEE. GENUINE REASONS AND REASONABLE CAUSE WAS PUT FORWARD BEFORE CIT (A). S.NO. ACME CONSUCTION CO. V. DCIT( ITAT PATNA BENCH) [1999] 68 ITD 1 (PAT.) CASE OF ASSESSEE 1. PENALTY U/S 272A(2)(C) PENALTY U/S 272A(2)(K) 2. IN THE CASE MENTIONED ABOVE TWO MAJOR ISSUES WERE ADDRESSED: FIRSTLY THE ASSESSEE HAD NOT DEDUCTED TDS U.S 194 C SECONDLY TDS RETURN WAS NOT FILED EVEN AFTER THE ISSUE OF SHOW CAUSE NOTICE ON THE GROUNDS THAT SINCE T.D.IS NOT DEDUCTED THERE IS NO REQUIREMENT OF FURNISHING TDS RETURN. IN THE CASE OF ASSESSEE THE TAX WAS DEDUCTED AND DEPOSITED WITH THE GOVERNMENT WELL BEFORE SHOW CAUSE NOTICE. THE STATEMENT OF RETURN UNDER IT, ACT WAS FURNISHED WELL BEFORE THE ISSUANCE OF SHOW CAUSE NOTICE. 3. THERE WAS NO REASONABLE CAUSE OF THE FAILURE. THERE WAS REASONABLE CAUSE OF THE FAILURE. 4. THE ASSESSEE FAILED TO OBTAIN THE EXEMPTION CERTIFICATE FROM THE CONCERNED AO FOR NON DEDUCTION OF TDS OF THE DEDUCTEE AND JUST ON THE THE ASSESSEE DEDUCTED TDS AND ALSO DEPOSITED THE SAME WITH THE GOVERNMENT. ITA NO. 522/JP/16 M/S ARGUS GOLDEN TRADE INDIA LTD. VS. JCIT TDS, JAIPUR 9 BASIS OF THE LETTER PROVIDED BY THE DEDUCTEE DID NOT DEDUCT THE TDS. S.NO. VEENA THEATER V.CIT(HIGH COURT OF PATNA) [2010] 322 ITR 260 (PAT.) CASE OF ASSESSEE 1. PENALTY U/S 272A(2)(G) PENALTY U/S 272A(2)(K) 2. THE REASONS PROVIDED BY THE ASSESSEE FOR NON FILING THE RETURN WITHIN TIME WAS THAT THERE WAS A CRIMINAL SUIT FILED AGAINST THE MANAGING PARTNER AND THE MANAGING PARTNER WAS GRANTED ANTICIPATORY BAIL. THUS, THE SAME WAS NOT CONSIDERED A REASONABLE CAUSE. IN THE CASE OF ASSESSEE THE REASONS PUT FORWARD BY THE ASSESSEE HAS DIRECT NEXUS WITH THE LAW SINCE WITHOUT OBTAINING PAN RETURN UNDER THE LAW CANNOT BE FILED. 5. THE DR IS HEARD WHO HAS VEHEMENTLY ARGUED THE MATT ER AND SUBMITTED THAT THE ORDER OF THE ASSESSING OFFICER LEVYING PEN ALTY U/S 272A(2)(K) OF THE ACT IS CORRECT AND THE LD CIT(A) IS JUSTIFIED IN CO NFIRMING THE SAME. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FIRSTLY, IT IS NOTED THAT THE PENALTY HA S BEEN LEVIED U/S 272A(2)(K) OF THE ACT WHICH TALKS ABOUT THE FAILURE TO DELIVER A COPY OF THE STATEMENT WITHIN THE TIME SPECIFIED IN SECTION 200(3) OR PROV ISO TO SECTION 206C (3) OF THE ACT. IN THE INSTANT CASE, THERE IS NO SUCH FAC TUAL SITUATION BEFORE US RATHER THERE IS A DELAY IN FILING OF QUARTERLY E-TDS RETUR NS WHICH IS COVERED UNDER THE PROVISIONS OF SECTION 272A(2)(C) OF THE ACT. HENCE, ON THIS GROUND ITSELF, WHERE THE ASSESSING OFFICER IS NOT CLEAR ABOUT BASI S OF THE CHARGE, THE LEVY OF PENALTY CANNOT BE SUSTAINED. 7. ON MERITS, IT IS NOTED THAT DURING THE FINANCIAL YE AR 2010-11 WHICH IS UNDER CONSIDERATION BEFORE US, THERE WAS A CHANGE W HICH WAS BROUGHT ABOUT ITA NO. 522/JP/16 M/S ARGUS GOLDEN TRADE INDIA LTD. VS. JCIT TDS, JAIPUR 10 IN FILING OF E-TDS RETURNS WHEREIN THERE WAS A NECE SSITY TO MENTION 100% VALID PERMANENT ACCOUNT NUMBERS OF THE PAYEE TO WHO M THE PAYMENT HAS BEEN MADE AND TDS DONE IN SUCH PAYMENT IN THE E-TDS RETURN AND THEREAFTER ONLY THE E-TDS RETURN CAN BE VALIDATED AND UPLOADED IN THE IT SYSTEM. THE SAME HAS BEEN THE POSITION OF THE CBDT VIDE ITS NOT IFICATION DATED 31.5.2010. THE ASSESSEE HAS SUBMITTED THAT SINCE THERE WERE LA RGE NUMBER OF DEDUCTEES SCATTERED THROUGHOUT THE COUNTRY, A FACT NOT DISPUT ED BY THE REVENUE, IT TOOK THEM SOME TIME TO COLLECT THE PANS OF THESE DEDUCTE ES AND THEREAFTER, IT WAS ABLE TO UPLOAD THE E-TDS RETURNS IN THE IT SYSTEM M AINTAINED BY THE REVENUE. FURTHER, THE TAXES HAVE DEDUCTED AND DEPO SITED AT THE PRESCRIBED RATE WITH DELAY OF FEW DAYS. HENCE, THERE IS NO LO SS TO THE REVENUE WHICH IS CAUSED DUE TO THE DELAY IN FILING OF THE E-TDS RETU RNS WHICH IS TOTALLY UNINTENTIONAL. FURTHER, OUR ATTENTION WAS DRAWN TO THE DECISION OF THE COORDINATE BENCHES IN CASE OF COLLECTOR LAND ACQUIS ITION, UCO BANK AND SBI (SUPRA) WHEREIN NON AVAILABILITY OF PAN WAS HELD T O BE A REASONABLE CAUSE FOR DELAY IN FILING OF THE E-TDS RETURN. GIVEN THE PEC ULARITY OF THE FACTS IN THE PRESENT CASE WHERE THERE WAS A CHANGE EFFECTED IN T HE IT SYSTEM FOR MANDATORY REQUIREMENT OF PANS OF ALL DEDUCTEES BEFO RE THE RETURNS CAN BE VALIDATED AND UPLOADED, THE FACT THAT THERE WERE LA RGE NUMBER OF DEDUCTEES SPREAD THROUGHOUT THE COUNTRY AND EFFORTS WERE MADE BY THE ASSESSEE TO OBTAIN THEIR PANS NUMBERS, THE FACT THAT TAXES HAVE BEEN DEDUCTED AND DEPOSITED, HENCE NO LOSS TO THE REVENUE, WE FIND TH AT ASSESSEE HAS A REASONABLE CAUSE FOR DELAYED FILING OF ITS E-TDS RE TURNS IN TERMS OF SECTION 273B AND THE PENALTY UNDER SECTION 272(A)(K) IS HER EBY DELETED. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/05/2017. ITA NO. 522/JP/16 M/S ARGUS GOLDEN TRADE INDIA LTD. VS. JCIT TDS, JAIPUR 11 SD/- SD/- DQY HKKJR FOE FLAG ;KNO (KUL BHARAT) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 24/05/2017 VKNS'K DH IZFRFYFI VXZSF'KR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S ARGUS GOLDEN TRADES INDIA LTD.,JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, JCIT, TDS, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, 6. XKMZ QKBZY@ GUARD FILE (ITA NO.522/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.