M/s. Akums Drugs & Pharmaceuticals Ltd., Delhi V. JCIT (TDS), New Delhi

ITA 6596/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4343 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 11-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ATIQ AHMAD SENIOR
• Keywords: Question of law; Reasonable cause; Bonafide mistake
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.6596/DEL./2015 (ASSESSMENT YEAR : 2008-09) ITA NO.6597/DEL./2015 (ASSESSMENT YEAR : 2009-10) M/S. AKUMS DRUGS & PHARMACEUTICALS LTD., VS. JCIT, 304, MOHAN PLACE, LSC, C BLOCK, TDS RANGE 49, SARASWATI VIHAR, NEW DELHI. DELHI 110 034. (PAN : AAECA7090B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL JAIN, CA REVENUE BY : SHRI ATIQ AHMAD, SENIOR DR DATE OF HEARING : 18.09.2017 DATE OF ORDER : 21.09.2017 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : SINCE COMMON QUESTION OF LAW AND FACTS IS INVOLVED IN THE AFORESAID APPEALS FILED BY THE ASSESSEE AGAINST A S INGLE ORDER DATED 01.10.2015 PASSED BY THE LD. CIT (A) FOR AYS 2008- 09 AND 2009- 10, THE SAME ARE BEING DISPOSED OFF BY WAY OF CONSO LIDATED ORDER TO AVOID REPETITION OF DISCUSSION. ITA NOS.6596 & 6597/DEL./2015 2 2. THE APPELLANT, M/S. AKUMS DRUGS & PHARMACEUTICAL S LTD. (HEREINAFTER REFERRED TO AS THE ASSESSEE COMPANY) , BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED OR DER DATED 01.10.2015 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-35, NEW DELHI QUA THE ASSESSMENT YEARS 2008-09 & 2009-1 0 ON THE GROUNDS INTER ALIA THAT :- ASSESSMENT YEAR : 2008-09 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW THE LD. CIT (A) HAS FAILED TO APPRECIATE THAT THE PENALTY ORDER PASSED U/S 271C OF THE INCOME TAX ACT, 1961 BY THE JCIT IS ILLEGAL AND BAD IN LAW. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW THE LD. CIT (A) HAS ERRED IN SUSTAINING PENALTY OF RS.72,959/- UNDER SECTION 271C OF THE INCOME TAX ACT, 1961 ASSESSMENT YEAR : 2009-10 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW THE LD. CIT (A) HAS FAILED TO APPRECIATE THAT THE PENALTY ORDER PASSED U/S 271C OF THE INCOME TAX ACT, 1961 BY THE JCIT IS ILLEGAL AND BAD IN LAW. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW THE LD. CIT (A) HAS ERRED IN SUSTAINING PENALTY OF RS.49,996/- UNDER SECTION 271C OF THE INCOME TAX ACT, 1961 3. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND IN BOTH THE AFORESAID APPEALS A RE : ON THE BASIS ITA NOS.6596 & 6597/DEL./2015 3 OF ASSESSMENT COMPLETED UNDER SECTION 143 (3) OF TH E INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) FOR ASSESSMENT YEAR S 2008-09 AND 2009-10, ASSESSING OFFICER NOTICED THAT THE TDS WAS NOT DEDUCTED BY THE ASSESSEE COMPANY AT SOURCE AMOUNTING TO RS.7 2,959/- AND RS.49,996/- RESPECTIVELY, WHICH THE ASSESSEE WAS RE QUIRED TO DISCLOSE. AO, AFTER ISSUING THE NOTICE U/S 271(1)( C) OF THE ACT READ WITH SECTION 274 (1) INITIATED THE PENALTY PROCEEDI NGS. ASSESSEE SUBMITTED THAT IMMEDIATELY AFTER THE OBJECTIONS RAI SED BY THE TAX AUDITOR, ASSESSEE COMPANY HAS DEDUCTED TDS ON THE A BOVE PAYMENT AND DEPOSITED THE SAME. AO, BEING DIS-SATI SFIED WITH THE EXPLANATION, PROCEEDED TO IMPOSE THE PENALTY TO THE TUNE OF RS.72,959/- AND RS.49,996/- FOR AYS 2008-09 AND 200 9-10 RESPECTIVELY. 4. ASSESSEE COMPANY CARRIED THE MATTER BY WAY OF FI LING APPEALS BEFORE THE LD. CIT (A) WHO HAS CONFIRMED TH E PENALTY. FEELING AGGRIEVED, THE ASSESSEE COMPANY HAS COME UP BEFORE THE TRIBUNAL BY WAY OF CHALLENGING THE IMPUGNED ORDER P ASSED BY LD. CIT (A). 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NOS.6596 & 6597/DEL./2015 4 6. UNDISPUTEDLY, ASSESSEE COMPANY HAS NOT DEDUCTED AND DEPOSITED THE TDS TO THE TUNE OF RS.72,959/- FOR AY 2008-09 U/S 194C & 194J. SIMILARLY, ASSESSEE COMPANY HAS ALSO NOT DEDUCTED TDS FOR RS.49,996/- FOR AY 2009-10 RESPECTIVELY U/S 194C, 194J & 194I. ASSESSEE COMPANY HAS TAKEN DEFENCE FOR NON -DEDUCTING AND NON-DEPOSITING THE TDS AS CLERICAL ERROR WHICH WAS SUBSEQUENTLY NOTICED BY TAX AUDITORS AND IMMEDIATEL Y THEREAFTER, ASSESSEE COMPANY HAS DEPOSITED THE TDS WITH TAX AUT HORITIES. IT IS ALSO NOT IN DISPUTE THAT IN THE COMPLETED ASSESSMEN T, THE ASSESSEE HAS NEVER DECLARED ASSESSEE IN DEFAULT NOR ANY ORDE R HAS BEEN PASSED BY THE AO SUBSEQUENTLY U/S 201 OF THE ACT. 7. BARE PERUSAL OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ORDER PASSED BY THE LOWER REVENUE AUTHORITIES LEADS TO THE CONCLUSION THAT OMISSION FOR NON-DEDUCTION OF THE T DS WAS NOT INTENTIONAL RATHER DUE TO BONAFIDE MISTAKE AS IMMED IATELY AFTER POINTING OUT BY THE TAX AUDITORS, TDS WAS DEPOSITED BY THE ASSESSEE COMPANY OUT OF ITS OWN POCKET WITHOUT COL LECTING IT FROM THE DEDUCTEE. ASSESSEE COMPANY HAS EVEN DEPOSITED THE TDS EVEN BEFORE DEDUCTION MADE BY THE REVENUE AUTHORITIES. 8. SO, WE ARE OF THE CONSIDERED VIEW THAT IT WAS A REASONABLE CAUSE FOR THE ASSESSEE COMPANY NOT TO DEPOSIT THE T DS WITHIN TIME. FURTHERMORE, PENALTY ORDER U/S 271(1)(C) OF THE ACT HAS BEEN ITA NOS.6596 & 6597/DEL./2015 5 PASSED WITHOUT DECLARING THE ASSESSEE IN DEFAULT BY PASSING ORDER U/S 201(1) OF THE ACT. SO, WHEN AO HAS NOT RECORDE D HIS SATISFACTION FOR INITIATION OF THE PENALTY U/S 271( 1)(C) IN THE ORDER REQUIRED TO BE PASSED U/S 201(1) OF THE ACT, THE PE NALTY ORDER IS NOT SUSTAINABLE. 9. COORDINATE BENCH OF THE TRIBUNAL IN INDO NISSIN FOODS LTD. VS. JCIT 83 TTJ BANG 440 WHILE DECIDING THE IDENTICAL ISSUE HELD THAT THE VOLUNTARY PAYMENT OF TAX AND INTEREST , ALBEIT WITH DELAY, CANNOT CONSTITUTE AS AN ACT OF MALAFIDE AND AS SUCH PENALTY IS NOT SUSTAINABLE, BY RELYING UPON THE DECISION RENDE RED BY HONBLE DELHI HIGH COURT IN AZADI BACHAO ANDOLAN VS. UOI (2001) 252 ITR 471 (DEL.) . 10. HONBLE MADHYA PRADESH HIGH COURT IN CASE OF CIT VS. SENIOR ACCOUNTS OFFICER (2005) 276 ITR 84 (MP) WHILE DECIDING THE IDENTICAL ISSUE ALSO DECIDED THE SAME IN FAVOUR OF THE ASSESSEE AS IT WAS NOT A CASE OF DELIBERATE ATTEMPT ON THE PART OF THE ASSESSEE TO AVOID PAYMENT BY WAY OF DEDUCTION FOR B EING DEPOSITED. 11. SIMILARLY, HONBLE DELHI HIGH COURT ALSO CIT VS. CADBURY INDIA LTD. (2011) 11 TAXMANN.COM 66 (DELHI) ALSO DELETED THE PENALTY IN A CASE WHERE THERE WAS NO MALAFIDE INTEN TION NOR THERE WAS NEGLIGENT INTENTION OR WANT OF BONA FIDE BUT A CASE OF ITA NOS.6596 & 6597/DEL./2015 6 MISCONCEIVED BELIEF OF APPLICABILITY OF ONE PROVISI ON OF THE LAW THAN THE OTHER. IN THE INSTANT CASE, THERE IS NOT AN IOTA OF MALAFIDE OR AN ATTEMPT TO AVOID THE PAYMENT OF TAX ON THE PA RT OF THE ASSESSEE COMPANY AND AS SUCH, THE PENALTY ORDERS AR E NOT SUSTAINABLE. 11. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, PENAL TY TO THE TUNE OF RS.72,959/- AND RS.49,996/- FOR AYS 2008-09 AND 2009-10 RESPECTIVELY IS HEREBY DELETED. CONSEQUENTLY, APPE ALS FILED BY THE ASSESSEE STAND ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 21 ST DAY OF SEPTEMBER, 2017. SD/- SD/- (N.K. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 21 ST DAY OF SEPTEMBER, 2017 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A)-35, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.