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Income Tax Appellate Tribunal, MUMBAI BENCHES “D”, MUMBAI
Before: SHRI B.R.BASKARAN (AM) & SHRI RAM LAL NEGI (JM)
PER RAM LAL NEGI, JM
This appeal has been filed by the assessee against order dated 15/05/2014 passed by the Ld. CIT(Appeals)-14 Mumbai for the Asst. Year 2010-11 whereby the Ld. CIT(A) dismissed the appeal filed by the assessee against penalty order passed u/s 272A(2)(k) of the Income Tax Act, 1961 (in short ‘the Act’).
Brief facts of the case are that the A.O, on examination of records, noted that the assessee had not filed the quarterly TDS statement in Form No. 26Q within the time specified u/s 206/206C of the Act read with Rule 37
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of the Income Tax Rules, 1962 (in short ‘the Rules’) for the A.Y. 2009-10 which was required to be filed at the end of the every year quarter. Accordingly, the Assessing Officer issued show-cause notice and after hearing the assessee imposed penalty of Rs. 43619/-u/s 272A(2)(k) of the Act. The assessee challenged the said order before the Ld. CIT(A) who had after hearing the assessee dismissed the same. The assessee is in appeal before the Tribunal against the impugned order passed by the Ld. CIT(A) on the following effective grounds of appeal:-
“1. The learned Commissioner of Income Tax, (Appeals)-14, Mumbai erred in confirming the penalty of Rs. 43,619/- u/s 272A(2)(k) levied by the learned Income Tax Officer (TDS)-3(1), Mumbai. 1.1 Your appellant submits that your appellant has deducted the tax and paid within the time allowed and as such as CIT(A) ought to have considered this and ought not to have confirmed the penalty for late filing the return of TDS.
1.2 Your appellant submits that the penalty of Rs. 43,619/- levied by the ITO(TDS)-3(1) be deleted in full.”
Before us the Ld. Authorised Representative (AR) submitted that since the assessee had changed his Accountant during the relevant period, he was not aware whether the statement had been filed or not and due to this reason TDS statement could not be filed within the prescribed period, though the TDS had been deducted and paid in time. The Ld. AR relying on the law laid down by the Hon’ble Supreme Court in the case of Hindustan Steel Ltd. vs. State of Orissa (1972) 83 ITR 0026 submitted that the impugned order is not in accordance with the law laid down by the
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Hon’ble Supreme Court in the said case, therefore, the same is liable to be set aside. 4. On the other hand the Ld. Departmental Representative submitted that the assessee has failed to discharge statutory duty to file the statement as required under the law. Secondly, the assessee has failed to prove reasonable cause for his failure. Therefore, the Ld.CIT(A) has rightly confirmed the penalty levied u/s 272(2)(k) of the Act.
We have heard the rival submissions and also perused the documents on record in the light of the rival contentions. Section 273B of the Act reads as under:-
“ Notwithstanding anything contained in the provisions of clause (b) of sub-section(1)of section 271, section 271A section 271AA, section 271B, section 271BA, section 271BB, section 271C, section 271 CA, section 271D, section 271E, section 271F, section 271FA, section 271FAB, section 271FB, section 271G, section 271 GA, section 271 GB, section 271H, section 271 I, clause (c) or clause (d) of subsection (1) or subsection (2) of section 272A, subsection (1) 272AA or section 272B or subsection (1) or subsection (1A) of section 272 BB or subsection (1) of section 272 BBB or clause (b) of subsection (1) or clause (b) or clause (c) of subsection (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 provisions if he proves that there was reasonable cause for the said failure.”
Admittedly, the assessee has failed to comply with the provisions of section 272A(2)(k) of the Act. As per the provisions of section 273B of the Act, unless the assessee is in a position to prove that there was a reasonable cause for the said failure, within the meaning of the said section, he is liable for penalty prescribed under law. We notice that the
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plea of the assessee before the authorities below was that due to change of Accountant the assessee was not aware whether the return was filed or not and the assessee filed the statement when he came to know that the same has not been filed. Before us the Ld. AR reiterated the same plea. In Hindustan Steel Ltd. vs. State of Orissa (supra), the Hon,ble Supreme Court has observed as under:-
“5….….. An order imposing penalty for failure to carry out a statutory obligation is the result of 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 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…..”
The facts and circumstance of the case do not suggest that the failure on the part of the assessee in filing return within the prescribed period was either deliberate or dishonest. Therefore, in view of the ratio laid down by the Hon’ble Supreme Court, we hold, in the light of the plea taken by the assessee before the authorities below and before us that there was reasonable cause for assessee’s failure to discharge the statutory obligation within the meaning of section 273B of the Act. Hence, we find substance in the contention of the assessee. Accordingly, we set aside the
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order passed by the Ld. CIT(A) and allow the grounds of appeal of the assessee.
In the result, the appeal filed by the assessee for the assessment year 2010-11 is allowed.
Order pronounced in the open court on 28th September, 2016
Sd/- Sd/- (B.R.BASKARAN) (RAM LAL NEGI) ACCOUNTANT MEMBER JUDICIAL MEMBER मुंबई Mumbai; �दनांक Dated: 28/09/2016
आदेश ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. आयकर आयु�त(अपील) / The CIT(A)- 4. आयकर आयु�त / CIT 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाईल / Guard file.
आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील�य अ�धकरण, मुंबई / ITAT, Mumbai
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