RANI GROVER, MUMBAI V. ADDL CIT (TDS) RG 3, MUMBAI

ITA 6334/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2387 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 17-10-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 13-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C KANOJIA
• Keywords: Reasonable cause; Ignorance of law
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH H,MUM BAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NOS.6334 TO 6336/MUM/2014 (ASSESSMENT YEARS : 2008-09, 2009-10 & 2010-11) SMT. RANI A. GROVER (PROP. VISUAL COMMUNICATIONS), 12, DAYARAJ APARTMENTS, 212, SHERE PUNJAB SOCIETY, MAHAKALI, ANDHERI (E), MUMBAI-400093. PAN: AABPG5099G VS. ACIT(TDS)-RANGE-3 , MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI BHUPENDRA SHA H (AR) REVENUE BY : SHRI K.C. KANOJIA (DR) DATE OF HEARING : 17.10.2016 DATE OF PRONOUNCEMENT : 19.10.2016 O R D E R PER PAWAN SINGH, JM: 1. THESE THREE APPEALS UNDER SECTION 253 OF THE INCOME TAX ACT (ACT) DIRECTED BY ASSESSEE AGAINST THE COMMON ORDER OF COMMISSIONER ( APPEALS) DATED 4TH JULY 2014 FOR ASSESSMENT YEARS 2008-09, 2009-10 & 201011. IN ALL APPEALS COMMON GROUNDS OF APPEAL ARE RAISED BY ASSESSEE, ORDER OF LD CIT (APPEALS) ARE COMMON THUS ALL THE APPEALS WERE HEARD TOGETHER AND ARE BE ING DECIDED BY COMMON ORDER. FOR THE APPRECIATION OF FACTS, WE SHALL TAKE UP APP EAL FOR ASSESSMENT YEAR 200809 BEING ITA NO. 6334/M/2014. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE AVAIL ED FOR A CERTIFICATE UNDER SECTION 197 OF THE ACT FOR DEDUCTION OF TAX AT LOWER RATE. AND AS PER THE PROVISIONS OF INCOME TAX ACT ASSESSEE HAS TO FILE TDS RETURN IN F ORM NO. 24Q AND 26Q FOR FOUR QUARTERS I.E. FOR FIRST QUARTER BEFORE 15 JULY 2007 , FOR SECOND QUARTER BEFORE 19 TH FEB 2008, FOR THIRD-QUARTER BEFORE 15 JANUARY 2008 AND FOR FOURTH-QUARTER BEFORE 15 JUNE 2008 RESPECTIVELY. ON PERUSAL OF RECORD AO FOUND TH AT ASSESSEE FILED QUARTERLY TDS RETURNS AFTER DUE DATES. FOR FIRST-QUARTER THE ASSE SSEE FILED RETURNS LATE BY 507 DAYS, FOR SECOND-QUARTER LATE BY 279 DAYS, FOR THIRD-QUAR TER LATE BY 324 DAYS AND FOR 2 ITA NOS. 6334 TO 6336/M/2014 SMT. RANI A. GROVER FOURTH-QUARTER 172 DAYS. AS ASSESSEE HAD COMMITTED DEFAULT UNDER SECTION 272A (2)(K)OF THE ACT. THE AO/ ACIT ISSUED NOTICE TO THE ASSESSEE LEVYING THE PENALTY. IN RESPONSE TO THE NOTICE ASSESSEE CONTENDED THAT THE ASSESSEE IS A SENIOR CITIZEN AND HAS FILED RETURN VOLUNTARILY. THE REPLY OF ASSESSEE WAS NOT CONSIDERED SUFFICIENT BY AO/ ACIT AND THUS A PENALTY FOR DELAY IN IS FURNISH ING RETURN OF TEDIOUS WAS LIMIT AT THE RATE OF RUPEES HUNDRED PER DAY FOR THE DELAYED PERIOD. ACCORDINGLY A PENALTY OF RS. 1 28200 WAS WORKED OUT FOR A BY 2008 09. 3. SIMILARLY FOR A WIDE 2000 910 THE PENALTY WAS WORKE D OUT AT RUPEES 66224 AND FOUR ASSESSMENT YEAR 2010 11 FOR SIMILAR DELAY IN FILING OF TEDIOUS RETURNS THE PENALTY WAS WORKED OUT AT RS. 56,300/-. AGGRIEVED BY THE OR DER OF AO ASSESSEE FILED THREE SEPARATE APPEALS BEFORE COMMISSIONER OF INCOME TAX (APPEALS) WHEREIN THE ORDER PENALTY WAS SUSTAINED. THUS, FURTHER AGGRIEVED OF T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) THE ASSESSEE HAS FILED THE SEC OND APPEAL BEFORE US. 4. WE HAVE HEARD THE LD AR FOR THE ASSESSEE AND THE LD DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AND PERUSED THE MATERIAL AVAIL ABLE ON RECORD. THE LD AR FOR THE ASSESSEE ARGUED THAT ASSESSEE IS A SENIOR CITIZ EN, SHE HAD VOLUNTARILY DEPOSITED THE TAX DEDUCTED BY HER IN THE RETURN OF TDS. IT WA S ARGUED THAT A LENIENT VIEW MAY BE TAKEN AGAINST THE ASSESSEE. THE LD AR OF THE ASS ESSEE FURTHER RELIED UPON THE DECISION OF MUMBAI TRIBUNAL IN ITA NO. 8525/M/2010 IN ACIT VERSUS KARROX TECHNOLOGY (P) LIMITED, ACIT VS LOK PRAKASHAN LTD I N ITA NO. 2815/AHD /2009, ACIT VS GREATER HYDERABAD MUNICIPAL CORPORATION IN ITA NO. 155TO 160/H/2015, UNION BANK OF INDIA VERSUS ACIT IN ITA NO.122/AGRA/ 2012, BRANCH MANAGER(TDS) UKO BANK VERSUS ACIT IN ITA NO. 91/CTK /2013, SBI VS JCIT (TDS) IN ITA NO. 261&262(CTK) OF 2014 AND THE JUDGE MENT OF HONBLE BOMBAY HIGH COURT IN CIT VERSUS SCHELL INTERNATIONAL REPOR TED VIZ; 278 ITR 630(BOM). ON THE OTHER HAND, LD DR FOR REVENUE ARGUED THAT ASSES SEE HAS NOT GIVEN ANY SATISFACTORY EXPLANATION TO THE NOTICE OF PENALTY. IT WAS FURTHER ARGUED THAT THE ASSESSEE DESPITE GIVEN SUFFICIENT PROPORTIONATELY D ID NOT APPEAR BEFORE THE FIRST APPELLATE AUTHORITY (FAA). THE LD DR FOR REVENUE PR AYED THAT THE ORDER OF AUTHORITIES BELOW IS WELL REASONED AND DOES NOT REQ UIRE ANY FURTHER INTERFERENCE FROM THE TRIBUNAL. 5. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND GONE THROUGH THE ORDER OF AUTHORITIES BELOW. THERE IS NO DISPUTE THAT THE TAX DEDUCTED BY ASSESSEE AT SOURCE WAS DEPOSITED. THE DISPUTE IS ABOUT THE DELAY IN FI LING OF TDS RETURNS. BEFORE LEVYING THE PENALTY A SHOW CAUSE NOTICE DATED 5/10/ 2010, UNDER SECTION 272A(2)(K) WAS ISSUED TO THE ASSESSEE. THE ASSESSEE CONTESTED THE NOTICE BY FILING REPLY. THE ASSESSEE CONTENDED THEREIN THAT SHE IS A SENIOR CIT IZEN AND HAS FILED RETURNS VOLUNTARILY. THERE WAS NO EXPLANATION OFFERED BY HE R, AS TO WHY THE DELAY OCCURRED FOR FILING RETURNS OF TDS. NEITHER THE ASSESSEE NOR HER REPRESENTATIVE APPEARED BEFORE THE FIRST APPELLATE AUTHORITY. NOW BEFORE US THE LEARNED AR FOR ASSESSEE 3 ITA NOS. 6334 TO 6336/M/2014 SMT. RANI A. GROVER ARGUED THAT A LENIENT VIEW MAY BE TAKEN AS ASSESSEE HIMSELF AND VOLUNTARILY FILED RETURNS THOUGH ADMITTEDLY THE RETURN WAS SUBMITTED BEYOND THE TIME PROVIDED UNDER THE STATUE. WE HAVE SEEN THAT BEFORE LEVYING THE PE NALTY NEITHER THE ACIT/AO NOR THE COMMISSIONER (APPEAL) WHILE DECIDING THE APPEAL OF THE ASSESSEE MADE ANY OBSERVATION THAT THE ASSESSEE ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY BY THE ACT OF HIS CONDUCT. AS PER OUR CONSIDERED OPINI ON WHILE LEVYING THE PENALTY THE AUTHORITY MUST RECORD ITS SATISFACTION THAT THE ACT OF THE ASSESSEE WAS DELIBERATE AND WAS NOT CONDONABLE. THE COORDINATE BENCH OF AHMADABAD TRIBUNAL IN ACIT VERSUS LOK PRAKASHAN (SUPRA) WHILE DEALING WITH THE SIMILAR PENALTIES HE LD AS UNDER: 15 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE UNDISPUTED FACTS ARE THAT THE ASSESSEE COMPANY WAS LIABLE TO DEDUCT TAX AS PER THE PROVISIONS CONTAINED IN CHAPTER XVII OF THE ACT. TH E ASSESSEE ACCORDINGLY DEDUCTED THE TAX AND ALSO PAID THE TAX SO DEDUCTED TO THE CR EDIT OF THE CENTRAL GOVERNMENT WITHIN TIME IS ALSO NOT IN DISPUTE. FURTHER, THE AS SESSEE WAS LIABLE TO FILE QUARTERLY STATEMENTS IN FORM NO.24Q AND 26 IS ALSO NOT IN DIS PUTE. THE ASSESSEE HAS FURNISHED THE SAID QUARTERLY STATEMENTS WITH CERTAI N DELAY. THE LEARNED ASSESSING OFFICER OBSERVING THE DELAY IN FURNISHING OF THE QU ARTERLY STATEMENTS LEVIED PENALTY OF RS.4,47,200/- AS THE DELAY WAS FOR 2583 DAYS IN RESPECT OF FORM NO.24Q AND 1889 DAYS IN RESPECT OF FORM, NO.26Q. THE LEARNED C OMMISSIONER OF INCOME-TAX (APPEALS) OBSERVED THAT THE DELAY IN FILING THE QUA RTERLY STATEMENTS BY THE ASSESSEE WAS BECAUSE OF LACK OF KNOWLEDGE OF THE ABOVE REQUI REMENT OF LAW ON THE PART OF THE ASSESSEE AND AS NO LOSS TO THE REVENUE TOOK PLACE B ECAUSE OF THE AFORESAID DELAY, THE BREACH OF DUTY ON THE PART OF THE ASSESSEE WAS MERELY OR VENIAL BREACH AND THEREFORE IN VIEW OF THE PROVISIONS OF SECTION 273B OF THE ACT HE DELETED THE LEVY OF PENALTY. WE FIND THAT IT IS NOT IN DISPUTE THAT THE QUARTERLY STATEMENTS WERE FILED BY THE 8 ASSESSEE THOUGH WITH CERTAIN DELAY AND THE TA XES DEDUCTED BY THE ASSESSEE WERE PAID TO THE CREDIT OF CENTRAL GOVERNMENT BY TH E ASSESSEE WITHIN PRESCRIBED TIME. THE AFORESAID DELAY IN FILING THE QUARTERLY S TATEMENTS BY THE ASSESSEE WAS CERTAINLY A DEFAULT ON THE PART OF THE ASSESSEE WHI CH ATTRACTED PENALTY U/S 272A(2)(K) OF THE ACT UNLESS THE ASSESSEE SHOWS A R EASONABLE CAUSE WITHIN THE MEANING OF SECTION 273B OF THE ACT. THUS, WE ARE RE QUIRED TO ADJUDICATE WHETHER ON FACTS OF THE INSTANT CASE THE CAUSE WHICH HAS BEEN SHOWN BY THE ASSESSEE CONSTITUTES A REASONABLE CAUSE U/S 273B OF THE ACT OR NOT. THE FINDING OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS THAT THE AS SESSEE WAS PREVENTED FROM FILING THE QUARTERLY STATEMENTS WITHIN PRESCRIBED T IME BECAUSE OF THE LACK OF KNOWLEDGE OF THE REQUIREMENT OF LAW ON THE PART OF THE DIRECTORS OF THE ASSESSEE- COMPANY AND ITS EMPLOYEES. WE FIND THAT THE PROVISI ONS OF FURNISHING OF THE QUARTERLY STATEMENTS WERE INTRODUCED UNDER SUBSECTI ON (3) OF SECTION 200 BY THE FINANCE (NO.2) ACT, 2004 W.E.F. 1- 4-2005. WE FIND THAT REVENUE COULD NOT BRING ANY MATERIAL BEFORE US TO CONTROVERT THE ABOVE FIND ING OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) AND TO SHOW TH AT THE ASSESSEE WAS EARLIER AWARE OF THIS REQUIREMENT OF LAW. FURTHER, ON THE F ACTS OF THE CASE THAT THE ASSESSEE 4 ITA NOS. 6334 TO 6336/M/2014 SMT. RANI A. GROVER HAS PAID THE TAX WITHIN THE PRESCRIBED TIME, ITSELF SHOWS THAT ORDINARILY THERE WOULD NOT BE ANY BENEFIT TO THE ASSESSEE FOR WHICH IT WOU LD DELIBERATELY DELAY THE SUBMISSION OF THE QUARTERLY STATEMENTS. FURTHER, TH E CONTENTION OF THE REVENUE THAT IGNORANCE OF LAW CANNOT BE AN EXCUSE IS FOUND TO BE UNACCEPTABLE IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F MOTILAL PADAMPAT SUGAR MILLS CO. LTD. VS. STATE OF UP (1979) 118 ITR 326 (SC) WH EREIN IT WAS HELD THAT THERE IS NO PRESUMPTION IN THIS COUNTRY THAT EVERY PERSON KN OWS THE LAW AND IT WOULD BE CONTRARY TO COMMON SENSE AND REASON IF IT WERE SO. IT WAS ALSO STATED THAT IT IS IMPOSSIBLE TO KNOW ALL THE STATUTORY LAW, AND NOT V ERY POSSIBLE TO KNOW ALL THE COMMON LAW. FURTHER, THE HON'BLE MADRAS HIGH COURT 9 IN THE CASE OF CIT VS. K P V S MOHAMMAD ROWTHER & CO. 232 ITR 176 (MAD) HELD THAT IGNORANCE OF LAW CAN BE A REASONABLE CAUSE FOR THE FAILURE AND DELET ION OF PENALTY WAS JUSTIFIED. FURTHER, IT IS OBSERVED THAT THE REVENUE COULD NOT BRING ANY MATERIAL BEFORE US TO SHOW THAT ANY LOSS TO THE REVENUE WAS CAUSED BECAUS E OF THE AFORESAID DELAY IN FURNISHING OF THE QUARTERLY STATEMENTS BY THE ASSES SEE. ON THE ABOVE FACTS WE DO NOT FIND ANY ERROR IN THE FINDINGS OF THE LEARNED COMMI SSIONER OF INCOME-TAX (APPEALS) THAT THE BREACH OF PROVISIONS BY THE ASSESSEE BY FI LING THE QUARTERLY STATEMENTS WITH CERTAIN DELAY WAS A TECHNICAL OR VENIAL BREACH OF L AW ONLY. KEEPING IN VIEW THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F HINDUSTAN STEEL LTD. V STATE OF ORISSA 83 ITR 26 (SC) AND THE DECISION OF THE JURIS DICTIONAL HIGH COURT IN THE CASE OF HARSIDDH CONSTRUCTION PVT. LTD. VS. CI?T 244 ITR 417 (GUJ), WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE LEAR NED COMMISSIONER OF INCOME-TAX (APPEALS). THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE PRESENT CASE NEITHER THE ORDER OF AO NOR LD. COMMISSIONER (APPEALS) ORDER REVEALED THAT THE ACT OF ASSESSEE WAS DELIBERATE OR IN DEFIANCE OF LAW OR THE ASSESSEE IS GUILTY OF HER CONDUCT. WE NOTICED THAT THERE IS NO REFERENCE IN THE ORDER OF PENALTY THAT THERE WAS ANY WILFUL NEGLIGENCE OR MAGNIFIED O N THE PART OF ASSESSEE IN THE MATTER OF FILING RETURN OF TDS. HAVING CONSIDERED T HE ENTIRETY OF THE FACT, MOREOVER THE ASSESSEE HAS NOT TAKEN ANY LAME EXCUSE WHILE FU RNISHING THE REPLY TO THE NOTICE OF INITIATION OF PENALTY. SHE HAD VOLUNTARILY FILED RETURN BEFORE ISSUANCE OF THE NOTICE FOR INITIATION OF PENALTY. IN OUR CONSIDERED OPINIO N THAT IT IS A FIT CASE FOR DELETING THE PENALTY AS THE ASSESSEE CAME FORWARD WITH HONESTY. HOWEVER, THE OBSERVATION MADE HEREINABOVE MAY NOT BE PRECEDENT FOR FUTURE REFEREN CES. WITH THESE OBSERVATIONS WE DELETE THE PENALTY FOR ALL THREE ASSESSMENT YEARS B Y ACCEPTING APPEAL OF THE ASSESSEE. 7. IN THE RESULT, APPEALS OF THE ASSESSEE FOR ALL THRE E ASSESSMENT YEARS ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 19 TH OCTOBER, 2016 SD/- SD/- (R.C.SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 19/10/2016 5 ITA NOS. 6334 TO 6336/M/2014 SMT. RANI A. GROVER S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/