M/s.Country Club India Ltd.,, Hyderabad v. Addl. CIT,, Hyderabad

ITA 1250/HYD/2013 | 2007-2008
Pronouncement Date: 26-03-2021 | Result: Partly Allowed

Appeal Details

RSA Number 125022514 RSA 2013
Assessee PAN AAACC8276B
Bench Hyderabad
Appeal Number ITA 1250/HYD/2013
Duration Of Justice 7 year(s) 6 month(s) 20 day(s)
Appellant M/s.Country Club India Ltd.,, Hyderabad
Respondent Addl. CIT,, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 26-03-2021
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB-A
Tribunal Order Date 26-03-2021
Date Of Final Hearing 25-02-2021
Next Hearing Date 25-02-2021
Last Hearing Date 24-10-2018
First Hearing Date 29-09-2020
Assessment Year 2007-2008
Appeal Filed On 05-09-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU ACCOUNTANT MEMBER I.T.A. NOS. 1250 & 1251/HYD/2013 ASSESSMENT YEARS: 2007-08 & 2008-09 M/S.COUNTRY CLUB INDIA LIMITED HYDERABAD [PAN: AAACC8276B] VS ADDL. COMMISSIONER OF INCOME TAX RANGE-14 HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P.MURALI MOHANA RAO AR FOR REVENUE : SHRI SUNIL KUMAR PANDEY DR DATE OF HEARING : 25-02-2021 DATE OF PRONOUNCEMENT : 26-03-2021 O R D E R PER S.S.GODARA J.M. : THESE TWO ASSESSEES APPEALS FOR AYS.2007-08 & 2008 -09 ARISE FROM THE CIT(A)-II HYDERABADS ORDERS DATED 15 -07-2013 PASSED IN APPEAL NOS.0522 & 0526/CIT(A)-II HYD/201 1-12; RESPECTIVELY IN PROCEEDINGS U/S.272A(2)(K) OF THE IN COME TAX ACT 1961 [IN SHORT THE ACT]. HEARD BOTH PARTIES. CASE FILES PERUSED. 2. IT TRANSPIRES AT THE OUTSET THAT THIS IS SECOND ROUND OF THE IMPUGNED PENALTY PROCEEDINGS BETWEEN THE PARTIES B EFORE THE TRIBUNAL. LEARNED CO-ORDINATE BENCHS EARLIER ORDE R ITA NOS. 1250 & 1251/HYD/2013 :- 2 -: DT.11-04-2014 HAS ACCEPTED THE ASSESSEES EXPLANATION THAT IT WAS PREVENTED BY REASONS BEYOND ITS CONTROL TO FILE T HE TDS RETURNS WITHIN THE PRESCRIBED TIME AS FOLLOWS: 2. FACTS OF THE CASE IN BRIEF COMMON IN THESE APP EALS ARE THAT IN THE COURSE OF VERIFICATION OF THE ITD APPLICATION IT W AS NOTICED THAT THE ASSESSEE HAS FAILED TO FILE THE QUARTERLY RETURNS I .E. 24Q AND 26Q FOR THE YEARS UNDER APPEAL WITHIN THE STIPULATED TIME AND THERE WAS A DELAY FOR ALL THE THREE QUARTERS OF EACH OF THE YEA RS UNDER APPEAL. OBSERVING THAT AS PER THE PROVISIONS OF S.200(3) OF THE ACT READ WITH RULE 31A OF THE INCOME-TAX RULES THE DEDUCTOR IS U NDER A STATUTORY OBLIGATION TO FURNISH QUARTERLY STATEMENTS FOR DETA ILS OF TAX DEDUCTED AT SOURCE TO THE PRESCRIBED AUTHORITY AND IN THE PR ESCRIBED FORM WITHIN THE STIPULATED TIME FOR THE NON-COMPLIANCE ON THE PART OF THE ASSESSEE THE ASSESSING OFFICER INITIATED THE PENAL TY PROCEEDINGS UNDER S.271A(2)(K) OF THE ACT FOR THESE FOUR YEARS. IN THE COURSE OF PENALTY PROCEEDINGS INITIATED BY ISSUANCE OF NOTICE DATED 13.12.2010 ASSESSEE SUBMITTED THAT TDS RETURNS COULD NOT BE FI LED DUE TO NON- AVAILABILITY OF THE PERMANENT ACCOUNT NUMBERS AND A DDRESSES OF THE ASSESSEE DEDUCTEES AS IT IS MANDATORY FOR FILING OF RETURNS AS PER THE TDS PROVISIONS OF THE IT ACT. NOT SATISFIED WITH TH E EXPLANATION OF THE ASSESSEE AND OBSERVING THAT IT IS THE STATUTORY OBL IGATION OF THE DEDCUTOR TO OBTAIN PAN NUMBERS OF THE PARTIES AGAIN ST WHOM THE TDS WAS MADE AND THE DEDUCTOR COULD HAVE FILED E-TDS R ETURNS WITH THE AVAILABLE PAN NOS. AND COULD HAVE FILED CORRECTED S TATEMENTS AS AND WHEN HE GOT THE CORRECT PAN NOS. FOR THE BALANCE/RE MAINING DEDUCTEES ARE AVAILABLE PROCEEDED TO IMPOSE THE IM PUGNED PENALTIES UNDER S.272A(2)(K) OF THE ACT FOR THE FAILURE ON T HE PART OF THE ASSESSEE TO FILE FORM NOS.24Q AND 26Q FOR ALL THE F OUR QUARTERS OF THE FOUR YEARS UNDER APPEAL VIDE SEPARATE PENALTY ORDE RS DATED 24.6.2011 FOR THE ASSESSMENT YEAR 2006-07 AND DATED 28.6.2011 FOR THE OTHER THREE YEARS. 3. ON APPEAL BEFORE THE CIT(A) THE ASSESSEE CONTEND ED INTER-ALIA THAT THE ASSESSEE WAS PROMPTLY DEDUCTING THE TAX AND PAY ING THE SAME INTO GOVERNMENT ACCOUNT AND THE ONLY DEFAULT IS IN FILING THE QUARTERLY RETURNS BELATEDLY; THAT THE DELAY IN FILING THE QUA RTERLY RETURNS OCCURRED BECAUSE THE ASSESSEE HAD TO COLLECT THE PA N NUMBERS OF THE DEDCUTEES BY INDIVIDUALLY CONTACTING THEM TO ENSURE BETTER COMPLIANCE IN QUOTING OF PAN IN E-TDS STATEMENTS; A ND THAT THE LATE FILING OF THE TDS RETURNS WAS ALSO DUE TO THE SICKN ESS OF THE ACCOUNTANT. AFTER DUE CONSIDERATION OF THESE CONTEN TIONS OF THE ASSESSEE IN THE LIGHT OF THE DECISIONS RELIED UPON BY THE LEARNED ITA NOS. 1250 & 1251/HYD/2013 :- 3 -: AUTHORISED REPRESENTATIVE FOR THE ASSESSEE BEFORE H IM THE CIT(A) CONFIRMED THE IMPUGNED PENALTIES LEVIED BY THE ASSE SSING OFFICER. 4. AGGRIEVED BY THE ORDERS OF THE CIT(A) ASSESSEE PREFERRED THESE SECOND APPEALS BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THERE WAS NO DEFAULT IN DEDUCTION OR REMITTING THE TDS TO THE CE NTRAL GOVERNMENT. THERE IS NO LOSS CAUSED BY THE ASSESSEE BY DELAY IN FILING THE TDS RETURN. HE FURTHER SUBMITTED THAT THE DELAY IN FILI NG THE RETURN DUE TO NON-AVAILABILITY OF THE PAN NUMBERS OF THE DEDUCTEE S. THEREFORE PENALTY SHOULD NOT BE LEVIED UNDER S.272A(2)(K) OF THE ACT. HE RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF BRANCH MANAGER PUNJAB NATIONAL BANK V/S. ADDL. COMMISSIONER OF INCOMETAX (2011) 16 TAXMANN.COM.318(LUCKNOW) AND ALSO RELIED ON THE DE CISION OF THE COLLECTOR OF LAND ACQUISITION V/S. ADDL. COMMISSION ER OF INCOME-TAX (TDS) RANGE (2012)21 TAXMANN.COM.22(CHANDIGARH). 6. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPR ESENTATIVE DUTIFULLY SUPPORTED THE ORDERS PASSED BY THE REVENU E AUTHORITIES. 7. WE HEARD BOTH SIDES AND PERUSED THE ORDERS OF TH E REVENUE AUTHORITIES LAND OTHER MATERIAL AVAILABLE ON RECORD . IN THIS CASE THE PENALTY UNDER S.272A(2)(K) OF THE OF THE INCOME-TAX ACT 1961 HAS BEEN LEVIED ON THE GROUND THAT THE ASSESSEE HAS FAI LED TO FILE QUARTERLY RETURNS I.E. 24Q AND 26Q WITHIN THE STIP ULATED TIME. WHEN THE ASSESSING OFFICER HAS ASKED THE ASSESSEE FOR TH E REASONS FOR NON- FILING OF THE QUARTERLY RETURNS THE ASSESSEE HAS S UBMITTED THAT THE RETURN COULD NOT BE FILED DUE TO NON-AVAILABILITY O F PAN AND ADDRESSES OF THE DEDUCTEES AS IT IS MANDATORY FILING OF THE RETURNS AS PER THE TDS PROVISIONS OF THE INCOME-TAX ACT 1961. THE ASS ESSING OFFICER AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE IS OF THE OPINION THAT IT IS THE STATUTORY OBLIGATION OF THE DEDCUTOR TO OBTAIN PAN NUMBERS OF THE PARTIES AGAINST WHOM TDS WAS MADE. A CCORDINGLY PENALTY WAS IMPOSED UNDER S.272A(2)(K) OF THE ACT. ON APPEAL THE CIT(A) HAS CONFIRMED THE PENALTY ORDERS OF THE ASSE SSING OFFICER BY OBSERVING THAT IT IS THE STATUTORY OBLIGATION OF TH E ASSESSEE TO FILE THE TDS RETURNS WELL IN TIME. THE ASSESSEE HAS SUBMITTE D BEFORE THE ASSESSING OFFICER AS WELL AS THE CIT(A) THAT HE HAS DEDUCTED THE TDS AND THE SAME WAS REMITTED TO THE CENTRAL GOVERNMENT AND THE QUARTERLY RETURNS WERE FILED BELATEDLY ONLY BECAUSE OF NON-AVAILABILITY OF PAN NUMBERS OF THE DEDCUTEES. THIS FACT WAS NOT DISPUTED BY EITHER ASSESSING OFFICER OR THE CIT(A). WE FIND THA T THERE IS A JUSTIFIED REASON FOR NON-FILING OF THE QUARTERLY RETURNS IN T IME. ITA NOS. 1250 & 1251/HYD/2013 :- 4 -: 8. UNDER SIMILAR CIRCUMSTANCES THE HONBLE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF BRANCH MANAGER PUNJAB NATI ONAL BANK (SUPRA) HELD THAT SINCE THE AMOUNT OF TDS WAS DULY DEPOSITED IN GOVERNMENT TREASURY WITHIN THE PRESCRIBED TIME AND THE DELAY HAS NOT CAUSED ANY LOSS TO THE REVENUE PENALTY MUST BE DELETED. IN THE CASE OF COLLECTOR LAND ACQUISITION (SUPRA) THE CH ANDIGARH BENCH OF THE TRIBUNAL HAS HELD THAT SINCE THE ASSESSEE WAS P REVENTED BY SUFFICIENT CAUSE FROM FILING THE RETURN WITHIN THE STATUTORY PERIOD AND NO LOSS OF REVENUE HAS BEEN CAUSED TO THE DEPARTMEN T PENALTY SHOULD BE SET ASIDE. TAKING INTO CONSIDERATION TOTA LITY OF FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND KEEPING IN VI EW THE JUDICIAL PRECEDENTS WE FIND THAT IT IS NOT A FIT CASE FOR I MPOSITION OF PENALTY UNDER S.272A(2)(K) OF THE ACT. WE ACCORDINGLY DELET E THE IMPUGNED PENALTIES IMPOSED BY THE ASSESSING OFFICER UNDER S. 272A(2)(K) OF THE ACT FOR ALL THE FOUR YEARS ALLOWING THE GROUNDS OF THE ASSESSEE IN THESE APPEALS. 3. THE REVENUE THEREAFTER FILED ITS TAX APPEALS BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT. THEIR LORDSHIPS JUDGEMENT DT.26-11-2014 HAS ALLOWED THE SAME VIDE FOLLOWING OBSERVATIONS: I.T.T.A.NOS.608 AND 609 OF 2014 COMMON JUDGMENT: (PER THE HON'BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA) PRE-ADMISSION NOTICE HAS ALREADY BEEN ISSUED IN THE SE APPEALS. NONE APPEARS FOR THE RESPONDENT - ASSESSEE. WE HAVE HEARD MR.B.NARASIMHA SARMA LEARNED COUNSEL FOR THE APPELLANT - REVENUE. AFTER HEARING HIM AND GOING TH ROUGH THE IMPUGNED JUDGMENT AND ORDER OF THE LEARNED TRIBUNAL WE THOUGHT IT FIT TO ADMIT THESE APPEALS ON THE FOLLOWING SUGGEST ED QUESTION OF LAW AND DISPOSE OF THE SAME BY THIS COMMON JUDGMENT. IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER THE HON'BLE TRIBUNAL (ITAT) IS CORRECT IN LAW IN DELETI NG THE PENALTY IMPOSED UNDER SECTION 272A(2)(K) OF THE INC OME TAX ACT 1961 WITH A FINDING THAT IT IS NOT A FIT CA SE FOR IMPOSING OF THE SAID PENALTY? ITA NOS. 1250 & 1251/HYD/2013 :- 5 -: WE HAVE SEEN THE DISCUSSION AND FINDINGS OF THE LEA RNED TRIBUNAL IN THE IMPUGNED JUDGMENT AND ORDER AND IT APPEARS THAT THE LEARNED TRIBUNAL AFTER NOTING THE FACT WAIVED THE PENALTY BUT IT HAS NOT MENTIONED WHETHER ON THE FACTS AND CIRCUMSTANCES O F THE CASE PENALTY CAN BE WAIVED TOTALLY OR NOT AND WHETHER IT HAD A POWER TO DO SO IN THE PECULIAR FACTS AND CIRCUMSTANCES OF TH E CASE OR NOT. IN THE ABSENCE OF ANY SUCH DISCUSSION WE THINK THAT FULL WAIVER OF PENALTY OF HUGE AMOUNT CANNOT BE ACCEPTED. WE THEREFORE SET ASIDE THE IMPUGNED JUDGMENT AND ORDER OF THE TRIBUNAL. WE DI RECT THE TRIBUNAL TO DECIDE THE QUESTIONS AS INDICATED IN OUR ORDER. THIS EXERCISE SHALL BE DONE WITHIN A PERIOD OF THREE MONTHS FROM THE DA TE OF COMMUNICATION OF THIS ORDER. THE APPEALS ARE ACCORDINGLY ALLOWED. THERE SHALL B E NO ORDER AS TO COSTS. 4. WE ARE INFORMED THAT THE ASSESSEE HAS FILED ITS REVI EW APPLICATION NOS.457 & 458/2015 ON 19-03-2015 AND THE SAME ARE STATED TO BE PENDING AS ON DATE. IT IS IN THIS BACKDROP OF FACTS THAT THE INSTANT SECOND ROUND OF PROCEEDINGS HAS COME UP FOR HEARING BEFORE US. 5. WE HAVE HEARD RIVAL PLEADINGS AGAINST AND IN SUPP ORT OF THE IMPUGNED PENALTIES IMPOSED IN BOTH THE LOWER PROCEEDINGS. SUFFICE TO SAY THERE IS NO REBUTTAL FROM THE DEPARTMENTAL SIDE TO THE CLINCHING FACT THAT SINCE THE TDS DEDUCTEES HAD NOT FURNISHED OR MADE AVAILABLE THEIR RE SPECTIVE PANS TO THE ASSESSEE/DEDUCTOR IT WAS PREVENTED BY REA SONS BEYOND ITS CONTROL FROM FILING THE PRESCRIBED TDS RETU RNS WELL WITHIN THE TIME PRESCRIBED. THE SAME TAKES CARE OF THEI R LORDSHIPS SPECIFIC OBSERVATIONS ON THE FACTS AND CIRC UMSTANCES OF THE CASE (SUPRA). THE FACT ALSO REMAINS THAT THEIR LORDSHIPS HAVE FURTHER OBSERVED THAT FULL WAIVER OF PENALTY COUL D NOT BE ACCEPTED IN THE GIVEN FACTS AND CIRCUMSTANCES. WE THUS ITA NOS. 1250 & 1251/HYD/2013 :- 6 -: RESPECTFULLY FOLLOW THEIR LORDSHIPS LATTER OBSERVATION A ND RESTRICT THE IMPUGNED PENALTIES TO THE EXTENT OF RS.25 000/ - EACH IN THE INTEREST OF JUSTICE. NECESSARY COMPUTATION TO FOLLOW AS PER LAW. 6. THESE TWO ASSESSEES APPEALS ARE PARTLY ALLOWED I N ABOVE TERMS. A COPY OF THIS COMMON ORDER BE PLACED IN THE R ESPECTIVE CASE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH MARCH 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD DATED: 26-03-2021 TNMM ITA NOS. 1250 & 1251/HYD/2013 :- 7 -: COPY TO : 1.M/S.COUNTRY CLUB INDIA LTD. C/O. P. MURALI & CO. CHARTERED ACCOUNTANTS 6-3-655/2/3 1 ST FLOOR SOMAJIGUDA HYDERABAD. 2.THE ADDL.COMMISSIONER OF INCOME TAX RANGE-14 HYDERABAD. 3.CIT(APPEALS)-II HYDERABAD. 4.CIT-TDS HYDERABAD. 5.D.R. ITAT HYDERABAD. 6.GUARD FILE.