RAJASTHAN CRAFT INDUSTRIES, Jaipur V. ITO, Jaipur

ITA 558/JPR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5467 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 14-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• 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 BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NOS. 558/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 200 9-10. M/S. RAJASTHAN CRAFT INDUSTRIES, F-130-132, HEERAWALA INDUSTRIAL AREA, AGRA ROAD, KANOTA, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, TDS-2, JAIPU R. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY S BY : SHRI ROHAN SOGANI (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI AJAY MALIK (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02.02.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 12/02/2016. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THE PRESENT APPEAL FILED BY THE ASSESSEE IS ARISIN G FROM THE ORDER DATED 17.06.2014 PASSED BY THE LEARNED CIT (A)-III, JAIPU R FOR THE A.Y. 2009-10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL :- IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN IMPOSING PENALTY U/S 272B OF INCOME TAX ACT, 1961 AMOUNTING TO RS. 10,000/-. THE ACTION OF THE LD. CIT (A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY QUASHING THE PENALTY OF RS. 10,000/- IMPOSED U/S 272B. 2 ITA NO. 558/JP/2014 A.Y. 2009-10. M/S. RAJASTHAN CRAFT INDUSTRIES VS. ITO TDS 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E WHILE FILING THE RETURN OF TDS FOR THE FINANCIAL YEAR 2008-09 HAS NOT MENTIONED THE PA N OF THE DEDUCTEES IN 8 CASES. AS PER PROVISIONS OF SEC. 139A(5B) OF THE IT ACT, THE DEDUCTOR IS REQUIRED TO MENTION PAN OF THE PERSONS WHOSE TAX IS DEDUCTED, IN ITS TDS RE TURN. THEREFORE, NOTICE UNDER SECTION 272B OF THE IT ACT, 1961 HAS BEEN ISSUED TO THE ASS ESSEE ON 02.08.2011 ASKING TO SHOW CAUSE AS TO WHY PENALTY UNDER SECTION 272B SHO ULD NOT BE LEVIED ON THE ASSESSEE FOR FAILURE TO MENTION THE PAN OF THE DEDUCTEES. I N RESPONSE, THE ASSESSEE VIDE LETTER DATED 30.08.2011 SUBMITTED AS UNDER :- 5. YOU WILL OBSERVE THAT PAN IS INVALID IN CASE O F 5 PERSONS ONLY OUT OF APPROXIMATELY 150 DEDUCTEES I.E. 3% APPROXIM ATELY IN FORM 26. THE NUMBER INCREASED TO 12 ON ACCOUNT OF REPETI TIVE ERROR OF SOME PERSON. 6. THE ERROR OCCURRED ON ACCOUNT OF OVERSIGHT, WHIL E FILING THE TDS RETURN, WHICH WAS BONAFIDE AND WE DID NOT KNOW OR BELIEVE THE NUMBER TO THE INVALID. 7. THE ABOVE MISTAKE CONSTITUTES A REASONABLE CAUSE IN TERMS OF U/S 273B OF THE INCOME TAX ACT. 8. WE HUMBLE SUBMIT THAT THERE IS NO DELIBERATE DEF IANCE OF LAW OR CONTUMACIOUS OR DISHONEST CONDUCT OR CONSCIO US DISREGARD OF A STATUTORY OBLIGATION WE ARE REGULARLY FILING OUR TDS RETURN WITH CORRECT PAN. THERE IS NO REVENUE LOSS ON ACCOUNT OF WRONG PAN. 9. THE SUPREME COURT IN HINDUSTAN STEEL LTD. VS. ST ATE OF ORISSA (1972) 83 ITR 26 IN THE CONTEXT OF ORISSA SA LES TAX ACT, 1947 HAS HELD THAT PENALTY WILL NOT MERELY BE IMPOS ED BECAUSE IT IS LAWFUL TO DO SO, BUT WILL BE LEVIED ONLY IN CASES W HERE THERE IS DELIBERATE DEFIANCE OF LAW OF CONTUMACIOUS OR DISHO NEST CONDUCT OR CONSCIOUS DISREGARD OF A STATUTORY OBLIGATION AND A LTHOUGH THE STATUTE MAY PRESCRIBE A MINIMUM PENALTY THE AUTHORI TY WOULD BE JUSTIFIED IN REFUSING TO SADDLE THE ASSESSEE WITH P ENALTY WHERE THERE IS TECHNICAL OR VENIAL BREACH OF THE PROVISIO N OF LAW OR WHERE THE BREACH FOLLOWS FROM THE BONAFIDE, HONEST AND GE NUINE BELIEF 3 ITA NO. 558/JP/2014 A.Y. 2009-10. M/S. RAJASTHAN CRAFT INDUSTRIES VS. ITO TDS AND IN THE PREMISES, THE DISCRETION TO EXACT PENALT Y ON THE ASSESSEE MUST BE EXERCISED JUDICIALLY AND ON A CONS IDERATION OF ALL RELEVANT FACTORS. THE AO CONSIDERED THE REPLY SUBMITTED BY THE ASSESS EE BUT THE SAME COULD NOT BE FOUND ACCEPTABLE TO THE AO AS THE ASSESSEE HAS NOT GIVEN ANY COGENT REASON FOR NOT MENTIONING THE PAN IN TDS RETURN. THEREFORE, THE AO LEVIED THE PENALTY U/S 272B OF THE ACT HOLDING THAT DEFAULT STANDS ESTABLISHED. HE, H OWEVER, LEVIED THE MINIMUM PENALTY OF RS. 10,000/-. 3. BEING AGGRIEVED BY THE ORDER OF AO, ASSESSEE CAR RIED THE MATTER BEFORE LD. CIT (A), WHO CONFIRMED THE ORDER OF THE AO, HOLDING THA T MENTIONING OF PAN AS PER PROVISIONS OF SECTION 139A(5B) WAS MANDATORY AND VI OLATION OF SUCH PROVISION ATTRACTS PENALTY U/S 272B OF THE IT ACT. THE LD. CIT (A) ALS O OF THE VIEW THAT THE ONLY EXCEPTION AGAINST SUCH RULE IS THAT THERE SHOULD BE SOME REAS ONABLE CAUSE IN TERMS OF SECTION 273B FOR NOT MENTIONING OF PAN, BUT IN THIS CASE TH E ASSESSEE HAS FAILED TO SHOW ANY COGENT REASON FOR SUCH FAILURE. THEREFORE, HE CONF IRMED THE PENALTY IMPOSED U/S 272B BY THE AO. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4.1. THE LD. A/R FOR THE ASSESSEE SUBMITTED THAT AS PER PRESS RELEASE ISSUED BY THE CBDT (DEPARTMENT OF REVENUE, MINISTRY OF FINANCE) V IDE NO. 402/92/2006-MC (10 OF 2008) DATED 12 TH FEBRUARY, 2008, UPTO 85% OF PAN DATA FURNISHED IN FORM NO. 26Q CAN BE ACCEPTED BY THE DEPARTMENT WITH EFFECT FROM THE QUARTER ENDING 31 ST MARCH, 2008. THE LD. A/R OF THE ASSESSEE VIDE WRITTEN SUBMISSION DATED 02.02.2016 FURNISHED A TABLE SHOWING PERCENTAGE OF PAN NOT PROVIDED IN RESPECT O F FORM NO. 26Q, AS UNDER :- 4 ITA NO. 558/JP/2014 A.Y. 2009-10. M/S. RAJASTHAN CRAFT INDUSTRIES VS. ITO TDS QUARTER TOTAL NUMBER OF DEDUCTEES PAN NOT PROVIDED % OF PAN NOT PROVIDED 1 ST 111 14 12.61% 2 ND 140 20 14.29% 3 RD 118 15 12.71% 4 TH 128 13 10.16% THE LD. A/R THEREFORE SUBMITTED THAT NON MENTIONING OF PAN IN FORM NO. 26Q IS BELOW THE PERMISSIBLE LIMIT OF 15% AS PER PRESS RELEASE O F CBDT MENTIONED ABOVE, THEREFORE, PAN DATA SUBMITTED BY THE ASSESSEE IS ACCEPTABLE. THE LD. A/R ALSO SUBMITTED THAT PROVISIONS OF SECTION 272B ARE SUBJECT TO SECTION 2 73B OF THE ACT, WHICH PROVIDES THAT NOTWITHSTANDING ANYTHING CONTAINED IN THE PROVISION S, INTER ALIA, OF SECTION 272B, NO PENALTY SHALL BE IMPOSED FOR ANY FAILURE REFERRED T O IN THE SAID PROVISION IF IT IS PROVED THAT THERE WAS A REASONABLE CAUSE FOR THE SAID FAIL URE. THUS, NO PENALTY CAN BE IMPOSED WHERE THERE WAS NO MALAFIDE INTENTION OF THE ASSESS EE. THEREFORE, HE REQUESTED TO DELETE THE PENALTY. 4.2. ON THE OTHER HAND, THE LD. D/R FOR THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL ON RECORD. WE HAVE GONE THROUGH THE SUBMISSIONS ALONG WITH CBDT P RESS RELEASE DATED 12 TH FEBRUARY, 2008. WE FIND THAT PAN DATA FURNISHED IN FORM NO 2 6Q IS WITHIN THE NORMS PRESCRIBED BY THE CBDT. THE CASE OF THE ASSESSEE IS SUPPORTED BY THE DELHI BENCH OF THE TRIBUNAL IN THE MATTER OF ITO VS. EXECUTIVE ENGINEER (2015) 4 3 ITR (T) 162 (DELHI TRIB.). AFTER 5 ITA NO. 558/JP/2014 A.Y. 2009-10. M/S. RAJASTHAN CRAFT INDUSTRIES VS. ITO TDS CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE , WE FIND FORCE IN THE ARGUMENTS PUT FORTH BY THE LD. A/R. THEREFORE, WE DELETE THE PE NALTY. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/02/2016 . SD/- SD/- VH-VKJ-EHUK YFYR DQEKJ (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 12/02/2016. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-M/S. RAJASTHAN CRAFT INDUSTRIES, JAIP UR. 2. IZR;FKHZ@ THE RESPONDENT-THE ITO TDS-2, 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, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 558/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR 6 ITA NO. 558/JP/2014 A.Y. 2009-10. M/S. RAJASTHAN CRAFT INDUSTRIES VS. ITO TDS