Fortune Gitls Pvt.Ltd., Ahmedabad V. The Addl.CIT.,TDS Range, Ahmedabad

ITA 851/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5652 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-07-2010
• Assessment Year: 2008-2009
• Appeal Filed On: 22-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NIMESH VAYAWALA
• Keywords: Reasonable cause; TDS
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD A BENCH (BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND MUKUL SHRAWAT, JUDICIAL MEMBER) ITA.NO.851/AHD/2010 ASSTT.YEAR : 2008-2009 FORTUNE GILTS PVT. LTD. 1/2 MEGHALAY FLATS NR.SARDAR PATEL COLONY NARANPURA, AHMEDABAD. VS. ITO, WARD-1(2) SURAT. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NIMESH VAYAWALA REVENUE BY : SHRI SAMIR TEKRIWAL O R D E R PER G.D. AGARWAL, VICE-PRESIDENT: THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE CIT(A)-VI, SURAT DATED 18. 11.2009 FOR A.Y.2008-2009 ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER P ASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961. 2. THE ONLY GROUND IN THIS APPEAL BY THE ASSESSEE R EADS AS UNDER: GROUND 1. THE LD.CIT(A) HAS ERRED IN HOLDING THAT THERE W AS NO REASONABLE CAUSE FOR LATE PAYMENT OF TDS U/S.194A HE OUGHT NOT HAVE CONFIRM THAT PENALTY U/S.271C. THUS, PENALTY MAY BE DELETED. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE FIND THAT THE ASSESSEE DEDUCTED TDS FROM J. M. PRODUCTS FIN. LTD. AMOUNTING TO RS.1,12,955/-. HOWEVER, THERE WAS DEL AY IN THE DEPOSIT OF THE ABOVE TDS AMOUNT BY 16 DAYS. THE TDS WAS TO BE DEP OSITED BY 7-1-2008, BUT THE ASSESSEE DEPOSITED THE SAME ON 23-1-2008. IT I S SUBMITTED BY THE LEARNED COUNSEL THAT NOMINAL DELAY OF 16 DAYS WAS DUE TO AC COUNTANT OF THE ASSESSEE. HE ALSO SUBMITTED THAT THE TDS WAS DEPOSITED WITH I NTEREST. IT WAS POINTED OUT BY THE LEARNED DR THAT THERE WAS SURVEY AT THE ASSE SSEES PREMISES ON 22-2- ITA.NO.851/AHD/2010 -2- 2008 AND TDS WAS DEPOSITED BY THE ASSESSEE ON 23-1- 2008. THUS, HAD THERE BEEN NO SURVEY, THE ASSESSEE WOULD NOT HAVE DEPOSIT ED THE TDS AND THEREFORE PENALTY WAS RIGHTLY LEVIED BY THE AO. IT WAS POINT ED OUT BY THE LEARNED COUNSEL THAT THE ASSESSEE HAD ALWAYS DEPOSITED TDS IN TIME. EVEN DURING THE YEAR UNDER CONSIDERATION, THE TDS OF OTHER PARTIES WAS D EPOSITED IN TIME, BUT MERELY BECAUSE THERE WAS A NOMINAL DELAY OF 16 DAYS IN DEP OSIT OF TDS, IT CANNOT BE PRESUMED THAT HAD THERE BEEN NO SURVEY, THE ASSESSE E WOULD NOT HAVE DEPOSITED THE TDS. HE THEREFORE SUBMITTED THAT THE PENALTY L EVIED UNDER SECTION 271C MAY BE CANCELED. 4. CONSIDERING ALL THE FACTS AND THE ARGUMENTS OF T HE BOTH THE SIDES, IN OUR OPINION, IT IS NOT A FIT CASE FOR LEVY OF PENALTY U NDER SECTION 271C. MERELY BECAUSE SURVEY HAD TAKEN PLACE ON 22-2-2008, IT CAN NOT BE PRESUMED THAT THE TDS DEPOSITED BY THE ASSESSEE WAS ONLY ON ACCOUNT O F SURVEY. IT IS NOT DISPUTED THAT TAX DEDUCTED FROM OTHER PARTIES WAS D EPOSITED BY THE ASSESSEE IN TIME, IN THIS YEAR AS WELL AS IN THE PRECEDING YEAR S. MERELY BECAUSE, THE ACCOUNTANT OMITTED TO DEPOSIT THE TDS FOR A PERIOD OF 16 DAYS, WHICH IS ALSO DEPOSITED BY THE ASSESSEE WITH INTEREST, IT CANNOT BE SAID THAT THE ASSESSEE FAILED TO DEPOSIT THE TAX DEDUCTED AT SOURCE SO AS TO MAKE HIM LIABLE FOR PENALTY UNDER SECTION 271C. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT THE LEVY OF PENALTY UNDER SECTION 271C IS NOT JUSTIFIED. THE S AME IS CANCELLED. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 9 TH JULY, 2010. SD/- SD/- (MUKUL SHRAWAT) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 09-07-2010 ITA.NO.851/AHD/2010 -3- VK* COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER AR, ITAT, AHMEDABAD