Punjab National Bank, Ambala City V. ITO (TDS), Panchkula

ITA 597/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77133 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-04-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 22-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 27; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS.597 & 598/CHD/2013 ASSESSMENT YEAR : 2009-10 PUNJAB NATIONAL BANK VS. THE INCOME TAX OFFICE R(TDS), BO BALDEV NAGAR, PANCHKULA. AMBALA CITY. PAN: RTKP02634C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANURAG GOYAL RESPONDENT BY : SHRI AKHILESH GUPTA, DR DATE OF HEARING : 22.05.2014 DATE OF PRONOUNCEMENT : 29.05.2014 O R D E R PER SUSHMA CHOWLA, J.M. : THESE TWO APPEALS FILED BY THE ASSESSEE ARE AGAINST THE CONSOLIDATED ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS), PANCHKULA DATED 01.04.2013 RELATING TO ASSESSMENT Y EAR 2009-10 AGAINST THE PENALTY LEVIED UNDER SECTION 272B OF INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED COMMON GROUNDS OF APPEAL IN BOTH THE APPEALS WHICH READ AS UNDER: THAT THE ORDER PASSED BY LEARNED INCOME TAX OFFICER (TDS), PANCHKULA IS WRONG, ILLEGAL & 'UNJUSTIFIED ON FOLLOWING GROUNDS 1) THE MATTER REQUIRE NO DEBATE AS HONORABLE ITAT CHANDIGARH BENCH HAS RECENTLY PASSED AN ORDER IN FAVOR OF THE ANOTHER BR ANCH OFFICE OF THE BANK 2 SITUATED AT AMBALA VIDE ITA NO.937/CHANDI/2011 FOR, AY 2008-09 (PUNJAB NATIONAL BANK, BO : SME BRANCH, AMBALA CANT T VS ITO TDS, PANCHKULA) VIDE ORDER DATED 20 TH JANUARY 2012 [COPY IS HEREBY ENCLOSED]WHICH GIVES REQUIRED COVER TO THE APPEAL O F THE ASSESSEE. THE ORDER HAS BEEN PASSED AFTER PLACING RELIANCE ON MANY OTHER SIMILAR DECIDED CASES E.G. ITO (TDS) VS ORIENTAL BANK OF CO MMERCE, NARAINGARH, DISTT AMBALA PRONOUNCED ON 19 TH SEPTEMBER 2011 BY SAME CHANDIGARH BENCH OF ITAT [COPY IS HEREBY ENCLOSED]. 2) THAT THE LEARNED ITO(TDS) IS COMPLETELY WRONG I N MAKING THE DECISION OF IMPOSING PENALTY UNDER SECTION 272 B OF INCOME TAX ACT-1961. THE BASIC REASON BEHIND THIS THERE IS NO LOSS OF REVENUE TO G OVERNMENT IF THE DEDUCTOR FAILS TO PROVIDE PAN NUMBER OF DEDUCTEES FROM WHOM TAX IS DEDUCTED IN THEIR TDS RETURNS. BECAUSE THE INCOME TAX ACT- 1961 LAYS DOWN THE RESPONSIBILITY OF DEDUCTING THE TAX ON THE SHOULDERS OF DEDUCTOR, IF A DEDUCTOR DEDUCTS THE TAX AS APPLICAB LE FROM DEDUCTEES AND DEPOSIT THE SAME TO GOVERNMENT ACCOUNT IN TIME, THERE IS NO LOSS OF REVENUE TO INCOME TAX DEPARTMEN T. THE BASIC PURPOSE OF LEGISLATURE IS TO GET THE DEDUCTION OF THE TAX AT T HE TIME OF ACCRUAL OF INCOME. 3) THAT IN THIS PARTICULAR CASE, THE DEDUCTOR HAS PROVIDED THE LIST OF ALL THE DEDUCTEES EXCEPT ONE WHOSE PAN NO. IS WRONGLY MENTI ONED IN ORIGINAL TDS RETURN. THIS IS CLEARLY AGAINST THE PRINCIPAL OF NATURAL JUSTICE. HOW A PERSON CAN BE PENALIZED FOR BREACH OF PROVISION WHI CH ARE ALREADY RECTIFIED BY US. IT SEEMS THAT THE LEARNED ITO (TDS) HAS DECIDED TO PUT ON PENALTY PROCEEDING ON EVERY ONE WHETHER SOMEONE IS COMPLYIN G WITH SHOW CAUSE NOTICE OR NOT. IT IS REALLY VERY BAD ON PART OF REVENUE OFFICER TH AT HE IS NOT CONSIDERING REPLY TO SHOW CAUSE NOTICES. 4) THAT AS PER PROVISIONS OF SECTION 139(5A), THE DEDUCTEE IS UNDER STATUTORY OBLIGATION TO PROVIDE HIS PAN NUMBER TO THE DEDUCT OR AT THE TIME OF TAX DEDUCTION. FURTHER, AS PER PROVISIONS OF SECTION 13 9 (5B), THE DEDUCTOR IS RESPONSIBLE FOR FURNISHING PAN NUMBER OF AH 1 THE DEDUCTEES (AS PROVIDED TO HIM BY DEDUCTEE FROM WHOM TAX IS DEDUCTIBLE) IN TDS RETURNS FURNISHED BY HIM. IT IS VERY CLEAR FROM PLAIN READING OF SECTION 139( SB) THAT THE DEDUCTOR IS REQUIRED TO MENTION PAN OF DEDUCTEE ONLY WHEN THE D EDUCTEE PROVIDES THE SAME TO DEDUCTOR. THE DEDUCTOR IS NO WAY RESPONSIBL E IF DEDUCTEES PROVIDES HIM WRONG/INACCURATE/INCOMPLETE PERMANENT ACCOUNT N UMBER OR DOES NOT PROVIDE HIM HIS PAN NUMBER. 5) THAT THE APPLICANT WANTS TO ADD ONE MORE GROUND HERE THAT THE INCOME TAX ACT-1961 HAS PRO VIDE /GIVE NO POWER TO DEDUCTOR TO ENFORCE THE DEDUCTEE TO PROVIDE HIS PAN NUMBER TO HIM. IT IS ON THE SWEET W ISHES OF DEDUCTEE WHETHER HE PROVIDES HIM PERMANENT ACCOUNT NUMBER OR NOT. IF THE DEDUCTEE DOESN'T PROVIDE THE DEDUCTOR HIS PERMANENT ACCOUNT NUMBER, HE HAS NO REMEDY OR RELIEF PROVIDED TO HIM IN THE ACT. IN THIS CASE, THE DEDUCTOR HAS LEFT WITH NO OPTION EITHER NOT TO FILE TDS RETURN OR NOT TO DEDUCT TAX FROM THE DEDUCTEE. 6) THAT THE APPLICANT REQUESTS THE HONORABLE MEMBE RS OF APPELLATE TRIBUNAL TO CONSIDER ONE THING MORE THAT THE FINANCE ACT 2010 I NSERTED A NEW PROVISION IN THE INCOME TAX ACT-1961 AFTER A LONG WAIT, THAT THE DEDUCTEE WHO FAILS TO PROVIDE PAN NUMBER TO DEDUCTOR HAS BEEN MADE LIABLE FOR DEDUCTION AT A HIGHER RATE OF 20% . HENCE, NOW THE LEGISLATURE IT SELF DECIDED TO PENALIZE 3 DEDUCTEES FOR NOT PROVIDING PAN NUMBER BY WAY OF DE DUCTION OF HIGHER TAX NOT THE DEDUCTOR. 7) THAT THE APPLICANT WISHES TO BRING ONE MORE IMP ORTANT POINT TO THE KIND CONSIDERATION OF HONORABLE MEMBERS OF APPELLATE TRI BUNAL THAT CBDT HAS LAST YEAR AMENDED THE TDS RULES WITH EFFECT FROM 1 ST APRIL,2010 SAYING THAT NO TDS/TCS STATEMENT IS NOW ACCEPTED WITHOUT 100% P AN NUMBER OF DEDUCTEES WHILE EARLIER THE TDS /TCS RETURNS ARE AC CEPTED WITH 85% OF STRUCTURALLY VALID PAN. HENCE GOVERNMENT INTENTION IS NOW VERY MUCH CLEAR THAT THE NO TAX CREDIT IS PROVIDED TO DEDUCTE ES WHO FAIL TO FURNISH A VALID PAN. 8) THAT FURTHER, THE APPLICANT IS VERY SORRY' TO S AY THAT THE LEARNED INCOME TAX OFFICER (TDS) IS NOT CLEAR WITH PROVISIONS OF L AW. THIS POINT IS VERY MUCH CLEAR FROM THE FACT THAT THE LEARNED ITO (TDS) MISINTERPRETED THE PROVISION OF SECTION 272 B AS PER THEIR WISH TO IMPOSE MAXIMUM PENALTY ON THE APPLICANT. THIS SEEMS THAT THE LEARNED INC OME TAX OFFICER HAS WORKING IN INTEREST OF REVENUE TARGETS NOT IN THE INTEREST OF JUSTICE. 3. BOTH THE APPEALS RELATING TO THE SAME ASSESSEE W ERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORD ER FOR THE SAKE OF CONVENIENCE. REFERENCE IS MADE TO THE FACTS IN ITA NO.597/CHD/13 TO ADJUDICATE THE ISSUE INVOLVED IN THE CASE. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD FILED E-TDS QUARTERLY STATEMENT OF TAX DEDUCTION IN FORM NO.26Q RELATING TO FINANCIAL YEAR 2008-09 FOR 1 ST QUARTER ON 11.8.2008 AND FOR 2 ND QUARTER ON 14.11.2008. FOR THE 1 ST QUARTER OUT OF 41 TAX DEDUCTEES PAN NUMBERS IN RESPECT OF 28 TAX DEDUCTEES WERE FURNISHED AND THE BALANCE WERE FOUND TO BE INVALID/MISSING. FOR THE 2 ND QUARTER THE PAN NUMBERS IN RESPECT OF 60 TAX DEDUCTEES WERE FOUND TO BE INVALID/MISSING. THE ASSESSEE DID NOT FURNISH ANY CORRECTION STATEMENT BEFORE THE ASSESSI NG OFFICER NOR DID FURNISH ANY EXPLANATION BEFORE THE ASSESSING OFFICE R. THE ASSESSING OFFICER THUS LEVIED PENALTY UNDER SECTION 272B OF T HE ACT AT RS.10,000/- FOR EACH QUARTER. 5. THE CIT (APPEALS) CONFIRMED THE ORDER OF THE ASS ESSING OFFICER. 4 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF T HE CIT (APPEALS). THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT TH E PAN NUMBER WAS NOT AVAILABLE AND HENCE THE DEFAULT, THOUGH TAX WAS DEDUCTED AT SOURCE AND WAS DEPOSITED IN TO THE TREASURY BY THE ASSESSE E. 7. THE LEARNED D.R. FOR THE REVENUE STRONGLY OPPOSE D AND SUBMITTED THAT THE ASSESSEE HAD DEFAULTED IN NOT FURNISHING T HE REQUISITE INFORMATION BEFORE THE AUTHORITIES BELOW AND EVEN N OW COMPLETE INFORMATION WAS NOT AVAILABLE AND HENCE NO MERIT IN THE PLEA OF THE ASSESSEE. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE FACTS OF THE PRESENT CASE THE ASSESSEE HAD DEFAULTE D IN NOT FURNISHING THE PAN NUMBER OF ONE OF THE TAX DEDUCTEE IN E-TDS QUAR TERLY STATEMENT OF TAX DEDUCTION FILED BY THE ASSESSEE FOR THE FINANCI AL YEAR 2008-09 FOR THE 1 ST AND 2 ND QUARTER. THE ASSESSEE NEITHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOR THE APPELLATE PROCEEDINGS HAD FURNI SHED CORRECTION STATEMENT AND CONSEQUENTLY PENALTY UNDER SECTION 27 2B OF THE ACT WAS LEVIED AT RS.10,000/- FOR THE SAID DEFAULT. HENCE THERE IS NO MERIT IN THE PLEA OF THE ASSESSEE THAT IT HAD COMPLIED WITH THE PROVISIONS TO THE EXTENT IT WAS POSSIBLE AT HIS END. THE PROVISIONS OF SECTION 272B(1) OF THE ACT PROVIDE THAT IF A PERSON FAILED TO COMPLY WITH THE PROVISION OF SECTION 139A, THE ASSESSING OFFICER MAY DIRECT THAT SUCH PERSON SHALL PAY, BY WAY OF PENALTY A SUM OF RS.10,000/- . IN VIEW OF THE ABOVE SAID PROVISIONS OF THE ACT WE ARE IN AGREEMENT WITH THE ORDER OF THE CIT (APPEALS) IN LEVYING PENALTY OF RS.10,000/- UNDER S ECTION 272B OF THE ACT. THUS GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE DISMISSED. 5 9. THE FACTS IN ITA NO.598/CHD/13 ARE IDENTICAL TO THE FACTS IN ITA NO.597/CHD/2013 AND OUR DECISION IN ITA NO.597/CHD/ 2013 SHALL APPLY MUTATIS MUTANDIS TO THE FACTS IN ITA NO.598/CHD/201 3. 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF MAY, 2014. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 29 TH MAY, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH