M/S WORLD TRADE PARK LIMITED,JAIPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX (TDS), JAIPUR

PER BENCH :

These four appeals by the assessee are directed against four separate orders of ld. CIT (A) all dated 22nd December, 2017 arising from the penalty order passed

under section 271H of the IT Act for the assessment year 2012-13 Q1 to Q4. The

assessee has raised common grounds in these appeals. The ground raised in ITA

No. 166/JP/2018 are as under :-

“ 1. That the Commissioner of Income Tax (Appeals)-III has grossly erred in sustaining penalty of Rs. 10,000/-.

2 ITA Nos. 166, 167, 168 & 169/JP/2018. M/s. World Trade Park Limited, Jaipur.

of TDS in the prescribed Form 24Q for the financial year 2012-13 as required under

section 200(3) of the IT Act. Accordingly the AO issued a show cause notice under section 271H dated 4th June, 2015 for levy of penalty for default of non-submitting

the quarterly TDS statement/return. The assessee contended that the assessee was

facing financial difficulties and, therefore, could not pay the TDS by due dates after

deducting the tax at the time of credit given to the deductee and, therefore, the

assessee pleaded that there was a reasonable and sufficient cause for not

submitting the quarterly TDS statement in time. The AO did not accept the

contention of the assessee and observed that the assessee could not file the

statement even after depositing the tax. Hence the AO levied the penalty of Rs.

20,000/- under section 271H for each quarter. The assessee challenged the action

of the AO before ld. CIT (A) and reiterated its contention that there was a

reasonable cause which has prevented the assessee in submitting the quarterly TDS

statement/return in time. The ld. CIT (A) did not accept the explanation of the

assessee, however, the penalty imposed by the AO of Rs. 20,000/- for each quarter

was restricted to minimum of Rs. 10,000/- per quarter.

not deposit the amount in the Government account due to paucity of funds and,

therefore, though the TDS was deducted at the time of crediting the amount in the

account of the deductee, however, in the absence of availability of funds with the

assessee, the assessee could not pay the same and, therefore, there was a delay in

submitting the quarterly statement of TDS in Form No. 24Q and 26Q. The ld. A/R

3 ITA Nos. 166, 167, 168 & 169/JP/2018. M/s. World Trade Park Limited, Jaipur.

has filed the statement of ledger account of M/s. Dewan Housing Finance

Corporation Ltd. and submitted that the assessee was having a Escrow account and

whatever funds were available with the assessee, was going to the Escrow account

and, therefore due to non-availability of funds the assessee could not deposit the

amount in the Government account and consequently the assessee could not file the

statements within the period of limitation. The ld. A/R has further submitted that

the AO has also passed the order under section 201(1) and 201(1A) for non-

payment of TDS amount. He has filed a copy of the order dated 11.11.2013 under

section 201(1) and 201(1A) of the Act. Thus the ld. A/R has pleaded that the non-

availability of funds may be considered as a reasonable cause for not submitting the

TDS statement in time and, therefore, as per the provisions of section 273B of the

Act the explanation of the assessee be accepted as bonafide and the penalty levied

by the AO under section 271H be deleted.

3.1 On the other hand, the ld. D/R has relied upon the orders of the authorities

below and submitted that the ld. CIT (A) has given a specific finding that the

assessee has failed to file the quarterly TDS statement despite deposit of tax. Thus

when the period of one year is given to the assessee for submitting the statement to

avoid the penalty and the assessee has failed even to submit the quarterly

statement within the said period of one year from the due date of filing the

statement, the penalty levied by the AO and sustained by ld. CIT (A) is justified.

record. There is no dispute that the assessee has failed to submit the quarterly TDS

statements within the period of limitation prescribed. The assessee has also not

4 ITA Nos. 166, 167, 168 & 169/JP/2018. M/s. World Trade Park Limited, Jaipur.

disputed the failure on its part to submit the statement on due date. However, the

assessee has taken the plea that due to paucity of funds the assessee could not pay

the amount of TDS and consequently the quarterly TDS statement could not be

submitted/delivered within the prescribed period as per the provisions of section

200(3) of the Act read with section 206C. Hence we find that the failure on the part

of the assessee to furnish the quarterly statement is not in dispute. The only issue

is whether the assessee was able to explain the cause of delay which is bonafide in

terms of provisions of section 273B of the Act. As per sub section (3) of section

271H, no penalty shall be levied for the failure of the assessee to submit the

quarterly statement and if the assessee proves that the tax deducted/collected along

with fee and interest is deposited to the account of the Central Government and it

had delivered the quarterly statement before the expiry of the period of one year

from the time prescribed for delivering of such statement. Thus a further period of

one year is also provided under sub-section (3) of section 271H in case the assessee

deposited the amount of TDS along with fee and interest and also delivered the

statement within the said extended period of one year. In the case in hand the

assessee has also failed to comply with the provisions of sub-section (3) of section

271H. The AO as well as the ld. CIT (A) has observed that the assessee has failed

to file the statement even after depositing the tax. This statement of the authorities

below appears to be contrary to the fact because the AO has also passed the order

dated 11.11.2013 under section 201(1) and 201(1A) of the Act by holding that the

assessee has failed to deposit the tax and, therefore, the assessee was considered

as assessee in default under section 201. The assessee has also filed the

5 ITA Nos. 166, 167, 168 & 169/JP/2018. M/s. World Trade Park Limited, Jaipur.

statements of ledger account of M/s. Dewan Housing Finance Corporation Ltd and

submitted that since the assessee was having Escrow account, all the funds available

with the assessee were automatically going into the Escrow account and the

assessee was not having any right to withdraw the funds. Thus the assessee was

not having any funds available for depositing the TDS collected to the account of the

Central Government. Since these facts have not been considered by the authorities

below and particularly the reasons as recorded by the AO and ld. CIT (A) are prima

facie contradictory to the order passed by the AO under section 201(1) and 201(1A),

therefore, without expressing any view on the merits of the explanation of the

assessee in terms of section 273B, we are of the considered opinion that the

explanation of the assessee be considered afresh at the level of the AO.

Accordingly, we set aside the impugned orders of the authorities below and remit

the matter to the record of the AO for adjudication of the same afresh after

considering the explanation of the assessee. Needless to say, the assessee be given

proper opportunity of hearing.

Order is pronounced in the open court on 21/06/2018.

Sd/- Sd/- (foØe flag ;kno) (fot; iky jkWo ½ (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member

Jaipur Dated:- 21/06/2018. Das/

6 ITA Nos. 166, 167, 168 & 169/JP/2018. M/s. World Trade Park Limited, Jaipur.

आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

7 ITA Nos. 166, 167, 168 & 169/JP/2018. M/s. World Trade Park Limited, Jaipur.