MAESTROS MEDILINE SYSTEMS LTD.,MUMBAI vs. JCIT (TDS)-1(3), MUMBAI

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ITA 3049/MUM/2018Status: DisposedITAT Mumbai28 November 2019AY 2013-144 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that all facts were not on record as the assessee did not cooperate with the Assessing Officer and the CIT(A) rejected additional evidence. Therefore, the matter was sent back to the Assessing Officer for fresh adjudication.

What were the facts?

The assessee was penalized under Section 271C for not deducting TDS on salary paid to an ex-employee. The assessee claimed a dispute with the employee and that salary was not paid initially, with post-dated cheques issued later which did not clear.

What were the issues?

Whether there was a reasonable cause for the non-deduction of TDS and if the penalty under Section 271C was justified, considering the rejection of evidence.

Which sections of the Income-tax Act were involved?

Section 271C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “D”, MUMBAI

Before: SHRI C.N. PRASAD, HONBLE & SHRI S. RIFAUR REHMAN, HONBLE

For Appellant: Shri Gaurav Kabra
Hearing: 30.09.2019Pronounced: 28.11.2019

O R D E R PER C.N. PRASAD (JM)

1.

This appeal is filed by the assessee against the order of the Ld.Commissioner of Income-tax (Appeals)- 59, Mumbai [hereinafter for short "Ld. CIT(A)] dated 08.02.2018 for the A.Y. 2013-14 in sustaining the penalty levied U/s. 271C of the Act.

2.

At the outset, Ld. Counsel for the assessee submitted that assessee has not paid any salary to its Ex. employee Shri J. Chandramohan and he

2 ITA.NO. 3049/MUM/2018 (A.Y:2013-14) M/s. Maestros Mediline Systems Ltd has filed a criminal complaint and referring to Page No. 11 of the Paper Book it is submitted that the ex- employee had even stated in his complaint that the assessee has not paid salary. Ld. Counsel for the assessee submits that since there was a dispute with the Ex-employee salary was not paid and no TDS was made. Referring to Page No. 21 of the Paper book the Ld. Counsel for the assessee submits that in the reply to legal notice issued by Shri J. Chandramohan assessee had stated that Shri J. Chandramohan has not performed his duties from 01.01.2013, therefore, assessee has no liability to pay salary. However, as the colleagues of Shri J. Chandramohan pressurized the assessee to pay the salary post- dated cheques were issued by the assessee. It is also submitted that the cheques issued were not cleared. It is also submitted that the additional evidences produced by the assessee before the Ld. CIT(A) have not been admitted. Hence there is a reasonable cause in not deducting the TDS and remitting into government account and penalty be deleted.

3.

On the other hand, Ld. DR strongly supported the orders of the authorities below. Referring to the Page No. 5 of the Ld. CIT(A) order it is submitted that assessee has not filed TDS return at all. Therefore, it was submitted that Assessing Officer rightly levied penalty U/s. 271C of the Act.

3 ITA.NO. 3049/MUM/2018 (A.Y:2013-14) M/s. Maestros Mediline Systems Ltd 4. We have heard the rival submissions and perused the orders of the authorities below. Before the Assessing Officer assessee could not furnish its explanation in spite of several opportunities. Before the Ld.CIT(A) assessee furnished additional evidences which the Ld. CIT(A) rejected on the ground that assessee has not cooperated with the proceedings before the Assessing Officer, though several opportunities were given. Not appreciating the submissions of the assessee and rejecting the additional evidences the Ld.CIT(A) confirmed the penalty U/s. 271C of the Act.

5.

On a perusal of the entire record, we are of the view that all the facts have not come on record as the assessee could not respond to the notices before the Assessing Officer and the additional evidences were not admitted by the Ld. CIT(A). In the absence of complete facts on record we are unable to adjudicate as to whether there is a reasonable cause in not deducting TDS and remitting to the Government Account. Thus, we are of the view that the issue should go back to the file of the Assessing Officer and the assessee shall submit all the evidences to prove that there is reasonable cause for non-deduction of TDS and remitting into the Government Account and Assessing Officer shall pass fresh order taking all the facts into record. Thus, we restore this issue to the file of the 4 ITA.NO. 3049/MUM/2018 (A.Y:2013-14) M/s. Maestros Mediline Systems Ltd Assessing Officer for passing speaking order after obtaining all the facts on record. Assessee shall be given adequate opportunity of being heard.

6.

In the result, appeal of the assessee is allowed for statistical purpose.

Order pronounced in the open court on the 28th November, 2019

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