ADDL CIT (TDS) RG-1, MUMBAI v. AMERICAN SHCOOL OF BOMBAY EDUCATION TRUST, MUMBAI

ITA 6351/MUM/2009 | 1999-2000
Pronouncement Date: 31-01-2011 | Result: Dismissed

Appeal Details

RSA Number 635119914 RSA 2009
Assessee PAN AAATT9038K
Bench Mumbai
Appeal Number ITA 6351/MUM/2009
Duration Of Justice 1 year(s) 1 month(s) 21 day(s)
Appellant ADDL CIT (TDS) RG-1, MUMBAI
Respondent AMERICAN SHCOOL OF BOMBAY EDUCATION TRUST, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 31-01-2011
Assessment Year 1999-2000
Appeal Filed On 09-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI R.S. SYAL (AM) & SMT. ASHA VIJAYARAGHA VAN (JM) I.T.A.NOS.6349 TO 6351/MUM/2009 (A.YS. 1997-98 TO 1999-2000) ASST.COMMR. OF INCOME-AX(TDS) RANGE-1 8 TH FLOOR SMT.K.G.MITTAL AYURVEDIC HOSPITAL BLDG. CHARNI RD. (W) MUMBAI-400 002. VS. AMERICAN SCHOOL OF BOMBAY EDUCATION TRUST SF-2 G-BLOCK BKC BANDRA (E) MUMBAI-400 051. PAN: AAATT9038K APPELLANT RESPONDENT C.O. NOS. 141 TO 143/MUM/2010 (ARISING OUT OF I.T.A.NOS.6349 TO 6351/MUM/2009) (A.YS. 1997-98 TO 1999-2000) AMERICAN SCHOOL OF BOMBAY EDUCATION TRUST SF-2 G-BLOCK BKC BANDRA (E) MUMBAI-400 051. PAN: AAATT9038K VS. ASST.COMMR. OF INCOME-AX(TDS) RANGE-1 8 TH FLOOR SMT.K.G.MITTAL AYURVEDIC HOSPITAL BLDG. CHARNI RD. (W) MUMBAI-400 002. CROSS OBJECTOR RESPONDENT DEPARTMENT BY SHRI SANDEEP GOYAL. ASSESSEE BY SHRI PORUS KAKA . O R D E R PER BENCH : THIS BATCH OF THREE APPEALS BY THE REVENUE AND EQU AL NUMBER OF CROSS OBJECTIONS BY THE ASSESSEE ARISE OUT OF THE THREE S EPARATE ORDERS PASSED BY THE CIT(A) ON 24-09-2009 IN RELATION TO THE ASSTT. YEA RS 1997-98 TO 1999-2000 DELETING PENALTY IMPOSED BY THE AO U/S.271C OF THE ACT. SINCE ALL THE APPEALS ARE BASED ON IDENTICAL FACTS AND COMMON GROUND OF APPEA L WE ARE THEREFORE ITA NOS.6349 TO 6351/M/09 & CO NOS. 141 TO 143/M/10. 2 PROCEEDING TO DISPOSE OF THESE APPEALS BY A CONSOLI DATED ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT A SURV EY ACTION U/S.133A WAS TAKEN UPON THE ASSESSEE ON 24-01-2006. ORDERS U/S. 201(1) AND 201(1A) WERE PASSED BY THE DCIT (TDS). THEREAFTER PENALTY WAS LEVIED U/S.271C INTER ALIA IN RESPECT OF THE YEARS UNDER CONSIDERATION. WHEN THE MATTER CAME UP BEFORE THE LD. CIT(A) THE ASSESSEE CONTENDED THAT THE TRIBUNA L VIDE ORDER DATED 01-07- 2009 IN ITA NOS.3622 TO 3624/M/07 HAS OBSERVED THAT THE INITIATION OF PROCEEDINGS IN THE INSTANT YEARS WAS BEYOND THE PER IOD OF 6 YEARS AND HENCE BARRED BY LIMITATION. CONSIDERING THE FACT THAT THE TRIBUNAL HAS QUASHED THE ORDERS U/S.201(1) AND 201(1A) IN RESPECT OF THESE Y EARS THE LD. CIT(A) ORDERED FOR THE DELETION OF PENALTY U/S.271C IN THESE YEARS AGAINST WHICH THE REVENUE HAS COME UP IN APPEALS BEFORE US. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. SHORN OF UNNECESSARY DETAILS IT IS SEEN TH AT SEC. 271C PROVIDES FOR IMPOSITION OF PENALTY FOR FAILURE TO DEDUCT TAX AT SOURCE. SUB-SEC. (1) OF THE SECTION PROVIDES THAT IF ANY PERSON FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX AS REQUIRED BY OR UNDER THE PROVISIONS OF CHAPTER X VII-B OR FAILS TO PAY THE TAX AS REQUIRED BY OR U/S. 115-O(2) OR SECOND PROVISO TO S EC. 194B THEN SUCH PERSON SHALL BE LIABLE TO PAY BY WAY OF PENALTY A SUM EQ UAL TO THE AMOUNT OF TAX WHICH SUCH PERSON FAILED TO DEDUCT OR PAY AS AFORESAID. A BARE PERUSAL OF THIS PROVISION INDICATES THAT PENALTY U/S.271C CAN BE IMPOSED ONLY WHEN THERE IS A FAILURE ON THE PART OF THE ASSESSEE TO DEDUCT OR PAY THE WHOLE OR ANY PART OF TAX AND THEN THE QUANTUM OF PENALTY IS EQUAL TO THE AMOUNT OF TA X WHICH SUCH PERSON FAILED TO ITA NOS.6349 TO 6351/M/09 & CO NOS. 141 TO 143/M/10. 3 DEDUCT OR PAY. FROM HERE IT EMERGES THAT THERE MUS T BE SOME SUM WHICH SUCH PERSON FAILED TO DEDUCT OR PAY. SUCH AMOUNT CONSTI TUTES THE BASIS FOR IMPOSITION OF PENALTY U/S.271C. IN OTHER WORDS THE LIABILITY OF THE ASSESSEE U/S.201(1) IS A PRE-CONDITION FOR IMPOSITION OF PENALTY U/S.271C. I F THE VERY ORDER PASSED U/S.201(1) CREATING LIABILITY HAS BEEN SET ASIDE ON ACCOUNT OF LIMITATION AND THERE IS NO POSSIBILITY OF ANY FRESH ORDER BEING LIKELY TO BE PASSED U/S.201(1) THERE REMAINS NO QUESTION OF THE ASSESSEE BEING DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX. THE NATURAL COROLLARY WHICH THEREFORE FOLLOWS IS THAT IF THE ORDER U/S.201(1) CEASES TO BE OPERATIVE IT WIL L HAVE THE EFFECT OF THE ASSESSEE BEING NOT IN DEFAULT. ONCE THE ASSESSEE IS NOT IN DEFAULT FOR FAILURE TO DEDUCT OR PAY TAX AT SOURCE NATURALLY THERE CANNO T ANY QUESTION OF IMPOSING PENALTY U/S.271C FOR THE REASON THAT THE VERY BASIS OF SUCH PENALTY IS THE AMOUNT OF TAX WHICH SUCH PERSON FAILED TO DEDUCT OR PAY AS PER LAW AND WHEN THERE IS NO SUCH AMOUNT IN EXISTENCE THE POSSIBILITY OF IMPO SING PENALTY WILL AUTOMATICALLY BE RULED OUT. 4. ADVERTING TO THE FACTS OF THE INSTANT CASE IT I S NOTICED THAT THE TRIBUNAL IN THE AFORENOTED ORDER HAS SET ASIDE THE ORDER U/S. 201(1) AND 201(1A) ON ACCOUNT OF LIMITATION. THE EFFECT OF THE TRIBUNAL ORDER IS THAT THE ASSESSEE IS NOT DEEMED TO BE IN DEFAULT IN RESPECT OF ANY FAILURE T O DEDUCT OR PAY TAX AT SOURCE. IN SUCH CIRCUMSTANCES THE QUESTION OF PENALTY U/S. 271C CANNOT ARISE. 5. AS THE LD. CIT(A) HAS ALSO ORDERED FOR THE CANCELLATION OF PENALTY U/S.271C ON THE BASIS OF THE TRIBUNAL ORDER WITHOU T GOING INTO THE MERITS WE ARE REFRAINING OURSELVES FROM CONSIDERING THE SUBMISSIO NS BY BOTH THE SIDES ON MERITS. RESULTANTLY THE IMPUGNED ORDER IS UPHELD. ITA NOS.6349 TO 6351/M/09 & CO NOS. 141 TO 143/M/10. 4 6. THE CROSS OBJECTIONS FILED BY THE ASSESSEE IN RE SPECT OF THESE YEARS HAVE BECOME ACADEMIC IN VIEW OF OUR DECISION ON THE APPE ALS BY THE REVENUE. 7. IN THE RESULT THE APPEALS BY THE REVENUE ARE DI SMISSED AND THE CROSS OBJECTIONS BY THE ASSESSEE ARE DISMISSED HAVING BE COME INFRUCTUOUS. ORDER PRONOUNCED ON THE 31ST DAY OF JANUARY 2011. SD/- SD/- (SMT. ASHA VIJAYARAGHAVAN) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 31ST JANUARY 2011. NG: COPY TO : 1. DEPARTMENT. 2.ASSESSEE. 3 CIT(A)-14 MUMBAI. 4 CIT (TDS) MUMBAI. 5.DR A BENCH MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER ASST.REGISTRAR ITAT MUMBAI. ITA NOS.6349 TO 6351/M/09 & CO NOS. 141 TO 143/M/10. 5 DETAILS DATE INITIALS DESIGNA TION 1. DRAFT DICTATED ON 25-01-2011 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 25-01-2011 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/ AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER *