THE DISTRICT MINING OFFICER, Rajgarh V. THE JCIT(TDS), Indore

ITA 624/IND/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4385 (ITAT-INDORE)
• Duration Of Justice: 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 13-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Keywords: Ignorance of law

Judgement Text

ITANO.624/ IND/2016 :AY:1009-10 DISTRICT MINING OFFICER,RAJGARH PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER DISTRICT MINING OFFICER RAJGARH TAN BPL000720G VS. JCIT(TDS) INDORE APPELLANT RESPONDENT APPELLANT BY SHRI RAJESH MEHTA RESPONDENT BY SHRI MOHD. JAVED DATE OF HEARING 3.8.2016 DATE OF PRONOUNCEMENT 3.8.2016 O R D E R PER O.P. MEENA ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS), UJJAIN [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 11.12 .2015 AND PERTAINS TO ASSESSMENT YEAR 2009-10 AS AGAINST APPE AL DECIDED IN PENALTY ORDER U/S. 272A(2)(K) OF INCOME TAX ACT,1961( HEREIN AFTER REFERRED TO AS 'THE ACT) DAT ED 11.3.2013 OF JCIT(TDS), INDORE, [HEREINAFTER REFERR ED TO AS THE AO]. I.T.A. NO. 624/IND/2016 ASSESSMENT YEAR: 2009-10 ITANO.624/ IND/2016 :AY:1009-10 DISTRICT MINING OFFICER,RAJGARH PAGE 2 OF 6 2. THE SUM AND SUBSTANCES OF THE GROUNDS OF APPEAL IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIR MING THE PENALTY OF RS.92,000/- U/S 272A(2)(K) OF THE ACT FO R FAILURE ON THE PART OF THE ASSESSEE TO FURNISH THE RETURN W ITHIN THE PRESCRIBED TIME. 3. BRIEFLY STATED, THE ASSESSEE IS A GOVERNMENT OFF ICER. THE ASSESSEE WAS REQUIRED TO DEDUCT TDS AND DEPOSIT THE SAME IN GOVERNMENT ACCOUNT. THE ASSESSEE WAS ALSO REQUIRED TO FURNISH THE QUARTERLY RETURN IN RESPECT OF THE TAX DEDUCTED. THERE WAS A DELAY ON THE PART OF THE ASSE SSEE IN SUBMISSION OF THE QUARTERLY STATEMENT IN FORM NO. 2 7EQ. THE LEARNED JCIT (TDS) LEVIED PENALTY OF RS.92,000/ - U/S 272A(2)(K) OF THE ACT. ON APPEAL, THE LEARNED CIT(A ) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT AN IDENTICAL ISSUE IN THE ASSESSEES OWN CASE HAD COME UP BEFORE THE ITAT, INDORE BENCH, INDORE, WHEREIN THE TRIBUNAL VIDE ITS ORDER DATED 20.5.2016 IN ITA NOS. 101 & 102/IND/2016 HAS CATEGORICALLY HELD THAT THE REVENUE AUTHORITIES COULD NOT APPRECIATE THE FACTS AND SUBM ISSION ITANO.624/ IND/2016 :AY:1009-10 DISTRICT MINING OFFICER,RAJGARH PAGE 3 OF 6 THEREOF THAT THE TDS WAS TIMELY DEPOSITED AND TDS STATEMENTS WERE FILED VOLUNTARILY WITHOUT RECEIVING ANY NOTICE FROM THE INCOME-TAX DEPARTMENT. NO DEMAND IS OUTSTA NDING OUT OF TCS COLLECTED. HENCE, THERE WAS NO INTENTION OF THE ASSESSEE FOR THE DELAY AS NARRATED ABOVE . THE RELEVANT FINDINGS OF THE TRIBUNAL ARE AS UNDER :- 2. THE ASSESSEE IS A DISTRICT MINING OFFICER, WORKING IN MINING DEPARTMENT UNDER GOVT. OF M.P. THE ASSESSEE HAD COLLECTED TCS AND DEPOSITED THE SAME TO THE CREDIT OF THE CENTRAL GOVT. ACCOUNT WIT HIN STIPULATED TIME. HOWEVER, THERE IS DELAY IN SUBMISS ION OF QUARTERLY STATEMENT IN FORM 27EQ. THE ASSESSING OFFICER LEVIED PENALTY AT RS.1,27,050/- FOR THE ASSESSMENT YEAR 2010-11 AND RS.2,01,620/- FOR THE ASSESSMENT YEAR 2011-12. 3. THE MATTER CARRIED TO LD. CIT(A). THE LD. CIT(A) DISMISSED THE APPEALS OF THE ASSESSEE. 4. DURING THE COURSE OF HEARING, THE LD. AUTHORI ZED REPRESENTATIVE HAS SUBMITTED BEFORE US THAT ASSESSEE COLLECTED AND DEPOSITED TCS ALONG WITH INTEREST. THE ASSESSEE AND THE STAFF/OFFICIALS WORK ING IN DEPARTMENT ARE NOT CONVERGENT WITH THE PROVISION S OF THE ACT. THE STAFF TO WHICH THE TDS WORK WAS GIV EN BECAME TRANSFERRED AND THERE WAS LACK OF STAFF ALSO IN THE DISTRICT MINING OFFICE, RAJGARH. THERE WAS A CHANGE IN PROCESS OF FILING TDS STATEMENT FROM MANUALLY TO ELECTRONIC MODE, FOR WHICH, SERVICES OF OUTSIDER AGENCY WAS REQUIRED AND FOR PAYMENT OF FEE S TO THEM, THERE WAS NO DISTRICT MINING OFFICE BUDGET ALLOTTED. THEREFORE, IT REQUIRED THE PERMISSION OF HIGHER AUTHORITY TO PAY THEM. BUT, THE TDS WAS TIMELY DEPOSITED AND TDS STATEMENTS WERE FILED VOLUNTARILY WITHOUT RECEIVING ANY NOTICE FROM THE INCOME-TAX DEPARTMENT. THE ASSESSEE WAS UNDER BONA FIDE BELIEF ITANO.624/ IND/2016 :AY:1009-10 DISTRICT MINING OFFICER,RAJGARH PAGE 4 OF 6 THAT ONCE TAX AS COLLECTED WAS DEPOSITED THEN NO REQUIREMENT TO FILE RETURN IN FORM NO.27EQ IS LIABL E. NO DEMAND IS OUTSTANDING OUT OF TCS COLLECTED. HENCE, THERE WAS NO INTENTION OF THE ASSESSEE FOR NON-DEPOSITION OF TCS. TCS RETURNS WERE DELAYED ONLY DUE TO LATE COLLECTION OF TCS, WHICH WAS UNINTENTIONAL. ON THE OTHER HAND, LD. DR RELIED ON THE ORDERS OF AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND HAVE ALSO PERUSED THE MATERIAL AVAILABL E ON RECORD. WE FOUND THAT THE ASSESSING OFFICER HELD THAT THE ASSESSEE WAS IN DEFAULT BY NOT FILING THE FORM 27EQ ON TIME AND THE LD. CIT(A) DISMISSED THE APPEALS. AFTER HEARING THE RIVAL SUBMISSIONS, WE AR E OF THE VIEW THAT THE RATIO TAKEN IN THE JUDGMENT OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. SUPERINTENDING ENGINEER (2003) 260 ITR 641 IS APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. HONBLE HIGH COURT HELD THAT THE PURPOSE OF LEVY OF PENALTY U/S 272A(2)(C) APPEARS T O BE TO PUT PRESSURE ON THE OFFICERS TO PERFORM THEIR DUTY PUNCTUALLY IN THE PUBLIC INTEREST, BUT A TAX AUTHOR ITY CANNOT INFLICT PENALTY IN ROUTINE MANNER. THUS, THE PENALTY U/S 272A(2)(C) CANNOT BE LEVIED IN A ROUTIN E MANNER. THE DISCRETION VESTED WITH THE AUTHORITY IS TO BE EXERCISED JUDICIOUSLY ON CONSIDERATION OF ALL TH E RELEVANT CIRCUMSTANCES. A BONA FIDE BREACH CANNOT LEAD TO A PENALTY U/S 272A(2)(C). IN THE INSTANT CA SE, THOUGH IGNORANCE OF LAW IS NO EXCUSE BUT STILL, THE PRESCRIBED AUTHORITIES WERE REQUIRED TO EXAMINE ALL THE RELEVANT FACTS AND CIRCUMSTANCES OF THE CASE AND TO ASCERTAIN IF IT WAS A DELIBERATE OR NEGLIGENT OR AN INADVERTENT DEFAULT. IN CASE OF NEGLIGENCE, IT WOUL D BE A SOUND EXERCISE OF DISCRETION TO INFLICT MINIMUM O R NOMINAL PENALTY BUT IN THE CASE OF INADVERTENT OFFI CE MISTAKE, IT WOULD NOT BE A SOUND EXERCISE OF JUDICI AL OR QUASI-JUDICIAL POWER TO INFLICT A PENALTY ON THE HE AD OF THE PUBLIC OFFICE. ON CONSIDERATION OF FACTS AND SUBMISSION THEREOF, WE FIND THAT THERE IS NO CONSCI OUS BREACH OF LAW IN THE PRESENT CASE. THE RATIO LAID D OWN IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF OR ISSA (1973) 83 ITR 26 (SC) FURTHER SUPPORTS THE CASE OF THE ITANO.624/ IND/2016 :AY:1009-10 DISTRICT MINING OFFICER,RAJGARH PAGE 5 OF 6 ASSESSEE. THE REVENUE AUTHORITIES COULD NOT APPRECIATE THE FACTS AND SUBMISSION THEREOF THAT TH E TDS WAS TIMELY DEPOSITED AND TDS STATEMENTS WERE FILED VOLUNTARILY WITHOUT RECEIVING ANY NOTICE FROM THE INCOME-TAX DEPARTMENT. NO DEMAND IS OUTSTANDING OUT OF TCS COLLECTED. HENCE, THERE WAS NO INTENTION OF THE ASSESSEE FOR THE DELAY AS NARRATED ABOVE. THEREFORE, ON CONSIDERATION OF FACTS AND CIRCUMSTANCES IN THE LIGHT OF THE JUDICIAL PRONOUNCEMENTS, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE PENALTY FOR BOTH T HE YEARS UNDER CONSIDERATION. 6. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED. 5. WE FIND THAT THE FACTS OF THIS APPEAL ARE IDENTI AL, THEREFORE, FOLLOWING THE ABOVE ORDER OF THE TRIBUNA L, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELET E THE PENALTY OF RS.92,000/- LEVIED BY THE ASSESSING OFFI CER AND CONFIRMED BY THE LEARNED CIT(A). 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 3 RD AUGUST, 2016. SD/- SD/- (D.T.GARASIA) JUDICIAL MEMBER (O.P.MEENA) ACCOUNTANT MEMBER DATED : 3 RD AUGUST, 2016. DN/- ITANO.624/ IND/2016 :AY:1009-10 DISTRICT MINING OFFICER,RAJGARH PAGE 6 OF 6