M/s. Ashok Heritage travels Private Limited , Jaipur V. Income Tax Officer, TDS, Jaipur

ITA 756/JPR/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9942 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 30-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P P MEENA CIT DHK
• Assessee Lawyers: SHRAVAN KR GUPTA
• Keywords: Bonafide belief; Reasonable cause; Ignorance of law; TDS
• Section: 273B

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES A, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA -@ ITA NO. 756/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2011-12 M/S ASHOK HERITAGE TRAVELS PVT. LTD., A-207, A-BLOCK, VAISHALI NAGAR, JAIPUR. C UKE VS. I.T.O., TDS-1, JAIPUR. LFKK;H YS[KK LA -@THVKBZVKJ LA-@ PAN/GIR NO.: AAHCA 3027 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI SHRAVAN KR. GUPTA (ADV) JKTLO DH VKSJ LS @ REVENUE BY : SHRI P.P. MEENA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 29/04/2019 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 31/05/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT(A)-3, JAIPUR DATED 11/05/2018 FOR THE A.Y. 2011-12 IN THE MATTER OF ORDER PASSED U/S 272A(2)(K) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) IMPOSING PENALTY OF RS. 43,248/-. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. IN THIS CASE, THE ASSESSEE HAS FAILED TO FURNISH QUARTERLY STATEMENT (REFERENCE) OF THE TDS IN THE PRESCRIBED FORM WITHIN TIME PRESCRIBED U/S 206 OF THE ITA 756/JP/2018_ M/S ASHOK HERITAGE TRAVELS P LTD. VS ITO-TDS-1 2 ACT. AS THERE WAS A DELAY IN FILING THE RETURN, THE A.O. LEVIED PENALTY OF RS. 43,248/- U/S 272A(2)(K) OF THE ACT CONSIDERING THE DELAY IN EACH QUARTER. 3. BY THE IMPUGNED ORDER, THE LD CIT(A) CONFIRMED THE ACTION OF THE A.O. AGAINST WHICH, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE ITAT. 4. IT WAS ARGUED BY THE LD AR THAT THE ASSESSEE HAD DEDUCTED THE TDS AND ALSO DEPOSITED THE SAME IN TO THE ACCOUNT OF CENTRAL GOVT. WITH INTEREST ALSO. THIS IS THE ADMITTED FACTS AND NOT DISPUTED. ACCORDINGLY, THE REQUIREMENT OF THE TDS RETURN FILLING IS TO ENSURE THAT THE ASSESSEE WHETHER DEDUCTED CORRECT TAX OR NOT OR AFTER DEDUCTING THE SAME WHETHER PAID OR NOT IN TO THE ACCOUNT OF CENTRAL GOVT. IF BOTH OF THE THINGS HAS BEEN DONE AND PURPOSE OF THE REVENUE IS FULFILLED AND WHEN THERE WAS NO LOSS TO THE REVENUE BECAUSE THE ASSESSEE HAS ALSO PAID INTEREST, THEN THERE SHOULD NOT BE ANY QUESTION TO IMPOSE ANY PENALTY ON THE ASSESSEE ONLY DUE TO THE REASON THAT THE ASSESSEE HAS NOT FILLED THE RETURN TIMELY. THE REASON OF NON-FILLING THE TDS RETURN IN TIME WAS DUE NOT RECEIVING OF PAN NO. OF THE DEDUCTEE OR OF THE PERSONS TO WHOM PAYMENT WAS MADE. LD. A.R. FURTHER SUBMITTED THAT IN THE ASSESSEES COMPANY SH. ASHOK SING AND HIS WIFE SMT. ROZA HERNEDIZ WERE THE DIRECTOR AND SOME DISPUTE HAS BEEN AROSE BETWEEN THEM ITA 756/JP/2018_ M/S ASHOK HERITAGE TRAVELS P LTD. VS ITO-TDS-1 3 HENCE BOTH THE DIRECTORS WERE IN TENSION AND ULTIMATELY, THEY WERE LIVING SEPARATE AT THAT TIME. THIS HAS RESULTED IN DELAY IN FILING OF TDS/TCS STATEMENT. HOWEVER, AFTER RECEIVING THE PAN THE ASSESSEE HAS FILED THE TDS RETURN OF ALL THE QUARTER WITH INTEREST, WHEN THE DELAY HAS BEEN OCCURRED DUE TO THE ABOVE REASONS. THE ASSESSEE HAS PAID SALARY/OTHER PAYMENT AFTER DEDUCTING THE TDS AND THIS TDS HAS BEEN DEPOSITED BEFORE FILLING THE TDS RETURN. HERE THE ASSESSEE HAD DONE ALL THE WORK WHICH WERE IN ITS HAND (I.E. DEDUCTION AND DEPOSIT OF TAX). NOW THE TASK OF FILLING OF E-TDS RETURN WAS ON RECEIVING PAN, IN WHICH THERE WAS NO DEFAULT OF THE ASSESSEE AND IF ANY DEFAULT WAS OF THE PERSON WHO HAS NOT PROVIDED THEIR PAN NO TO THE ASSESSEE IN TIMELY, WHICH WAS BEYOND THE CONTROL OF THE ASSESSEE, FOR WHICH HE SHOULD NOT BE SUFFERED AND PENALIZED. OTHERWISE NO ASSESSEE OR PERSON WANTS EXTRA BURDEN OF INTEREST. 5. RELIANCE WAS PLACED ON THE DECISION OF ITAT JAIPUR BENCH IN THE CASE OF ARGUS GOLDEN TRADES INDIA LTD V/S JCIT 189 TTJ 589(JP) WHEREIN IT WAS HELD THAT: PENALTY U/S 272A(2)(K)DELAY IN FILING E-TDS RETURN WITHIN STIPULATED TIMEAO IMPOSED PENALTY U/S 272A(2)(K) HOLDING THAT ASSESSEE COMPANY HAD DELAYED IN FILING QUARTERLY E-TDS RETURN WITHIN STIPULATED TIMECIT (A) UPHELD LEVY OF PENALTY AND OBSERVED THAT DELAY WAS NOT OF ONE OR TWO DAYS BUT THERE WAS DELAY OF 1024 DAYS, HENCE, IT REVEALED WILLFUL ATTEMPT FOR NON-COMPLIANCE OF STATUTORY ITA 756/JP/2018_ M/S ASHOK HERITAGE TRAVELS P LTD. VS ITO-TDS-1 4 PROVISIONSHELD, PENALTY HAD BEEN LEVIED U/S 272A(2)(K) WHICH TALKED ABOUT FAILURE TO DELIVER COPY OF STATEMENT WITHIN TIME SPECIFIED IN SECTION 200(3) OR PROVISO TO SECTION 206C (3)THERE WAS DELAY IN FILING OF QUARTERLY E-TDS RETURNS WHICH WAS COVERED UNDER PROVISIONS OF SECTION 272A(2)(C)WHERE AO WAS NOT CLEAR ABOUT BASIS OF CHARGE, LEVY OF PENALTY COULD NOT BE SUSTAINEDNO LOSS TO REVENUE WHICH WAS CAUSED DUE TO DELAY IN FILING OF E-TDS RETURNS WHICH WAS TOTALLY UNINTENTIONALTHERE WAS CHANGE EFFECTED IN IT SYSTEM FOR MANDATORY REQUIREMENT OF PANS OF ALL DEDUCTEES BEFORE RETURNS COULD BE VALIDATED AND UPLOADEDTHERE WERE LARGE NUMBER OF DEDUCTEES SPREAD THROUGHOUT COUNTRY AND EFFORTS WERE MADE BY THE ASSESSEE TO OBTAIN THEIR PANS NUMBERS AND TAXES HAD BEEN DEDUCTED AND DEPOSITEDHENCE NO LOSS TO REVENUEASSESSEE HAD REASONABLE CAUSE FOR DELAYED FILING OF ITS E-TDS RETURNS IN TERMS OF SECTION 273BPENALTY U/S 272(A)(K) DELETEDASSESSEES APPEAL ALLOWED. 6. AS PER THE LD AR, THERE WAS ONLY TECHNICAL BREACH AND THE CONDUCT OF THE ASSESSEE HAS NOT BEEN SHOWN TO BE CONTUMACIOUS AND NO DEFIANCE OF LAW IS ESTABLISHED. RELIANCE WAS PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEELS VS. STATE OF ORISSA 83 ITR 26 (SC) WHEREIN THE HONBLE COURT HAS HELD: 'THAT IN ORDER TO IMPOSE PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF QUASI CRIMINAL PROCEEDINGS AND PENALTY WILL NOT ORDINARILY BE IMPOSED, UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. THE SUPREME COURT HAS FURTHER LAID DOWN THAT PENALTY WILL NOT BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY AND IS TO BE EXERCISED JUDICIOUSLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY, WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF ACT OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE.' THE ASSESSEE IN ANY CASE ENTERTAINED A BONAFIDE BELIEF THAT THE TDS RETURN CANNOT BE FILED WITHOUT PAN NO. THAT IS WAY A REASONABLE CAUSE DID EXIST U/S 273B AND HENCE ALSO THE PENALTY IMPOSED MAY KINDLY BE QUASHED. THUS DUE TO THE NEGLIGENCE OF THE DEDUCTEE A POOR ASSESSEE SHOULD NOT BE SUFFERED. ITA 756/JP/2018_ M/S ASHOK HERITAGE TRAVELS P LTD. VS ITO-TDS-1 5 7. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND CONTENDED THAT THE A.O. HAS CORRECTLY IMPOSED PENALTY FOR THE RESPECTIVE DELAY IN EACH QUARTER IN FILING THE RETURN OF TDS. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT THE ASSESSEE HAS DEPOSITED DUE TAXES COLLECTED AND ALSO INTEREST THEREON TILL DATE OF PAYMENT. IMMEDIATELY, AFTER PAYMENT OF TDS, THE ASSESSEE HAS ALSO FILED TDS RETURNS. AS THE ASSESSEE WAS NOT HAVING PAN NUMBER OF THE DEDUCTEE, THEREFORE, HE HAS ENTERTAINED A BONAFIDE BELIEF THAT THE TDS RETURN CANNOT BE FILED WITHOUT PAN NUMBER. ACCORDINGLY, WE FOUND THAT THERE WAS A REASONABLE CAUSE U/S 273B OF THE ACT. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. SUPERINTENDENT ENGINEER, UDAIPUR 260 ITR 641 (RAJ) HAS HELD THAT: A PLAIN READING OF THE PROVISO TO S. 272A(2) CLEARLY SHOWS THAT IT ONLY PROVIDES AN OUTER LIMIT OF THE PENALTY. THE WORDS 'DEDUCTIBLE' OR 'COLLECTIBLE' HAVE BEEN USED ONLY WITH REFERENCE TO THE QUANTUM OF PENALTY TO BE LEVIED. IF THE VIEW OF THE TRIBUNAL IS ACCEPTED, THE PROVISO WILL DEFEAT THE VERY PURPOSE OF THE SUBSTANTIVE PROVISION UNDER S. 272A(2)(C). THE PURPOSE OF LEVY OF PENALTY UNDER S. 272A(2)(C) APPEARS TO BE TO PUT PRESSURE ON THE THOUGHTLESS AND INEFFICIENT OFFICERS TO PERFORM THEIR DUTY PUNCTUALLY IN THE PUBLIC INTEREST, BUT A TAX AUTHORITY CANNOT INFLICT PENALTY IN THOUGHTLESS OR ROUTINE MANNER. THE LEGISLATURE MAY CREATE AN OFFENCE OF A STRICT LIABILITY WHERE MENS REA IS WHOLLY OR PARTLY NOT NECESSARY. THE QUESTION WHETHER THE OFFENCE INVOLVES THE EXISTENCE OF MENS REA ITA 756/JP/2018_ M/S ASHOK HERITAGE TRAVELS P LTD. VS ITO-TDS-1 6 AS AN ESSENTIAL ELEMENT OF IT OR WHETHER THE STATUTE DISPENSES WITH IT AND CREATES STRICT LIABILITY, ARE QUESTIONS WHICH HAVE TO BE ANSWERED ON A TRUE CONSTRUCTION OF THE STATUTE. THE PENALTY UNDER S. 272A(2)(C) CANNOT BE LEVIED IN A ROUTINE MANNER. THE DISCRETION VESTED WITH THE AUTHORITY IS TO BE EXERCISED JUDICIOUSLY ON CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. A BONA FIDE BREACH CANNOT LEAD TO A PENALTY UNDER S. 272A(2)(C). IN THE INSTANT CASE, THOUGH IT IS TRUE THAT THE IGNORANCE OF LAW IS NO EXCUSE BUT STILL THE PRESCRIBED AUTHORITY WAS REQUIRED TO EXAMINE ALL THE RELEVANT FACTS AND CIRCUMSTANCES OF THE CASE AND TO ASCERTAIN IF IT WAS A DELIBERATE OR NEGLIGENT OR AN INADVERTENT DEFAULT. IN CASE OF NEGLIGENCE, IT WOULD BE A SOUND EXERCISE OF DISCRETION, TO INFLICT MINIMUM OR NOMINAL PENALTY BUT IN CASE OF INADVERTENT OFFICE MISTAKE, IT WOULD NOT BE A SOUND EXERCISE OF JUDICIAL OR QUASI-JUDICIAL POWER TO INFLICT A PENALTY ON THE HEAD OF THE PUBLIC OFFICE. IN SUCH CASES, THE TAX AUTHORITIES SHOULD ALSO EVOLVE A METHOD OF ADVISING THE HEAD OF OFFICE BY WAY OF NOTICE OR REMINDER PROVIDING AN OPPORTUNITY TO COMPLY WITH THE PROVISIONS, THE BREACH OF WHICH MAY LEAD TO LEVY OF PENALTY. IF THE HEAD OF OFFICE DOES NOT ACT EVEN AFTER SUCH A NOTICE, IT WILL BE OPEN FOR THE TAX AUTHORITIES TO SAY THAT IT WAS NOT A CASE OF INADVERTENT MISTAKE. THE TRIBUNAL WAS JUSTIFIED IN CANCELLING THE PENALTY IMPOSED UNDER S. 272A(2)(C), THOUGH FOR DIFFERENT REASONS AS GIVEN IN THE PRECEDING PARAS. 9. THE LUCKNOW BENCH OF THE ITAT IN THE CASE OF BRANCH MANAGER, PUNJAB NATIONAL BANK VS. ADDL.CIT (2011) 140 TTJ 622 (LUCK.) HAS HELD AS UNDER: PENALTY UNDER S. 272A(2)(K)FAILURE TO FILE TDS RETURNREASONABLE CAUSE ASSESSEE COULD NOT COLLECT DETAILS OF PAN FROM ALL DEDUCTEESTHERE WAS ONLY A TECHNICAL BREACHASSESSEE DID NOT DERIVE ANY BENEFIT WHATSOEVER BY NOT FILING THE QUARTERLY TDS STATEMENTS IN TIME AS THE AMOUNT OF TDS WAS DULY DEPOSITED IN THE GOVERNMENT TREASURY WITHIN THE PRESCRIBED TIMENO PENALTY UNDER S. 272A(2)(K) CAN BE VALIDLY IMPOSED. 10. SIMILAR VIEW HAS BEEN TAKEN BY THE ITAT AHMADABAD BENCH IN THE CASE OF ITO TDS VS. THE ORIENTAL INSURANCE COMPANY VS DEPARTMENT OF INCOME TAX IN ITA NO. 2906/AHD/2009 ORDER DATED 14/09/2011. ITA 756/JP/2018_ M/S ASHOK HERITAGE TRAVELS P LTD. VS ITO-TDS-1 7 11. KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES AND APPLYING THE PROPOSITION OF LAW AS DISCUSSED ABOVE, WE DO NOT FIND ANY MERIT IN THE PENALTY SO IMPOSED, ACCORDINGLY, WE DIRECT THE A.O. TO DELETE THE SAME. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MAY, 2019. SD/- SD/- FOT; IKY JKO JES'K LH 'KEKZ (VIJAY PAL RAO) (RAMESH C SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 31 ST MAY, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S ASHOK HERITAGE TRAVELS PVT. LTD., JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO TDS-1, JAIPUR 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 756/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR