ITO (TDS), Rohtak V. M/s. L.T. Foods, Sonepat

ITA 6488/DEL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6584 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 22-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 05-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMESH CHAND DUBEY
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D , NEW DELHI BEFORE SH. N. K. SAINI, AM AND MS. SUCHITRA KAMBLE, JM ITA NO. 6488/DEL/2013 : ASSTT. YEAR : 201 0 - 1 1 INCOME TAX OFFICER (TDS), ROHTAK VS M/S L. T . FOODS, 43, K. M. STONE, G.T. ROAD, BAHALGARH, DISTT. SONEPAT (APPELLANT) (RESPONDENT) PAN NO. RTKLO00819A ASSESSEE BY : SH. SANAT KAPOOR , ADV. REVENUE BY : SH. UMESH CHAND DUBEY , SR. DR DATE OF HE ARING : 22 .11 .201 6 DATE OF PRONOUNCEMENT : 28 . 11 .201 6 ORDER PER N. K. SAINI, AM: THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 25.09.2013 OF LD. CIT(A) , ROHTAK . 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING TH E PENALTY U/S 272B OF THE I.TAX ACT AM OUNTING TO RS. 87,20,000/ - WITHOUT ANY COGENT REASON. 2. ON THE FACTS AND CIRCUMSTANCES OF - THE CASE LD. CIT(A) HAS ERRED IN LAW AND FACTS BY DELETING THE PENALTY IGNORING THE FACT OF THE SUBMISSION MADE BY THE ASSESSEE THAT THERE WAS NO REASONABLE CAUSE F OR NOT COMPLYING WITH THE PROVISIONS OF THE ACT IN TIME. ITA NO. 6488 /DEL /201 3 L. T. FOODS 2 3. ON THE FACTS AND IN TH A T CIRCUMSTANCES OF THE CASE THE LD. C IT(A), HAS ERRED IN LAW AND FACTS IN DELETING THE PENALTY U/S 272B OF THE I.TAX ACT IGNORING THE FACTS T HAT THE ASSESSEE PR HAS QUOTED INVALID PAN IN VIOLATION OF SUB - SECTION (5B) OF SECTION 139A OF THE I.TAX ACT. 4. THE APPELLANT CRAVES LEAVE TO ADD OR A MEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS HEA RD. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE AO LEVIED THE IMPUGNED PENALTY BY OBSERVING THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO MAKE APPROPRIATE COMPLIANCE OF PROVISIONS OF SECTION 139A OF THE INCOME TAX ACT, 1961 (HERE INAFTER REFERRED TO AS THE ACT) AND THAT IN AS MANY AS 872 CASES INVALID PAN OF THE DEDUCTEES IN ITS E - TDS RETURN HAVE BEEN FURNISHED . 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO DELETED THE P ENALTY BY OBSERVING IN PARA 5 OF THE IMPUGNED ORDER AS UNDER: 5. I HAVE CONSIDERED THE ISSUE AND THE WRITTEN SUBMISSIONS PRODUCED BY THE AR OF THE APPELLANT. FROM THE FACTS, IT IS EVIDENT THAT THE APPELLANT FILED TDS CORRECTION STATEMENT IMMEDIATELY ON RE CEIPT OF SHOW CAUSE NOTICE GENERATED BY THE SYSTEM AND A COPY OF ACKNOWLEDGEMENT WAS SENT TO THE AO. THE APPELLANT RECEIVED THE FINAL SHOW CAUSE NOTICE OF PENALTY BEYOND THE SPECIFIED DATE OF COMPLIANCE. SINCE THE INVALID / MISSING PAN S HAVE BEEN MADE GOOD BY FILING ITA NO. 6488 /DEL /201 3 L. T. FOODS 3 CORRECTION STATEMENTS WELL BEFORE THE ISSUE OF FINAL PENALTY NOTICE, THE PENALTY IS CANCELLED IN VIEW OF THE CASE LAW RELIED UPON BY THE APPELLANT THE GROUNDS OF APPEAL ARE ALLOWED. SINCE THE FACTS FOR OTHER APPEALS ARE SIMILAR, THE PENALTY IMPO SED IN THESE APPEALS IS ALSO CANCELLED. 5. NOW THE DEPARTMENT IS IN APPEAL. THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE AO DATED 12.03.2012 . 6. IN HIS RIVAL SUBMISSIONS THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AN IDENTICAL ISSUE HAVING SIMILA R FACTS WAS A SUBJECT MATTER OF THE DEPARTMENTAL APPEAL IN ITA NO. 6489/DEL/2013 FOR THE ASSESSMENT YEAR 2010 - 11 WHEREIN VIDE ORDER DATED 09.03.2016, THE DEPARTMENTAL APPEAL WAS DISMISSED AND THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE (COPY OF THE SAI D ORDER WAS FURNISHED WHICH IS PLACED ON RECORD). 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS NOTICED THAT AN IDENTICAL ISSUE HAVING SIMILAR FACTS HAS ALREADY BEEN ADJUDICATED BY THIS B ENCH OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR THE AFORESAID REFERRED TO ORDER DATED 09.03.2016 IN ITA NO. 6489/DEL/2013 WHEREIN THE RELEVANT FINDINGS HAVE BEEN GIVEN VIDE PARAS 3 TO 5 WHICH READ AS UNDER: 3. HAVING CAREFULLY EXAMINED THE ORDERS OF THE L OWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT THE ASSESSEE HAS ITA NO. 6488 /DEL /201 3 L. T. FOODS 4 PLACED ALL THE RELEVANT EVIDENCE IN SUPPORT OF THE EXPLANATION THAT THE PAN NUMBERS WERE FURNISHED ON THE BASIS OF THE INFORMATION RECEIVED FROM THE DEDUCTEES AND MOREOVE R THE INCOME OF THE DEDUCTEES WERE NOT TAXABLE, THEREFORE, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS AND IN RESPECT OF SHRI. KARAN MANKOTIA, TDS WAS DEDUCTED AND PAID IN TIME. THEREFORE, THERE WAS NO LOSS TO THE REVENUE. HOWEVER, THE ASSESSEE HAS FURNISH ED CORRECT STATEMENT. WE FIND THAT THE LEARNED ''COMMI SSIONER OF INCOME TAX (APPEALS) HAS APPRECIATED THE EXPLANATIONS FURNISHED BY THE ASSESSEE AND R IGHTLY DELETED THE PENALTY. 4. WE HAVE ALSO CAREFULLY EXAMINED THE JUDGMENT OF THE HON'BLE PUNJAB & HARY ANA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX (TDS) VS. SUPERINTENDENT OF POLICE (SUPRA) AND WE FIND THAT UNDER SIMILAR CIRCUMSTANCES, THE HON'BLE HIGH COURT HAS HELD THAT PENALTY UNDER SECTION 272B OF THE ACT SHOULD NOT BE LEVIED. THE RELEVANT OBSERVATIONS OF THE HON'BLE HIGH COURT ARE AS UNDER: - ' THE TRIBUNAL HAD COME TO THE CONCLUSION THAT THERE WAS SUFFICIENT CAUSE ON THE PART OF THE RESPONDENT WHILE QUOTING PA OF THE DEDUCTEES AND AS SUCH NO PENALTY WAS LEVIABLE. THE TAX WAS DEDUCTED AND DE POSITED IN TIME IN THE GOVERNMENT TREASURY, THE ERROR WAS DUE TO WRONG QUOTING OF PAN BY THE DEDUCTEES TO THE ASSESSEE. THE ASSESSEE HAD RECTIFIED THE MISTAKE BY FURNISHING THE CORRECT PAN AS SOON AS IT CAME TO ITS NOTICE. THE REVISED PAN AND THE REVISED S TATEMENT WERE ACCORDINGLY FILED. FOLLOWING FINDINGS RECORDED BY THE TRIBUNAL MAY BE READ: - '6. IN THE INSTANT CASE, THE ONLY QUESTION BEFORE US IS WHETHER THERE WAS REASONABLE CAUSE FOR ALLEGED FAILURE ON THE PART OF THE ASSESSEE. IN THE INSTANT CASE, THE ITO(TDS) WHILE GOING THROUGH THE QUARTERLY RETURN IN FORM NO.26Q, FILED BY THE ASSESSEE NOTED THAT IT HAS OMITTED TO QUOTE PAN/HAD QUOTED INVALID PAN IN 196 CASES, AS REGARDS THE REASONABLE CAUSE, IT WAS PLEADED ON BEHALF OF THE ASSESSEE THAT TDS WAS DEDU CTED AND DEPOSITED IN TIME IN GOVERNMENT TREASURY. THE DEFAULT IS ONLY WITH REGARD TO ITA NO. 6488 /DEL /201 3 L. T. FOODS 5 THE WRONG QUOTING OF PAN OF 196 OF THE DEDUCTEES, SUCH DEDUCTEES QUOTED WRONG PAN. HOWEVER, CORRECT PAN WAS GIVEN AS SOON AS DEFAULT WAS BROUGHT TO THE NOTICE OF THE ASSE SSEE, IN THIS CASE, THE CIT(A) HAS CATEGORICALLY OBSERVED THAT THE ASSESSEE DEDUCTED TDS CORRECTLY AND REVISED PAN AND FILED THE REVISED STATEMENT ON FORM NO,26G, HENCE THERE WAS SUFFICIENT COMPLIANCE OF THE PROVISIONS OF SECTION 139A. THERE IS NO DISPUTE THAT THE ASSESSEE QUOTED INVALID PAN FOR 196 DEDUCTEES WHIC H WAS CORRECTED ON OUT BY ITO(TD S). IN THE INSTANT CASE, FAILURE TO QUOTE OCCURRED AS THE CONCERNED DEPOSITOR HAD MISQUOTED PA N . THERE IS ALSO NO DISPUTE THAT THE PAN WAS CORRECTED AFTER ASCERTAINI NG THE SAME FROM THE RESPECTIVE DEDUCTEES.' 5. THE FINDING OF THE CIT(A) WAS UPHELD BY THE TRIBUNAL WITH THE FOLLOWING OBSERVATIONS: - '7. IN THE ABOVE CASE, THE TRIBUNAL HELD THAT CUMULATIVE ANALYSIS OF SECTION 139A AND RULES 114B TO 114D SHOWS THAT AN O BLIGATION TO QUOTE PAN/GIR NUMBER OR TO FILE FORM NO, 60 IS THAT OF CUSTOMER AND NOT THAT OF THE BANK. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, AND ALSO KEEPING IN VIEW THE DECISION OF ITAT, AHMADABAD 'D' BENCH IN THE CASE OF FIN ANCIAL COOPERATIVE BANK LIMITED V. ITO, WARD 2(3), SURAT (SUPRA), WE HOLD THAT THERE WAS REASONABLE CAUSE OF THE DEFAULT, IF ANY COMMITTED BY THE ASSESSES AND HENCE NO PENALTY UNDER SECTION 273B OF THE ACT IS LEVIABLE. IN OUR VIEW THE LEARNED CIT(A) HAS CO RRECTLY APPRECIATED THE FACTS OF THE PRESENT CASE AS WEL L AS SETTLED LEGAL POSITION AND THEREFORE, WE DO NOT FIND ANY VALID GROUND IN INTERFERING WITH THE ORDER OF CIT(A). CONSEQUENTLY, APPEAL FILED BY THE REVENUE IS DEVOID OF ANY MERIT AND DESERVES TO BE DISMISSED,' 6. LEARNED COUNSEL FOR THE APPELLANT WAS UNABLE TO SHOW THAT THE FINDINGS RECORDED BY THE CIT(A) AS WELL AS THE TRIBUNAL ARE ERRONEOUS IN ANY MANNER, IT WAS URGED THAT THERE WAS NO REASONABLE CAUSE ON THE PART OF THE ASSESSEE TO FURNISH INACCU RATE PAN IN FORM 24Q. ITA NO. 6488 /DEL /201 3 L. T. FOODS 6 7. ON APPRECIATION OF THE ENTIRE MATTER/ CIT(A) AND THE TRIBUNAL EXAMINED THE EXPLANATION OF THE ASSESSEE AND CAME TO THE CONCLUSION THAT THERE WAS SUFFICIENT CAUSE SHOWN WHICH WOULD BE A QUESTION OF FACT IN THE GIVEN FACTS AND CIRCUM STANCES. ONCE THAT WAS SO, THERE IS NO SUBSTANCE IN THE ARGUMENT RAISED BY THE LE ARNED COUNSEL FOR THE APPELLANT. 8. FINDING NO MERIT IN THE APPEAL, THE SAME IS DISMISSED. 5. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT PENALTY CANNOT BE LEVIED UN DER SECTION 272B OF THE ACT. WE, THEREFORE, FIND NO JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), WHO HAS RIGHTLY DELETED THE PENALTY LEVIED UNDER SECTION 272B OF THE ACT. 8. SO, RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDER DATED 09.03.2016 IN ITA NO. 6489/DEL/2013 FOR THE ASSESSMENT YEAR 2010 - 11 IN ASSESSEE S OWN CASE. WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 9 . IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. ( ORDER P RON OUNCED IN THE COURT ON 28 /11/2016) SD/ - SD/ - (SUCHITRA KAMBLE ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DAT ED: 28 /11 /2016 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPO NDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR