Chandram Narsappa Ashanna,, Aurangabad v. Joint Commissioner of Income-tax,,

ITA 113/PUN/2016 | 2011-2012
Pronouncement Date: 19-10-2016 | Result: Partly Allowed

Appeal Details

RSA Number 11324514 RSA 2016
Assessee PAN AAWPA8160D
Bench Pune
Appeal Number ITA 113/PUN/2016
Duration Of Justice 8 month(s) 27 day(s)
Appellant Chandram Narsappa Ashanna,, Aurangabad
Respondent Joint Commissioner of Income-tax,,
Appeal Type Income Tax Appeal
Pronouncement Date 19-10-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 19-10-2016
Date Of Final Hearing 30-08-2016
Next Hearing Date 30-08-2016
Assessment Year 2011-2012
Appeal Filed On 22-01-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE . . ! # $ BEFORE SHRI R.K. PANDA AM AND SHRI VIKAS AWASTHY JM . / ITA NO.113/PN/2016 #& & / ASSESSMENT YEAR : 2011-12 CHANDRAM NARSAPPA ASHANNA SHOP NO.3 MALKHARE ARCADE OPP. MSM GROUND NEAR JUBILEE PARK DIST. AURANGABAD - 431001 PAN : AAWPA8160D . /APPELLANT V/S JCIT TDS RANGE NASHIK . /RESPONDENT ASSESSEE BY : SHRI S.N. PURANIK REVENUE BY : SHRI P.L. KUREEL / ORDER PER R.K.PANDA AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 12-10-2015 OF THE CIT(A)-I AURANGABAD RELATING TO ASSESSMENT YEAR 2011-12. 2. THERE WAS DELAY OF 3 DAYS IN FILING OF THIS APPEAL BY THE ASSESSEE FOR WHICH THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONAT ION OF DELAY ALONG WITH AN AFFIDAVIT EXPLAINING THE REASONS FOR DELAY . AFTER HEARING BOTH THE SIDES THE DELAY IN FILING OF THIS APPEAL BY T HE ASSESSEE IS CONDONED AND THE APPEAL IS ADMITTED FOR ADJUDICATION. / DATE OF HEARING :06.09.2016 / DATE OF PRONOUNCEMENT: 19.10.2016 2 ITA NO.113/PN/2016 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION AT AURAN GABAD. HE HAD DEDUCTED TDS ON INTEREST PAID TO NBFCS NAMELY ELEC TRONICA FINANCE LTD. AND SHRIRAM FINANCE LTD. THE TDS WAS LIABLE T O BE DEDUCTED AS PER THE PROVISIONS OF THE I.T. ACT ON THIS IN TEREST. IT WAS NOTICED BY THE JCIT (TDS) THAT THE ASSESSEE HAD DEDUCT ED THE TDS AND PAID THE SAME ALONG WITH INTEREST TO THE CREDIT OF C ENTRAL GOVERNMENT. FURTHER THERE WAS DELAY IN FILING OF QUARTERL Y STATEMENTS FOR ALL THE 4 QUARTERS. THE QUARTERLY STATE MENT IN FORM 26Q WAS FILED BELATEDLY BY 522 DAYS FOR THE FIRST QUARTER 430 DAYS FOR THE SECOND QUARTER 338 DAYS FOR THE THIRD QUARTER AND 218 DAYS FOR THE FOURTH QUARTER. ON BEING QUESTIONED BY THE JCIT (TD S) THE ASSESSEE SUBMITTED THAT THE DELAY HAD OCCURRED DUE TO LATE DEPOSIT OF TDS AMOUNTS WHICH CONSEQUENTLY RESULTED IN LATE FILING OF E- TDS STATEMENTS. HOWEVER THE JCIT (TDS) WAS NOT SATISFIED WIT H THE EXPLANATION GIVEN BY THE ASSESSEE AND LEVIED PENALTY OF RS .1 17 000/- UNDER THE PROVISIONS OF SECTION 272A(2)(K) R.W.S. 200(3) OF THE I.T. ACT 1961. IN APPEAL THE LD.CIT(A) CONFIRMED THE PENALTY LEVIED BY THE AO. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY U/S.2 72A(2)(K) OF THE ACT CONSIDERING REASONABLE CAUSE SAME MAY PLEASE BE CAN CELLED. 2. APPELLANT PRAYS FOR JUST AND EQUITABLE RELIEF. 3. CIT(A) HAS ERRED IN DECIDING THAT PROPER OPPORTUN ITY WAS GIVEN BEFORE JT. CIT. APPELLANT PRAYS THAT SINCE JT. CIT WA S NOT IN THE OFFICE ON DATE GIVEN AS SUCH THERE WAS NO HEARING NEXT DATE PR OMISED WAS NOT GIVEN. THERE WAS NO REASONABLE AND PROPER OPPORTUNIT Y U/S.274 OF THE ACT 1961. HENCE ORDER IS BAD IN LAW. 4. APPELLANT PRAYS TO ADD ALTER AMEND AND/OR WITHD RAW THE GROUND/S DURING THE PROCEEDINGS. 3 ITA NO.113/PN/2016 5. AFTER HEARING BOTH THE SIDES WE FIND THE ONLY ISSUE TO BE DECIDED IN THE IMPUGNED APPEAL IS REGARDING THE LEVY OF PE NALTY U/S.272A(2)(K) OF THE I.T. ACT. WE FIND THE TRIBUNAL IN THE CA SE OF NAV MAHARASHTRA VIDYALAYA VS. ADDL.CIT IN ITA NO.832/PN/2016 FO R A.Y. 2011-12 AND BUNCH OF OTHER APPEALS VIDE ORDER DATED 07-10-2016 HAS DECIDED AN IDENTICAL ISSUE AND HAS OBSERV ED AS UNDER: 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THIS BUNCH OF APPEALS THE ISSUE WHICH ARISES FOR ADJUDIC ATION IS AGAINST THE LEVY OF PENALTY UNDER SECTION 272A(2)(K) OF THE ACT FOR LATE FILING OF TDS STATEMENTS / RETURNS. IN THIS REGARD REFERENCE IS BEING MADE TO THE RELEVANT PROVISIONS OF THE ACT. UNDER CHAPTER XVII O F THE ACT DUTY IS UPON THE PERSON MAKING CERTAIN PAYMENTS TO DEDUCT TAX AT SOURCE UNDER THE RESPECTIVE SECTIONS. THE SAID TAX DEDUCTED AT SOUR CE IS DUE TO BE THE INCOME RECEIVED BY THE DEDUCTEE AS PER SECTION 198 OF THE ACT. SECTION 199 OF THE ACT FURTHER PROVIDES THAT WHERE ANY DEDUC TION IS MADE UNDER THE CHAPTER AND PAID TO THE CENTRAL GOVERNMENT THE N THE SAME IS TO BE TREATED AS PAYMENT OF TAX ON BEHALF OF THE PERSON FRO M WHOSE INCOME SUCH DEDUCTION IS MADE. 18. SECTION 200 OF THE ACT LAYS DOWN THE DUTY OF THE PERSON DEDUCTING TAX WHICH READS AS UNDER:- 200. (1) ANY PERSON DEDUCTING ANY SUM IN ACCORDANCE WIT H THE FOREGOING PROVISIONS OF THIS CHAPTER SHALL PAY WITHIN THE PRE SCRIBED TIME THE SUM SO DEDUCTED TO THE CREDIT OF THE CENTRAL GOVERNMENT OR AS THE BOARD DIRECTS. (2) ANY PERSON BEING AN EMPLOYER REFERRED TO IN SU B-SECTION (1A) OF SECTION 192 SHALL PAY WITHIN THE PRESCRIBED TIME THE TAX TO THE CREDIT OF THE CENTRAL GOVERNMENT OR AS THE BOARD DIRECTS. (2A) IN CASE OF AN OFFICE OF THE GOVERNMENT WHERE THE SUM DEDUCTED IN ACCORDANCE WITH THE FOREGOING PROVISIONS OF THIS CH APTER OR TAX REFERRED TO IN SUB-SECTION(1A) OF SECTION 192 HAS BEEN PAID TO THE CREDIT OF THE CENTRAL GOVERNMENT WITHOUT THE PRODUCTION OF A CHALLAN THE PAY AND ACCOUNTS OFFICER OR THE TREASURY OFFICER OR THE CHEQUE DRAWI NG AND DISBURSING OFFICER OR ANY OTHER PERSON BY WHATEVER NAME CALLED WHO I S RESPONSIBLE FOR CREDITING SUCH SUM OR TAX TO THE CREDIT OF THE CENT RAL GOVERNMENT SHALL DELIVER OR CAUSE TO BE DELIVERED TO THE PRESCRIBED INCOME-TAX AUTHORITY OR TO THE PERSON AUTHORISED BY SUCH AUTHORITY A STATEMEN T IN SUCH FORM VERIFIED IN SUCH MANNER SETTING FORTH SUCH PARTICULARS AND WIT HIN SUCH TIME AS MAY BE PRESCRIBED. (3) ANY PERSON DEDUCTING ANY SUM ON OR AFTER THE 1S T DAY OF APRIL 2005 IN ACCORDANCE WITH THE FOREGOING PROVISIONS OF THIS CH APTER OR AS THE CASE MAY BE ANY PERSON BEING AN EMPLOYER REFERRED TO IN SUB -SECTION (1A) OF SECTION 192 SHALL AFTER PAYING THE TAX DEDUCTED TO THE CREDIT OF THE CENTRAL GOVERNMENT WITHIN THE PRESCRIBED TIME PREPARE SUCH STATEMENTS FOR SUCH PERIOD AS MAY BE PRESCRIBED AND DELIVER OR CAUSE TO BE DELIVERED TO THE PRESCRIBED INCOME-TAX AUTHORITY OR THE PERSON AUTHO RISED BY SUCH AUTHORITY SUCH STATEMENT IN SUCH FORM AND VERIFIED IN SUCH MA NNER AND SETTING FORTH SUCH PARTICULARS AND WITHIN SUCH TIME AS MAY BE PRE SCRIBED: 4 ITA NO.113/PN/2016 PROVIDED THAT THE PERSON MAY ALSO DELIVER TO THE PRESCRIBED AUTHORITY A CORRECTION STATEMENT FOR RECTIFICATION OF ANY MISTA KE OR TO ADD DELETE OR UPDATE THE INFORMATION FURNISHED IN THE STATEMENT D ELIVERED UNDER THIS SUB- SECTION IN SUCH FORM AND VERIFIED IN SUCH MANNER AS MAY BE SPECIFIED BY THE AUTHORITY. 19. UNDER SECTION 200(1) OF THE ACT IT IS PROVIDED T HAT ANY PERSON DEDUCTING ANY SUM IN ACCORDANCE WITH THE PROVISIONS O F THE CHAPTER SHALL PAY WITHIN THE PRESCRIBED TIME THE SUM SO DEDUCTED TO THE CREDIT OF THE CENTRAL GOVERNMENT OR AS THE BOARD DIRECTS. UNDER SEC TION 200(2) OF THE ACT ANY PERSON BEING AN EMPLOYER AS REFERRED TO IN SUB-SECTION (1A) OF SECTION 192 OF THE ACT SHALL PAY WITHIN THE PRESCRIBED TIME TH E TAX TO THE CREDIT OF THE CENTRAL GOVERNMENT OR AS THE BOARD DIRECTS. UNDER SUB- SECTION (2A) OF THE ACT IT IS PROVIDED THAT WHERE TH E SUM HAS BEEN DEDUCTED IN ACCORDANCE WITH FOREGOING PROVISIONS OF T HE CHAPTER BY THE OFFICE OF THE GOVERNMENT THEN DUTY IS UPON THE TREA SURY OFFICER OR THE DRAWING & DISBURSING OFFICER OR ANY OTHER PERSON TO D ELIVER OR CAUSE TO BE DELIVERED TO THE PRESCRIBED INCOME TAX AUTHORITIE S OR TO THE PERSON AUTHORIZED BY SUCH AUTHORITY STATEMENT IN SUCH FORM VERIFIED IN SUCH MANNER SETTING FORTH SUCH PARTICULARS WITHIN SUCH TIME AS MAY BE PRESCRIBED. UNDER SECTION 200(3) OF THE ACT SIMILAR RESPONSIBILITY IS ON ANY PERSON DEDUCTING ANY SUM ON OR AFTER FIRST DAY OF APRIL 2005 IN ACCORDANCE WITH FOREGOING PROVISIONS OF THE CHAPTER INCLUDING ANY PERSON AS AN EMPLOYER REFERRED TO IN SECTION 192(1A) O F THE ACT. THE ONUS IS UPON SUCH PERSON THAT HE SHALL AFTER PAYING THE TAX TO THE CREDIT OF CENTRAL GOVERNMENT WITHIN PRESCRIBED TIME PREPARE SU CH STATEMENT FOR SUCH PERIOD AS MAY BE PRESCRIBED AND DELIVER OR CAUSE TO BE DELIVERED TO THE PRESCRIBED INCOME TAX AUTHORITY OR ANY PERSON SO A UTHORIZED SUCH STATEMENT IN SUCH FORM AND VERIFIED IN SUCH MANNER AND SETTING FORTH SUCH PARTICULARS AND WITHIN SUCH TIME AS MAY BE PROVIDE D. THE DUTY IS UPON A PERSON DEDUCTING ANY SUM IN ACCORDANCE WITH VA RIOUS PROVISIONS UNDER THE CHAPTER AND ALSO UPON AN EMPLOYER WHO IS MA KING DEDUCTION OUT OF THE PAYMENTS MADE TO THE EMPLOYEES THEN SUB-SEC TION (3) REQUIRES THAT THE DEDUCTOR IS TO PREPARE A STATEMENT FOR SUCH P ERIOD AS MAY BE PRESCRIBED WHICH IS TO BE DELIVERED TO THE PRESCRIBED AUTHORITY IN SUCH FORM AND VERIFIED AND SETTING FORTH SUCH PARTICULARS AS MAY BE PRESCRIBED. THE SAID STATEMENT IS TO BE DELIVERED WITHIN SUCH TIME AS MAY BE PRESCRIBED. 20. IN OTHER WORDS ANY DEDUCTOR DEDUCTING ANY SUM O N OR AFTER FIRST DAY OF APRIL 2005 IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER HAS THE FOLLOWING DUTIES I.E. AFTER PAYING THE TAX DEDUCTED AT SOURCE CREDIT TO THE CENTRAL GOVERNMENT THE TDS STATEMENTS WITHIN PRESCRIB ED TIME SHALL BE PREPARED AND FILED. RULES 31A OF THE RULES PROVIDE T HE TIME LIMIT FOR DEPOSIT OF THE TAX DEDUCTED STATEMENT AS PER SECTION 20 0(3) OF THE ACT. THE TDS STATEMENTS ARE TO BE DEPOSITED QUARTERLY I.E. QUARTER ENDING 30 TH JUNE 30 TH SEPTEMBER 31 ST DECEMBER AND 31 ST MARCH OF EACH FINANCIAL YEAR AND THE DUE DATE FOR FURNISHING THE TDS STATEMENTS IS 1 5 TH JULY FOR THE FIRST QUARTER 15 TH OCTOBER FOR THE SECOND QUARTER 15 TH JANUARY FOR THE THIRD QUARTER AND 15 TH MAY OF THE IMMEDIATELY FOLLOWING FINANCIAL YEAR FO R THE FOURTH QUARTER I.E. 31 ST MARCH. THE SAID STATEMENTS COULD BE FURNISHED EITHER IN PAPER FORM OR ELECTRONICALLY. HOWEVER SU BSEQUENT TO THE AMENDMENT BY IT (SIXTH) AMENDMENT RULES 2010 WITH R ETROSPECTIVE EFFECT FROM 01.04.2010 IT WAS PROVIDED THAT FURNISHI NG OF STATEMENTS ELECTRONICALLY IN ACCORDANCE WITH THE FORMAT AND STA NDARDS PRESCRIBED 5 ITA NO.113/PN/2016 BECAME MANDATORY. THE DEDUCTOR IN THE SAID STATEMENT OF TAX DEDUCTED AT SOURCE WAS COMPULSORILY REQUIRED TO QUOTE ITS TAX DE DUCTION AND COLLECTION ACCOUNT NUMBER I.E. TAN NUMBER. FURTHER QUOTE ITS PERMANENT ACCOUNTANT NUMBER EXCEPT IN THE CASE WHERE THE DEDUCTOR WAS OFFICE OF GOVERNMENT AND ALSO QUOTE PAN NUMBER OF ALL THE DEDUCTEES. FURTHER THE DEDUCTOR WAS REQUIRED TO FUR NISH THE PARTICULARS OF TAX PAID TO THE CENTRAL GOVERNMENT INCLUDING BOO K IDENTIFICATION NUMBER OR CHALLAN INDICATION NUMBER AS THE CASE MAY B E. HE WAS ALSO REQUIRED TO FURNISH THE PARTICULARS OF AMOUNT PAID OR CREDITED ON WHICH TAX WAS NOT DEDUCTED. 21. IN VIEW OF VARIOUS PROVISIONS OF THE ACT AS POINT ED OUT ABOVE THE SUBSTITUTION WAS MADE BY INCOME TAX (SIXTH) AMENDMENT RULES 2010 AND WAS APPLICABLE FOR THE FINANCIAL YEAR 2010-11. SINCE E-COMPLIANCE OF TDS RETURNS WAS INTRODUCED IN THE SAID FINANCIAL YEAR THERE WAS TIME AND AGAIN AMENDMENTS/CORRECTIONS IN ORDER TO MAKE SYSTEM OF FILING TDS RETURNS USER-FRIENDLY. THE LEARNED AUTHORIZED REPRESE NTATIVE FOR THE ASSESSEE HAS POINTED OUT THAT THERE WERE ABOUT 18 AMEND MENTS / CORRECTIONS IN THIS REGARD. IN THE PRESENT SET OF APPE ALS BEFORE US ADMITTEDLY THERE WAS DEFAULT IN FURNISHING E-TDS STAT EMENTS LATE FOR THE RESPECTIVE QUARTERS BY DIFFERENT ASSESSEE BUT ALL RELATI NG TO ASSESSMENT YEAR 2011-12. THE QUESTION WHICH ARISES FOR ADJUDICA TION BEFORE US IS WHETHER IN SUCH CASES WHERE E-TDS WAS MADE COMPULSORY FO R THE INSTANT ASSESSMENT YEAR AND WHERE THE SOFTWARE WAS NOT USER-FRIEND LY AND REQUIRED AMENDMENTS AT THE END OF THE GOVERNMENT ITSE LF FROM TIME TO TIME AND THE COMPLIANCE BEING A COMPLEX PROCEDURE I NTRODUCED FOR THE FIRST TIME AND WHERE ORIGINALLY THE DEDUCTORS WERE NO T DEFAULT IN DEPOSITING THE PAPER TDS RETURNS DOES THE ASSESSEE DEDUCT OR HAVE REASONABLE CAUSE FOR NOT FURNISHING THE SAID E-TDS RETU RNS IN TIME. IN THIS REGARD REFERENCE IS TO BE MADE TO THE PROVISIONS OF SECTION 273B OF THE ACT WHERE IT HAS BEEN PROVIDED THAT IN CASE A PERSO N ESTABLISHES OR PROVES THAT HE HAD REASONABLE CAUSE FOR THE FAILURE TO COMPLY WITH THE PROVISIONS OF VARIOUS SECTIONS PROVIDED IN SECTION 273B OF THE ACT THEN NO PENALTY SHALL BE IMPOSABLE ON SUCH PERSON FOR THE SAI D FAILURE. READING OF SECTION 273B OF THE ACT SHOWS THAT UNDER IT THE SECTION REFERS TO ALONG WITH MANY OTHER SECTIONS CLAUSE (C) OR CLAUSE (D) OF SUB-SECTION (1) OR SUB-SECTION (2) OF SECTION 272A OF THE ACT. W HAT IS RELEVANT FOR ADJUDICATION BEFORE US IS SECTION 272A(2) OF THE ACT SINCE PENALTY HAS BEEN LEVIED FOR DEFAULT IN FURNISHING E-TDS RETURNS U NDER SECTION 272A(2)(K) OF THE ACT. SINCE SECTION 273B OF THE AC T COVERS THE CASES OF LEVY OF PENALTY UNDER SECTION 272A(2) OF THE ACT TH EN IN LINE WITH THE PROVISIONS OF SAID SECTION IN CASE A PERSON ESTABLISHES ITS C ASE OF REASONABLE CAUSE FOR NOT COMPLYING WITH THE PROVISIONS OF SAID SECTION THEN THE SECTION PROVIDES THAT SUCH A PERSON SHALL NOT BE LIABLE TO THE PENALTY IMPOSABLE FOR THE SAID FAILURE I.E. UNDER SECT ION 272A(2) OF THE ACT. THE CIT(A) IN THE CASE OF SEVERAL ASSESSEE BEFORE US HAS WRONGLY COME TO THE CONCLUSION THAT THE PROVISIONS OF SECTION 2 73B OF THE ACT DO NOT COVER THE DEFAULTS UNDER SECTION 272A(2)(K) OF TH E ACT. WE REVERSE THE FINDING OF CIT(A) IN THIS REGARD. 22. NOW COMING TO THE CASE OF REASONABLENESS PUT UP BE FORE US BY DIFFERENT ASSESSEE. THE FIRST PLEA RAISED BY ALL THE ASSESSE E IS THAT WHERE THE COMPLIANCE TO THE PROVISIONS OF THE ACT WAS COMPLI CATED AND DIFFICULT AND IN THE ABSENCE OF ANY TECHNICAL SUPPORT IN THIS RE GARD DEFAULT IF ANY 6 ITA NO.113/PN/2016 IN FURNISHING THE TDS RETURNS LATE SHOULD BE CONDONED. ANOTHER PLEA RAISED BY SOME OF THE ASSESSEE WAS THAT WHERE THE TAX DEDU CTED AT SOURCE WAS NOT PAID IN TIME E-TDS RETURNS AS SUCH COULD NOT BE FILED AND HENCE THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE IN NOT FILI NG E-TDS RETURNS IN TIME AND AS SUCH NO MERIT IN LEVY OF PENAL TY. ANOTHER PLEA RAISED BEFORE US IS THAT CHARGING OF FEES FOR EACH DAY OF DEFAULT AND THEN RESTRICTING THE SAME TO THE TAX DEDUCTED AT SOURCE WAS NOT CORRECT. ONE ANOTHER ASPECT OF REASONABLENESS WAS THAT IN CASE THE RET URNS FOR QUARTER 1 WAS FILED BELATEDLY THEN THE RETURNS FOR CONSEQUENT QUARTERS ALSO GOT DELAYED FOR NO DEFAULT AND AS SUCH NO PENALTY WAS L EVIABLE FOR SUCH QUARTERS. DIFFERENT LEARNED AUTHORIZED REPRESENTATIV ES APPEARING BEFORE US HAS MADE REFERENCE TO THE DECISIONS OF VARIOUS BENCH ES OF TRIBUNAL. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRESEN TATIVE FOR THE REVENUE HAS PLACED RELIANCE ON THE RATIO LAID DOWN B Y THE HONBLE ALLAHABAD HIGH COURT IN RAJA HARPAL SINGH INTER COL LEGE VS. PRL. CIT (SUPRA) AND CHANDIGARH BENCH OF TRIBUNAL IN CENTRAL SCIENTIFIC INSTRUMENTS ORGANIZATION VS. JCIT (TDS) (SUPRA). ONE L AST ASPECT POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THAT THE CIT(A) HAS ACKNOWLEDGED THAT THERE WAS REASONABLE CAUSE IN NOT FURNISHING E-TDS RETURNS IN TIME. HOWEVER NO BENEFI T OF THE SAME WAS GIVEN TO THE ASSESSEE BECAUSE THE CIT(A) WAS OF THE VIEW THAT THE PROVISIONS OF SECTION 273B OF THE ACT DO NOT COVER PEN ALTY LEVIABLE UNDER SECTION 272A(2)(K) OF THE ACT. 23. FIRST OF ALL WE SHALL DEAL WITH THE LAST SUBMISSION S OF THE ASSESSEE THAT UNDER THE PROVISIONS OF SECTION 273B OF THE ACT THE PROVISIONS OF SECTION 272A(2)(K) OF THE ACT ARE REFERRED AND IN CA SE THE PERSON ESTABLISHES ITS CASE OF REASONABLE CAUSE THEN NO PENALT Y IS TO BE LEVIABLE FOR SUCH DEFAULTS. THE CASE PUT UP BY THE ASSESSEE WAS T HAT WHERE TAX WAS DEDUCTED AT SOURCE AND MERELY BECAUSE E-TDS STATEMENTS / RETURNS WERE NOT FILED IN TIME DOES NOT RESULT IN ANY LOSS OF REVENU E AND HENCE NO MERIT IN LEVY OF PENALTY UNDER SECTION 272A(2)(K) OF THE A CT. THE CLAIM OF DEDUCTION OF TAX DEDUCTED AT SOURCE ITS PAYMENT TO T HE TREASURY TO THE GOVERNMENT AND THEREAFTER THE CREDIT TO BE ALLOWED TO THE DEDUCTEE OF TAX DEDUCTED FROM HIS ACCOUNT ALL WORK ON THE PRINC IPLE THAT THE TAX IS COLLECTED AND DEPOSITED IN THE ACCOUNT OF THE GOVERN MENT AS INCOME IS EARNED. IN OTHER WORDS THE SAID PROVISIONS OF TAX DED UCTED ARE ADVANCE PAYMENTS OF TAX AS YOU EARN THE INCOME. TAXES ARE DED UCTED BY THE DEDUCTOR OUT OF PAYMENTS DUE TO THE DEDUCTEE AND SUCH TAX DEDUCTED IS THE INCOME OF DEDUCTEE. THE CREDIT FOR TAX DEDUCTI ON AT SOURCE WOULD BE ALLOWED TO THE DEDUCTEE ONLY AFTER THE TAX DEDUCTED AT SOURCE IS DEPOSITED IN THE CREDIT OF THE GOVERNMENT AND THE DEDUCTOR FI LES THE COMPLIANCE REPORT IN THIS REGARD BY WAY OF E-TDS RETURNS. THUS IT IS OBLIGATORY UPON THE PERSON DEDUCTING TAX TO DEPOSIT THE TAX DEDUCTED AT SOURCE AND ALSO TO FURNISH STATEMENT DECLARING TAX DEDUCTION MADE FROM T HE ACCOUNT OF VARIOUS DEDUCTEES. EARLIER PROVISIONS WERE TO BE COMPL IED WITH MANUALLY BY FILING THE TDS RETURNS IN PAPER FORM. HOWEVER A S PER IT (SIXTH) AMENDMENT RULES 2010 WITH RETROSPECTIVE EFFECT FROM 01.04.2010 THE DEDUCTOR WAS ASKED TO FILE E-TDS STATEMENTS FOR WHICH I NFRASTRUCTURE WAS PROVIDED AND IT WAS REQUIRED THAT THE ASSESSEE COMPLIES T O THE SAID FILING OF E-TDS RETURNS. HOWEVER SINCE ASSESSMENT YEAR 2011-12 WAS THE FIRST YEAR OF INTRODUCTION OF SUCH FACILITIES OF E-TDS RETU RNS THERE WERE CERTAIN HINDRANCES WHICH WERE TAKEN CARE OF BY THE AUTHORITI ES BY WAY OF VARIOUS AMENDMENTS INTRODUCED IN THIS BEHALF. THE CASE OF THE ASSESSEE ON THE OTHER HAND IS THAT THEY WERE SMALL TAX PAYERS AND IN THE ABSENCE OF 7 ITA NO.113/PN/2016 TECHNICAL GUIDANCE PROVIDED AND BECAUSE OF TECHNICAL HITCHES THE TDS RETURNS COULD NOT BE FILED IN TIME. MOST OF THE ASSESSEE BEFORE US HAVE PAID THE TAX DEDUCTED AT SOURCE TO THE TREASURY WITHI N TIME FRAME BUT HAVE DEFAULTED IN FILING E-TDS STATEMENTS. IN SOME OF THE CASES THERE IS DEFAULT IN PAYMENT OF TAX DEDUCTED AT SOURCE AND CON SEQUENTLY DELAY IN FILING THE E-TDS RETURNS. THE QUESTION WHICH ARISES I S WHETHER IN THE ABOVE SAID SCENARIO CAN THE PROVISIONS OF SECTION 273B OF THE ACT BE APPLIED IN ORDER TO DECIDE THE ISSUE OF LEVY OF PENAL TY UNDER SECTION 272A(2)(K) OF THE ACT. 24. THE HONBLE PUNJAB & HARYANA HIGH COURT IN HMT LTD. TRACTOR DIVISION VS. CIT (2005) 274 ITR 540 (P&H) HAD HELD T HAT WHERE THE TAX DEDUCTED AT SOURCE HAD BEEN PAID IN TIME AND THE NEC ESSARY RETURNS IN RESPECT THERETO WERE FILED IN TIME WITH THE INCOME T AX DEPARTMENT ON MERE LATE ISSUE OF TAX DEDUCTION CERTIFICATE THERE W AS NO LOSS TO THE REVENUE AND THE DELAY IN FURNISHING THE TAX DEDUCTIO N CERTIFICATE WAS HELD TO BE MERELY TECHNICAL OR VENIAL IN NATURE AND PENA LTY LEVIED UNDER SECTION 272A(2)(K) OF THE ACT WAS DELETED. IT MAY BE CLARIFIED HEREIN THAT EARLIER UNDER SECTION 272A(2)(K) OF THE ACT PENALTY WAS LEVIABLE WHERE THE TAX DEDUCTION CERTIFICATE WAS NOT ISSUED IN TIME. HOWEVER BY FINANCE (NO.2) ACT 2004 W.E.F. 01.04.2005 IT HAS BEEN PROV IDED THAT WHERE A PERSON FAILS TO DELIVER OR CAUSE TO BE DELIVER COPY OF STATEMENT WITHIN TIME SPECIFIED IN SECTION 200(3) OF THE ACT OR THE PR OVISO TO SECTION 206C(3) OF THE ACT THEN HE SHALL PAY BY WAY OF PENA LTY SUM OF RS.100/- FOR EVERY DAY OF DEFAULT. IT IS FURTHER PROVIDED U NDER THE SAID SUB-SECTION THAT THE AMOUNT OF PENALTY FOR FAILURE SHALL NOT EXC EED THE AMOUNT OF TAX DEDUCTIBLE OR COLLECTABLE AS THE CASE MAY BE. IT IS FURTHER PROVIDED THAT NO PENALTY SHALL BE LEVIED UNDER CLAUSE (A) FOR FAILU RE TO FURNISH THE STATEMENT UNDER SECTION 200(3) OF THE ACT OR PROVISO T O SECTION 206C(3) OF THE ACT ON OR AFTER FIRST DAY OF JULY 2012. 25. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HAS PLACED STRONG RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE ALLAHABAD HIGH COURT IN RAJA HARPAL SINGH INTER COLLEGE VS. PR L. CIT (SUPRA) FOR THE PROPOSITION THAT WHERE THE ETDS STATEMENT WAS NOT FIL ED IN TIME THEN PENALTY UNDER SECTION 272A(2)(K) OF THE ACT HAS BEEN HELD TO BE LEVIABLE. IN THE FACTS OF THE SAID CASE BEFORE THE HONBLE HIGH COURT THE ASSESSEE WAS DEDUCTING THE TAX AT SOURCE BUT HAD NOT FILED THE E-TDS RETURNS FOR FIVE SUCCESSIVE ASSESSMENT YEARS STARTING FROM 2008-09 TO 20 12-13. THE ASSESSEE FAILED TO FURNISH ANY EXPLANATION BEFORE THE ASSE SSING OFFICER FOR THE SAID DEFAULT AND ONLY ON THE LAST DATE IT WAS POI NTED OUT THAT SINCE THE PRINCIPAL OF COLLEGE HAD JOINED RECENTLY IT WOULD TAKE SOME TIME TO COLLECT THE RECORDS FOR FILING THE E-TDS STATEMENTS. THE ASSESSE E HOWEVER FAILED TO COMPLY WITH NOTICE AND THE ASSESSING OFFICER HELD TH E ASSESSEE TO BE LIABLE FOR LEVY OF PENALTY UNDER SECTION 272A(2)(K) OF THE ACT. BEFORE THE CIT(A) THE ASSESSEE FOR THE FIRST TIME OFFERED AN EXPLA NATION THAT PRIOR TO JOINING REGULAR PRINCIPAL IN THE COLLEGE ON 25.01.2 010 ONLY OFFICIATING PRINCIPAL HAD BEEN WORKING WHO DID NOT HAVE IDEA O F E-TDS STATEMENTS AND REQUIREMENT OF FILING THE SAME. THE TRIBUNAL NO TED THAT THE APPELLATE AUTHORITY HAD ACCEPTED THE EXPLANATION OFFERED BY T HE ASSESSEE AND IMPOSED PENALTY ONLY FROM 01.04.2010 THOUGH REGULAR PRINCIPAL HAD JOINED THE COLLEGE ON 25.01.2010. THE TRIBUNAL DISM ISSED THE APPEAL OF ASSESSEE AS NO EXPLANATION WAS FURNISHED FOR NON-FURNISHIN G TDS STATEMENTS IN TIME. THE HONBLE HIGH COURT THUS IN T HIS REGARD OBSERVED 8 ITA NO.113/PN/2016 THAT THE REQUIREMENT OF FILING E-TDS STATEMENTS IN TI ME COULD NOT BE OVERLOOKED. IN SUCH CIRCUMSTANCES THE HONBLE HIGH C OURT HELD THAT IT CANNOT BE URGED BY THE COUNSEL FOR THE ASSESSEE THAT NO PENALTY COULD HAVE BEEN IMPOSED FOR NON-FILING E-TDS RETURNS IN TI ME SINCE IT HAD NOT RESULTED IN ANY LOSS TO THE REVENUE. THE HONBLE HIGH COURT FURTHER TOOK NOTE OF THE FACT THAT BEFORE THE ASSESSING OFFICER NO EXPLANATION WAS OFFERED. HOWEVER AN EXPLANATION WAS OFFERED BEFORE THE APPE LLATE AUTHORITY WHICH WAS TAKEN INTO CONSIDERATION AND T HE PENALTY AMOUNT WAS SUITABLY REDUCED AS THE CASE OF APPELLANT THAT REGU LAR PRINCIPAL ASSUMED CHARGE ON 25.01.2010 WAS ACCEPTED AND THE PENALTY WAS IMPOSED AFTER THAT DATE. THE APPEAL OF THE ASSESSEE IN THIS REGARD WAS THUS DISMI SSED. 26. APPLYING THE SAID RATIO LAID DOWN BY THE HONBLE ALLAHABAD HIGH COURT IN RAJA HARPAL SINGH INTER COLLEGE VS. PRL. CI T (SUPRA) THERE IS NO MERIT IN THE PLEA OF THE LEARNED DEPARTMENTAL REPRE SENTATIVE FOR THE REVENUE THAT THE HONBLE HIGH COURT HAS LAID DOWN TH E PROPOSITION THAT IN EVERY CASE OF DEFAULT IN FILING THE E-TDS STATEMEN TS IN TIME PENALTY UNDER SECTION 272A(2)(K) OF THE ACT IS LEVIABLE. THE HONBLE HIGH COURT IN AN APPEAL FILED BY THE ASSESSEE DISMISSED THE PLEA OF ASSESSEE THAT NO PENALTY IS LEVIABLE BUT HAS UPHELD THE ORDERS OF AUTHO RITIES BELOW WHEREIN THE CIT(A) HAD RESTRICTED THE LEVY OF PENALT Y FROM THE DATE OF 1 ST APRIL 2010 IN RESPECT OF E-TDS STATEMENTS TO BE FILED FOR ASSESSMENT YEARS 2008-09 TO 2012-13 SINCE THE ASSESSEE HAD EXPLAINE D THAT REGULAR PRINCIPAL HAD ASSUMED CHARGE ON 25.01.2010. IN OTHER WORDS THE HONBLE HIGH COURT HAS ACCEPTED THE EXPLANATION OFFERED BY THE ASSESSEE REGARDING REASONABLENESS OF CAUSE OF DELAY IN FURNISHING E-TDS RETURNS LATE PARTIALLY. ADMITTEDLY THE DEFAULT IN FILING THE SAID E-TDS RETURNS HAVE NOT BEEN ACCEPTED IN FULL BUT TAKING INTO CONSIDERAT ION THE REASONABLENESS OF EXPLANATION THE PENALTY CHARGEABLE UNDER SECTION 272A(2)(K) OF THE ACT HAS BEEN RESTRICTED I.E. SUITABLY REDUCED IN THE C ASE OF APPELLANT AS HELD BY THE HONBLE HIGH COURT. 27. ANOTHER RELIANCE PLACED UPON BY THE LEARNED DEP ARTMENTAL REPRESENTATIVE FOR THE REVENUE IS ON THE RATIO LAID D OWN BY THE CHANDIGARH BENCH OF TRIBUNAL IN CENTRAL SCIENTIFIC INSTRUMENTS ORGANIZATION VS. JCIT (TDS) (SUPRA). IN THE FACTS OF THE SAID CASE THE ASSESSEE HAD FILED TDS RETURNS IN FORM NO.26Q BELATEDLY AFTER EXPIRY OF 10 YEARS FROM PRESCRIBED TIME LIMIT AND THE ASSESSEE HAD SUBMITTED THAT HE WAS UNAWARE OF PROVISIONS OF SECTION 200(3) OF THE A CT. THE ASSESSEE HAD DEPOSITED THE TAX TO THE CENTRAL GOVERNMENT AT R ELEVANT TIME HOWEVER THE ASSESSEE FAILED TO FURNISH TDS RETURNS. THE DELAY IN FILING THE RETURNS IN PRESCRIBED FORM FOR ALL FOUR QUARTERS W AS 6463 DAYS IN ASSESSMENT YEAR 2009-10 AND IN ASSESSMENT YEAR 2010-11 FOR ALL FOUR QUARTER WAS 4966 DAYS AND IN ASSESSMENT YEAR 2011-12 TH E DELAY WAS 3474 DAYS. IN VIEW OF THE FACTUAL ASPECTS OF THE CASE WHERE THE DELAY IS SO HUGE AND IN THE ABSENCE OF ANY EXPLANATION OF THE ASSE SSEE WE FIND NO MERIT IN THE RELIANCE PLACED UPON ON SUCH DECISION BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE. 28. ON THE OTHER HAND VARIOUS BENCHES OF TRIBUNAL HA VE TIME AND AGAIN HELD THAT WHERE THERE WAS CASE OF REASONABLENESS THERE WAS NO MERIT IN LEVYING THE PENALTY UNDER SECTION 272A(2)(K ) OF THE ACT. THUS IN ORDER TO ADJUDICATE THE ISSUE BEFORE US WE ACCEPT THE CASE OF REASONABLE 9 ITA NO.113/PN/2016 CAUSE AS RELEVANT TO SECTION 273B OF THE ACT PUT UP BY THE ASSESSEE IN THE RESPECTIVE CASES IN THE APPEALS BEFORE US WHICH ADMITT EDLY RELATE TO DIFFERENT QUARTERS OF ASSESSMENT YEAR 2011-12. WHERE FO R THE FIRST TIME THERE WAS REQUIREMENT OF E-TDS FURNISHING OF TDS STATE MENT AND SINCE THERE WERE CERTAIN COMPLICATIONS IN E-FILING OF TDS RETURNS BECAUSE OF SYSTEM FAILURE WHICH ADMITTEDLY WAS AMENDED 18 TIMES BY THE DEPARTMENT THE DELAY IN FURNISHING THE SAID RETURNS L ATE COULD NOT BE ATTRIBUTED TO THE ASSESSEE. THE ONUS WAS UPON THE AUTHO RITIES TO PROVIDE PLATFORM FOR EASY COMPLIANCE TO NEWLY INTRODUCED PRO VISIONS OF THE ACT. WHERE SUCH FACILITIES COULD NOT BE PROVIDED BY THE AU THORITIES AND THE TECHNICAL SUPPORT NOT BEING AVAILABLE TO SMALL ASSESSEES WHO ARE IN APPEAL BEFORE US THEN THE DELAY IN FURNISHING THE E- TDS RETURNS LATE SHOULD BE LIBERALLY CONSTRUED. HENCE THERE WAS PRAC TICAL DIFFICULTY ON THE PART OF ASSESSEE TO COMPLY WITH NEWLY INTRODUCED REQUIR EMENT OF E-TDS FILING OF TDS STATEMENTS BEING TECHNICAL DELAY AND N OT VENIAL IN NATURE MERITS TO BE CONSIDERED AS REASONABLE CAUSE FOR NON LEVY OF PENALTY AS PER THE REQUIREMENTS OF SECTION 273B OF THE ACT. WE HOLD SO. IN THIS BUNCH OF APPEALS THERE ARE CASES WHERE THE ASSESSEE HAS DEFAULTED IN NOT DEPOSITING TAX DEDUCTED AT SOURCE IN TIME IN SUCH CASE S THE RETURNS WERE DELAYED BECAUSE OF DEFAULT ON BEHALF OF THE DEDUCTOR . IN SUCH CASES PENALTY UNDER SECTION 272A(2)(K) OF THE ACT IS LEVIAB LE. HOWEVER THE SAME IS TO BE RESTRICTED FROM THE DATE OF PAYMENT OF T DS TO THE DATE OF FILING E-TDS STATEMENTS SINCE E-TDS STATEMENTS CANNOT B E FILED WITHOUT PAYMENT OF TDS TO THE CREDIT OF CENTRAL GOVERNMENT. SIMILAR RATIO HAS BEEN LAID DOWN BY THE CHANDIGARH BENCH OF TRIBUNAL IN M/S. ASHIRWAD COMPLEX VS. JCIT (TDS) (SUPRA). ACCORDINGLY WE HOLD SO. 29. ANOTHER ISSUE RAISED IN SOME OF THE APPEALS IS THAT W HERE ALL QUARTERLY RETURNS RELATING TO ASSESSMENT YEAR 2011-12 WE RE FILED ON ONE DATE I.E. THERE WAS DEFAULT IN FURNISHING THE RETURNS FOR EACH OF THE QUARTERS LATE THE CASE OF THE ASSESSEE WAS THAT BECAUSE OF OVERLAPPING DEFAULT PENALTY AT BEST SHOULD BE RESTRICTED TO QUAR TER NO.1 AND NO PENALTY SHOULD BE LEVIED FOR THE SUBSEQUENT QUARTERS. WE FIND MERIT IN THE ABOVE PLEA OF THE ASSESSEE AND ACCORDINGLY WE DIRE CT THE ASSESSING OFFICER TO RESTRICT THE PENALTY LEVIABLE TO FIRST QUA RTER WHICH IS IN DEFAULT AND FOR THE OVERLAPPING DEFAULT NO PENALTY IS TO B E LEVIED UNDER SECTION 272A(2)(K) OF THE ACT. WE DIRECT THE ASSESSING OFFICER TO VERIFY THE CLAIM OF ASSESSEE IN THIS REGARD AND WORK OUT THE PENALTY ACCO RDINGLY. 30. THE ISSUE ARISING IN OTHER APPEALS BEFORE US IS IDEN TICAL AND FOLLOWING OUR DIRECTIONS IN THE PARAS HEREINABOVE TH E ASSESSING OFFICER IN THE CASE OF INDIVIDUAL ASSESSEE HAS TO VERIFY THE CLAIM O F ASSESSEE AND WORK OUT PENALTY IF ANY LEVIABLE ACCORDINGLY AFTE R AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. SINCE THE FACTS OF THE INSTANT APPEAL ARE IDENTICAL TO TH E FACTS OF THE CASE DECIDED BY THE TRIBUNAL THEREFORE FOLLOWING THE RE ASONINGS GIVEN THEREIN WE RESTORE THE ISSUE TO THE FILE OF THE AO W ITH THE DIRECTION TO FOLLOW THE ORDER OF THE TRIBUNAL AND DECIDE TH E ISSUE 10 ITA NO.113/PN/2016 REGARDING LEVY OF PENALTY U/S.272A(2)(K) AFTER GIVING DUE OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCO RDINGLY. GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19-10-2016. SD/- SD/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; ! DATED : 19 TH OCTOBER 2016. ) *# ! -!/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. THE CIT(A) - I AURANGABAD THE CIT-I AURANGABAD 5. # &&' ' / DR ITAT B PUNE; 6 . * / GUARD FILE. / BY ORDER // TRUE COPY // // # & //TRUE - & ' / SR. PRIVATE SECRETARY ' / ITAT PUNE