GOVIND PRITAMDAS VANJANI, MUMBAI V. ADDL CIT (TDS) RG 1, MUMBAI

ITA 6816/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3399 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 10-11-2014
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRAN
• Assessee Lawyers: S S PHADKAR; VISHWANATH VERMA
• Keywords: Reasonable cause
• Section: 2

Judgement Text

, , G , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI , , , BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.6816/MUM/2014 ASSESSMENT YEAR: 2010-11 GOVIND PRITAMDAS VANJANI, 1214/1215 RAHEJA CLASSIC 28 LINK RD. OSHIWARA ANDHERI(W) MUMBAI-400053 / VS. ACIT (TDS) RG 1 MUMBAI- (ASSESSEE ) (REVENUE) P.A. NO. AALPV4342H APPELLANT BY SHRI S.S. PHADKAR & SHRI VISHWANATH VERMA (AR) RESPONDENT BY SHRI A. RAMACHANDRAN (D R) / DATE OF HEARING: 06/06/2016 / DATE OF ORDER: 24/06/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI-1 {(IN SHORT CIT(A)}, DATED 12/09/2014 PASSED AGAIN ST PENALTY GOVIND PRITAMDAS 2 ORDER U/S 272A(2)(K) OF THE ACT, FOR THE ASSESSMENT YEAR 2010- 11 ON THE FOLLOWING GROUNDS: BEING AGGRIEVED BY THE ORDER OF THE CIT (APPEALS) RANGE 1 ,MUMBAI, HEREAFTER REFERRED TO AS THE CIT(A) , IS F ILING THIS APPEAL. YOUR APPELLANT SUBMITS THE FOLLOWING GROUND S OF APPEAL FOR YOUR SYMPATHETIC CONSIDERATION: 1. THE HON'BLE CIT(A) ERRED IN CONFIRMING PENALTY U/S 272A(2)(K) OF THE INCOME TAX ACT, 1961 AMOUNTING TO RS. 71346/- YOUR APPELLANT HUMBLY PRAYS THAT THE SAID PENALTY O F RS.71346/- BE DELETED. 2. THE HON'BLE CIT(A) ERRED IN COMING TO THE CONCLUSIO N THAT YOUR APPELLANT HAD NO 'REASONABLE CAUSE' TO DELAY THE FILING OF ETDS RETURNS, WHEREAS THE ASSESSEE DID NO T HAVE ACCOUNTING STAFF POSSESSING REQUIRED EXPERT KNOWLEDGE ABOUT PROCESS OF FILING THE ETDS RETURNS, AND ASSESSEE GOT KNOWLEDGE ABOUT HIS LIABILITY OF DEDUC TING TDS AT THE END OF THE FINANCIAL YEAR ENDED 31 .03.2 010 WHEN HIS SALES TURNOVER CROSSED RS.40 LACS WHICH WA S THE LIMIT FOR GETTING THE BOOKS AUDITED U/S.44AB OF THE ACT. 3. IT IS ALSO MENTIONED THAT THE FINANCIAL YEAR 2009-1 0 (A.Y.201 0-11) WAS THE FIRST YEAR OF TAX AUDIT FOR THE APPELLANT, SO AS PER PROVISIONS OF IT ACT, 1961 APP ELLANT WAS ACTUALLY NOT LIABLE TO DEDUCT AND PAY THE TAX A T SOURCE 4. THE HON'BLE ERRED IN COMING TO THE CONCLUSION THAT THE DELAY IN NOT ACCEPTABLE IN THE MODERN DAYS OF COMPU TER, WHILE ACTUALLY FILING TDS RETURNS BY PAPER RETURNS WAS EASIER AND SIMPLIER THAN FILING THE TDS RETURNS THR OUGH COMPUTERS, WHICH REQUIRES A SEPARATE COMPUTER SOFTW ARE AND AN EXPERT PERSON TO OPERATE IT. 5. HON'BLE CIT(A)-14 FIXED THE DATE OF HEARING OF THE APPEAL FOR 11.09.2014, HOWEVER AS THE CONSULTANT OF THE APPELL ANT WAS OUT OF STATION, THERE WAS A ADJOURNMENT REQUEST SUBMITTED TO THE OFFICE OF THE CIT(A)-14 ON 11-09-2 014, HOWEVER HON'BLE CIT(A)-14 COULD NOT CONSIDER THE FI RST AND ONLY REQUEST FOR ADJOURNMENT AND DECIDED THE APPEAL. WE THEREFORE PLEAD THAT APPELLANT WAS NOT G IVEN GOVIND PRITAMDAS 3 DUE RIGHT OF BEING HEARD. 6. ON THESE FACTS AND UNDER THE CIRCUMSTANCES THERE WA S A 'REASONABLE CAUSE' DUE TO WHICH THE ASSESSEE COULD NOT FILED THE EMS RETURNS ON THE DUE DATES. 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI S.S. PHADKAR & SHRI VISHWANATH VERMA, (ARS) ON BEHALF OF THE ASSESSEE AND BY SHRI A. RAMACHANDRAN, DEPART MENTAL REPRESENTATIVE (LD. DR) ON BEHALF OF THE REVENUE. 3 . THE SOLITARY ISSUE RAISED IN THIS APPEAL IS WITH REGARD TO LEVY OF PENALTY OF RS.71,346/- DUE TO DELAY IN FILING OF ETDS RETURNS. 3.1. DURING THE COURSE OF HEARING, IT WAS SUBMITTED BY THE LD. COUNSEL THAT ENTIRE AMOUNT OF TDS WAS DEDUCTED AND DEPOSITED IN THE GOVERNMENT TREASURY WITHIN TIME AS PER LAW. BUT, DUE TO LACK OF INFRASTRUCTURE AND PROPER STAFF , THE RETURNS COULD NOT BE FILED TIMELY. THE ASSESSEE HAD A PART TIME ACCOUNTANT WHO WAS NOT WELL VERSED TO THE SYSTEM OF E-FILING OF RETURNS WHICH WAS INTRODUCED RECENTLY. THUS, THERE WERE REASONS BEYOND THE CONTROL OF THE ASSESSEE AND THUS , THERE WAS REASONABLE CAUSE DUE TO WHICH DELAY OCCURRED IN FILING OF THESE DOCUMENTS ELECTRONICALLY. 3.2. PER CONTRA LD. DR SUBMITTED THAT ALTHOUGH THE AMOU NT INVOLVED IS NOT SUBSTANTIAL BUT DUE TO DELAY IN FIL ING OF ELECTRONIC TDS RETURNS IT BECOMES DIFFICULT FOR PAY EES TO GET CREDIT OF THE TDS AMOUNT AS THE SAME ARE LINKED TO FORM GOVIND PRITAMDAS 4 NO.26AS AND THEREFORE, PENALTY SHOULD BE LEVIED ON THE ASSESSEE UNDER SUCH CIRCUMSTANCES. 3.3. WE HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHO RITIES AND CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES. IT IS NOTED BY US THAT AS PER FACTS BROUGHT BEFORE US, THE ASSE SSEE HAD DEDUCTED THE TAX AS PER LAW AND DEPOSITED THE SAME ALSO WITHIN TIME. THUS, IN EFFECT THERE IS NO LEAKAGE OF REVENUE. IT IS CONTENDED THAT THE SYSTEM OF ELECTRONICALLY FILLING OF TDS WAS INTRODUCED RECENTLY AND MANY PERSONS WERE NOT YET W ELL VERSED WITH THE TECHNICALITIES AND PROCEDURES INVOLVED IN FILING OF TDS RETURNS ELECTRONICALLY. IT IS ALSO STATED THAT THE ASSESSEE HAD A SMALL SET UP AND DID NOT HAVE A PERMANENT ACCOUNTAN T AND THE PART-TIME ACCOUNTANT WHO WAS WORKING FOR THE CO MPANY COULD NOT APPRECIATE THE IMPLICATIONS OF LATE FILIN G OF ELECTRONIC TDS RETURNS. IT WAS FURTHER SUBMITTED BY THE ASSESS EE THAT IT TOOK TIME TO AVAIL SERVICES OF A TECHNICAL EXPERT T O DO THIS JOB. IT IS FURTHER BROUGHT TO OUR NOTICE THAT IMPUGNED A SSESSMENT YEAR WAS FIRST YEAR OF TAX AUDIT OF BOOKS OF ACCOUN TS OF THE ASSESSEE. WE FIND FORCE IN THE CONTENTIONS MADE BY LD. COUNSEL. THE EXPLANATIONS OF THE ASSESSEE ARE PLAUS IBLE AND THESE CANNOT BE DISMISSED AS WHOLLY UNFOUNDED. IN O UR VIEW, THE ASSESSEE HAS BEEN ABLE TO SET UP A 'REASONABLE CAUSE' , AS ENVISAGED U/S 273B, FOR HIS FAILURE IN FILING THE RETURNS IN TIME. THUS, TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AND OVERALL CONDUCT OF TH E ASSESSEE, WE FIND THAT IN THIS CASE PENALTY SHOULD NOT BE LEV IED AND GOVIND PRITAMDAS 5 THEREFORE, WE DIRECT THE AO TO DELETE THE PENALTY O F RS. 71,346/-. 4. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JUNE, 2016. SD/- (AMIT SHUKLA ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER MUMBAI; # DATED : 24/06/2016 CTX? P.S/. .. #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. % &' / THE APPELLANT 2. ()&' / THE RESPONDENT. 3. * * ( % ) / THE CIT, MUMBAI. 4. * * / CIT(A)- , MUMBAI 5. -. / (01 , * % 012 , / DR, ITAT, MUMBAI 6. / 34 5 / GUARD FILE. / BY ORDER, ) -% ( //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI