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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI ANIL CHATURVEDI, AM & SHRI VIKAS AWASTHY, JM
आदेश / ORDER
PER ANIL CHATURVEDI, AM :
This appeal filed by the assessee is emanating out of the order of 1. Commissioner of Income Tax (A) – Pune, 10 dt.02.03.2016 for the assessment year 2011-12.
The relevant facts as culled out from the material on record are as under :-
2.1 Assessee is a partnership firm stated to be engaged in construction business. It was noticed that assessee had filed return of TDS u/s 200(3) of the Act in Form No.26Q for the 1st quarter of F.Y. 2010-11 on 25.10.2011. The due date of filing of such return was
15.07.2010 but assessee filed the quarterly return after the delay of
467 days. Assessee was issued show cause notice u/s 272A(2)(k) /
274 r.w.s. 200(3) of the Act to explain the delay. AO noted that no
submissions were filed by the assessee nor anybody attended on behalf
of assessee. AO therefore concluded that assessee has nothing to say
in the matter and that the assessee has not established any reasonable
cause for delay in filing e-TDS return in Form-26Q for 1st quarter of
F.Y. 2010-11. He therefore held that as per provisions of Section
272A(2)(k) / 274 r.w.s. 200(3), the assessee was liable for penalty of
Rs.100/- per day for the delay of submission of Form No.26Q. He
accordingly worked out the penalty at Rs.100/- per day and levied
penalty of Rs.46,700/-. Aggrieved by the order of AO, assessee carried
the matter (in appeal No.PN/CIT(A)10/Addl.CIT(TDS)/297/14-15)
before Ld.CIT(A), who upheld the levy of penalty by holding as under :
“5. I have carefully considered the submission of the appellant. It is undisputed that there was a substantial delay in filing the TDS quarterly statement within the stipulated time by the appellant deductor, which ultimately would have delayed the processing of returns of deductees and issue of refunds etc. if any, would have arose on account of the impugned delay etc. The purpose and intention of penalty under Section 272A(2)(k) of I.T. Act has been to penalize the deductor so as to avoid further hardships to the numerous deductees, whose claim of refunds etc. depend on the timely furnishing of statement by the deductors. Although, the appellant has enumerated several reasons behind the impugned delay and some are genuine, however, the said reasons may not help on simple ground that the benefit of reasonable cause as envisaged u/s.273B has not been extended to defaulted deductors. Here, it is relevant to highlight the provisions of Section 273B, which provides an escape to the taxpayers from the levy of the penalty imposed under several sections as enumerated in section 273B. Section 273B inserted w.e.f. 10.09.1986 by Taxation Laws (Amendment and miscellaneous provisions) Act, 1986, as subsequently amended enacts provisions of the overriding nature and provides that notwithstanding anything contained in the provisions of [clause (b) of section 271B [section-271BA] [Section 271BB] section 271C, [section 271CA,] section 271D, section 271E, [271F,section 271FA,] [section 271FAB] [section
271FB] [section 271G)) [section 271GA] [section 271H,] [section 271-I] clause (c) or clause (d) of sub-section (1) or sub- section (2) of section 272A, sub-section (1) of section 272AA] or [section 272B or] [sub-section (1) [or sub-section (1A)] of section 272BB or][sub-section(1) of section 272BBB or] clause (b) of sub-section (1) or clause (b) or clause (c) of sub-section (2) of section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provision, if he proves that there was reasonable cause for the said failure. From the reading of Section 273B it is clear that no penalty shall be imposable if the assessee shows sufficient cause for belated filing of the return j statement etc. This section envisages a non obstante clause as against sections enumerated in impugned section; it is permissible for an assessee to substantiate reasonable cause for his failure to comply with the provisions on the basis whereof penalty is sought to be imposed upon him, however, for a penalty imposed u/s.272A(2)(k). the overriding effects of Section 273B does not apply as the said penalty has not found a place in Section 273B of I.T. Act, and only penalty imposable u/s.272A(2)(c) and (d) have found a place, accordingly, the appellant cannot get the benefit of Section 273B, even if, there are reasonable grounds to explain the reason behind inordinate delay in filing the quarterly TDS statement as envisaged u/s.200(3) of I.T. Act. Further, the enactment of second proviso to section 272A clearly establish that no penalty u/s.272A(2)(k) of I.T. Act is leviable if such failure relates to statement to be filed for the period commencing on or after 01.07.2012. In view of the above proviso (due to prospective amendment), although, no penalty will be leviable for the failure to be committed after the period 1.7 .2012, still, defaulter has to pay for the failure for the period prior to 01.07.2012. Moreover, Section 273B of I.T. Act has not extended it's benefit to the penalty levied u/s.272A(2)(k) of I.T. Act. Further, as regards the appellant's contention that it was not required to deduct tax u/s. 40(a)(ia) of I.T. Act, the impugned contention has no meaning as the appellant itself filed its quarter statement after a gap of 467 days. The action of appellant apparently shows that the deduction was required to be done followed by filing of quarterly statement as per the existing provisions of I.T. Act. The case Laws relied upon by the appellant have not dealt the issue with reference to the observations given in above paras, hence, are not applicable. Hence, considering the above legal position on this issue, the AO has correctly levied the penalty. Accordingly, the appeal filed deserves to be dismissed.”
Aggrieved by the order of Ld.CIT(A), assessee is now in appeal before us
and has raised the following grounds:
“1. On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in dismissing the appeal of the assessee. The order of the Ld CIT(A) be set aside.
On the facts and circumstances of the case and in law the Ld. CIT(A) ought to have appreciated the legal position after the retrospective amendment made by inserting 2nd proviso in S. 40(a)(ia) of the Act. The amended 2nd proviso is applicable to the appellant herein since the deductee had shown the entire income received from the deductor and paid the tax thereon as declared in the Return. The assessee had no obligation to deduct any tax. The provisions of S. 272A(2)(k) of the Act are not applicable. The assessee-appellant was not obliged to file F. 26Q of the Rules. The penalty, therefore, was not leviable on the assessee. The penalty be deleted.
On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in observing that inspite of this the assessee paid the deducted tax to the credit of the Central Govt. and therefore, was liable for penalty. The order of the Ld. CIT(A) is not in consonance with the provisions of law. The penalty levied and confirmed by Ld. CIT(A) be quashed.
On the date of hearing, none appeared on behalf of the assessee
nor any adjournment application was filed. We find that the Benches
at Pune have decided identical issue in the past. We therefore proceed
to dispose of the appeal ex-parte qua the assessee.
Before us, Ld.D.R. took us through the order of lower authorities
and submitted that since the assessee has not explained the delay in
filing Form 26Q, AO was fully justified in levying penalty. He thus
supported the order of AO.
We have heard the Ld.D.R. and perused the material on record.
The issue in the present ground is with respect to levy of penalty u/s
272(2)(k) / 274 r.w.s. 200(3) of the Act of delay in filing of e-TDS return
for 1st quarter of F.Y. 2010-11. We find that before Ld.CIT(A) assessee
has made submissions to the effect that he was under bonafide belief
that assessee was not required to deduct TDS but later on by way of
abundant caution, he deducted and deposited the tax to the credit of
Central Government. We find that identical issue has been decided by
Co-ordinate Bench of the Pune Tribunal in the case of CIT Vs. Kranti
Liquors in ITA No.1038/PUN/2016 order dt.28.02.2018 wherein, it
after relying on the decision of Co-ordinate Bench of the Tribunal in
bunch of appeals, lead case being Nav Maharashtra Vidyalaya Vs.
Addl. Commissioner of Income Tax (TDS) Range, Pune in ITA No.
832/PN/2016 order dt. 07-10-2016 held that when the assessee has
been able to explain reasonable cause for the failure to file return in
time, penalty can be deleted as per the provisions of Section 273B of
the Act. In the present case, we find that assessee was under the
bonafide belief that it being not liable to deduct the TDS but
subsequently, it deducted the TDS and deposited it to the account of
Government and the belief of the assessee that it was not liable to pay
tax is not found to be wrong. We further find that Hon’ble Apex
Court in the case of Hindustan Steel Ltd., Vs. State of Orissa (1972) 83
ITR 26 has inter-alia held that penalty will not be imposed merely
because it is lawful to do so. It further held that even if a minimum
penalty is prescribed, the authority competent to impose 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 bonafide belief that the offender is not liable to act in the
manner prescribed by the Statute. In view of the aforesaid facts, after
following the decisions of Pune Bench of the Tribunal in the case of
Kranti Liquors (supra) and Hon’ble Apex Court in the case of
Hindustan Steel Ltd (supra), we are of the view that Ld.CIT(A) has
erred in upholding the levy of penalty. We therefore direct the deletion
of the penalty levied u/s 272A(2)(k) of the Act. Thus, the grounds of the assessee are allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced on 15th day of March, 2018.
Sd/- Sd/- (VIKAS AWASTHY) (ANIL CHATURVEDI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER
पुणे Pune; �दनांक Dated : 15th March, 2018. Yamini
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. CIT(A)-5, Pune / CIT(A) concerned. 4. CIT(TDS), Pune. / CIT concerned. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” / DR, 5 ITAT, “B” Pune; 6. गाड� फाईल / Guard file.
आदेशानुसार/ BY ORDER
// True Copy // // True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.