Deputy Excise & Taxation, Yamunanagar V. ITO (TDS), Panchkula

ITA 855/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73557 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 22-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKSHILESH GUPTA
• Assessee Lawyers: RAJEEV SHARMA
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS.855 & 856/CHD/2013 ASSESSMENT YEARS : 2008-09 & 2009-10 DEPUTY EXCISE & TAXATION VS. THE INCOME TAX OFF ICER(TDS), COMMISSIONER(ST), PANCHKULA. JAGADHRI, YAMUNANAGAR. PAN: RTO00883B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJEEV SHARMA RESPONDENT BY : SHRI AKSHILESH GUPTA, DR DATE OF HEARING : 20.03.2014 DATE OF PRONOUNCEMENT : 25.03.2014 O R D E R PER SUSHMA CHOWLA, J.M. : THESE TWO APPEALS FILED BY THE ASSESSEE ARE AGAINST THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS), KARNAL, DATED 1.4.2013 RELATING TO FINANCIAL YEARS 2007-08 AND 20 08-09 AGAINST THE PENALTY LEVIED UNDER SECTION 272B OF INCOME TAX ACT , 1961 (IN SHORT THE ACT). 2. THE COMMON GROUND OF APPEAL RAISED BY THE ASSESS EE IN BOTH THE APPEALS READS AS UNDER: 1. THAT THE LD.CIT(A) IS NOT JUSTIFIED IN CONFIRMI NG THE PENALTY U/S 272B FOR FURNISHING INVALID PAN NUMBER IN TDS RETURN IGNORING THAT THE APPELLANT HAS RECTIFIE D THE DEFECTS BY FILING THE CORRECTED PAN NUMBERS IN FORM 2 NO.24Q AND FILED STATUS REPORT BEFORE CIT(A) AS THE RECTIFIED RETURN IS UNDER PROCESS BEFORE CPC. 3. THE ONLY ISSUE RAISED IN BOTH THE APPEALS IS AGA INST LEVY OF PENALTY UNDER SECTION 272B OF THE ACT. 4. BOTH THE APPEALS RELATING TO THE SAME ASSESSEE W ERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORD ER FOR THE SAKE OF CONVENIENCE. REFERENCE IS MADE TO THE FACTS IN ITA NO.855/CHD/13 TO ADJUDICATE THE ISSUE INVOLVED IN THE CASE. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IN THE E-TDS QUARTERLY STATEMENT OF DEDUCTION OF TAX IN FORM NO. 26Q RELATING TO FINANCIAL YEAR 2007-08 FILED ON 13.6.2008 HAD DEFA ULTED IN QUOTING PAN NUMBERS OF 8 DEDUCTEES. THE PAN NUMBERS OF 8 DEDUC TEES QUOTED BY THE ASSESSEE WERE FOUND TO BE INVALID AND NO CORRECTION STATEMENT WAS FILED BY THE ASSESSEE IN THIS REGARD. THE ASSESSING OFFI CER HELD THE ASSESSEE TO BE LIABLE TO PENALTY UNDER SECTION 272B OF THE A CT AND IMPOSED PENALTY OF RS.10,000/-. 6. BEFORE THE CIT (APPEALS) THE ASSESSEE DID NOT FI LE ANY CORRECTION STATEMENT AND PENALTY UNDER SECTION 272B OF THE ACT WAS CONFIRMED AT RS.10,000/-. HOWEVER, BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE HAS POINTED OUT THAT THE CORRECT PAN NUMBER OF THE DEDU CTEE IS NOW AVAILABLE I.E. AFTER PASSING OF THE ORDER OF THE AS SESSING OFFICER AND CIT (APPEALS). 7. THE LEARNED D.R. FOR THE REVENUE POINTED OUT THA T THERE IS NO REASONABLE CAUSE IN THE PRESENT APPEAL AS THE ASSES SEE HAD FAILED TO FURNISH THE REQUISITE DOCUMENTS IN TIME BEFORE THE AUTHORITIES BELOW. 3 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE RAISED IN THE PRESENT APPEAL IS IN RELATION T O LEVY OF PENALTY UNDER SECTION 272B OF THE ACT FOR THE DEFAULT IN QUOTING OF PAN NUMBERS OF THE DEDUCTEES IN THE E-TDS QUARTERLY STATEMENT FILED IN FORM NO.26Q BY THE ASSESSEE. THE ASSESSEE IN THE SAID FORM NO.26Q REL ATING TO FINANCIAL YEAR 2007-08 HAD WRONGLY QUOTED THE PAN NUMBERS IN RESPECT OF 8 DEDUCTEES. THE ASSESSEE HAD NOT FILED THE CORRECTI ON STATEMENT BEFORE THE ASSESSING OFFICER OR BEFORE PASSING OF THE ORDE R OF THE CIT (APPEALS) ALSO. IN VIEW THEREOF THE ASSESSING OFFICER LEVIED PENALTY OF RS.10,000/- WHICH WAS CONFIRMED BY THE CIT (APPEALS). THE COR RECTION STATEMENT IS NOW AVAILABLE. THE PROVISIONS OF SECTION 272B(1) O F THE ACT PROVIDE THAT IF A PERSON FAILED TO COMPLY WITH THE PROVISION OF SECTION 139A, THE ASSESSING OFFICER MAY DIRECT THAT SUCH PERSON S HALL PAY, BY WAY OF PENALTY A SUM OF RS.10,000/- . 9. WE FURTHER FIND THAT SIMILAR ISSUE OF LEVY OF PE NALTY UNDER SECTION 272B OF THE ACT AROSE BEFORE THE CHANDIGARH BENCH O F TRIBUNAL IN ITA NO.441/CHD/2012 & C.O.NO.31/CHD/2012 IN THE CASE OF ITO(TDS) VS. ORIENTAL BANK OF COMMERCE, YAMUNANAGAR AND THE TRIB UNAL VIDE ORDER DATED 15.7.2013 HELD AS UNDER: 7. THE ISSUE RAISED IN THE PRESENT APPEAL IS IN REL ATION TO LEVY OF PENALTY UNDER SECTION 272B OF THE ACT FOR THE DE FAULT IN QUOTING OF PAN NUMBERS OF THE DEDUCTEES IN THE E-TDS QUARTE RLY STATEMENT FILED IN FORM NO.26Q BY THE ASSESSEE. THE ASSESSEE IN THE SAID FORM NO.26Q RELATING TO FINANCIAL YEAR 2007-08 HAD WRONGLY QUOTED THE PAN NUMBERS IN RESPECT OF 53 DEDUCTEES. THE ASSESSEE HAD NOT FILED THE CORRECTION STATEMENT BEFORE THE A SSESSING OFFICER OR BEFORE PASSING OF THE ORDER OF THE CIT (APPEALS) ALSO. IN VIEW THEREOF THOUGH THE ASSESSING OFFICER LEVIED PENALTY OF RS.5,30,000/- THE SAME WAS RESTRICTED TO RS.10,000/- BY THE CIT ( APPEALS). THE PROVISIONS OF SECTION 272B(1) OF THE ACT PROVIDE TH AT IF A PERSON FAILED TO COMPLY WITH THE PROVISION OF SECTION 139A , THE ASSESSING OFFICER MAY DIRECT THAT SUCH PERSON SHALL PAY, BY W AY OF PENALTY A SUM OF RS.10,000/- . IN VIEW OF THE ABOVE SAID PROVISIONS OF THE ACT WE ARE IN AGREEMENT WITH THE ORDER OF THE CIT (APPE ALS) IN RESTRICTING LEVY OF PENALTY UNDER SECTION 272B OF T HE ACT AT RS.10,000/-. 4 8. SIMILAR ISSUE AROSE BEFORE THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASES OF VARIOUS ASSESSEES AND THE TRIBUNAL IN THE UNDERMENTIONED CASES HAD UPHELD THE LEVY OF PENALTY UNDER SECTION 272B OF THE ACT AT RS.10,000/- : SNO. NAME OF ASSESSEE ITA NO ASSTT.YEAR DATE OF DECISION 1. ITO(TDS) VS. STATE DIRECTOR SECONDARY EDUCATION, CHANDIGARH 777/CHD/2012 2009-10 22.11.2012 2. ADVANCED MICRO DEVICES PVT. LTD. VS. ITO(TDS), PANCHKULA 490/CHD/2012 2006-07 26.11.2012 3. THE SARASWATI INDUSTRIAL SYNDICATE LTD. VS. ITO (TDS), PANCHKULA 830 TO 833/CHD/2012 2009-10 31.01.2013 4. THE BRANCH MANAGER VS. ITO(TDS), PANCHKULA 853 TO 855/CHD/2012 2008-09 & 2009- 10 28.02.2013 9. THE LEARNED A.R. FOR THE ASSESSEE HAD ALSO FILED PAPER BOOK IN WHICH THE ORDER OF THE TRIBUNAL IN THE CASE OF I TO VS. AMBALA DISTT. CO-OP. MILK PRODUCERS UNION LTD. IN ITA NO.9 41/CHD/2011, IS ATTACHED, UNDER WHICH THE PENALTY OF RS.10,000/- UNDER SECTION 272B OF THE ACT HAS BEEN UPHELD AND IT HAS BEEN FUR THER HELD THAT THERE IS NO PROVISION IN SECTION 272B FOR LEVY OF P ENALTY @ RS.10,000/- PER DEFAULT. 10. HOWEVER, THE LEARNED A.R. FOR THE ASSESSEE PLAC ED RELIANCE ON THE RATIO LAID DOWN BY THE CHANDIGARH BENCH OF T HE TRIBUNAL IN THE CORPORATION BANK VS. ITO IN ITA NOS.185 TO 187/ CHD/2013 RELATING TO ASSESSMENT YEAR 2009-10 WHEREIN VIDE OR DER DATED 16.4.2013, THE TRIBUNAL HAD DELETED THE PENALTY LE VIED UNDER SECTION 272B OF THE ACT AT RS.10,000/-. THE TRIBUN AL (IN THE DIFFERENT COMBINATION) VIDE ORDER DATED 16.4.2013 H AD DELETED THE SAID PENALTY. HOWEVER, IN THE EARLIER DECISIONS TH E CHANDIGARH BENCH OF THE TRIBUNAL HAD UPHELD THE LEVY OF PENALT Y UNDER SECTION 272B OF THE ACT LEVIED FOR DEFAULT IN FURNISHING TH E PAN NUMBER, TO THE EXTENT OF RS.10,000/-, IN A SERIES OF DECISIONS , WHICH WERE NOT TAKEN NOTE OF BY THE OTHER BENCH OF THE TRIBUNAL. WE ALSO FIND THAT THE ASSESSEE HAD DEFAULTED IN NOT BRINGING TO THE K NOWLEDGE OF THE BENCH THE SAID DECISIONS WHICH HAVE BEEN DECIDED EA RLIER TO THE ORDER PASSED ON 16.4.2013. IN ANY CASE, THE PERUSA L OF THE ORDER REFLECTS THE EFFORTS BEING MADE BY THE ASSESSEE THE REIN TO COLLECT THE PAN NUMBERS OF THE DEDUCTEES AND NECESSARY DETAILS COULD NOT BE FURNISHED AND THE TRIBUNAL THUS HELD THAT THERE WAS REASONABLE CAUSE IN NOT FURNISHING THE DETAILS AND HENCE NO PE NALTY. HOWEVER, THE ASSESSEE HAS FAILED TO ESTABLISH ITS CASE OF RE ASONABLE CAUSE FOR 5 THE DEFAULT. IN VIEW OF THE EARLIER ORDERS OF THE TRIBUNAL ON THE ABOVE SAID ISSUE OF LEVY OF PENALTY UNDER SECTION 2 72B OF THE ACT, WE UPHOLD THE IMPOSITION OF PENALTY UNDER SECTION 2 72B OF THE ACT AT RS.10,000/-. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE THUS DISMISSED. 10. THE ISSUE TO BE SEEN IN THE PRESENT CASE IS WHE THER THE ASSESSEE HAD REASONABLE CAUSE IN NOT FURNISHING THE INFORMAT ION BEFORE THE ASSESSING OFFICER AND CIT(APPEALS) AND FURNISHING T HE CORRECTION STATEMENT BEFORE US. WE FIND MERIT IN THE PLEA OF T HE ASSESSEE THAT IT WAS PREVENTED BY REASONABLE CAUSE IN NOT FURNISHING THE INFORMATION BEFORE THE ASSESSING OFFICER AND CIT (APPEALS) AS C ORRECT PAN NUMBERS WERE NOT AVAILABLE. THE CORRECT PAN NUMBER S WERE AVAILABLE AFTER THE PASSING OF THE ORDER OF CIT (AP PEALS) AND IN SUCH CIRCUMSTANCES, THE ASSESSEE IS NOT EXIGIBLE TO LEVY OF PENALTY UNDER SECTION 272B OF THE ACT. HOWEVER, THE CLAIM OF THE ASSESSEE NEEDS VERIFICATION AT THE LEVEL OF ASSESSING OFFICER AND MATTER IS SENT BACK TO THE ASSESSING OFFICER, WHO SHALL AFFORD REASONAB LE OPPORTUNITY TO ASSESSEE I.E. VERIFY CLAIM OF CORRECTION STATEMENT FILED BY ASSESSEE AND IN CASE THERE IS NO DEFAULT, THEN NO PENALTY IS LEVIABLE UNDER SECTION 272B OF THE ACT. HOWEVER, IF THERE IS DEFA ULT OF NON FURNISHING OF EVEN ONE PAN NUMBER OF ANY OF THE DED UCTEES, THE ASSESSEE IS EXIGIBLE TO LEVY OF PENALTY UNDER SECTI ON 272B OF THE ACT AT RS.10,000/-. THE ASSESSING OFFICER SHALL DECIDE THE ISSUE IN LINE WITH OUR DIRECTIONS. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. 11. THE FACTS IN ITA NO.856/CHD/13 ARE IDENTICAL TO THE FACTS IN ITA NO.855/CHD/2013 AND OUR DECISION IN ITA NO.855/CHD/ 2013 SHALL APPLY 6 MUTATIS MUTANDIS TO THE FACTS IN ITA NO.856/CHD/13. 12. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF MARCH, 2014. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 25 TH MARCH, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH