ITO, New Delhi v. M/s. Coronation Infrastructure Ltd., Delhi

ITA 5722/DEL/2012 | 2007-2008
Pronouncement Date: 21-11-2014 | Result: Dismissed

Appeal Details

RSA Number 572220114 RSA 2012
Assessee PAN DELCO4843G
Bench Delhi
Appeal Number ITA 5722/DEL/2012
Duration Of Justice 2 year(s) 11 day(s)
Appellant ITO, New Delhi
Respondent M/s. Coronation Infrastructure Ltd., Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 21-11-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 21-11-2014
Date Of Final Hearing 20-11-2014
Next Hearing Date 20-11-2014
Assessment Year 2007-2008
Appeal Filed On 09-11-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : B NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY AM AND SHRI GEORGE GEORGE K JM ITA NO. 5721 TO 5724/DEL/2012 AY : - 2006-07 ITO. VS. M/S. COR ONATION INFRASTRUCTURE LTD. WARD-49(3) E-0-1 & 2 NEW DELHI. ISHWAR NA GAR DELH I (P AN DELCO4843G) (APPELLANT) (RES PONDENT) APPELLANT BY : SMT. PARWINDER KAUR SR. DR RESPONDENT :SH RI R.S. SINGHVI CA O R D E R PER J.SUDHAKAR REDDY ACCOUNTANT MEMBER ALL THESE APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE CIT(A) XXX NEW DELHI DATED 30.8.2012 FOR THE ASSTT . YEARS 2006-07 TO 2009-10 WHEREIN THE LD. CIT(A) HAD CANCELLED THE PENALTY LE VIED BY THE LD. AO U/S 271C OF THE ACT. AS THE ISSUE ARISING IN ALL THESE APPEALS ARE COMMON FOR THE SAKE OF CONVENIENCE THEY ARE HEARD TOGETHER AND ARE BEING D ISPOSED OFF BY WAY OF THIS COMMON ORDER. 2. FACTS IN BRIEF : THE ASSESEE IS A COMPANY ENGAGED IN THE BUSINESS OF MINING. A SURVEY OPERATION U/S 133A OF THE ACT WAS CARRIED OUT ON 12.11.2008 AT THE BUSINESS PREMISES OF THE COMPANY. DURING THE COURSE OF SURVEY IT WAS FOUND THAT THE ASSESSEE HAS MADE PAYMENT TO FOUR NON BANKING FINAN CIAL COMPANIES DURING THE FINANCIAL YEAR WITHOUT DEDUCTION OF TAX AT SOURCE. IT WAS ALSO FOUND THAT THE ASSESEE ITA NOS. 5721 TO 5724 /DEL/2012 AYS 2006-07 2007-08 2007-08 2009-10 ITO VS. CORONATION INFRASTRUCTURE LT D. 2 HAD NOT COLLECTED TCS U/S 206C ON SALE OF SCRAP. TH OUGH THE ASSESSEE COULD NOT BE DEEMED TO BE A ASSESSEE IN DEFAULT U/S 201(1) OF TH E ACT IN RESPECT OF SUCH TDS/TCS AS THE PAYEES HAD PAID THEIR TAXES AND FIL ED THEIR RETURN OF INCOME IT DEPOSITED THE AMOUNT OF TDS/TCS ALONGWITH THE INTER EST ON BEING FOUND FAULT BY THE SURVEY TEAM. THEREAFTER PENALTY U/S 271((1)(C) OF THE ACT WAS LEVIED VIDE ORDER DATED 27.11.2010. AGGRIEVED THE ASSESSEE FILED AN APPEAL. THE FIR ST APPELLATE AUTHORITY CANCELLED THE PENALTY BY HOLDING AMONG OTHER THINGS THAT THE ASSE SSEES EXPLANATION IS BONAFIDE. 3. AGGRIEVED THE REVENUE IS BEFORE US ON THE F OLLOWING GROUNDS :- 1. DELETING THE PENALTY LEVIED U/S 271C OF I.T. ACT 1961 AMOUNTING TO RS. 47 94 806/- BEING 100% OF TAX NOT DEDUCTED BY THE A SSESSEE ON THE INTEREST CHARGES PAID TO NON-BANKING FINANCE. COMPA NIES U/S 194A AND NON-COLLECTION OF TCS ON SCRAP SALE U/S 206C OF THE I.T. ACT. THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE FAULT WAS ESTABLISHED CONCLUSIVELY AND WAS ADMITTED BY THE ASSESSEE. 2. HOLDING THAT THE ASSESSEE BEING IGNORANT OF LAW CAN BE SAID TO HAVE A REASONABLE CAUSE WITHIN THE MEANING OF SECTION 273B OF THE I.T. ACT. THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT IN ASSESSE ES CASE WHO IS AVAILING SERVICES OF QUALIFIED TAX CONSULTANTS IGNORANCE OF LAW CAN NOT BE A VALID GROUND FOR SUCH RELIEF. 3. HOLDING THAT THE IMPOSITION OF PENALTY U/S 271C OF THE I.T. ACT IS NOT JUSTIFIED AS IT WOULD AMOUNT TO PENALIZING THE ASSE SSEE FOR AN OMISSION DID NOT CAUSE ANY LOSS OF REVENUE. WE HAVE HEARD SMT. PARMINDER KAUR SR. DR ON BEHALF OF THE REVENUE AND SHRI R.S. SINGHVI THE LD. COUNSEL ON BEHALF OF THE ASSESSEE. 4. ON A CAREFUL CONSIDERATION OF THE FACTS A ND CIRCUMSTANCES OF THE CASE AND A PERUSAL OF THE PAPERS ON RECORD AND THE ORDERS OF T HE AUTHORITIES BELOW WE HOLD AS FOLLOWS :- ITA NOS. 5721 TO 5724 /DEL/2012 AYS 2006-07 2007-08 2007-08 2009-10 ITO VS. CORONATION INFRASTRUCTURE LT D. 3 4.1 THE FIRST APPELLATE AUTHORITY GAVE A FINDIN G THAT THE ASSESSEE HAS SUBSEQUENT TO THE SURVEY PAID TDS ALONGWITH INTEREST ON FINA NCE CHARGES PAID TO THE FOLLOWING FOUR NON BANKING FINANCIAL COMPANIES :- I) TATA CAPITAL LTD. II) L & T FINANCE LTD. III) SRI INFRASTRUCTURE FINANCE LTD. IV) MAGMA SHRACHI FIN. LTD. 5. THE FACTUAL FINDING IS ALSO GIVEN THAT A LL THESE NBFCS HAVE ACCOUNTED FOR THE FINANCIAL CHARGES EARNED FROM THE ASSESSEE IN THEIR RESPECTIVE INCOME TAX RETURN AND FILED U/S 139 OF THE ACT AND THAT THEY HAD ALSO DULY PAID THE TAXES THEREON. UNDER THESE CIRCUMSTANCES THE ASSESSEE COULD NOT HA VE BEEN HELD AS AN ASSESSEE IN DEFAULT. DESPITE THIS LEGAL POSITION THE ASSESEE H AD PAID THE TDS AND INTEREST THEREON. THE ASSESSEE PLEADED THAT IT WAS UNDER A B ONAFIDE BELIEF THAT NO TAX NEED TO BE DEDUCTED AT SOURCE IN CASES WHERE TERM LOANS WERE TAKEN FROM NBFCS. IN THESE CASES THE REPAYMENT SCHEDULED IS FIXED AND IN CLUDES THE PRINCIPLE AMOUNT AS WELL AS THE INTEREST THEREON AND POST DATED CHEQUES ARE COLLECTED. ON THESE FACTS WE ARE CONVINCED WITH THE EXPLANATION OF THE ASSESE EE THAT IT ACTED IN A BONAFIDE MANNER AS IT WAS UNDER A BONAFIDE BELIEF THAT NO TD S NEEDS TO BE MADE ON THE SAID PAYMENTS. 6. AS FAR AS TCS ON SALE OF SCRAP IS CONCERNE D THE FIRST APPELLATE AUTHORITY HAS NOTED THAT THE ASSESSEE IS NOT A MANUFACTURER AND U NDER THESE CIRCUMSTANCES THE SECTION ITSELF DOES NOT APPLY. WE DO NOT FIND ANY I NFIRMITY IN THIS FINDING. AS THE ITA NOS. 5721 TO 5724 /DEL/2012 AYS 2006-07 2007-08 2007-08 2009-10 ITO VS. CORONATION INFRASTRUCTURE LT D. 4 EXPLANATION GIVEN BY THE ASSESSEE IS BONAFIDE WE HO LD THAT THE FIRST APPELLATE AUTHORITY WAS RIGHT IN DELETING THE PENALTY BY RELY ING ON THE FOLLOWING JUDGMENTS :- A) CIT VS. ELI LILLY AND OTHERS 312 ITR 2 25(SC) B) HINDUSTAN STEEL LTD. VS. STATE OF ORISS A 83 ITR 26 (SC) C) CIT V (1) SENEMA SA FRANCE (2) SENEMA INDIA LIAISON OFFICE 266 ITR 76 (DHC) D) CIT VS. CADBURY INDIA LTD. 55 DTR 318 ( DEL.) 7. IN THE RESULT ALL THE APPEALS OF THE RE VENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST NOVEMBER 2014. SD/- SD/- (GEORGE GEORGE K) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 21 ST NOVEMBER 2014 *VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DEPUTY REGISTRAR