RAZA PAPER MART, MUMBAI v. ADDL CIT (TDS) RG 3, MUMBAI

ITA 3790/MUM/2014 | 2008-2009
Pronouncement Date: 31-10-2016

Appeal Details

RSA Number 379019914 RSA 2014
Bench Mumbai
Appeal Number ITA 3790/MUM/2014
Duration Of Justice 2 year(s) 5 month(s) 3 day(s)
Appellant RAZA PAPER MART, MUMBAI
Respondent ADDL CIT (TDS) RG 3, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-10-2016
Appeal Filed By Assessee
Bench Allotted D
Tribunal Order Date 31-10-2016
Date Of Final Hearing 21-07-2016
Next Hearing Date 21-07-2016
Assessment Year 2008-2009
Appeal Filed On 27-05-2014
Judgment Text
D IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SANJAY GARG JUDICIAL MEMBER AND SHRI ASHWANI TANEJA ACCOUNTANT MEMBER ITA NO.3790/MUM/2014 ASSESSMENT YEAR: 2008-09 & ITA NO.3791/MUM/2014 ASSESSMENT YEAR: 2009-10 & ITA NO.3792/MUM/2014 ASSESSMENT YEAR: 2010-11 RAZA PAPER MART SHOP NO.3 OPP. ATLANTA INDL. ESTATE G.M. LINK RD ETT BHATTI GEREGAON (E) MUMBAI-400063 / VS. ADDL. C IT (TDS) RG 3 MUMBAI- ( APPELLANT ) ( REVENUE ) P.A. NO . MUMR19395F APPELLANT BY SHRI BHUPENDRA SHAH (AR) REVENUE BY SHRI B.S. BIST (DR) ! ' # $% / DATE OF HEARING : 20/10/2016 # $% / DATE OF ORDER: 31/10/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAIN ST THE ORDER OF LD. CIT(A) DATED 07.03.2014 PASSED AGAINST THE RAZA PAPER MART 2 PENALTY ORDER OF THE AO DATED 31.12.2011 U/S 272A(2 )(K) OF THE ACT ON THE FOLLOWING IDENTICAL GROUNDS: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED A.O. ERRED IN LEVYING MAXIMUM PENALTY AMOUNTING TO RS 64 292/- U/S 272A[2][K] FOR LATE FILING OF TDS RETURN IN FORM 24Q & 26Q. [B] RELIEF PRAYED: TO DELETE THE PENALTY AMOUNTING TO RS. 64 292/- U/S 272A[2][K]. [C] GENERAL: THE APPELLANT RESERVE RIGHTS TO ADD ALTER OR DELETE ANY PORTION OF THIS APPEAL BEFORE ITS CONCLUSION. 2. DURING THE COURSE OF HEARING ARGUMENTS WERE MADE B Y SHRI BHUPENDRA SHAH AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI B.S. BIST DEPAR TMENTAL REPRESENTATIVE (SR. DR) ON BEHALF OF THE REVENUE. 3. THE SOLITARY ISSUE RAISED IN ALL THESE THREE APPEAL S BY THE ASSESSEE IS FOR CHALLENGNG THE LEVY OF PENALTY U/S 272A(2)(K) FOR LATE FILING OF TDS RETURN IN FORM NO. 24Q & 26Q. 3.1. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. WE H AVE PONDERED OVER THE ISSUE I.E. WHETHER THE LEVY OF PE NALTY OF RS. 64 292/- FOR A.Y. 2008-09 RS.92540/- FOR A.Y. 2009 -10 AND RS.4356 FOR A.Y. 2010-11 IS JUSTIFIED IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE OR NOT. IT HAS BEEN HELD BY THE AO THAT SINCE THERE WAS DELAY IN FILING OF TDS RETURNS THEREFORE ASSESSEE WAS LIABLE TO PAY PENALTY @ RS. 100 FOR EA CH DAY AND ACCORDINGLY PENALTY WAS LEVIED. LD. CIT(A) CONFIRME D THE PENALTY ON THE GROUND THAT NO REASONABLE CAUSE HAS BEEN EXPLAINED BY THE ASSESSEE FOR DELAY OF FILING OF TD S RETURN. BEFORE US LD. COUNSEL HAS VEHEMENTLY SUBMITTED THA T IN THESE RAZA PAPER MART 3 YEARS NEW SYSTEM OF FILING OF TDS RETURN ELECTRONIC ALLY WAS RECENTLY LAUNCHED AND THE ASSESSEE DID NOT HAVE SUF FICIENT RESOURCES TO ADOPT AND ADAPT TO THE NEW SYSTEM OF F ILING OF RETURNS. ON THE TOP OF IT THERE WAS LATE RECEIPT O F BILLS FROM THE DEDUCTEES NON-AVAILABILITY OF PAN NUMBERS OF MANY DEDUCTEES AND SHORTAGE OF TRAINED STAFF TO IMPLEMENT THE COMP LIANCES. IT WAS FURTHER SUBMITTED THAT TDS AMOUNTS WERE DULY DE DUCTED AND DEPOSITED INTO THE GOVERNMENT TREASURY WELL WIT HIN TIME AND AS PER RATES PRESCRIBED AND THERE IS NO DISPUTE ON THAT. THUS THOUGH THERE WAS SUBSTANTIVE COMPLIANCE OF TH E LAW BUT MERELY A TECHNICAL OR VENIAL BREACH DUE TO THE REAS ONS STATED ABOVE. RELYING UPON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF OR ISSA 83 ITR 26 (SC) IT WAS REQUESTED THAT PENALTY SHOULD BE DE LETED. IN ADDITION TO THAT HE RELIED UPON THE FOLLOWING DECIS IONS IN SUPPORT OF HIS CLAIM THAT IF TDS WAS DEDUCTED AND D EPOSITED IN TIME PENALTY U/S 272A(2) SHALL NOT BE LEVIABLE: 1. CIT VS. HARSIDDH CONSTRUCTION PVT. LTD. 144 ITR 417(GUJ) 2. SAHARA INDIA MUTUAL BENEFIT CO. LTD. 157 TAXMAN 52(ALL) 3. CREST COMMUNICATION LTD. 106 ITD 558(MUMBAI) 4. SATURDAY CLUB LIMITED 85 ITD 224(CAL) 3.2. WE HAVE GONE THROUGH THE ENTIRE FACTS AND CIRCUMST ANCES OF THE CASE AND SUBMISSIONS MADE BY BOTH THE SIDES AS WELL AS JUDGMENTS RELIED UPON BY BOTH THE SIDES. IT IS NOTE D THAT UNDISPUTED FACTS ARE THAT THERE WAS FULL COMPLIANCE MADE BY THE ASSESSEE WITH RESPECT TO DEDUCTION AND DEPOSIT OF TAX WITHIN TIME IN ACCORDANCE WITH LAW AND NO LAPSE HAS BEEN REPORTEDLY MADE BY THE ASSESSEE IN THIS REGARD. THU S AS PER RAZA PAPER MART 4 THE FACTS NARRATED BEFORE US SUBSTANTIVE COMPLIANC E OF THE LAW HAS BEEN MADE BY THE ASSESSEE. THE DELAY OCCURRED I N FILING OF TDS RETURNS BECAUSE IN SOME CASES THERE WAS LATE RE CEIPT OF BILLS FROM THE DEDUCTEES AND IF SOME OTHER CASE ASS ESSEE DID NOT HAVE PAN NUMBERS OF THE DEDUCTEES. THE ASSESSEE HAS ALSO SUBMITTED THAT ASSESSEE WAS FINDING IT DIFFICU LT TO SWITCH OVER TO THE NEW SYSTEM OF FILING OF TDS RETURN ELEC TRONICALLY AS THE ASSESSEE DID NOT HAVE REQUISITE STRENGTH OF TRA INED STAFF AND OTHER REQUIRED RESOURCES. THESE FACTS AND CONST RAINTS NARRATED BY THE ASSESSEE HAVE NOT BEEN DISPUTED OR NEGATED BY AO LD. CIT(A) OR BY THE DR BEFORE US. UNDER THESE CIRCUMSTANCES IN OUR VIEW AO SHOULD NOT HAVE LEVI ED THE PENALTY. SUCH PENAL PROVISIONS HAVE BEEN BROUGHT IN THE STATUTE TO SET RIGHT THE TAXPAYER OF NEGLIGENT AND NON- COMPLIANT NATURE. THESE PROVISIONS WERE NOT BROUGHT FOR COLLECTION OF REVENUE AND NOR THESE ARE MEANT TO CA USE UNDUE HARDSHIP EVEN TO THOSE TAXPAYERS WHO HAD MADE SERIO US EFFORTS TO MAKE COMPLIANCE BUT SOMEHOW THERE WERE S OME TECHNICAL LAPSES OF VENIAL NATURE. THE AO HAS NOT B EEN ABLE TO BRING ANYTHING ON RECORD TO SHOW THAT ASSESSEES CA SE WOULD FALL IN A CATEGORY WHERE THE LEVY OF PENALTY WOULD BE JUSTIFIED. THUS TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMS TANCES OF THE CASE LEVY OF PENALTY IS HELD TO BE NOT JUSTIFI ED IN THE CASE BEFORE US. 3.3. BEFORE PARTING WITH WE SHALL ALSO LIKE TO PLACE O N RECORD APPREHENSION EXPRESSED BY THE LD. DR THAT DELAY IN FILING OF TDS RETURN MAKE IT DIFFICULT FOR THE DEDUCTEES AT T IMES TO MAKE CLAIM OF TDS CREDIT IN THEIR RESPECTIVE INCOME TAX RETURNS. WE RAZA PAPER MART 5 AGREE WITH THE LD. DR ON THIS ISSUE AND THUS WE ARE OF THE OPINION THAT DEDUCTORS MUST MAKE SINCERE EFFORTS TO FILE TDS RETURNS TIMELY AS NOW LONG TIME HAS PASSED SINCE N EW SYSTEM OF FILING OF TDS RETURNS ELECTRONICALLY WAS INTRODU CED. THUS ALL SINCERE EFFORTS SHOULD BE MADE BY THE ASSESSEE IN F UTURE TO FILE ALL THE TDS RETURN TIMELY AND IN ACCORDANCE WITH LA W. IN ABSENCE OF THE SAME THE AO SHALL BE AT LIBERTY TO INITIATE PENALTY PROCEEDINGS UNDER THE LAW. 3.4. WITH THE AFORESAID DIRECTIONS THE PENALTY LEVIED I N THESE THREE APPEALS ARE DIRECTED TO BE DELETED AND ALL TH E THREE APPEALS ARE ALLOWED. 4. IN THE RESULT THESE THREE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER 2016 SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER ! ' MUMBAI; ' DATED : 31/10/2016 CTX? P.S/. .. #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. ) *+ / THE APPELLANT 2. -*+ / THE RESPONDENT. 3. .$ . ! / ( ) ) / THE CIT MUMBAI. 4. .$ . ! / / CIT(A)- MUMBAI 5. 23 45 .$ )% 45$6 ! ' / DR ITAT MUMBAI 6. 7 8 ' / GUARD FILE. / BY ORDER - 2) //TRUE COPY// / (DY./ASSTT. REGISTRAR) ! ' / ITAT MUMBAI