Oriental Bank of Commerce, Lucknow V. DCIT - (TDS), Lucknow

ITA 596/LKW/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83311 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-07-2014
• Assessment Year: misc
• Appeal Filed On: 05-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Keywords: Additional evidence; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 596/LKW/2011 ASSESSMENT YEAR: 2008 - 09 ORIENTAL BANK OF COMMERCE HAZRATGANJ BRANCH 94, M.G. MARG, LUCKNOW V. DCIT (TDS) LUCKNOW PAN: LKNOO5069B (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. RAKESH GARG, ADVOCATE RESPONDENT BY: SHRI. ALOK MITRA, D.R. DATE OF HEARING: 28 07 2014 DATE OF PRONOUNCEMENT: 16 0 9 2014 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON VARIOUS GROUNDS WHICH ARE AS UNDER: - 1 . THAT THE LEARNED LOWER AUTHORITIES HAVE ERRED BOTH IN LAW AS WELL AS IN FACTS IN CHARGING INTEREST U/S 201(1 A ) FOR THE DELAY OF JUST ONE DAY WHICH WAS BEYOND THE CONTROL OF THE APPELLANT AND IN NOT DELETING THE INTEREST PAYABLE. 2 . THAT THE APPELLANT WAS PREVENTED BY A REASONABLE CAUSE FROM DEPOSITING THE TAX DEDUCTED AT SOURCE WITHIN THE TIME PRESCRIBED BY SECTION 201. 3 . THAT THE TAX WAS TO BE DEPOSITED WITHIN 7 DAYS OF THE END OF THE MONTH THAT IS 7 TH DAY OF APRIL 2008. THE BANK BEING CLOSED ON 6 TH APRIL 2008 BECAUSE OF SUNDAY AND ON 7 TH APRIL 2008 BECAUSE OF HOLIDAY ON ACCOUNT OF CHETI CHAND JAYANTI A U.P. GOVT. HOL IDAY. THE WORKING OF THE BANK WAS HAMPERED ON 8 TH APRIL, 2008 DUE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : TO CABLE FAULT. THE TAX WAS DEPOSITED ON 9TH APRIL 2008. 4 . THAT THE ORDERS OF THE LEARNED LOWER AUTHORITIES ARE AGAINST THE MERITS, CIRCUMSTANCES AND LEGAL ASPECTS OF THE CASE. 2 . THROUGH THESE GROUNDS, THE ASSESSEE HAS CHALLENGED THE LEVY OF INTEREST UNDER SECTION 201(1A) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') ON THE GROUND THAT THERE WAS DELAY OF JUST ONE DAY WHICH WAS BEYOND THE CONTROL OF THE ASSESSEE, AS THE LAST DAY , ON WHICH TDS WAS REQUIRED TO BE DEPOSITED , THE BANK WORKING WAS HAMPERED DUE TO CABLE FAULT. IT WAS FURTHER CONTENDED ON BEHALF OF THE ASSESSEE THAT ASSESSEE HAD REMITTED TDS OF RS.1,23,61,452/ - DEDUCTED DURING MARCH ON 9.4.2008 AS 6.4.2008 WAS SUND AY AND THE BANK WAS CLOSED ON 7.4.2008 DUE TO CHETTICHAND AND THE BANK WORKING WAS HAMPERED DUE TO CABLE FAULT ON 8.4.2008. THESE FACTS WERE BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER VIDE REPLY DATED 20.10.2010, BUT IT WAS NOT ACCEPTED BY THE ASSESSI NG OFFICER AND HE LEVIED INTEREST UNDER SECTION 201(1A) OF THE ACT. 3 . ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). SIMILAR ARGUMENT WAS RAISED, BUT THE LD. CIT(A) CONFIRMED THE LEVY OF INTEREST CHARGED UNDER SECTION 201(1A) OF THE ACT , HAVING OBSERVE D THAT UNDER SECTION 201(1A) OF THE ACT , INTEREST IS CHARGEABLE @ 1% FOR EVERY MONTH OR PART OF THE MONTH FOR FAILURE TO DEPOSIT THE TAX IN TIME AND THIS INTEREST CANNOT BE WAIVED AND IS MANDATORY. 4 . DURING THE COURSE OF HEARING OF THE APPEAL BEFORE US, AN AFFIDAVIT OF SHRI RAJEEV KHOSLA, AN EMPLOYEE OF THE ASSESSEE WAS FILED TO THE EFFECT THAT THE DELAY OF ONE DAY IN DEPOSITING THE TAX DEDUCTED AT SOURCE ON INTEREST PAYMENT ETC. WAS PURELY ON ACCOUNT OF TECHNICAL FAULT TAKEN PLACE IN THE SERVER/COMPUTER, D UE TO WHICH THE ENTIRE FUNCTIONING CAME TO BE SUSPENDED/STANDSTILL. IN SUPPORT OF HIS CONTENTION, SHRI. RAJEEV KHOSLA HAS ALSO FILED REPORT DATED 24.2.2014 OBTAINED FROM IBM, NETWORK ENGINEER, PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : OBC, RO, LUCKNOW DIT, F IRST FLOOR, ELDECO CORPORATE CHAMBER - 1, V IBHUTI KHAND, GOMTI NAGAR, LUCKNOW IN ORDER TO ESTABLISH THAT THERE WAS BREAKDOWN IN THE SYSTEM ON 8.4.2008. 5 . THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 6 . HAVING CAREFULLY EXAMINED THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT BEFORE THE LOWER AUTHORITIES ASSESSEE HAS RAISED ORAL CONTENTIONS WITH REGARD TO THE BREAKDOWN IN THE NETWORK SYSTEM ON 8.4.2008, BUT NO EVIDENCE WAS FILED IN THIS REGARD. FIRST TIME, ASSESSEE HAS FILED AN AFFIDAVIT ALONG WITH EVIDENCE WITH REGARD TO THE TECHNICAL FAULT TAKEN PLACE IN THE COMPUTER/SERVER ON 8.4.2008. IN THE CERTIFICATE, IT HAS BEEN CERTIFIE D BY THE IBM NETWORK ENGINEER THAT THE BRANCH OF THE HAZRATGANJ WAS DOWN ON 8.4.2008 DUE TO BSNL RING RING FAIL AT (MAJOR OFC CUT) MAHANAGAR EXCHANGE DUE TO WHICH MOST OF THE BRANCHES OF THE BANK WERE ISOLATED ON THE SAME DAY. IN THE LIGHT OF THE AFORESAID CERTIFICATE, WE FIND THAT THE ASSESSEE HAS A VALID REASON FOR NON - DEPOSITING OF THE TDS ON THE LAST DAY. BUT THIS EVIDENCE WAS F ILED FIRST TIME BEFORE THE TRIBUNAL AND IT REQUIRES VERIFICATION BY THE ASSESSING OFFICER. 7 . OUR ATTENTION WAS ALSO INVITED T O THE ORDER OF THE TRIBUNAL IN THE CASE OF INCOME TAX OFFICER VS. REGISTRAR, COCHIN UNIVERSITY OF SCIENCE AND TECHNOLOGY, 1 ITR (TR IB) 252 (COCHIN) IN WHICH IT HAS BEEN HELD THAT THE DELAY DUE TO TECHNICAL LAPSE IN THE PUBLIC INSTITUTION, ASSESSEE CANNOT BE DECLARED TO BE IN DEFAULT AND INTEREST UNDER SECTION 201(1A) OF THE ACT SHOULD NOT BE CHARGED. OUR ATTENTION WAS ALSO INVITED TO THE ORDER OF THE TRIBUNAL IN THE CASE OF UTTAR PRADESH FINANCIAL CORPORATION VS. INCOME TAX OFFICER (TDS) IN I.T. A . NO S . 642&643/LKW/2010, IN WHICH SIMILAR VIEW WAS TAKEN BY THE TRIBUNAL. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : 8 . KEEPING IN VIEW THE AFORESAID ORDERS OF THE TRIBUNAL, WE ARE OF T HE CONSIDERED OPINION THAT FOR THE DELAY IN DEPOSIT OF TDS ON ACCOUNT OF CIRCUMSTANCES BEYOND THE CONTROL OF THE ASSESSEE, THE ASSESSEE SHOULD NOT BE HELD TO BE IN DEFAULT AND INTEREST UNDER SECTION 201(1A) OF THE ACT SHOULD NOT BE CHARGED. BUT IN THE INS TANT CASE, SINCE THE ASSESSEE HAS FILED AN AFFIDAVIT ALONG WITH EVIDENCE FIRST TIME BEFORE THE TRIBUNAL, IT REQUIRES VERIFICATION BY THE ASSESSING OFFICER. IF THE ADDITIONAL EVIDENCE FILED BEFORE US IS FOUND TO BE CORRECT, ASSESSEE SHOULD NOT BE HELD TO B E IN DEFAULT AND INTEREST UNDER SECTION 201(1A) OF THE ACT SHOULD NOT BE CHARGED. ACCORDINGLY, WITH THESE DIRECTIONS, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR MAKING NECESSARY VERIFICATION OF THE ADDITIONAL EVIDENCE FILED BEFORE US. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENT I ONED ON THE CAPTION PAGE. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACC OUNTANT MEMBER JUDICIAL MEMBER DATED: 16 TH SEPTEMBER , 2014 JJ: 0809 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )