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आदेश/Order
PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER:
The above captioned appeals have been filed by two different assessees against the separate orders of even date 29.08.2018 ,passed by the Commissioner of Income Tax (Appeals)-1, Chandigarh [in short referred to as CIT(A)] relating to assessment years 2011-12 and 2012-13.
At the outset itself, it was pointed out that the issue involved in both the appeals was identical being penalty levied u/s 272A(2)(k) of the Income Tax Act,1961 (in short referred to as ‘the Act’) on account
ITA Nos. 1385&1386 /CHD/2018 A.Y. 2011-12 & 2012-13 Page 2 of 8
of late filing of TDS return. Both the appeals were therefore, taken up
together for hearing and are being disposed of by this common order.
We shall first be dealing with the appeal of the assessee in ITA
1385/CHD/2018.
The appeal was time barred by two days. Application for
condoning the delay was filed on 28.03.2019 stating that the delay
was on account of the fact that the documents for filing of appeal
were given to one C.A. Ramneet Kaur who was working in the office
of C.A. Shri Vineet Khurana, counsel of the assessee and since the
said person had fallen ill with viral, the appeal could not be
submitted in time resulting in delay of two days. The application
was suported by an affidavit of C.A. Shri Vineet Khurana, ld.
counsel for the assessee to this effect was filed.
On going through the contents of the applicationsupported
by way of an affidavit filed by the ld. counsel for the assessee, we
find that in the facts of the circumstances of the present case, the
delay of two days has occurred for reasons beyond the control of
the assessee. The delay is, accordingly, condoned. Said order was
pronounced in the presence of parties in the Open Court. The
parties were, accordingly, directed to argue the appeal on merits.
Briefly stated, on information available with the office of JCIT
(TDS) Chandigarh, it was noticed that the person responsible
(hereinafter referred to as PR) had failed to file quarterly returns in
time relating to F.Y. 2010-11. Accordingly, penalty u/s 272A(2)(k) of
the Act was imposed against the PR working out the delay in filing
TDS in days and the amount of penalty leviable as a consequence
thereto as under :
ITA Nos. 1385&1386 /CHD/2018 A.Y. 2011-12 & 2012-13 Page 3 of 8
FYs 2010- Date of Filling Amount of Due date of Delays in Amount of I I Filling TDS Penalty Days 1st quarter 07.02.02012 15.07.2010 571 0 0 2nd quarter 07.02.02012 15.10.2010 480 0 0 3rd quarter 07.02.02012 15.01.2011 389 2055371 38900 4th quarter 07.02.02012 15.05.2011 268 1756756 26800 657 65700
Thus a penalty of Rs. 65,700/- was imposed u/s 272A(2)(k)
of the Act. Aggrieved by the order of the AO, the assessee filed
appeal before the ld. CIT(A), contending that the delay in filing of
TDS return was due to non-availability of PAN details of various
persons to whom the payment had been made. It was submitted
that the Income Tax Act has made it mandatory to provide PAN
number of each and every payment detail and since the majority of
persons did not have their PAN numbers or had provided incorrect
numbers, it led to unwanted delay, despite the fact that TDS had
already been deposited.
The ld. CIT(A) after considering the contentions of the
assessee, dismissed the same holding that the contention was not
acceptable because the assessee had been filing its returns in
earlier years also indicating that PAN of deductees were available
and further that Section 206AA entails that in case the deductee
does not provide its PAN number, the deductor shall deduct tax at
higher rate. The Ld.CIT(A) further stated that penalty was to be
levied even if no loss occured to the Revenue. The relevant findings
of the ld. CIT(A) at para 5.5 to 5.9 of the order is as under :
5.5 The Ld. Counsel has submitted that the appellant has been deducting and depositing the tax in time, but the TDS returns were filed late because PANs of deductees were not readily available. According to him, the returns were uploaded after receipt of PANs. This contention of the appellant is not acceptable because the appellant has been filing its return in earlier years also indicating
ITA Nos. 1385&1386 /CHD/2018 A.Y. 2011-12 & 2012-13 Page 4 of 8
that PAN of deductee were available. However, section 206AA entails that in case the deductee does not provide its PAN number, the deductor shall deduct tax at a higher rate. 5.6 The Ld. Counsel had contended that delay in filing the TDS return has not caused any loss to revenue. The provision under which the impugned penalty has been imposed, namely Section 272A(2)(k) states that if any person fails to deliver or cause to be delivered a copy of the statement under sub-section (3) of Section 200 within the specified time, he shall pay by way of penalty a sum of one hundred rupees for every day, during which the default continues. A plain reading of the provision clearly shows that the question of direct loss of revenue can never occur if the specified statement is not filed within the stipulated time. The section provides that the penalty for delay in submission of the statement was to be levied even when there was no loss to revenue. Therefore, in such a situation to plead that since there is no loss to revenue, no penalty should be imposed would render the provisions of law otiose. It has to be borne in mind that every violation of law does not necessarily entail loss to the exchequer but still there are penal provisions to enforce the legal obligations. It may also be mentioned that the information contained in TDS statements is utilized by the department in ensuring proper assessment of tax in the case of the persons from whose income, tax has been deducted at source. Hence, while non-filing of statement by the deductor may not entail a loss to revenue in deductor's case, it may result in loss of revenue in the case of deductees and so the contention of the Ld. Counsel that in the absence of loss to revenue, the penalty imposed has to be cancelled is without any merits. 5.7 The Ld. Counsel has relied upon the judgement of Hon’ble Apex Court in the case of M/s Hindustan Steel Ltd. (83 ITR 26) to support his view that the default was only of technical and venial in nature and the penalty should be imposed judiciously and has a bonafide belief that penalty is not leviable and flows from a bonafide belief that it is not liable. In the instant case, the penalty has been levied for not filing the TDS returns in time and the Assessing Officer has judicially exercised his powers. Therefore, the ratio of this judgement is not applicable to the facts of the appellant. The same is true for the other judgements quoted by the appellant. 5.8 The appellant is not a first time filer but a regular filer and well aware of provisions of law. It regularly deducts taxes and files return. The breach is on account of conscious neglect of the appellant and out of habit of non filing even when it is very much aware that every year the liability is to be discharged. 5.9 The PR was supposed to mandatorily file TDS returns within the prescribed time, as provided in rule 31A(2). As the PR has failed to do so, the PR has rightly been treated as 'assessee in default' for not filing the TDS returns within prescribed period. The penalty u/s 272A(2)(k) has rightly been imposed and the same is accordingly upheld and ground of appeal No. 1 is dismissed. 9. Aggrieved by the same, the assessee has come up in appeal
before us raising the following grounds :
That the order of the Ld. Commissioner of Income Tax (Appeals) - 1 is not a speaking order, is erroneous, arbitrary, opposed to law and facts of the case.
ITA Nos. 1385&1386 /CHD/2018 A.Y. 2011-12 & 2012-13 Page 5 of 8
That the Ld. Commissioner of Income Tax (Appeals)-1 has erred in law as well as on facts in levying a penalty of Rs. 65,700/- under section 272A(2)(k) of the I.T. Act, 1961 without correctly appreciating the facts of the case. 3. That the Ld. Commissioner Tax Appeals (I) has not taken cognizance of the fact that in the case of the sister-concerns (SRBS Entertainment and Silver City Housing and Infrastructure Limited ) of the assessee firm , the Learned Joint Commissioner of Income Tax, TDS, Chandigarh had imposed penalties under 272A(2)(k) for the same year on identical grounds. The Hon'ble IT AT vide ITA 250/Chd/2017 and ITA 251/Chd/2017 was pleased to delete the penalties. 4. That the appellant craves leave to add, to alter, to amend or vary from the aforesaid grounds of appeal at or before the time of hearing of the said appeal.
During the course of hearing before us, ld. counsel for the
assessee contended that it had a reasonable cause for the delay
being the non availability of PAN number of the deductees and
since the mentioning of the PAN number had been made
compulsory, it took a lot of time to collect the correct PAN numbers
leading to delay. The ld. counsel for the assessee contended that
in identical facts and circumstances, the ITAT had deleted the levy
of penalty u/s 272A(2)(k) in the case of M/s SBBS Entertainment
Vs JCIT in ITA 250/CHD/2017 and M/s Silver City Housing &
Infrastructure Ltd. Vs JCIT (TDS) in ITA 251/CHD/2017 vide their
order dated 26.05.2017. Copy of the order was placed before us.
Referring to the same, it was pointed out from para 6 of the order
that in those cases also, the delay was on account of non
availability of PAN numbers, considering which the ITAT had held
that the assessee had shown reasonable cause for not uploading
TDS returns in time and accordingly, deleted the levy of penalty
u/s 272A(2)(k) of the Act. The relevant findings at para 6 & 7 of
the order are as under :
We have heard the rival submissions. The Ld. counsel for the appellant has brought our attention to the written submissions filed by the appellant before the Ld. CIT(A). It has been duly explained therein that now a days the online returns are filed / uploaded. In the required column, the mentioning of the PAN number of the deductee is mandatory and that the return can not be uploaded without mentioning of the PAN number. Since the PAN numbers of some persons were not available with the appellant at the prescribed time of filing of return, hence,
ITA Nos. 1385&1386 /CHD/2018 A.Y. 2011-12 & 2012-13 Page 6 of 8
the returns could not be uploaded in time. The returns were uploaded as soon as the appellant got the PAN numbers of the respective deductees. The Ld. counsel for the assessee, therefore, has submitted that the delay in uploading / filing of the TDS was not intentional but there was a reasonable cause for the delay in filing the returns. He has, therefore, pleaded that the penalty is not invited in the case of the appellant as the appellant has shown reasonable cause for the delay in filing the return, which is duly covered under the provisions of section 273B of the Act. 7. The contentions of the Ld. Counsel for the assessee have not been rebutted by the Revenue. The appellant has shown reasonable cause of the the non availability of the PAN numbers of the deductees for which the appellant could not upload the returns in time. In our view, the plea taken by the appellant is duly covered within the scope of the provisions of section 273B of the Act and can be said to be a reasonable cause for delay in filing the return. The impugned penalty, in our view, is not warranted in this case. We accordingly delete the penalty levied by the lower authorities u/s 272A(2)(k) of the Act. 11. The ld. DR on the other hand relied on the order of the ld.
CIT(A).
We have heard the rival contentions. The assessee ,we find
,had attributed the delay in the filing of TDS returns, on account of
which penalty u/s 272A(2)(k) had been levied, to the non-
availability of correct PAN numbers of the deductees which was
compulsorily required for filing/uploading the TDS returns in the
impugned year. The Revenue has controverted the above facts
stating that in earlier years also, the assessee was filing TDS
returns indicating PAN of the deductee and that as per Section
206AA if the PAN number is not available, it could have deducted
tax at a higher rate.
We are not convinced with the arguments of the Ld.DR and find
that the same do not controvert the contention and explanation of
the assessee for the delay in filing the TDS returns. Merely because
the assessee had been filing TDS returns in earlier years, quoting
PAN numbers does not mean that the explanation for the delay in
filing TDS return in the impugned year on account of the non
availability of correct PAN numbers was false, since it is not the
ITA Nos. 1385&1386 /CHD/2018 A.Y. 2011-12 & 2012-13 Page 7 of 8
case of the revenue nor has it been demonstrated by them that the
deductees in the earlier years were same as in the impugned year
and the returns in the earlier years were filed in time . It is only if
the fact situation in the earlier year of the deductees being the
same as in the impugned year and the assessee having filed the
return in time in the earlier year,would it have helped the case of
the Revenue to prove the explantion of the assessee of non
availability of PAN No’s of the deductees as false . Even before us,
no such fact has been brought to our notice. Further, the
contention that the assessee could have deducted tax at a higher
rate also does not help the case of the revenue since the contention
of the assessee that it was compulsorily required to quote PAN
numbers has remained uncontroverted and therefore, deducting
tax at higher rate without PAN number would not have helped the
assessee to upload the return. We, therefore, hold that the
assessee had adduced reasonable cause for the delay in filing TDS
return. We also agree with the ld. counsel for the assessee that the
facts in the present case are identical to that in the case of M/s
SBBS Entertainment (supra) wherein the ITAT had deleted the levy
of penalty on identical explanation given by the assessee. The ld.
DR has failed to bring out any distinguishing facts from the said
case before us. In view of the same, we hold that the impugned
penalty was not warranted in this case. We, accordingly, delete the
penalty levied of Rs. 65,700/- u/s 272A(2)(k) of the Act. The appeal
of the assessee stands allowed.
ITA 1386/CHD/2018
ITA Nos. 1385&1386 /CHD/2018 A.Y. 2011-12 & 2012-13 Page 8 of 8
The facts and issue involved in the case of M/s Hari Code in
ITA 1386/CHD/2018 ,it was common ground,were exactly identical
to that in ITA 1385/CHD/2018 adjudicated above. In view of the
same, our findings given in the said case will apply to the present
case also and accordingly, the penalty levied in this case is also
directed to be deleted.
In the result, appeal of the assessee is allowed.
In a fact, both the appeals of the assessee are allowed.
Order pronounced in the Open Court on 04.04.2019.
Sd/- Sd/- (संजय गग�) (अ�नपूणा� गु�ता) (SANJAY GARG) (ANNAPURNA GUPTA) �या�यक सद�य/ Judicial Member लेखा सद�य/ Accountant Member “Poonam” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकर आयु�त/ CIT 3. आयकर आयु�त (अपील)/ The CIT(A) 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File 6.
आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar