RANI GROVER,MUMBAI vs. ADDL CIT (TDS) RG 3, MUMBAI

Assessee by : Shri Bhupendra Shah (AR) Revenue by : Shri K.C. Kanojia (DR) Date of hearing : 17.10.2016 Date of Pronouncement : 19.10.2016 O R D E R PER PAWAN SINGH, JM: 1. These three appeals under section 253 of the Income Tax Act (‘Act’) directed by assessee against the common order of Commissioner (Appeals) dated 4th July 2014 for Assessment Years 2008-09, 2009-10 & 2010–11. In all appeals common grounds of appeal are raised by assessee, order of ld CIT (Appeals) are common thus all the appeals were heard together and are being decided by common order. For the appreciation of facts, we shall take up appeal for Assessment Year 2008–09 being ITA No. 6334/M/2014.

2. The brief facts of the case are that assessee availed for a certificate under section 197 of the Act for deduction of tax at lower rate. And as per the provisions of Income Tax Act assessee has to file TDS return in form No. 24Q and 26Q for four quarters i.e. for first quarter before 15 July 2007, for second Quarter before 19th Feb 2008, for third-quarter before 15 January 2008 and for fourth-quarter before 15 June 2008 respectively. On perusal of record AO found that assessee filed quarterly TDS returns after due dates. For first-quarter the assessee filed returns late by 507 days, for second-quarter late by 279 days, for third-quarter late by 324 days and for fourth-quarter 172 days. As assessee had committed default under section 272A (2)(k)of the Act. The AO/ ACIT issued notice to the assessee levying the penalty. In response to the notice assessee contended that the assessee is a senior citizen and has filed return voluntarily. The reply of assessee was not considered sufficient by AO/ ACIT and thus a penalty for delay in is furnishing return of tedious was limit at the rate of rupees hundred per day for the delayed period. Accordingly a penalty of Rs. 1 28200 was worked out for a by 2008 – 09.

3. Similarly for a wide 2000 910 the penalty was worked out at rupees 66224 and four assessment year 2010 11 for similar delay in filing of tedious returns the penalty was worked out at Rs. 56,300/-. Aggrieved by the order of AO assessee filed three separate appeals before Commissioner of Income Tax (Appeals) wherein the order penalty was sustained. Thus, further aggrieved of the order of Commissioner of Income Tax (Appeals) the assessee has filed the second appeal before us.

argued that a lenient view may be taken as assessee himself and voluntarily filed returns though admittedly the return was submitted beyond the time provided under the statue. We have seen that before levying the penalty neither the ACIT/AO nor the Commissioner (Appeal) while deciding the appeal of the assessee made any observation that the assessee acted deliberately in defiance of law or was guilty by the act of his conduct. As per our considered opinion while levying the penalty the authority must record its satisfaction that the act of the assessee was deliberate and was not condonable. The coordinate bench of Ahmadabad Tribunal in ACIT versus Lok Prakashan (supra) while dealing with the similar penalties held as under: “15 We have heard the rival submissions and perused the orders of the lower authorities and the materials available on record. In the instant case, the undisputed facts are that the assessee company was liable to deduct tax as per the provisions contained in Chapter XVII of the Act. The assessee accordingly deducted the tax and also paid the tax so deducted to the credit of the Central Government within time is also not in dispute. Further, the assessee was liable to file quarterly statements in Form No.24Q and 26 is also not in dispute. The assessee has furnished the said quarterly statements with certain delay. The Learned Assessing Officer observing the delay in furnishing of the quarterly statements levied penalty of Rs.4,47,200/- as the delay was for 2583 days in respect of Form No.24Q and 1889 days in respect of Form, No.26Q. The Learned Commissioner of Income-tax (Appeals) observed that the delay in filing the quarterly statements by the assessee was because of lack of knowledge of the above requirement of law on the part of the assessee and as no loss to the revenue took place because of the aforesaid delay, the breach of duty on the part of the assessee was merely or venial breach and therefore in view of the provisions of section 273B of the Act he deleted the levy of penalty. We find that it is not in dispute that the quarterly statements were filed by the 8 assessee though with certain delay and the taxes deducted by the assessee were paid to the credit of Central Government by the assessee within prescribed time. The aforesaid delay in filing the quarterly statements by the assessee was certainly a default on the part of the assessee which attracted penalty u/s 272A(2)(k) of the Act unless the assessee shows a reasonable cause within the meaning of section 273B of the Act. Thus, we are required to adjudicate whether on facts of the instant case the cause which has been shown by the assessee constitutes a reasonable cause u/s 273B of the Act or not. The finding of the Learned Commissioner of Income-tax (Appeals) is that the assessee was prevented from filing the quarterly statements within prescribed time because of the lack of knowledge of the requirement of law on the part of the Directors of the assessee- company and its employees. We find that the provisions of furnishing of the quarterly statements were introduced under subsection (3) of section 200 by the Finance (No.2) Act, 2004 w.e.f. 1- 4-2005. We find that Revenue could not bring any material before us to controvert the above finding of the Learned Commissioner of Income-tax (Appeals) and to show that the assessee was earlier aware of this requirement of law. Further, on the facts of the case that the assessee has paid the tax within the prescribed time, itself shows that ordinarily there would not be any benefit to the assessee for which it would deliberately delay the submission of the quarterly statements. Further, the contention of the Revenue that ignorance of law cannot be an excuse is found to be unacceptable in view of the decision of the Hon'ble Supreme Court in the case of Motilal Padampat Sugar Mills Co. Ltd. vs. State of UP (1979) 118 ITR 326 (SC) wherein it was held that there is no presumption in this country that every person knows the law and it would be contrary to common sense and reason if it were so. It was also stated that “it is impossible to know all the statutory law, and not very possible to know all the common law”. Further, the Hon'ble Madras High Court 9 in the case of CIT vs. K P V S Mohammad Rowther & Co. 232 ITR 176 (Mad) held that ignorance of law can be a reasonable cause for the failure and deletion of penalty was justified. Further, it is observed that the Revenue could not bring any material before us to show that any loss to the Revenue was caused because of the aforesaid delay in furnishing of the quarterly statements by the assessee. ON the above facts we do not find any error in the findings of the Learned Commissioner of Income-tax (Appeals) that the breach of provisions by the assessee by filing the quarterly statements with certain delay was a technical or venial breach of law only. Keeping in view the decision of the Hon'ble Supreme Court in the case of Hindustan Steel Ltd. v State of Orissa 83 ITR 26 (SC) and the decision of the Jurisdictional High Court in the case of Harsiddh Construction Pvt. Ltd. Vs. CI?T 244 ITR 417 (Guj), we do not find any good reason to interfere with the order of the Learned Commissioner of Income-tax (Appeals). Therefore, the appeal of the Revenue is dismissed.”