ST ANTHONY'S INSTITUTE, MUMBAI V. ADDL CIT (TDS) RG 3, MUMBAI

ITA 7756/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3749 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 30-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIDANAND DUBE
• Assessee Lawyers: P V DESAI
• Keywords: Charitable institution; Reasonable cause
• Section: 273B; 10; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A , MUMBAI , , BEFORE SHRI B R BASKARAN , ACCOUNTANT MEMBER AND SHRI AMIT SHUKL A , JUDICIAL MEMBER ITA NO. : 7 7 5 6 /MUM/20 1 4 (ASSESSMENT YEAR: 200 9 - 1 0 ) ST ANTHONY S INSTITUTE , 33 RD /21 ST ROAD CORNER, TPS III, PALI, BANDRA (WEST), MUMBAI - 400 002 PAN: AA BTS 8069 G VS THE ADDL. CIT (TDS) - RG.3, ROOM NO. 1001, 10 TH FLOOR, SMT. K G MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD, MUMBAI - 400 002 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P V DESAI RESPONDENT BY : SHRI SACHIDANAND DU BE /DATE OF HEARING : 03 - 0 8 - 201 6 / DATE OF PRONOUNCEMENT : 03 - 0 8 - 2016 ORDER , : PER AMIT SHUKLA , J M: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST IMPUGNED ORDER D ATED 08 . 1 0.201 4 , PASSED BY CIT(A PPEALS ) - 14 , MUMBAI IN RELATION TO THE PENALTY PROCEEDINGS UNDER SECTION 272A(2)(K) FOR THE ASSESSMENT YEAR 2009 - 10. THE ASSESSEE IS MAINLY AGGRIEVED BY THE LEVY OF PENALTY OF RS.80,018/ - UNDER SECTION 272A92)(K). 2 ST ANTHONYS INSTITUTE ITA 7756 /MUM/ 201 4 2. THE AFO RESAID PENALTY HAS BEEN LEVIED BY THE AO ON THE GROUND THAT, ASSESSEE HAS NOT FILED THE QUARTERLY TDS STATEMENT IN FORM 26Q WITHIN THE TIME SPECIFIED UNDER SECTION 206/206C R.W. RULE 37 OF THE INCOME - TAX RULES FOR THE FINANCIAL YEAR 2008 - 09 , WHICH W AS REQU IRED TO BE FILED AT THE EN D OF THE EVERY QUARTER UNDER THE PROVISIONS OF SECTION 200(3) READ WITH RULE 31A . THE PROVISIONS PROVIDE THAT QUARTERLY STATEMENT OF TDS IN FORM NO.26Q IS REQUIRED TO BE FILED BY THE ASSESSEE BY 15 TH JULY, 15 TH OCTOBER, 15 TH JANUA RY AND 15 TH JUNE (FOR LAST QUARTER) OF THE YEAR. 3. IN RESPONSE TO THE SHOW CAUSE NOTICE BY THE AO TO THE ASSESSEE, AS TO WHY THE PENALTY UNDER THE AFORESAID SECTION SHOULD NOT BE LEVIED, THE ASSESSEE SUBMITTED THAT, IT IS A CHARITABLE TRUST CARRYING ON E DUCATIONAL ACTIVITIES AND PROMOTING VARIOUS SPORTS. DURING THE RELEVANT ACCOUNTING YEARS, THE TRUST HA D STARTED THE RENOVATION OF BUILDING AND CONSTRUCTION OF NEW ADJACENT BUILDING. DUE TO THIS, THE RECORDS WERE MISPLACED AND WERE NOT EASILY TRACEABLE . THE SITUATION GOT FURTHER AGGRAVATED BY THE LACK OF STAFF AND LACK OF SUPPORT OF PROFESSIONAL ORGANIZATION DUE TO FINANCIAL CONSTRAINTS. AS A RESULT, EVEN THOUGH THE TAX WAS DEDUCTED AT SOURCE AND DEPOSITED IN THE GOVERNMENT TREASURY, HOWEVER, THE RETURNS COU LD NOT BE FILED IN TIME DUE TO NON - AVAILABILITY OF NECESSARY DATA F OR THE PREPARATION OF THE RETURNS. THE AO, HOWEVER, REJECTED THE ASSESSEES CONTENTION AND HELD THAT, SINCE THERE IS V I O LATIO N OF STATUTORY OBLIGATION TO FILE THE QUARTERLY RETURNS, THEREFO RE IT H A S COMMITTED DEFAULT UNDER THE PROVISIONS OF THE SAID SECTION AND CALCULATED THE PENALTY IN THE FOLLOWING MANNER: - 3 ST ANTHONYS INSTITUTE ITA 7756 /MUM/ 201 4 QTR. NO. OF DAYS DELAY TDS AMOUNT PENALTY AMOUNT RESTRICTED TO 26Q - 1 ST 373 X 100 = 37300 35593 35593 26Q - 2 ND 281 X 100 = 28100 21725 21725 26Q - 3 RD 189 X 100 = 18900 22086 18900 26Q - 4 TH 38 X 100 = 3800 36659 3800 AMOUNT LEVIED 80018 4. BEFORE THE LD. CIT(APPEALS), THE ASSESSEE HAD SUBMITTED AND SATED AS UNDER: - THE TRUST HAD DEPOSITED THE TDS IN THE GOVERNMENT TREASURY WITHIN TIME AND THIS FACT HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICER. THEREFORE, THERE WAS NO LOSS TO THE REVENUE. THERE WAS NO LOSS TO THE REVENUE. THERE WAS ONLY A DELAY IN THE QUARTERLY RETURNS. THE INSTITUTION IS A PUBLIC CHARITABLE INSTITUTION AND ITS INCOME IS EXEMPT FROM TAXATION. IT IS NOT CARRYING ON ANY ACTIVITY FOR PROFIT. FROM AY 2010 - 11 TILL DATED THERE HAS BEEN NO DELAY IN FILING THE RETURNS. IN SUBSEQUENT YEARS THE RETURNS WERE FILED IN TIME AND NO PENALTIES HAVE BEEN LEVIED ON THE ASSESSEE TRUST. THE TRUST HAS BEEN REGULAR IN FILING ITS RETURNS AND COMPLYING WITH OTHER PROC EDURE AS LAID DOWN BY THE INCOME TAX ACT, 1961. THIS IS THE ONLY PERIOD THAT THERE HAS BEEN A DELAY DUE TO ABOVE MENTIONED CIRCUMSTANCES WHICH WERE BEYOND THE CONTROL OF THE TRUSTEES. THE ASSESSING OFFICER HAS MERELY BRUSHED ASIDE THE REASON GIVEN BY THE T RUST FOR THE DELAY AND HAS PASSED A NON - SPEAKING ORDER FOR LEVY OF PENALTY U/S 271A(2)(K) WHICH IS VERY HARSH IN VIEW OF THE FACTS AND THE CIRCUMSTANCES OF THE CASE. IN FACT THE TRUST HAS DEPOSITED EXCESS AMOUNT OF TDS IN THE GOVT. TREASURY FOR ALL THE QUA RTERS AS UNDER WHICH FACT THE ASSESSING OFFICER HAS NOT CONSIDERED: 4 ST ANTHONYS INSTITUTE ITA 7756 /MUM/ 201 4 QUARTER TDS TO BE DEPOSITED TDS DEPOSITED EXCESS DEPOSITED Q1 35593 39470 3877 Q2 31725 25563 3838 Q3 22086 30546 8460 Q4 36659 40287 3628 THE EXCESS AMOUNT WAS DEPOSITED ON ACCOUNT OF ERROR IN CALCULATING DUE TO UNAVAILABILITY OF RECORDS. THE OFFICER SHOULD HAVE CONSIDERED THIS FACT AT THE TIME OF LEVY OF PENALTY AS NO REFUND HAS BEEN GRANTED TO THE ASSESSEE FOR THE EXCESS AMOUNT PAID. THERE HAS BEEN ABSOLUTELY NO LOSS TO REVENUE. ON THE CONTRARY EXCESS AMOUNT HAS BEEN PAID WHICH SHOULD HAVE BEEN CONSIDERED AT THE TIME OF LEVY OF PENALTY AS THIS CLEARLY INDICATES THAT THERE WAS NO INTENTION TO WITHHOLD ANY TAX 5. HOWEVER, THE CIT(APPEALS) HELD THAT THE LIABILITY OF THE ASSESSEE UNDER THE STATUTE IS ABSOLUTE LIABILITY WHICH HAS TO BE STR ICTLY CONSTRUED AN D FOLLOWED AND NOBODY CAN AVOID THE RESPONSIBILITY OF THE MANDATE OF THE STATUTORY LIABILITY. HE OBSERVED THAT S ECTION 272A(2K) CONTEMPLATES THAT AN OFFENCE IS COMMITTED ON THE NON - FILING OF RETURN FILED IN TIME . HENCE , PENALTY HAS TO BE LEVIED. 6. AFTER HEARING BOTH THE PARTIES, WE FIND THAT IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS DEDUCTED THE TDS AND ALSO DEPOSITED THE SAME IN THE GOVT. TREASURY WITHIN TIME. HOWEVER, THE QUARTERLY RETURN COULD NOT BE FILED IN TIME AND WERE FILED BEYOND THE DUE DA TES PRESCRIBED . THE REASONS STATED BY THE ASSESSEE WHICH HAS BEEN ( INCORPORATED ABOVE ) WAS THAT, DURING THE RELEVANT FINANCIAL YEAR, THERE WERE CERTAIN UNAVOIDABLE CIRCUMSTANCES DUE TO WHICH THE RETURNS 5 ST ANTHONYS INSTITUTE ITA 7756 /MUM/ 201 4 COULD NOT BE FILED TIMELY, OTHERWISE, THE ASSESSEE I N THE EARLIER AS WELL AS IN THE SUBSEQUENT YEARS HAS TIMELY FILED THE QUARTERLY RETURNS OF TDS . HERE IT IS ALSO AN UNDISPUTED FACT THAT THE ASSESSEE - TRUST HAS DEPOSITED THE EXCESS AMOUNT OF TDS IN THE GOVT. TREASURY FOR ALL THE QUARTERS. UNDER THESE FACTS, WE ARE OF THE OPINION THAT, ASSESSEES CASE FALLS WITHIN THE AMBIT OF REASONABLE CAUSE AS STIPULATED IN SECTION 273B FOR FAILURE TO FURNISH THE QUARTERLY RETURN IN TIME. IN ANY CASE, IT IS A TECHNICAL BREACH OF LAW AND IS VENIAL IN NATURE AND NO LOSS TO THE REVENUE HAS OCCURRED , BECAUSE ALREADY EXCESS AMOUNT OF TAX HAS BEEN DEPOSITED TO THE GOVT. TREASURY. THUS, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT NO PENALTY SHOULD BE LEVIED AS THERE WAS A REASONABLE CAUSE FOR THE FAILURE TO FIL E QUARTERLY RETURN. THUS, PENALTY LEVIED OF RS.80,018/ - IS DIRECTED TO BE DELETED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD AUGUST, 2016 . SD/ - SD/ - ( ) ( ) ( B R BASKARAN ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 3 RD AUGUST , 2016 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3 ) THE C IT 14 , MUMBAI . 4 ) THE C IT (TDS) /CONCERNED - ____ , MUMBAI 5 ) , , / 6 ST ANTHONYS INSTITUTE ITA 7756 /MUM/ 201 4 THE D.R. A BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS