ITO TDS -II, AGRA vs. ORIENTAL BANK OF COMMERCE, AGRA

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ITA 55/AGR/2017Status: DisposedITAT Agra23 November 2017AY 2012-134 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) had failed to decide the issue of limitation raised by the assessee regarding the penalty order. Therefore, the appeals and cross-objections were remitted back to the CIT(A) for fresh adjudication after deciding the issue of limitation first.

What were the facts?

The appeals concerned the deletion of penalty under Section 271C for failure to deduct tax at source by Oriental Bank of Commerce. The assessee had not deducted tax on payments made to Agra Development Authority. The CIT(A) had deleted the penalty, and the Revenue appealed this deletion.

What were the issues?

Whether the penalty under Section 271C was leviable, and crucially, whether the penalty order was barred by limitation. The Tribunal also noted the issue of reasonable cause for non-deduction of tax.

Which sections of the Income-tax Act were involved?

Section 271C,Section 201(1)/201(1A),Section 12AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA BENCH: AGRA

Before: SHRI A. D. JAIN, & DR. MITHA LAL MEENA

For Appellant: Shri Anurag Sinha, AR
For Respondent: Shri Waseem Arshad, Sr. DR, Shri Anurag Sinha, AR
Hearing: 13.09.2017Pronounced: 23.11.2017

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH: AGRA BEFORE SHRI A. D. JAIN, JUDICIAL MEMBER, AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER

I.T.A Nos. 55 & 56/Agra/2017 (ASSESSMENT YEARs: 2012-13 & 2013-14)

ITO (TDS)-II Vs..Oriental Bank of Commerce, Agra. 251, Jaipur House, Lohamandi, Agra. PANNo.AAACO0191M (Assessee) (Revenue)

C.O. Nos. 05 & 06/Agra/2017 (in I.T.A Nos. 55 & 56/Agra/2017) (ASSESSMENT YEARs: 2012-13 & 2013-14)

Oriental Bank of Commerce, Vs..ITO (TDS)-II 251, Jaipur House, Lohamandi, Agra. Agra. PANNo.AAACO0191M (Assessee) (Revenue)

Revenue by Shri Waseem Arshad, Sr. DR. Assessee by Shri Anurag Sinha, AR.

Date of Hearing 13.09.2017 Date of Pronouncement 23.11.2017 ORDER PER, BENCH:

These are Department’s appeals and assessee’s Cross objections for Assessment Years 2012-13 and 2013-14, respectively. The following are the common grounds that have been taken by the Department.

I.T.A Nos. 55 & 56/Agra/2017 2 & C.O. Nos. 05 & 06/Agra/2017

1.

The Ld. CIT (A)-l, Agra has erred in law and on facts in holding that there existed a

reasonable cause with the assesses for not deducting tax in respect of payment to Agra Development Authority as belief of the assessee

was contrary to the provision of the Income Tax

Act, 1961 as tax is deductible even in cases which are granted registration u/s 12AA.

2.

The Ld. CIT (A)-l, Agra has erred in law and on facts in holding that the ratio given in the

case of DCIT Vs SMS India Ltd. Reported as

(2006) 7 SOT 424 favours the assessee's first objection as the fact of the case are distinguishable as in the above reported case, the

order u/s 271C was passed by the assessing

officer and whereas in the present case, the order u/s 271C was passed by the Addl. CIT (TDS),

Kanpur.

3.

The Ld. CIT (A)-l, Agra has erred in deleting the penalty u/s 271C ignoring the fact

that the default was an admitted default and the

I.T.A Nos. 55 & 56/Agra/2017 3 & C.O. Nos. 05 & 06/Agra/2017

assessee had itself withdrawn its appeal against the order u/s 201(1)/201(1A), in view of which, penalty u/s 271C was clearly leviable.

2.

The following are the common cross objections raised by the assessee:

“1. Because, the Learned CIT(A) ought to have held the penalty order dated 30.03.2015 passed under section 271C of the Income Tax Act by the Ld. Income Tax Officer (TDS)-2, Agra to be as void- ab-initio being barred by limitation.

2.

Because, in any view of the matter penalty order passed under section 271C of the Income Tax Act by the Ld. Income Tax Officer (TDS)-2, Agra is bad in law and on facts.”

3.

As per the Cross objections, both the orders of the ld. CIT(A) are bad in law, since the penalty orders ought to have been held void ab initio, being barred by limitation, which has not been done.

The objection of the assessee’s is correct. The issue of limitation was 4. specifically raised by the assessee for both the years before the ld. CIT(A). However, the ld. CIT(A) has not decided this issue. The issue of limitation is the basic issue, which needs to be decided first. Accordingly, both these appeals as well as cross-objections are remitted to the file of the ld. CIT(A), to be decided in fresh in accordance with law after deciding the issue of limitation first. The merits

I.T.A Nos. 55 & 56/Agra/2017 4 & C.O. Nos. 05 & 06/Agra/2017

of the cases shall be decided in accordance with the decision to be taken on the

issue of limitation. The assessee shall be afforded due and adequate opportunity of

hearing. The assessee, no doubt, shall co-operate with the ld. CIT(A) in the fresh

proceedings. All pleas available under the law shall remain so available to the

assessee. Ordered, accordingly.

5.

In the result, for statistical purposes, both the appeals as well as both the

Cross-objections are treated as allowed.

Order pronounced in the open court on 23/11/2017.

Sd/- Sd/- (DR. MITHA LAL MEENA) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 23/11/2017 *AKV* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT AGRA

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