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Income Tax Appellate Tribunal, DELHI BENCH ‘A’ : NEW DELHI
Before: SHRI R.K. PANDA & SHRI KULDIP SINGH
PER KULDIP SINGH, JUDICIAL MEMBER :
Since common questions of facts and law have been raised in both the aforesaid appeal, the same are being disposed off by way of consolidated order to avoid repetition of discussion.
The appellant, M/s. Ambience Developers & Infrastructure P. Ltd. (hereinafter referred to as ‘the assessee’) by filing the present appeals sought to set aside the impugned orders dated 30.12.2014 passed by Ld. CIT (Appeals)-41, New Delhi qua the assessment year 2008-09 & 2009-10 on the identical grounds inter alia that:-
“On the facts and circumstance of the case the learned CIT (A) has erred: 1. In sustaining the penalty of Rs.1,04,800/- u/s 272A(2)(k) of the IT Act imposed by the Addl. CIT Range 49 New Delhi ignoring the fact that the appellant did not willfully delayed the filling of e-TDS Returns.
2. In ignoring the fact that there was reasonable cause which prevented the assessee in complying with the due dates of filing of the e-TDS Returns due to the latest restrictions/ instructions imposed by the Central Board of Direct Taxes in this regard.
In ignoring the fact that the appellant was dependent on the information to be supplied by the deductees about their PAN which delayed the filing of the e-TDS returns by the appellant, as per the latest instructions. 4. In ignoring the fact that there was no revenue loss involved as the TDS In question was deposited on time.
WITHOUT PREJUDICE TO THE ABOVE THAT THERE WAS A REASONABLE CAUSE FOR LATE FILLING OF THE e-TDS RETURNS. THE LEARNED CIT (A) HAS NOT GIVEN THE BENEFIT OF 100 DAYS OF DELAY, A DELAY SHE TH9UGHT REASONABLE FOR CONDONATION, WHILE SUSTAINING THE PENALTY IN EACH QUATAR OF DEFAULT IN THE FINANCIAL YEARS 2007-08.” 3. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessee is into the business of real estate development and leasing or renting of commercial complex. It is noticed by the Assessing Officer that the assessee has not filed e- TDS quarterly return in Form 24Q & 26Q for the financial years 2005-06 to 2008-09 within prescribed time limit. Consequently, penalty proceedings under section 272A(2)(k) of the Income-tax Act, 1961 (for short ‘the Act’) have been initiated by way of issuance of notice. Declining the contentions raised by the assessee as to not filing the e-TDS return for AYs 2008-09 & 2009-10 because of press release dated 25.09.2007, AO proceeded to levy the penalty to the tune of Rs.1,04,800/- each for AYs 2008- 09 & 2009-10 u/s 272A(2)(k) of the Act.
3. Assessee carried the matter before the ld. CIT (A) by way of filing appeals who has confirmed the penalty by dismissing the appeals. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeals.
We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
Undisputedly, the assessee company has duly deducted the tax at source and deposited the same with revenue department and has filed the e-TDS quarterly return in Form 24Q for salaries and in Form 26Q for the payment other than salaries for first two quarters for the years under assessment. It is also not in dispute that AO levied the penalty for the delay of 858 days and 190 days for FYs 2007-08 & 2008-09. AO, in the assessment year as per the details of delay committed by the assessee in filing of the return, has given in tabulated form which is extracted for ready perusal as under :-
“F.Y.2005-06
Form No.26Q Due date of filing Date of filing Delay Q.I 31.08.2005 31.08.2005 (Notified) Q.II Q.III Q.IV 15.06.2006 12.07.2006 27 Form No.24Q Due date of filing Q.I 31.08.2005 31.08.2006 (Notified) Q.II Q.III Q.IV
Period of delay 54 days”
“F.Y.2006-07
Form No.26Q Due date of filing Date of filing Delay Q.I Q.II 15.10.2006 16.10.2006 1 Q.III 15.01.2007 18.01.2007 3 Q.IV 15.06.2007 23.07.2007 38 Form No.24Q Due date of filing Q.I Q.II 15.10.2006 16.10.2006 1 Q.III 15.01.2007 18.01.2007 3 Q.IV 15.06.2007 23.06.2007 8
Period of delay 54 days”
“F.Y.2007-08
Form No.26Q Due date of filing Date of filing Delay Q.I 15.07.2007 25.07.2007 10 Q.II 15.10.2007 21.07.2008 276 Q.III 15.01.2008 21.07.2008 186 Q.IV 15.06.2008 21.07.2008 36 Form No.24Q Due date of filing Q.I Q.II 15.10.2007 02.05.2008 197 Q.III 15.01.2008 02.07.2008 199 Q.IV 15.06.2008 23.07.2008 38
Period of delay 858 days” “F.Y.2008-09
Form No.26Q Due date of filing Date of filing Delay Q.I 15.07.2008 20.10.2008 95 Q.II Q.III Q.IV Form No.24Q Due date of filing Q.I 15.07.2008 20.10.2008 95 Q.II Q.III Q.IV
Period of delay 190 days”
Ld. AR for the assessee submitted inter alia that there was a reasonable cause for not complying with the provisions contained u/s 272A(2)(k) of the Act; that, “due to restrictions imposed vide press release dated 25.09.2007 and 12.02.2008, available at pages 6 & 7 of the paper book, which is before the due date of filing of TDS return, the return could not be filed and took shelter u/s 273B of the Act.” Ld. AR for the assessee in support of his arguments relied upon the cases of Hindustan Steel Ltd. v. State of Orissa - 83 ITR 26, Commissioner of Income-tax v. State Bank of Patiala -[2005] 277 ITR 315 (P&H) & Commissioner of Income-tax v.
Harsiddh Construction Pvt. Ltd. - 244 ITR 417.
For facility of reference, press release dated 25.09.2007 and 12.09.2008 issued by Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes are extracted for ready perusal as under :-
“PIB Dated 25.09.2007: It has been observed that in most of the TDS (tax deducted from salaries) / TCS (tax deducted from payments other than salaries returns), the PAN of the deductees is either missing or incorrect. As the requirement of filing TDS / TCS certificates has been done away with, the lack of PAN of deductees is creating difficulties in giving credit for the tax deducted and collected. Therefore, it is notified vide the present press release that that TDS returns for salaries, i.e. Form No.24Q with less than 90% of PAN data, and TDS returns for payments other than salaries and TCS returns, i.e. Form No.26Q and Form No.27EQ respectively, with less than 70% of PAN data will not be accepted for the quarter ending on 30.9.2007 and thereafter. Tax deductors and tax collectors are, therefore, advised to obtain correct PAN details of all deductees and quote the same in the TDS / TCS returns, failing which the TDS / TCS returns will not be accepted and all penal consequences under the Income Tax Act will follow.”
“No.402/9212006-MC (10 of 2008) Government of India / Ministry of Finance Department of Revenue Central Board of Direct Taxes *** New Delhi dated the 12th February 2008 PRESS RELEASE All tax deductors / collectors are required to file the TDS/ TCS returns in Form No.24Q (for salaries), Form No.26Q (for payments other than salaries) or Form No.27EQ (for TCS).
These forms require details of all tax deductions with name and permanent account number (PAN) of parties from whom tax was deducted. It had earlier been decided that Form No.24Q with less than 90% of PAN data and Form No.26Q & Form No.27EQ with less than 70% of PAN data will not be accepted for the quarter ending on 30.09.2007 and thereafter. The said decision has since been reviewed. It has now been decided to enhance the threshold limit for PAN quoting without which TDS/TCS returns will not be accepted. The limit has been enhanced to 95% from 90% in case of Form 24Q and to 85% from 70% in case of Forms 26Q and 27EQ. The enhanced limits will be applicable for and from the quarter ending 31.03.2008. These threshold limits will also apply to all those TDS/TCS returns, which are filed for any of the earlier quarters on or after 01/04/2008. Tax deductors and tax collectors are, therefore, advised to obtain correct PAN of all deductees and quote the same in their TDS I TCS returns. Deductees are also advised to furnish their correct PAN with their deductors, failing which they will not only have difficulty in getting credit of TDS/TCS in their income tax assessments but will also face penal proceedings under the Income Tax Act.”
Undisputedly, vide press release dated 25.09.2007, the Department of Revenue has notified that TDS return for salary i.e. Form 24Q with less than 90% of PAN data and TDS return for payment other than salaries in Form 26Q and Form 27EQ respectively with less than 70% of PAN data will not be accepted for the quarter ending on 30.09.2007. The said limit has been enhanced to 95% from 90% in case of Form 24Q and to 85% from 70% in case of Form 26Q and 27EQ applicable for and from the quarter ending 31.03.2008. So, when we examine the case of the assessee in the light of the aforesaid press release making restriction by the Central Board of Direct Taxes, the assessee has reasonable cause who has otherwise deducted the tax at source and deposited the same with the Income-tax Department in time. So, there appears to be no willful disobedience on the part of the assessee in late filing of the returns.
Hon’ble Gujarat High Court in case cited as Commissioner of Income-tax v. Harsiddh Construction Pvt. Ltd. (supra) by relying upon the decision rendered by Hon’ble Supreme Court in Hindustan Steel Ltd. vs. State of Orissa – (1972) 83 ITR 26 (SC) held that when there was a bonafide mistake on the part of the assessee, penalty cannot be imposed. Operative part of the aforesaid decision rendered by Hon’ble Gujarat High Court is extracted for ready perusal as under :-
“REFERENCE-PENALTY-FAILURE TO ISSUE CERTIFICATE THAT TAX HAD BEEN DEDUCTED AT SOURCE-PAYMENT MADE INTO GOVERNMENT TREASURY WITHIN PRESCRIBED TIME-NO LOSS OF REVENUE-BONA FIDE MISTAKE OF ASSESSEE-NO COMPLAINT ABOUT NON-RECEIPT OF CERTIFICAT EIN TIME-TRIBUNAL JUSTIFIED IN HOLDING THAT PENALTY COULD NOT BE LEVIED-NO QUESTION OF LAW-INCOME TAX ACT, 1961, SS.256, 272A. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute.
Hindustan Steel Ltd. vs. State of Orissa – (1972) 83 ITR 26 (SC) Held that, in the instant case, the tax deducted at source under the provisions of section 194C of the Income-tax Act, 1961, was deposited in the Government account well within the prescribed time. There was no loss of revenue but only a failure to forward the certificate and since the Tribunal arrived at the conclusion that it was a bona fide mistake, the inference was based on facts. The Tribunal was justified in cancelling the penalty under section 272A(2)(g). No question of law arose for reference."
Hon’ble Supreme Court case cited as Hindustan Steel Ltd. vs. State of Orissa (supra) held that the penalty cannot be ordinarily imposed unless the party obliged either acted deliberately in defiance of law or has dishonestly disregard its obligation. For ready perusal, operative part of the decision rendered by Hon’ble Supreme Court is reproduced as under :-
“ An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute.”
In view of what has been discussed above, we are of the considered view that assessee has successfully made its case to be covered under “reasonable cause” for not filing e-TDS return in time u/s 273B, so the penalty levied by AO and confirmed by ld. CIT (A) is not sustainable in the eyes of law, hence ordered to be deleted. Consequently, both the appeals filed by the assessee are allowed. Order pronounced in open court on this 23rd day of October, 2018.