CENTRAL GOVT. HEALTH SCHEME,MUMBAI vs. ADDL CIT (TDS) RG 2, MUMBAI

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ITA 112/MUM/2015Status: DisposedITAT Mumbai19 July 2016AY 2011-124 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the non-availability of PAN numbers of deductees constituted a reasonable cause for the delay. Furthermore, it was noted that the relevant provisions for penalizing government departments for such defaults were amended after the AO's order.

What were the facts?

The assessee, Central Govt. Health Scheme, filed TDS statements (Form 24Q and 26Q) belatedly for the assessment year 2011-12. The Assessing Officer levied penalty under Section 272A(2)(k) for this delay.

What were the issues?

Whether the delay in filing TDS statements was due to a reasonable cause, and whether the assessee was a 'person' liable for penalty under the prevailing law at the time of the default.

Which sections of the Income-tax Act were involved?

Section 272A(2)(k),Section 200(3),Section 204

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, MUMBAI

Before: SHRI R.C. SHARMA, AM & SHRI SANDEEP GOSAIN, JM

For Appellant: Shri S.S. Savale, Shri Uday Bhaskar Jakke
For Respondent: Shri Uday Bhaskar Jakke

सुनवाई की तायीख / : 19/07/2016 Date of Hearing घोषणा की तायीख / : 19/07/2016 Date of Pronouncement आदेश / O R D E R Per R.C. SHARMA, A. M.: This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)- 14, Mumbai (‘CIT(A)’ for short) dated 13.11.2014 for the assessment year (A.Y.) 2011-12, in the matter of imposition of penalty u/s 272A(2)(k) of the I.T. Act,1961.

(A.Y. 2011-12) Central Govt. Health Scheme vs. ACIT 2. We have heard ld. DR and also gone through written submissions filed by assessee.

3.

We have gone through orders of authorities below and found that while levying penalty u/s 272A(2)(k) the ld. AO observed that the assessee was required to file form No.24Q and 26Q quarterly u/s 200(3) r.w.rule31A which the assessee had filed belatedly for all four quarters in respect of form 24Q and for three quarters for form 26Q. Hence penalty was levied @ Rs.100 per day for each default. It was submitted by the assessee before AO that it was mandatory to fill in PAN number of deductees in these forms as per rule 31A(4)(iii); and since PAN was not available in respect of some deductees and there was wrong PAN in some cases, there was delay. A circular issued by assessee to deductees to supply PAN number was also submitted. As regards, delay in respect of contractors payments, it was submitted that the assessee was not aware of the requirement and immediately filed the same on being pointed out by audit party.

4.

By observing that assessee failed to fulfill the requirement of section 200(3) which was inserted with effect from 01.05.2010, the AO levied penalty for delay in filing declaration. By the impugned order CIT(A) confirmed the action of AO.

(A.Y. 2011-12) Central Govt. Health Scheme vs. ACIT 5. We have considered contentions of DR and deliberated on the judicial pronouncements referred by lower authorities in the irrespective orders, as well as written submission filed by assessee before us. In the written submission it was provided that there was no liability of assessee u/s 200(3) to file statement. The liability has been provided by section 200(2A) w.e.f. 1-6-15. Hence penalty should be cancelled simply on this ground. It is further submitted that section 272A is applicable to person and the assessee is not a person, being govt. of India itself, within the meaning of section 2(31). The section does not impose any penalty on person responsible for deducting tax; but on person in general. Hence penalty is not leviable at all for want of any provision to impose penalty on govt. department. The term person responsible for deducting tax has been defined in section 204. That section also provided that govt. is not person responsible for paying tax. This section was amend w.e.f. 1-7-2012 to provide that govt. department can also be defaulter. This date of amendment is after the date of 26-12-11 when the ld. AO had passed order levying penalty. Hence penalty was not leviable as per prevailing legal provisions.

6.

We found that non-availability of PAN was a reasonable cause for which evidence was also submitted before lower authorities in the form of circular issued

(A.Y. 2011-12) Central Govt. Health Scheme vs. ACIT by assessee for supply of PAN vide annexure A. Hence penalty so levied for delay in filing declaration should be cancelled on this ground of reasonable cause.

7.

In view of the above discussion we direct the AO to delete the penalty so imposed u/s 272A(2)(k) of the I.T. Act.

8.

In the result, appeal of the assessee is allowed. Order pronounced in the open court on 19 July, 2016 Sd/- Sd/- (SANDEEP GOSAIN) (R.C. SHARMA) न्मायमक सदस्म / Judicial Member रेखा सदस्म / Accountant Member भुंफई Mumbai; ददनांक Dated : 19.07.2016 Ps. Ashwini आदेश की प्रनिलऱपि अग्रेपषि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. प्रत्मथी / The Respondent 2. आमकय आमुक्त(अऩीर) / The CIT(A) 3. आमकय आमुक्त / CIT - concerned 4. ववबागीम प्रयतयनधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai 5. गार्ड पाईर / Guard File 6. आदेशधिुसधर/ BY ORDER,

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