Punjab National Bank, Ambala Cantt. V. ITO (TDS), Panchkula

ITA 937/CHANDI/2011

• Counselvise Citation: 93721514 RSA 2011
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-01-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 21-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANURAJ GOEL
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH CH ANDIGARH BEFORE SHRI H.L. KARWA, VP AND SHRI D K SRIVASTAVA, AM ITA NO. 937/CHANDI/2011 ASSESSMENT YEAR: 2008-09 PUNJAB NATIONAL BANK V I.T.O (TDS), PANCHKULA BO: SME BRANCH SADAR BAZAR AMBALA CANTT RTKPO 2637 F APPELLANT BY: SHRI ANURAJ GOEL RESPONDENT BY: SHRI AKHILESH GUPTA DATE OF HEARING: 18.1.2012 DATE OF PRONOUNCEMENT: 20 .1.2012 ORDER PER H.L. KARWA, V.P THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER PASSED BY THE LD. CIT(A), PANCHKULA DATED 6.7.2011 IN SUSTAINING THE PENALTY OF RS. 10,000/- IMPOSED U/S 272B OF THE INCOME-TAX ACT, 1961 (IN SH ORT THE ACT) FOR AY 2008-09. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS RUNNING A BANKING BUSINESS UNDER THE NAME AND STYLE OF PUNJAB NATIONA L BANK, SME BRANCH, AMBALA CANTT. THE ITO(TDS) WHILE GOING THROUGH THE QUARTE RLY RETURN ON FORM NO. 26Q FILED BY THE ASSESSEE NOTED THAT IT HAD OMITTED TO QUOTE PAN/HAS QUOTED INVALID PAN IN 29 CASES. AFTER AFFORDING AN OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE, THE AO CONCLUDED THAT THE ASSESSEE HAS COMMITTED DEFAULT U /S 139A(5B) OF THE ACT FOR WHICH PENALTY U/S 272B(1) WAS LEVIABLE. THE ITO(TDS) THE REFORE LEVIED A PENALTY OF RS. 2,90,000/- @ RS. 10,000/- PER DEFAULT VIDE HIS ORDE R DATED 28.7.2010. 3. ON APPEAL, THE LD. CIT(A) SUSTAINED THE PENALTY OF RS. 10,000/- AS AGAINST RS. 2,90,000/- LEVIED BY THE AO. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND TH AT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE R EVENUE BY THE DECISION OF THIS BENCH OF THE TRIBUNAL DATED 19.9.2011 IN THE CASE O F ITO(TDS) PANCHKULA V. ORIENTAL BANK OF COMMERCE, NARAINGARH, DISTT. AMBALA IN ITA NO. 773/CHD/2011 RELEVANT TO AY 2009-10. IN THE ABOVE CASE, THE ITO(TDS) LEVIED A PENALTY OF RS. 7,70,000/- @ RS. 10,000 PER DEFAULT VIDE HIS ORDER DATED 28.7.20 10. ON APPEAL, THE LD. CIT(A) CANCELLED THE PENALTY AND THE REVENUE FILED APPEAL BEFORE THIS TRIBUNAL AGAINST THE ITA NO. 937/CHANDI/2011 PUNJAB NATIONAL BANK V. ITO(TDS) 2 2 ORDER OF THE LD. CIT(A). THIS BENCH OF THE TRIBUNA L VIDE ORDER DATED 19.9.2011 DISMISSED THE APPEAL OF THE REVENUE OBSERVING AS UN DER:- 5. WE HAVE HEARD SHRI N.K. SAINI, DR FOR THE REVE NUE AT LENGTH AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THIS CASE THE ASSESSEE QUOTED WRONG PANS FOR 77 DEDUCTEES WHICH WAS CORREC TED ON BEING POINTED OUT BY THE ITO(TDS). SECTION 273B OF THE ACT PROVID ES THAT NO PENALTY IS IMPOSABLE FOR A FAILURE U/S 272B, IF IT IS PROVED B Y THE DEDUCTEES THAT THERE WAS REASONABLE CAUSE FOR THE SAID FAILURE. IN THIS CAS E THE ASSESSEE HAS EXPLAINED THAT FAILURE TO QUOTE RIGHT PAN WAS OCCURRED AS TH E CONCERNED DEPOSITOR HAS HIMSELF MIS-QUOTED PAN. IT IS ALSO THE CASE OF TH E ASSESSEE THAT THE PAN WAS CORRECTED AFTER ASCERTAINING THE SAME FROM RESP ECTIVE DEDUCTEES. IN THE CASE OF THE FINANCIAL CO-OPERATIVE BANK LTD V. ITO (SUPRA) THE AHMEDABAD BENCH HAS HELD AS UNDER:- WE ARE, THEREFORE OF THE OPINION THAT SINCE THE F URNISHING OF INCOMPLETE DECLARATION BY THE CUSTOMER WAS A MISTAKE COMMITTED BY THE CUSTOMER AND NOT BY THE BANK, THE FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 139A AS ENVISAGED IN SUB-SEC (1) OF SEC 272B OF THE ACT WAS OF THE CUSTOMER AND NOT OF THE BANK; MEANING THEREBY THAT THE PENALTY UNDER SEC 272B(1) OF THE ACT, IF ANY, IS TO BE IMPOSED, I T IS TO BE IMPOSED ON THE CUSTOMER AND NOT ON THE BANK. BANK CAN BE PENA LIZED IF IT FAILS TO COMPLY WITH THE PROVISIONS OF SECTION 139A(6) OR RU LE 114D(2) IS FOR FAILURE TO ENSURE THAT PAN OR GIR NUMBER IS QUOTED BY THE CUSTOMER AND FOR FAILURE IN FORWARDING THE COPIES OF FORM NO . 60, BUT NOT FOR ANY OTHER DEFAULT. 5.1 IN THE INSTANT CASE, IT IS APPARENT FROM THE RE CORD THAT THE ASSESSEE DEDUCTED TDS CORRECTLY AND REVISED THE PAN AND FILE D REVISED STATEMENT IN FORM NO. 26Q, HENCE THERE WAS SUFFICIENT COMPLIANCE OF THE PROVISIONS OF SECTION 139A OF THE ACT. EVEN OTHERWISE THE ASSESS EE DID NOT DERIVE ANY BENEFIT WHATSOEVER, BY FILING THE WRONG PANS AND PA N WAS CORRECTED AFTER ASCERTAINING THE SAME FROM THE RESPECTIVE DEDUCTEES . IN OUR VIEW THE ASSESSEE HAS PROVED THAT THERE WAS REASONABLE CAUSE FOR ALLEGED FAILURE AND HENCE NO PENALTY IS LEVIABLE. EVEN OTHERWISE ALSO NO PENALTY IS LEVIABLE WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE ACT. THE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD V. STATE OF ORISSA (1972) 83 ITR 26 (S.C) HAS HELD AS UNDER:- AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDINGS, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITH ER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS A GUILTY OR CONDUCT CONTU MACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. W HETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTOR Y OBLIGATION IS A ITA NO. 937/CHANDI/2011 PUNJAB NATIONAL BANK V. ITO(TDS) 3 3 MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCIS ED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. E VEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO I MPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN TH ERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LI ABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 5.2 CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT NO PENALTY CAN BE VALIDLY LEVIED ON FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. WE, THEREFORE UPHOLD THE ORDER OF LD. CIT(A) IN CANCELING THE PENALTY. 5. IN THIS CASE ALSO, THE ASSESSEE HAS DEDUCTED THE TAX FROM CERTAIN DEDUCTEES AND DEPOSITED THE SAME WITH THE GOVERNMENT IN TIME. FURTHER THE ASSESSEE PROVIDED THE ITO(TDS) ALL THE CORRECT PANS OF DEDUC TEES WHEREVER AVAILABLE WITH THE ASSESSEE. 6. RESPECTFULLY FOLLOWING THE ORDER OF TRIBUNAL IN THE CASE OF ORIENTAL BANK OF COMMERCE (SUPRA) WE DO NOT SEE ANY JUSTIFICATION IN SUSTAINING THE PENALTY OF RS. 10,000/-. ACCORDINGLY WE CANCEL THE PENALTY OF RS. 10,000/- SUSTAINED BY THE LD. CIT(A). 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED ON 20 .01.2012 SD/- SD/- (D K SRIVASTAVA) (H.L. KARWA) ACCOUNTANT MEMBER VICE PRESIDENT CHANDIGARH, 20.01.2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/ THE DR ITA NO. 937/CHANDI/2011 PUNJAB NATIONAL BANK V. ITO(TDS) 4 4