The Sub Divisional Engineer (HQ), Chandigarh V. Addl. CIT (TDS), Chandigarh

ITA 673/CHANDI/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64068 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-12-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 15-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 673/CHD/2012 ASSESSMENT YEAR: 2008-09 THE SUB DIVISIONAL ENGINEER(HQ), V ADDL.CIT(TDS) MUNICIPAL CORPORATION, C.R. BUILDING, SECTOR 17, CHANDIGARH. SECTOR 17, CHANDIGARH. PAN: PTLA10107G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI OM DUTT SHARMA RESPONDENT : SHRI AKHILESH GUPTA DATE OF HEARING : 05.12.2012 DATE OF PRONOUNCEMENT : 13.12.2012 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 01.03.2012 PASSED BY THE LD . CIT(A) U/S 250(6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'THE AC T'). 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL: 1. THE APPELLANT HAS GIVEN THE PARKING LOTS ON LEA SE IN DIFFERENT SECTORS OF CHANDIGARH DURING THE FINANCIAL YEAR 2007-08 RELEVA NT TO THE ASSESSMENT YEAR - 2008-2009. THE LEASSEES OF THE PARKING LOT WERE RES PONSIBLE FOR THE PAYMENT OF TAXES ON THEIR RESPECTIVE INCOME AS PER THE TERMS O F THE CONTRACT. THE APPELLANT WAS UNDER BONAFIDE BELIEF THAT AS THE LEA SSEES OF PARKING LOTS ARE MADE RESPONSIBLE FOR PAYMENT OF TAX ON THEIR RESPECTIVE INCOME, HE IS UNDER NO OBLIGATION FOR DEDUCTION OF TAX AT SOURCE. BUT AS S OON AS THE PROVISIONS OF T.C.S. CAME TO THE NOTICE OF THE APPELLANT, HE IMMEDIATELY COLLECTED THE TAX AND DEPOSITED THE SAME WITH INTERESTS FOR DELATED PAYMENT WHICH A MOUNTED TO RS. 6,71,424/- INCLUSIVE OF INCOME. THE LEARNED ADDL. COMMISSIONER OF INCOME TAX (TDS) CHANDIGARH IS NOT JUSTIFIED IN LEVYING A PENALTY OF RS. 6,71,424/- FOR FAILURE TO 2 COLLECT TCS WHEREAS THE APPELLANT HAS COLLECTED THE TCS THOUGH LATE AND DEPOSITED THE SAME ALONG WITH INTEREST 2. THE APPELLANT CRAVES LEAVE TO ALTER OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL AT THE TIME OF HEARING. 3. THE PRESENT APPEAL HAS BEEN FILED AGAINST THE OR DER DATED 01.03.2012 FOR THE ASSESSMENT YEAR 2008-09 PASSED B Y THE CIT(APPEALS),UPHOLDING LEVY OF PENALTY U/S 271CA OF THE ACT, FOR FAILURE TO COLLECT TCS OF RS.6,71,424/- U/S 206 C(IC) OF THE ACT. 4. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, LD. 'AR' SUBMITTED THAT IT WAS THE FIRST YEAR FOR SUCH BONAF IDE DEFAULT AND THE LICENCEE, WHO WAS GIVING PARKING LOTS ON LE ASE IN DIFFERENT SECTORS, WAS RESPONSIBLE FOR PAYMENT OF T AX OF THEIR RESPECTIVE INCOME. IN VIEW OF THIS, IT WAS AGREED THAT APPELLANT WAS UNDER BONAFIDE BELIEF THAT SUCH PERSONS WERE RE SPONSIBLE FOR PAYMENT OF TAX ON THEIR RESPECTIVE INCOME AND T HE APPELLANT WAS NOT RESPONSIBLE TO COLLECT TDS. IT WAS, VEHEME NTLY, STATED BY THE LD. 'AR' THAT THE PAYMENT HAS BEEN MADE ALON GWITH INTEREST THEREON. HOWEVER, IN SUBSEQUENT YEARS, TH ERE IS NO SUCH DEFAULT. IN VIEW OF THIS, THE CASE OF THE APP ELLANT FALLS U/S 273B OF THE ACT, WHICH CONTEMPLATES NON-LEVY OF PEN ALTY U/S 271CA OF THE ACT, IN CASE OF FAILURE, REFERRED IN T HE SAID PROVISION WHERE THE ASSESSEE PROVES EXISTENCE OF RE ASONABLE CAUSE FOR SUCH FAILURE. THE ASSESSEE, FURTHER, STA TED THAT EVIDENCES FOR MAKING THE PAYMENTS HAVE BEEN FILED, AS IS EVIDENT FROM THE PAPER BOOK, FILED BY THE ASSESSEE. 5. LD. 'DR' DID NOT CONTROVERT SUCH ASSERTIONS, MAD E BY THE 3 APPELLANT IN RESPECT OF PAYMENT OF THE IMPUGNED AMO UNT. HOWEVER, HE PLACED RELIANCE ON THE ORDER OF THE CIT (APPEALS). 6. WE HAVE CAREFULLY PERUSED AND CONSIDERED THE RIV AL SUBMISSIONS, FACTS OF THE CASE AND THE RELEVANT REC ORDS AND FOUND THAT THE CASE OF THE ASSESSEE IS COVERED UNDE R THE PROVISIONS OF SECTION 273B OF THE ACT, HAVING REGAR D TO THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND CONDUCT OF THE APPELLANT IN MAKING THE IMPUGNED PAYMENT AND NON- EXISTENCE OF SUCH DEFAULT IN SUBSEQUENT YEARS. IN VIEW OF THIS, THE ASSESSEE SUCCEEDS IN HIS GROUND OF APPEAL AND, HENCE, THE FINDINGS OF THE CIT(APPEALS) IN THE MATTER, CANNOT BE UPHELD. HENCE, THE IMPUGNED ORDER OF PENALTY, PASSED BY THE CIT(APPEALS) IS SET ASIDE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH DEC.,2012. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13 TH DEC.,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH