SHRI SATISH KUMAR AGARWAL, Jaipur V. ADD. CIT, Jaipur

ITA 837/JPR/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1558 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 29-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROSHANTA MEENA
• Keywords: Reasonable cause; Ignorance of law

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR (BEFORE SHRI B.R. MITTAL AND SHRI B.R. JAIN) ITA NO. 837/JP/2012 ASSESSMENT YEAR : 2007-08 PAN: ACAPA 0811 D SHRI SATISH KUMAR AGARWAL VS. THE ADDL. CIT (TDS ) PROP. M/S. ROOP FASHION, 1 ST FLOOR JAIPUR MALANI HOUSE, KATLA PUROHIT JI KA JOHARI BAZAR, JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI GULSHAN AGARWAL DEPARTMENT BY: MISS. ROSHANTA MEENA ORDER PER B.R. MITTAL, JM:- THE ASSESSEE HAS FILED THIS APPEAL FOR THE ASSESS MENT YEAR 2007-08 AGAINST THE ORDER OF THE LD. CIT(A)-III, JAIPUR DATED 21-08-201 2 DISPUTING THE CONFIRMATION OF LEVY OF PENALTY OF RS. 68,366/- U/S 271C OF THE ACT. 2.1 THE ASSESSEE HAD TAKEN LOANS FORM VARIOUS PERSO NS AND PAID INTEREST OF RS. 6,83,664/- WITHOUT DEDUCTING TDS. 2.2 IN VIEW OF ABOVE, THE AO HAS LEVIED PENALTY @ 1 0% OF THE INTEREST PAID WHICH COMES TO RS. 68,366/-. 3.3 THE AO DID NOT ACCEPT THE CONTENTION OF THE ASS ESSEE THAT ASSESSEE WAS UNDER BONA FIDE BELIEF THAT LOAN TAKEN FOR PERSONAL PURP OSES AND THEREFORE, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS ON INTEREST PAID TO VARI OUS PERSONS FROM WHOM LOAN WAS TAKEN. IT WAS CONTENDED THAT THERE WAS A BONA FIDE REASON AND HENCE NO PENALTY BE 2 IMPOSED. THE AO DID NOT ACCEPT THE CONTENTION OF TH E ASSESSEE AND LEVIED THE PENALTY @ 10% ON THE AMOUNT OF INTEREST PAID U/S 271C OF THE ACT. 3.4 IN THE FIRST APPEAL, THE LD. CIT(A) HAS ALSO CO NFIRMED THE ACTION OF THE AO ON THE GROUND THAT IGNORANCE OF LAW CANNOT BE CONSIDERED A S A REASONABLE CAUSE TO DEFEND AN OMISSION. HENCE, THIS APPEAL BEFORE THE TRIBUNAL. 3.5 DURING THE COURSE OF HEARING, THE LD. AR REITE RATED THE ABOVE FACTS AND SUBMITTED THAT SAID LOAN WAS NOT USED BY THE ASSESSEE FOR BUS INESS PURPOSES BUT FOR PURCHASE OF PROPERTY. THEREFORE, THE ASSESSEE WAS UNDER BONA FI DE BELIEF THAT ON PERSONAL LOAN, NO TDS IS TO BE DEDUCTED ON INTEREST PAID. HE FURTHER SUBMITTED THAT WHEN THE ASSESSEE CAME TO KNOW, THE ASSESSEE PAID INTEREST AS WELL AS TDS . HE PRAYED THAT PENALTY BE CANCELLED. 3.6 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT IGNORANCE OF LAW IS NOT AN EXCUSE AN D LEVY OF PENALTY SHOULD BE CONFIRMED. 3.7 WE HAVE CONSIDERED THE FACTS OF THE CASE AND OR DERS OF THE AUTHORITIES BELOW AND ALSO SUBMISSIONS OF LD. REPRESENTATIVES OF THE PART IES. CONSIDERING THE FACTS THAT SAID LOAN HAD BEEN TAKEN BY THE ASSESSEE FOR HIS PERSONAL PUR POSES AND THE ASSESSEE WAS UNDER BONA FIDE BELIEF THAT NO TDS WAS REQUIRED TO BE DEDUCTED ON INTEREST ON THE LOAN TAKEN FOR PERSONAL PURPOSES, WE ARE OF THE CONSIDERED VIEW TH AT THERE IS A REASONABLE CAUSE FOR NON- COMPLIANCE OF PROVISION SECTION 194A OF THE ACT. SI NCE, IT WAS STATED THAT ASSESSEE DEDUCTED TDS AND PAID TO THE GOVT. ALONGWITH INTERE ST WHEN IT WAS BROUGHT TO HIS NOTICE, WE HOLD THAT THERE WAS A REASONABLE CAUSE FOR NON-C OMPLIANCE OF SECTION 194A OF THE ACT. THEREFORE, WE CANCEL THE LEVY OF PENALTY BY AL LOWING THE GROUND OF APPEAL TAKEN BY THE ASSESSEE 3 4.0. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED AS ANNOUNCED IN THE OPEN COURT IMMEDIATELY AFTER CONCLUSION OF HEARING ON 23-01-20 13. SD/- SD/- (B.R. JAIN) (B.R. MITTAL) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 23 RD JAN 2013 *MISHRA COPY FORWARDED TO:- BY ORDER 1. SHRI SATISH KUMAR AGARWAL, JAIPUR 2. THE ADDL. CIT (TDS), JAIPUR 3.THE LD. CIT 4.THE LD. CIT(A) 5.THE LD. DR 6.THE GUARD FILE (IT NO.837/JP/12) A.R. ITAT: JA IPUR 4 5