SANJAY SHIKSHA SAMITI, Jaipur V. JOINT COMMISSIONER OF INCOME TAX (TDS), Jaipur

ITA 963/JPR/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0757 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 14-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI JCIT DHK
• Keywords: Reasonable cause; Bonafide mistake; TDS
• Section: 273B

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH A, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,O A JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 963/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2011-12. SANJAY SHIKSHA SAMITI, LAL KOTHI SCHEME, BEHIND NEW ASSEMBLY, TONK ROAD, JAIPUR. CUKE VS. THE JOINT COMMISSIONER OF INCOME TAX (TDS) JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/TAN NO. JPRS01612C/AABAS5172K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SHRAWAN KUMAR GUPTA (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI J.C. KULHARI (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 07.08.2019 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 09/08/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 13.06.2018 OF LD. CIT(A)-3, JAIPUR ARISING FROM THE PENALTY ORDER PASSED UNDER SECTION 272A(2)(K) OF THE IT ACT FOR THE FINANCIAL YEAR 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT (APPEALS) HAS GROSSLY ERRED IN HOLDING THAT PENALTY U/S 272A(2)(K) RS. 1,11,600/- HAS BEEN IMPOSED CORRECT AND AS PER LAW. THE PENALTY HAS BEEN IMPOSED WRONG, ILLEGAL A ND AGAINST THE LAW. HENCE ORDER PENALTY DESERVES TO BE QUASHED . 2 ITA NO. 963/JP/2018 SANJAY SHIKSHA SAMITI, JAIPUR. 2. THAT DURING THE ASSESSMENT YEAR ASSESSEE DUE TO FINANCIAL CRISES HAS DEPOSITED TAX LATE AND FURTHER U/S 200(3) AND U /R 31A(4) E- QUARTERLY STATEMENT CAN BE FILED AFTER DEPOSIT OF D UE TAX. SINCE E-QUARTERLY STATEMENT WAS FILED AS SOON AS DUE TAX WAS DEPOSITED, HENCE IN THE CIRCUMSTANCES AND POSITION OF LAW, PENALTY U/S 271A(2)(K) CANNOT BE IMPOSED, AS SUCH P ENALTY HAS BEEN IMPOSED WRONG ILLEGAL AND AGAINST THE LAW. 3. THAT THE ASSESSEE HAS DEPOSITED TDS TAX AND RETU RN VOLUNTARILY AND HONESTLY HENCE IMPOSING OF PENALTY IS TOTALLY I LLEGAL AND DESERVES TO BE QUASHED. 4. THAT PENALTY ORDER ITSELF IS ILLEGAL AND DESER VES TO BE QUASHED. 5. THAT THE APPELLANT RESERVES THE RIGHT TO ADD, AM END, WITHDRAW OR ALTER ANY GROUND OF APPEAL BEFORE THE FINALIZATI ON OF SAID APPEAL. 2. THE ASSESSEE IS AN EDUCATIONAL INSTITUTION AND F ILED QUARTERLY TDS RETURN FOR THE FINANCIAL YEAR 2010-11 BELATEDLY ON 12 TH SEPTEMBER, 2011. THE QUARTERLY DELAY IN FILING THE E-TDS RETURNS ARE AS UNDER :- FORM F.Y. AND QUARTER DUE DATE OF DEPOSIT OF TDS RETURN DATE OF TDS DEPOSIT DELAY OF FILING OF E-TDS RETURNS. 26Q Q1 15.07.2010 12.09.2011 424 DAYS 26Q Q2 15.10.2010 12.09.2011 332 DAYS 26Q Q3 15.01.2011 12.09.2011 240 DAYS 26Q Q4 15.05.2011 12.09.2011 120 DAYS ACCORDINGLY, THE JOINT CIT TDS JAIPUR ISSUED A SHOW CAUSE NOTICE UNDER SECTION 272A(2)(K) OF THE IT ACT DATED 06.09.2012 FOR INITI ATING THE PENALTY PROCEEDINGS. THERE WAS NO RESPONSE ON BEHALF OF THE ASSESSEE TO THE SHOW CAUSE NOTICE. THEREFORE, ANOTHER NOTICE DATED 18.12.2012 WAS ISSU ED TO THE ASSESSEE. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE FINALLY FILED WRIT TEN SUBMISSION ON 04.03.2013. THUS IT WAS PLEADED DURING THE PENALTY PROCEEDINGS THAT DUE TO INADVERTENCE THE ASSESSEE 3 ITA NO. 963/JP/2018 SANJAY SHIKSHA SAMITI, JAIPUR. COULD NOT DEPOSIT THE TDS AND CONSEQUENTLY THE QUAR TERLY TDS RETURN WAS NOT FILED. HOWEVER, AT THE TIME OF FINALIZATION OF BOOKS OF AC COUNTS, THE CHARTERED ACCOUNTANT OF THE ASSESSEE POINTED OUT THE LIABILITY OF DEPOSI T OF TDS. THUS IT WAS PLEADED BY THE ASSESSEE THAT IMMEDIATELY AFTER REALIZING THE M ISTAKE THE ASSESSEE DEPOSITED THE TDS AND FILED THE QUARTERLY TDS RETURN ON 12.09.201 1. SINCE THERE WAS A DELAY RANGING FROM 120 DAYS TO 424 DAYS FROM QUARTER 4 TO QUARTER 1, THE JOINT CIT TDS WHILE PASSING THE PENALTY ORDER ON 18.03.2013 UNDER SECTION 272A(2)(K) HAS LEVIED THE PENALTY IN PROPORTION TO THE DELAY TOTAL AMOUNT ING TO RS. 1,11,600/-. THE ASSESSEE CHALLENGED THE ACTION OF THE AO/JCIT IN LE VYING THE PENALTY BEFORE THE LD. CIT (A) BUT COULD NOT SUCCEED. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBMI TTED THAT THE ACCOUNTANT OF THE ASSESSEE WHO LOOKS AFTER THE ACCOUNTS HAS NOT P OINTED OUT TO THE ASSESSEE ABOUT THE LIABILITY OF TDS AND ONLY WHEN THE ACCOUNTS OF ASSESSEE BEING FINALIZED BY THE AUDITOR IT WAS REALIZED THAT THE QUARTERLY TDS RETU RN ON PAYMENT MADE BY THE ASSESSEE WERE NOT FILED AND CONSEQUENTLY THE ASSESS EE IMMEDIATELY TOOK STEPS FOR PAYMENT OF AMOUNT TO THE ACCOUNT OF THE CENTRAL GOV ERNMENT AND FILING OF THE QUARTERLY TDS RETURN. THUS THE LD. A/R HAS CONTEND ED THAT THIS IS A BONAFIDE MISTAKE AND, THEREFORE, IN VIEW OF THE PROVISIONS OF SECTIO N 273B OF THE ACT WHEN THE ASSESSEE HAS EXPLAINED THE REASONABLE CAUSE, NO PEN ALTY SHALL BE LEVIED UNDER SECTION 272A(2)(K) OF THE ACT. THE LD. A/R HAS FUR THER SUBMITTED THAT THE QUARTERLY TDS RETURN AS REQUIRED TO BE FILED AFTER DEDUCTION OF TDS AND DEPOSITING THE SAME TO THE ACCOUNT OF THE CENTRAL GOVERNMENT. IN THE CASE IN HAND, WHEN THE ASSESSEE HAS NOT DEDUCTED ANY TDS ON THE PAYMENT AND THERE IS NO DELAY IN FILING THE QUARTERLY RETURN AFTER THE DEPOSIT OF AMOUNT TO THE ACCOUNT O F THE CENTRAL GOVERNMENT WITH 4 ITA NO. 963/JP/2018 SANJAY SHIKSHA SAMITI, JAIPUR. INTEREST THEN THE PROVISIONS OF SECTION 272A(2)(K) ARE NOT ATTRACTED AS THERE IS NO DELAY. THE REQUIREMENT OF TDS RETURN FILING IS TO ENSURE THAT WHETHER THE ASSESSEE HAS DEDUCTED CORRECT TAX OR NOT OR AFTER DEDUCTING THE SAME WHETHER PAID OR NOT INTO THE ACCOUNT OF THE CENTRAL GOVERNMENT. IF BOTH OF THE THINGS HAVE BEEN COMPLIED WITH THEN THERE WAS NO LOSS OF REVENUE BECAUSE THE ASSESSEE HAS ALREADY PAID THE INTEREST. CONSEQUENTLY THERE SHOULD NOT BE ANY QUES TION OF IMPOSING ANY PENALTY ON THE ASSESSEE BECAUSE OF THE REASON THAT THE ASSESSE E HAS NOT FILED THE RETURN IN TIME. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF MUMBAI BENCHES OF THE TRIBUNAL IN CASE OF PORWAL CREATIVE VISION (P) LTD. VS. ADDL. CIT, 139 TTJ 01 AND SUBMITTED THAT QUARTERLY RETURN OF TDS I S REQUIRED TO BE FILED ONLY AFTER PAYMENT TAX AND THUS AN ASSESSEE CAN FILE RETURN ON LY AFTER PAYING THE TAX TO THE GOVERNMENT. THE PENALTY UNDER SECTION 272A(2)(K) I S LEVIABLE FOR THE DELAY ONLY FROM THE DATE OF PAYMENT OF TAX TO THE CENTRAL GOVE RNMENT. THE LD. A/R HAS POINTED OUT THAT AS REGARDS THE DEFAULT OF PAYMENT OF TAX TO THE CENTRAL GOVERNMENT IN TIME OR DEDUCTING TAX AT SOURCE, THERE ARE OTHER PROVISIONS FOR ENSURING THE COMPLIANCE. THUS THE LD. A/R HAS SUBMITTED THAT WH EN THERE IS NO DELAY IN FILING THE QUARTERLY TDS RETURN AFTER AMOUNT WAS DEPOSITED TO THE ACCOUNT OF THE CENTRAL GOVERNMENT, EVEN THE ASSESSEE DID NOT DEDUCT TDS PR IOR TO THAT DATE, THEREFORE, NO PENALTY SHALL BE LEVIED UNDER SECTION 272A(2)(K). HE HAS ALSO RELIED UPON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN CA SE OF CIT VS. SUPERINTENDENT ENGINEER, UDAIPUR, 260 ITR 641 (RAJ.) AS WELL AS TH E DECISION OF THIS TRIBUNAL IN CASE OF ARGUS GOLDEN TRADES INDIA LTD. VS. JCIT, 189 TTJ 589 (JP). 4. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED THA T THERE IS NO DISPUTE THAT THERE IS A DELAY IN FILING THE QUARTERLY TDS RETURN AS REFERRED BY THE AO AS WELL AS LD. 5 ITA NO. 963/JP/2018 SANJAY SHIKSHA SAMITI, JAIPUR. CIT (APPEALS). THE DELAY IS RANGING FROM 120 DAYS TO 424 DAYS FROM QUARTER 4 TO QUARTER 1 AND, THEREFORE, ONCE THERE IS A FAILURE O N THE PART OF THE ASSESSEE TO COMPLY WITH THE PROVISIONS OF SECTION 206C, THEN TH E PROVISIONS OF SECTION 272A(2)(K) ARE ATTRACTED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. AS REGARDS THE DELAY IN FILING THE QUARTER LY TDS RETURN, THE ASSESSEE HAS NOT DISPUTED THE FACT OF FILING THE TDS RETURN FOR ALL FOUR QUARTERS ON 12.09.2011. THEREFORE, THE TDS RETURNS WERE FILED BELATEDLY. TH E LD. A/R OF THE ASSESSEE HAS POINTED OUT THAT THERE WAS A DELAY IN DEPOSITING TH E TAX IN THE ACCOUNT OF THE CENTRAL GOVERNMENT BUT AFTER DEPOSITING THE SAID AMOUNT THE RE IS NO DELAY IN FILING THE TDS RETURN. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON VARIOUS DECISIONS WHEREIN THE VIEW WAS TAKEN THAT THE PROVISIONS OF SECTION 272A( 2)(K) ARE ATTRACTED ONLY WHEN THERE IS A DELAY IN FILING THE QUARTERLY TDS RETURN AFTER DEPOSITING THE AMOUNT TO THE ACCOUNT OF CENTRAL GOVERNMENT. THESE DECISIONS CAN BE CONSIDERED ONLY WHEN THE FACT OF DEDUCTION OF TDS BY THE ASSESSEE AS WELL AS DEPOSITING THE SAME IN THE ACCOUNT OF THE CENTRAL GOVERNMENT IS ESTABLISHED AS CLAIMED BY THE ASSESSEE. THE ASSESSEE HAS NOT PRODUCED ANY RECORD BEFORE US REGA RDING THE TIMING OF DEDUCTION OF TDS AND DEPOSITING OF THE SAME TO THE ACCOUNT OF THE CENTRAL GOVERNMENT. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CA SE, IT IS PROPER TO VERIFY THIS ASPECT OF THE MATTER BY THE AO. ACCORDINGLY, WE SE T ASIDE THIS ISSUE TO THE RECORD OF THE AO FOR CONSIDERING THE EXPLANATION AND CONTENTI ON OF THE ASSESSEE WITH THE VERIFICATION OF THE FACT FROM THE RECORD REGARDING THE TIME OF THE DEDUCTION OF TDS AND DEPOSITING OF THE SAME TO THE ACCOUNT OF THE CE NTRAL GOVERNMENT AND THEN DECIDE THE ISSUE AFRESH IN THE LIGHT OF VARIOUS DEC ISIONS RELIED UPON BY THE ASSESSEE. 6 ITA NO. 963/JP/2018 SANJAY SHIKSHA SAMITI, JAIPUR. NEEDLESS TO SAY THAT THE ASSESSEE BE GIVEN AN APPRO PRIATE OPPORTUNITY OF HEARING BEFORE DECIDING THE MATTER AFRESH. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09/08/2019 . SD/- SD/- FOE FLAG ;KNO FOT; IKY JKWO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 09/08/2019. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-SANJAY SHIKSHA SAMITI, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT-THE JOINT CIT (TDS) JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 963/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR