M/S.BLUE STAR CONSTRUCTION CO.,MUMBAI vs. ADDL. CIT, THANE

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ITA 4610/MUM/2018Status: DisposedITAT Mumbai13 December 2019AY 2011-124 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty order was passed after the insertion of the second proviso to Section 272A, which barred penalties for delayed TDS statement filings on or after July 1, 2012. Therefore, the penalty order was null and void.

What were the facts?

The assessee appealed against a penalty levied under Section 272A(2)(k) for delayed filing of TDS statements. The assessee claimed non-receipt of notices and the penalty order, and also argued that the penalty was not leviable after July 1, 2012, due to a legislative amendment.

What were the issues?

Whether a penalty under Section 272A(2)(k) is leviable for delayed TDS statement filings after July 1, 2012, and whether the assessee received proper notices.

Which sections of the Income-tax Act were involved?

Section 272A(2)(k),Section 200(3)

AI-generated summary — verify with the full judgment below

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

Before: SHRI C.N. PRASAD, HONBLE & SHRI RAJESH KUMAR, HONBLEShri D.Y. Pandit

For Appellant: Shri D.Y. Pandit
For Respondent: Ms. Kavita P.Kaushik
Hearing: 16.10.2019Pronounced: 13.12.2019

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

1.

This appeal is filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals) – 3, Nasik (Camp Office –Thane) [hereinafter in short “Ld.CIT(A)”] dated 20.03.2018 for the A.Y. 2011-12.

2.

Assessee in its appeal raised the following grounds:

1) The learned CIT (A)

3. Nasik failed to take cognizance of the facts that assessee did not receive the any notices issued on under Sec 272 (1) K by Dy. CIT as stated by him in his order u/s.272(A)(2)(k) of the Act and also assessee did not receive even

(A.Y: 2011-12) M/s Blue Star Construction Co. the order dt. 05-02-2013 passed by DY. CIT u/s. 272(A)(2)k of the Act. 2) The CIT (A)-3 Nasik on merits should have appreciated the fact that with effect from 1st duly 2012, as stated in 2nd proviso to Sec 272 A(2) which is as follows Provided further that no penalty shall be levied under this Section for the failure referred to in clause(k) if such failure related to a statement referred to in sub Sec.(3) of the Sec 200 or the proviso to sub Sec (3) of Sec 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source as the case may be, on or after the 1st day of July 2012" and penalty is levied u/s (3) of Sec 200 of the Act and thus said penalty order is bad in law. 3) The notices of hearing sent from office of CIT (A)-3 Nasik fixing the hearing date are not sent on address mentioned in form 35 of the Act. Hence, the appeal orders dt. 20-03-2018 bad in law.”

3.

At the outset, Learned Counsel for the assessee submitted that, assessee has neither received the notice issued u/s. 272A(2)(K) of the Act requiring the assessee to show cause as to why the order imposing penalty u/s. 272A(2)(K) of the Act should not be passed. It was also further submitted by the Ld. Counsel for the assessee that even the order dated 05.02.2013 passed by the Additional Commissioner of Income-tax, imposing penalty u/s. 272A(2)(K) was not served on the assessee.

4.

Ld. Counsel for the assessee further submitted that as per the second proviso to section 272A which was inserted by the Finance Act, 2012 w.e.f. 01.07.2012 no penalty shall be levied under Section 272A on or after the 01st day of July, 2012, for failure to furnishing statements referred to in sub-section (3) of section 200 or sub-section (3) of section 206C of the Act. Ld. Counsel for the assessee submits that the Ld.CIT(A)

(A.Y: 2011-12) M/s Blue Star Construction Co. ignoring the second proviso to section 272A sustained the penalty observing that even prior to amendment provision of section 272A is in the statute.

5.

Ld. DR strongly supported the orders of the Ld.CIT(A).

6.

We have heard the rival submissions, perused the orders of the authorities below. The Additional Commissioner of Income-tax, passed an order u/s.272A(A)(K) of the Act on 05.02.2013 levying penalty of ₹.2,36,800/- for delay in filing Form No. 26Q i.e. quarterly statements of TDS u/s. 200(3) of the Act. On appeal the Ld.CIT(A) sustained the penalty without appreciating the submissions of the assessee. Before us, it is the submission of the Ld. Counsel for the assessee that no penalty is leviable under section 272A of the Act on or after 01st day of July, 2012 for the failure to furnish the statements referred to in sub section (3) of section 200 of the Act. We have perused the provisions of section 272A and the second proviso therein which reads as under: - “Provided further that no penalty shall be levied under this section for the failure referred to in clause (K), if such failure relates to a statement referred to in sub-Section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.”

7.

The above second proviso to section 272A was inserted by the Finance Act, 2012 w.e.f. 01.07.2012. On a plain reading of the proviso it

(A.Y: 2011-12) M/s Blue Star Construction Co. is abundantly clear that no penalty shall be levied under Section 272A of the Act on or after 01st day of July, 2012 for the failure referred to in clause (k) i.e. in respect of furnishing of copy of statements within the time specified in sub-section (3) of section 200 of the Act for non-deduction of TDS. However, in this case order imposing penalty u/s. 272A(2)(K) of the Act was passed on 05.12.2013 making the penalty order null and void as it was passed after insertion of the second proviso to section 272A of the Act. Thus we set-aside the penalty order passed u/s. 272A(2)(K) of the Act and direct the Assessing Officer to delete the penalty.

8.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on the 13th December, 2019

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