MAROL NAND DHAM UDYOG PRERMESISES CO OP SOCIETY LTD,MUMBAI vs. ADDL CIT CIR RG 2, MUMBAI

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ITA 4047/MUM/2015Status: DisposedITAT Mumbai23 June 2017AY 2012-135 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that for a small cooperative society, the non-availability of a professional cannot be entirely disregarded. They also noted that the Assessing Officer did not demonstrate that TDS certificates were not issued promptly to deductees.

What were the facts?

The assessee, a cooperative society, delayed filing quarterly TDS returns. The Assessing Officer imposed a penalty for this delay, citing the non-availability of a Chartered Accountant as an insufficient reason.

What were the issues?

Whether the delay in filing TDS returns by a small cooperative society due to the non-availability of a Chartered Accountant constitutes a reasonable cause to waive the penalty. Whether the penalty under Section 272A(2)(k) is leviable when TDS certificates are issued promptly to deductees.

Which sections of the Income-tax Act were involved?

Section 272A(2)(k),Section 274,Section 200(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “J”, MUMBAI

Before: Shri Shamim Yahya, AM & Shri Ravish Sood, JM

Hearing: 19.06.2017Pronounced: 23.06.2017

O R D E R

Per Shamim Yahya, AM

1.

This appeal by the Assessee is directed against order of learned CIT(A) dated 21.04.2015 and pertains to assessment year 2012-2013.

2.

The grounds of appeal read as under:-

“On the facts and circumstances of the case, the learned CIT(A) erred in confirming the penalty u/s 272(2)(k) r.w.s. 274 r.w.s. 200(3) of the Income Tax Act amounting to Rs.57,965/- without considering the fact and circumstances of the case.” 3. Brief facts of the case leading to the levy of penalty are as under:-

3.1 The facts of the case are that the Assessing Officer, on examination of records, noted that the assessee did not filed the TDS returns after the due

. Marol Nand Dham Udyog Premises Co-op Ho.Society Ltd. dates which were required to be filed at the end of every quarter. Under the provisions of section 200(3) read with Rule 31 A, a quarterly statement of TDS in Form No. 24Q. and 26Q, is required to be filed by the assessee by 15th July, 15th October,15th. January and 15th June (for last quarter) of the year.

3.2 The delays in submission of TDS returns for the quarters of FY 2011-12 were compiled by the Assessing Officer as under:-

Period No.of days Penalty amount restricted to (Rs.) 26Q1 332 33,200 26Q2 240 7,165 26Q3 148 14,800 26Q4 28 2,800 Total 57,965 3.3 The Assessing Officer, therefore, issued show-cause notice to the assessee asking it to explain as to why penalty under section 272A(2)(k) should not be levied. In response to the above notice, the assessee stated that delay in filing of TDS return was due to non-availability of client's Chartered Accountant.

3.4 The A.O. held that the reasons given by the assessee does not amount to a reasonable cause for not fulfilling the obligation under the Act. Since there existed a statutory obligation to file quarterly returns and the assessee failed to comply with the provisions of the Act he therefore, imposed penalty @ Rs.100/- per day of delay amounting to Rs.57,965/-.

. Marol Nand Dham Udyog Premises Co-op Ho.Society Ltd.

4.

Upon assessee’s appeal, the learned CIT(A) has confirmed the addition and concluded as under:-

“4.4 Section 200(3) places a statutory mandate on every person to file TDS return/statement in prescribed form and in the prescribed manner by the due date, On breach of provision of section 200(3) penalty is leviable u/s.272(a)(2k) of the I.T. Act. It is also stated that TDS statements are indispensible for the department because it linked to Form No 26 as for giving credit to deductees / tax payers. It is also accessible by deductees /tax payers on the interest. Therefore, timely filing of TDS statements by the deductor is absolutely necessary. 4.5 In case of the M/S Asha Pura garments Ltd. 322 ITR 83, the Hon'ble Bombay High Court has deleted the penalty u/s.272(a)(2)(c) on the ground that there was no delay in issuing of statement/certificate to the deductee u/s 206 immediately after the tax was deposited. Therefore, the Hon'ble Court has upheld the legislative intention that there should be no delay in issue of certificate after the deposit of tax deducted to the Government Treasury. Following the same analogy and the principle of ratio of decision of jurisdiction High Court it is amply clear that the TDS return should be filed immediately after the tax was deposited. In the instant case this has not been done. There is considerable delay in filing of return after the deposit of tax, in all the quarters. 4.6 The Hon’ble ITAT (Mum) in the case of M/s Porwal Creation has upheld the penalty u/s.272A(2)(k) for delay in filing of TDS statement/Return from the date of deposit of taxes. 4.7 The argument of appellant that non-availability of chartered accountant led to delay in filing of Return cannot come to its rescue, The assessee has deducted the tax so it was his duty to pay the tax on time. The appellant has to be vigilant and manage his affairs in such manner that statutory

. Marol Nand Dham Udyog Premises Co-op Ho.Society Ltd. compliances are met on time. In my considered opinion, since no reasonable cause has been demonstrated by the appellant for delay in filing of TDS statement/Returns, the action of the A.O. in levying penalty of Rs.57,965/- is upheld.” 5. Against the above order, the assessee is in appeal before us.

6.

We have heard the learned Departmental Representative and perused the records. None appeared on behalf of the assessee. We find that there was a delay from assessee in filing the quarterly TDS return in this case. The reasonable cause for the delay has been attributed to the proposition that the same was due to non-availability of Chartered Accountant. Here it is to be noted that the assessee is a small cooperative society. This submission of the assessee has not been accepted by the authorities below.

7.

We find that the assessee being a small cooperative society, the submission that there was non-availability of a professional cannot be brushed aside. Similarly, the learned CIT(A) has herself preferred to Hon’ble Bombay High Court decision in the case of M/s. Asha Pura Garments Limited (supra) for the proposition that when there is no delay in issuing of statement / certificate to the deductee u/s 206 of the Act, penalty u/s 272(a)(2)(c) cannot be levied. In these circumstances, we note that no case has been made out by the Assessing Officer that assessee has not issued the TDS certificate under consideration in proper time. In these circumstances, in our considered opinion, the assessee’s conduct in this case cannot be said to be contumacious so as to warrant levy of penalty. Accordingly, we set aside the orders of the authorities below and delete the levy of penalty.

. Marol Nand Dham Udyog Premises Co-op Ho.Society Ltd. 8. In the result, this appeal filed by the assessee stands allowed.

Order pronounced on this 23rd day of June, 2017.

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