SHEETAL SHELTERS P.LTD, MUMBAI V. ITO 5(3)(2), MUMBAI

ITA 964/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7829 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 10-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESH
• Keywords: Reasonable cause; Onus to prove

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A NOS. 964/MUM/2014 (ASSESSMENT YEAR: 2011-12) SHRI KETAN S VAKHARIA E/203, NEEL KAMAL CO-OP HOUSING SOCIETY LTD, CHINCHOLI ROAD, MALAD (W), MUMBAI-64 PAN : AAZP6595J VS ADDL CIT-TDS, RANE-2, MUMBAI APPELLANT RESPONDEDNT APPELLANT BY NONE RESPONDENT BY SHRI SAURABH DESHPANDE DATE OF HEARING 20-11-2017 DATE OF PRONOUNCEMENT 20-11-2017 O R D E R PER G MANJUNATHA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-14, MUMBAI DATED 21-09-2013 AND IT PERTAINS TO AY 2011- 12. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER, ON EXAMINATION OF RECORDS NOTED THAT THE ASSESSEE HAD NOT FILED TH E QUARTERLY TDS STATEMENTS IN FORM 24Q WITHIN THE TIME SPECIFIED U/S 206 / 206 A OF THE INCOME-TAX ACT, 1961 R.W.R. 37 OF THE INCOME-TAX RULES, 1962 FOR TH E FINANCIAL YEAR 2010-11 WHICH WERE REQUIRED TO BE FILED AT THE END OF EVERY QUARTER. THE AO FURTHER 2 NOTED THAT UNDER THE PROVISIONS OF SECTION 200(3)R. W.R. 31A, A QUARTERLY STATEMENT OF TDS IN FORM 24Q IS REQUIRED TO BE FILE D FOR EVERY QUARTER ON OR BEFORE 15 TH OF SUBSEQUENT MONTH IMMEDIATELY FOLLOWING THE END OF EVERY QUARTER. HOWEVER, THE ASSESSEE FAILED TO FILE THE TDS RETURN WITHIN THE TIME SPECIFIED UNDER THAT SECTION AND ACCORDINGLY ISSUED SHOW CAUSE NOTICE AND ASKED THE ASSESSEE AS TO WHY PENALTY U/S 272A(2)(K) SHALL NOT BE LEVIED. THE ASSESSEE, VIDE LETTER DATED 12-08-2011 SUBMITTED TH AT THE ASSESSEE HAD ALREADY FILED TDS RETURNS FOR ALL THE QUARTERS FOR THE FINANCIAL YEAR 2010-11. THOUGH THERE IS A DELAY IN FILING QUARTERLY STATEME NTS FOR FIRST 3 QUARTERS IT S BECAUSE OF THE CONSULTANT, WHO WAS OUT OF TOWN; THE REFORE, THE ASSESSEE COULD NOT FILE THE TDS RETURNS WITHIN THE TIME ALLOWED UN DER THE ACT. THE ASSESSEE FURTHER SUBMITTED THAT HE IS A SMALL TIME TRADER AN D DOES NOT HAVE ANY FULL TIME EMPLOYEES TO LOOKAFTER THE AFFAIRS OF HIS BUSINESS AND HE WAS FULLY DEPENDENT ON THE CONSULTANT, WHO WAS SUPPOSED TO FILE THE TDS RETURNS; HOWEVER, THE CONSULTANT COULD NOT FILE THE TDS RETURNS IN TIME B ECAUSE OF HIS PRE-OCCUPATION DURING THAT PARTICULAR POINT OF TIME. HOWEVER, THE LAST QUARTERLY STATEMENT HAS BEEN FILED WITHIN THE TIME ALLOWED UNDER THE ACT. THEREFORE, THERE WAS NO DELIBERATE ATTEMPT TO FILE THE RETURNS SO AS TO DER IVE ANY UNDUE BENEFIT AND HENCE, PENALTY CANNOT BE LEVIED U/S 272A(2)(K) OF T HE ACT, 1961. AS SOON AS THE CONSULTANT WAS AVAILABLE FOR THE SERVICE HE FILED T HE RETURNS. THE AO, AFTER 3 CONSIDERING THE EXPLANATION OF THE ASSESSEE OBSERVE D THAT THOUGH THERE IS A DELAY IN FILING QUARTERLY STATEMENTS FOR FIRST 3 QU ARTERS, THE ASSESSEE FAILED TO MAKE OUT A REASONABLE CAUSE FOR NOT FILING THE TDS RETURNS IN TIME AS REQUIRED BY THE ACT. THE ASSESSEE ALSO FAILED TO DISCHARGE ITS BURDEN TO PROVE ESSENTIALLY IN MAKING OUT SOME PLAUSIBLE CAUSE AGAINST THE PROP OSED LEVY OF PENALTY. IT IS WELL ESTABLISHED LEGAL POSITION THAT IF THE ASSESSE E WANTS TO BE FREE FROM PENAL CONSEQUENCES, BURDEN OF PROOF RESTS FIRMLY WITH IT SO AS TO SHOW THAT THE SAID DEFAULT OR CIRCUMSTANCES WERE BEYOND THE CONTROL OF THE ASSESSEE. IN THIS CASE, THIS HAS NOT BEEN DEMONSTRATED. THEREFORE, IT IS A FIT CASE FOR LEVY OF PENALTY FOR FAILURE TO FILE QUARTERLY STATEMENTS OF TDS AND HENCE LEVIED PENALTY U/S 272A(2)(K) FOR RS.12,675. AGGRIEVED BY THE PENALTY ORDER, ASSESSEE PREFERRED APPEAL BEFORE CIT(A); HOWEVER, THE CIT(A) AFFIRMED THE FINDINGS OF THE AO TO CONFIRM PENALTY LEVIED U/S 272A(2)(K) OF THE I.T. A CT, 1961. AGGRIEVED BY THE ORDER OF C IT(A), ASSESSEE IS IN APPEAL BEFORE US. 3. NONE APPEARED FOR THE ASSESSEE. WE HAVE HEARD THE LD.DR, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE O RDERS OF AUTHORITIES BELOW. THE AO LEVIED PENALTY U/S 272A(2)(K) FOR FAILURE TO FILE QUARTERLY STATEMENT OF TDS IN FORM 24Q. THE AO LEVIED PENALTY ON THE GROU ND THAT THE ASSESSEE FAILED TO FILE THE REQUIRED QUARTERLY STATEMENT IN FORM 24 Q WITHIN THE SPECIFIED TIME ALLOWED UNDER THE ACT, BUT ALSO FAILED TO EXPLAIN T HE REASONS FOR NOT FILING SAID 4 STATEMENTS. IT IS THE CONTENTION OF THE ASSESSEE T HAT QUARTERLY TDS STATEMENTS HAS NOT BEEN FILED BECAUSE HIS CONSULTANT, WHO WAS SUPPOSED TO FILE THE QUARTERLY TDS STATEMENTS, WAS OUT OF TOWN DURING TH E RELEVANT PERIOD OF TIME. THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE IS A SMALL TIME TRADER AND HAS NO REGULAR EMPLOYEES TO LOOKAFTER THE AFFAIRS OF HI S. THE ASSESSEE IS FULLY DEPENDENT UPON THE CONSULTANT FOR ITS ACCOUNTING AS WELL AS LEGAL MATTERS. THE REQUIRED TDS DEDUCTION HAS BEEN MADE AND ALSO PAID INTO THE GOVERNMENT ACCOUNT WITH INTEREST. THE QUARTERLY STATEMENTS HA VE BEEN FILED BELATEDLY DUE TO THE REASONS BEYOND HIS CONTROL. THEREFORE, THER E IS A REASONABLE CAUSE FOR NOT FILING THE STATEMENTS WITHIN THE TIME ALLOWED U NDER THE ACT AND HENCE, THE AO WAS INCORRECT IN LEVYING PENALTY U/S 272A(2)(K). 4. HAVING HEARD, WE FIND FORCE IN THE REASONS GIVEN BY THE ASSESSEE FOR NOT FILING THE QUARTERLY TDS STATEMENTS WITHIN THE TIME ALLOWED UNDER THE ACT, AS IT IS NOT A CASE OF THE AO THAT THE ASSESSEE HAS NOT D EDUCTED TDS AND ALSO NOT FILED TDS STATEMENTS. THE ASSESSEE HAS DEDUCTED TD S AND PAID TO THE GOVERNMENT ACCOUNT. THIS FACT HAS NOT BEEN DISPUTE D BY THE AO. THE ASSESSEE ALSO EXPLAINED THE REASONS FOR NOT FILING QUARTERLY STATEMENTS IN FORM 24Q WITHIN THE TIME ALLOWED UNDER THE ACT. THE REASONS GIVEN BY THE ASSESSEE FOR NOT FILING QUARTERLY TDS STATEMENTS APPEAR TO BE BO NA FIDE. THEREFORE, WE ARE OF THE VIEW THAT THE AO WAS INCORRECT IN LEVYING PE NALTY U/S 272A(2)(K) FOR NOT 5 FILING THE QUARTERLY TDS STATEMENTS WITHIN THE TIME ALLOWED UNDER THE ACT DESPITE THE ASSESSEE HAS EXPLAINED THE REASONS WHIC H WERE BEYOND THE CONTROL OF THE ASSESSEE. THE CIT(A), WITHOUT APPRECIATING THE FACTS, UPHELD PENALTY LEVIED BY THE AO. THEREFORE, WE DELETE THE PENALTY LEVIED BY THE AO AND SET ASIDE THE ORDERS OF AUTHORITIES BELOW. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH NOVEMBER, 2017. SD/- SD/- (MAHAVIR SINGH) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 20 TH NOVEMBER, 2017 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. 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