THE BHATIA GENERAL HOSPITAL, MUMBAI V. ADDL CIT (TDS) RG 3, MUMBAI

ITA 5587/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2780 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 04-09-2014
• Court: TRIBUNAL
• Department Lawyers: N P SINGH
• Assessee Lawyers: R V SHAH
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD , JUDICIAL MEMBER I.T.A. NO. 5587/M/2014 (ASSESSMENT YEAR :2011 - 2012 ) THE BHATIA GENER A L HOSPITAL, NANA CHOWK, TARDEO ROAD, MUMBAI 400 007. / VS. ADD. CIT (TDS), RANGE - 3, K.G. MITTAL HOSPITAL, CHARNI ROAD, MUMBAI. ./ PAN : AAATT3440K ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI R.V. SHAH / RESPONDENT BY : SHRI N.P. SINGH, CIT - DR / DATE OF HEARING : 08.09 .2016 / DATE OF PRONOUNCEMENT : 23 .09 .2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 4.9.2014 IS AGAINST THE ORDER OF THE CIT (A) - 14, MUMBAI DATED 25.6.2014 FOR THE ASSESSMENT YEAR 2011 - 2012. 2. IN THIS APPEAL, ASSESSEE RAISED NINE GROUNDS IN TOTO. THE ONLY ISSUE THAT EMANATES FROM ALL THE GROUNDS RE LATES TO THE LEVY OF PENALTY U/S 272A(2)(K) OF THE ACT. BRIEFLY STATED RELEVANT FACTS IN THIS REGARD ARE THAT ASSESSEE IS A TRUST RUNNING HOSPITAL FOR PHILANTHROPIC PURPOSES. DURING THE SCRUTINY PROCEEDINGS, AO NOTICED THAT THE ASSESSEE HAS NOT FILED THE QUARTERLY TDS STATEMENTS FOR THE AY 2011 - 12 WITHIN STIPULATED PERIOD AND SPECIFIED FORMS. CONSIDERING THE SAME, AO LEVIED THE PENALTY FOR THE DEFAULT OF FILING OF TDS RETURN IN FORM NO.24Q AND FORM NO.26Q. THE SAID RETURNS WERE FILED BELATEDLY TO THE TD S AUTHORITIES. THE DETAILS OF DELAY ARE GIVEN IN PARA 3.1 OF THE CIT (A)S ORDER. AO LEVIED THE PENALTY OF RS. 54,100/ - FOR DEFAULT RELATING TO THE SALARY RETURN AND LEVIED PENALTY OF RS. 18,100/ - IN RESPECT OF THE STATEMENT RELATING TO OTHER THAN THE SA LARIES. ASSESSEE S UBMITTED THAT THE LACK OF PROPER MANPOWER, INFRASTRUCTURE AND THE HIGH COST IN EMPLOYING THE ACCOUNTING PERSONNEL ARE THE REASONS FOR THE SAID DELAY. AO AND THE CIT (A) REJECTED THE SAME AND THE PENALTY IS CONFIRMED. 2 3. DURING THE PROCE EDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE REITERATED THE ABOVE SUBMISSIONS. FURTHER, LD COUNSEL SUBMITTED THAT SUCH DEFAULT HAPPENED FOR THE FIRST IN THE YEAR UNDER CONSIDERATION. THEREFORE, CONSIDERING THE ONE TIME DEFAULT, THE DEFAULT SHOULD NOT BE CONFIRMED BY THE TRIBUNAL. LD COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THE AO INITIATED THE SIMILAR PENALTY PROCEEDINGS FOR EARLIER AYS 2009 - 2010 AND 2010 - 2011 AND SUBSEQUENTLY DROPPED AFTER ACCEPTING THE AFOREMENTIONED REASONS AS A REASONABLE CAUSE . HOWEVER, THE AUTHORITIES CONFIRMED THE PENALTY FOR THE AY 2011 - 2012 WHICH VIOLATES THE PRINCIPLES OF CONSISTENCY. 4. ON THE OTHER HAND, LD DR FOR THE REVENUE HEAVILY RELIED ON THE ORDER OF THE AO AND THE CIT (A) AND EXPLAINED THAT THE ASSESSEE IS REQUIRED TO FOLLOW THE PROCEDURE RELATING TO THE FILING OF THE RETURNS AND FOR DEFAULT, IF ANY, IN THIS REGARD, PENALTY SHOULD BE LEVIED. IN THIS REGARD, LD DR RELIED ON THE RELEVANT PROVISIONS OF THE ACT. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. ON HEARING BOTH THE PARTIES, WE FIND, THE REASONS GIVEN BY THE ASSESSEE FOR DELAY IN FILING THE TDS RETURN ARE (I) LACK OF MANPOWER; (II) LACK OF INFRASTRUCTURE; (III) V OLUMINOUS DATA RELATING TO THE TDS TRANSACTIONS ETC. WE HAVE ALSO CONSIDERED THE FACT THAT THE AO INITIATED THE SIMILAR PROCEEDINGS FOR THE EARLIER AYS AND THEY WERE DROPPED ON SIMILAR CIRCUMSTANCES. THE REVENUE IS UNABLE TO EXPLAIN AS TO THE REASONS FOR DROPPING THE PENALTY IN THOSE YEARS AND CONFIRMING THE PENALTY IN THIS YEAR. WE ALSO FIND THAT THERE ARE NO SUCH SIMILAR DEFAULTS IN LATER YEARS OF THE ASSESSEE WHICH SHOWS THAT THE ASSESSEE IS NOT THE HABITUAL DEFAULTER ON THIS ISSUE OF FILING TDS RETUR NS. CONSIDERING THE OVERALL FACTUAL MATRIX OF THE ASSESSEE, WE ARE OF THE OPINION, THE PENALTY U/S 272A(2)(K) SHOULD NOT BE LEVIED IN THIS CASE. WE ORDER ACCORDINGLY. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 3 R D SEPTEMBER, 2016. S D / - S D / - ( RAVISH SOOD ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER 3 MUMBAI ; 2 3 .9 .2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI