Glaxo Smithkline Consumer Healthcare Ltd., Nabha v. DCIT (TDS), Chandigarh

ITA 848/CHANDI/2013 | 2010-2011
Pronouncement Date: 16-04-2014 | Result: Allowed

Appeal Details

RSA Number 84821514 RSA 2013
Assessee PAN AACCS0144E
Bench Chandigarh
Appeal Number ITA 848/CHANDI/2013
Duration Of Justice 7 month(s) 28 day(s)
Appellant Glaxo Smithkline Consumer Healthcare Ltd., Nabha
Respondent DCIT (TDS), Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 16-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 16-04-2014
Date Of Final Hearing 25-03-2014
Next Hearing Date 25-03-2014
Assessment Year 2010-2011
Appeal Filed On 19-08-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA JUDICIAL MEMBER ITA NO.848/CHD/2013 ASSESSMENT YEAR : 2010-11 M/S GLAXO SMITHKLINE CONSUMER LTD. VS. THE D.C.I .T.(TDS) PATIALA ROAD NABHA. CHANDIGARH. PAN: AACCS0144E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROHIT JAIN RESPONDENT BY : SHRI J.S.NAGAR DR DATE OF HEARING : 25.03.2014 DATE OF PRONOUNCEMENT : 16.04.2014 O R D E R PER SUSHMA CHOWLA J.M. : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS) CHANDIGARH DA TED 25.06.2013 AGAINST THE PENALTY LEVIED UNDER SECTION 272B OF IN COME TAX ACT 1961 (IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AND IN LAW IN AFFIRMING THE LEVY OF PENALTY OF RS.10 000/- UNDER SECTION 27 2B OF THE INCOME TAX ACT 1961 ('THE ACT') FOR ALLEGED FAILURE ON THE PART OF THE APPELL ANT TO COMPLY WITH THE PROVISIONS OF SECTION 139A OF THE ACT IN RESPECT OF THE TDS DEDUC TED FROM THE PAYMENTS MADE TO ITS EMPLOYEES. 2. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT IN RESPECT OF 7 EMPLOYEES THE CO RRECT/VALID PAN WERE NOT MADE AVAILABLE TO THE APPELLANT BY THE DEDUCTEES AND THU S THERE WAS NO DEFAULT ON THE PART OF THE APPELLANT UNDER SECTION 139A(5B) OF THE ACT. 3. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AND IN LAW IN NOT ACCEPTING THE CONTENTION OF THE APPELLANT THAT IN R ESPECT OF 3 EMPLOYEES NO PAN WAS MADE AVAILABLE TO THE APPELLANT BY THE DEDUCTEES AN D THUS THERE WAS NO DEFAULT ON THE PART OF THE APPELLANT UNDER SECTION 139A OF THE ACT. 2 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW PENALTY IS EVEN OTHERWISE NOT LEVIABLE SINCE THE APPELLANT HAS IN THE MEANWHILE FILED THE REVISED TDS RETURN. THE APPELLANT CRAVES LEAVE TO ADD AMEND ALTER OR VARY THE ABOVE GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING . 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS A GAINST THE LEVY OF PENALTY UNDER SECTION 272B OF THE ACT. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IN THE E-TDS QUARTERLY STATEMENT OF DEDUCTION OF TAX IN FORM NO. 24Q RELATING TO FINANCIAL YEAR 2009-10 FILED ON 17.5.2010 HAD DEFAU LTED IN QUOTING PAN NUMBERS OF 45 DEDUCTEES. THE PAN NUMBERS OF 45 DED UCTEES QUOTED BY THE ASSESSEE WERE FOUND TO BE INVALID AND NO CORREC TION STATEMENT WAS FILED BY THE ASSESSEE IN THIS REGARD. THE ASSESSIN G OFFICER HELD THE ASSESSEE TO BE LIABLE TO PENALTY UNDER SECTION 272B OF THE ACT AND IMPOSED PENALTY OF RS.10 000/-. THE EXPLANATION OF THE ASSESSEE BEFORE THE CIT (APPEALS) WAS THAT OUT OF 45 DEDUCTEES NO TAX WAS DEDUCTED IN RESPECT OF 34 DEDUCTEES AS THE AMOUNT WAS BELOW THE MAXIMUM AMOUNT CHARGEABLE TO TAX AND HENCE THERE WAS NO DEFAULT ON THE PART OF THE ASSESSEE ON ACCOUNT OF NON-MENTIONING OF PAN NUMBER S IN RESPECT OF 34 DEDUCTEES. IN RESPECT OF ONE OF THE DEDUCTEES THO UGH NO TAX WAS ACTUALLY REQUIRED TO BE DEDUCED AT SOURCE AS THE TO TAL AMOUNT WAS BELOW THE MAXIMUM AMOUNT CHARGEABLE TO TAX HOWEVER TAX WAS DEDUCTED OUT OF SUCH PAYMENT. BUT THERE WAS NO MERIT IN ANY IMP OSITION OF PENALTY FOR NON FURNISHING OF PAN NUMBER OF SUCH EMPLOYEE. IN RESPECT OF BALANCE 10 EMPLOYEES THE ASSESSEE CLAIMED THAT THE CORRECT/VALID PAN NUMBERS WERE NOT MADE AVAILABLE TO THE ASSESSEE BY THE RESPECTIVE DEDUCTEES. THE CIT (APPEALS) NOTED THAT THE ASSESS EE HAD NOT REVISED ITS TDS RETURNS DESPITE INCORRECT/INVALID PAN NUMBERS. BECAUSE OF THE DEFAULT OF THE ASSESSEE IN NOT QUOTING PAN NUMBERS OF 11 DEDUCTES PENALTY UNDER SECTION 272B OF THE ACT WAS LEVIED AT RS.10 000/-. 3 5. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF T HE CIT (APPEALS). THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT THAT IN RESPECT OF 34 EMPLOYEES AS THE TOTAL AMOUNTS PAID TO THE SAID PER SONS WERE BELOW THE TAXABLE LIMITS THERE WAS NO REQUIREMENT OF TAX DED UCTION AT SOURCE AND HENCE NO DEFAULT IN NOT MENTIONING OF THE PAN NUMBE RS. IN RESPECT OF THE BALANCE 11 DEDUCTEES IT WAS POINTED OUT BY THE LEARNED A.R. FOR THE ASSESSEE THAT CORRECTION STATEMENT OF 10 DEDUCTEES WAS MADE AVAILABLE BEFORE THE ASSESSING OFFICER AND COPY OF WHICH WAS PRODUCED BEFORE THE CIT (APPEALS) AND BOTH THE AUTHORITIES BELOW HADE F AILED TO TAKE IT IN TO CONSIDERATION. OUR ATTENTION WAS DRAWN TO THE COR RECTION STATEMENT FILED ON 3.5.2012 PLACED AT PAGES 1 AND 2 OF THE PA PER BOOK. IT WAS FURTHER POINTED OUT THAT IN RESPECT OF ONE OF THE D EDUCTEES THE TOTAL PAYMENT WAS RS.14048.63 AND THOUGH TAX WAS DEDUCTED AT SOURCE AT RS.410/- AND WAS DEPOSITED IN THE ACCOUNT OF THE TR EASURY BUT THE SAID PERSON HAD LEFT THE JOB AND THERE WAS IN FACT NO RE QUIREMENT TO DEDUCT TAX AT SOURCE OUT OF THE AMOUNT PAID TO THE SAID PE RSON. THE LIST OF THE EMPLOYEES ALONGWITH PAN NUMBERS AND THE PAYMENTS MA DE TO THE RESPECTIVE DEDUCTEES IS PLACED AT PAGES 7 AND 7-A T O THE PAPER BOOK. THE SAID DETAILS WERE PART OF THE REPLY DATED 11.5. 2012 OF PENALTY NOTICE ISSUED UNDER SECTION 272B OF THE ACT BY THE ACIT. 6. THE LEARNED D.R. FOR THE REVENUE POINTED OUT THA T THERE IS NO REASONABLE CAUSE IN THE PRESENT APPEAL AS THE ASSES SEE HAD FAILED TO FURNISH THE REQUISITE DOCUMENTS IN TIME BEFORE THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE RAISED IN THE PRESENT APPEAL IS IN RELATION T O LEVY OF PENALTY UNDER SECTION 272B OF THE ACT FOR THE DEFAULT IN QUOTING OF PAN NUMBERS OF THE DEDUCTEES IN THE E-TDS QUARTERLY STATEMENT FILED IN FORM NO.24Q BY THE ASSESSEE. THE ASSESSEE IN THE SAID FORM NO.24Q REL ATING TO FINANCIAL 4 YEAR 2009-10 HAD WRONGLY QUOTED THE PAN NUMBERS IN RESPECT OF 10 DEDUCTEES. THE ASSESSEE HAD FILED CORRECTION STATE MENT BEFORE THE ASSESSING OFFICER AND ALSO BEFORE THE CIT (APPEALS) BUT THE SAME HAS NOT BEEN CONSIDERED BY THE ASSESSING OFFICER OR THE CIT(A). IN VIEW THEREOF THE ASSESSING OFFICER LEVIED PENALTY OF RS .10 000/- WAS CONFIRMED BY THE CIT (APPEALS). THE CORRECTION ST ATEMENT IS AVAILABLE ON RECORD. THE PROVISIONS OF SECTION 272B(1) OF TH E ACT PROVIDE THAT IF A PERSON FAILED TO COMPLY WITH THE PROVISION OF SEC TION 139A THE ASSESSING OFFICER MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY A SUM OF RS.10 000/- . 8. WE FIND THAT SIMILAR ISSUE OF LEVY OF PENALTY UN DER SECTION 272B OF THE ACT AROSE BEFORE THE CHANDIGARH BENCH OF TRIBUN AL IN ITA NO.441/CHD/2012 & C.O.NO.31/CHD/2012 IN THE CASE OF ITO(TDS) VS. ORIENTAL BANK OF COMMERCE YAMUNANAGAR AND THE TRIB UNAL VIDE ORDER DATED 15.7.2013 HELD AS UNDER: 7. THE ISSUE RAISED IN THE PRESENT APPEAL IS IN REL ATION TO LEVY OF PENALTY UNDER SECTION 272B OF THE ACT FOR THE DE FAULT IN QUOTING OF PAN NUMBERS OF THE DEDUCTEES IN THE E-TDS QUARTE RLY STATEMENT FILED IN FORM NO.26Q BY THE ASSESSEE. THE ASSESSEE IN THE SAID FORM NO.26Q RELATING TO FINANCIAL YEAR 2007-08 HAD WRONGLY QUOTED THE PAN NUMBERS IN RESPECT OF 53 DEDUCTEES. THE ASSESSEE HAD NOT FILED THE CORRECTION STATEMENT BEFORE THE A SSESSING OFFICER OR BEFORE PASSING OF THE ORDER OF THE CIT (APPEALS) ALSO. IN VIEW THEREOF THOUGH THE ASSESSING OFFICER LEVIED PENALTY OF RS.5 30 000/- THE SAME WAS RESTRICTED TO RS.10 000/- BY THE CIT ( APPEALS). THE PROVISIONS OF SECTION 272B(1) OF THE ACT PROVIDE TH AT IF A PERSON FAILED TO COMPLY WITH THE PROVISION OF SECTION 139A THE ASSESSING OFFICER MAY DIRECT THAT SUCH PERSON SHALL PAY BY W AY OF PENALTY A SUM OF RS.10 000/- . IN VIEW OF THE ABOVE SAID PROVISIONS OF THE ACT WE ARE IN AGREEMENT WITH THE ORDER OF THE CIT (APPE ALS) IN RESTRICTING LEVY OF PENALTY UNDER SECTION 272B OF T HE ACT AT RS.10 000/-. 8. SIMILAR ISSUE AROSE BEFORE THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASES OF VARIOUS ASSESSEES AND THE TRIBUNAL IN THE UNDERMENTIONED CASES HAD UPHELD THE LEVY OF PENALTY UNDER SECTION 272B OF THE ACT AT RS.10 000/- : SNO. NAME OF ITA NO ASSTT.YEAR DATE OF 5 ASSESSEE DECISION 1. ITO(TDS) VS. STATE DIRECTOR SECONDARY EDUCATION CHANDIGARH 777/CHD/2012 2009-10 22.11.2012 2. ADVANCED MICRO DEVICES PVT. LTD. VS. ITO(TDS) PANCHKULA 490/CHD/2012 2006-07 26.11.2012 3. THE SARASWATI INDUSTRIAL SYNDICATE LTD. VS. ITO (TDS) PANCHKULA 830 TO 833/CHD/2012 2009-10 31.01.2013 4. THE BRANCH MANAGER VS. ITO(TDS) PANCHKULA 853 TO 855/CHD/2012 2008-09 & 2009- 10 28.02.2013 9. THE LEARNED A.R. FOR THE ASSESSEE HAD ALSO FILED PAPER BOOK IN WHICH THE ORDER OF THE TRIBUNAL IN THE CASE OF I TO VS. AMBALA DISTT. CO-OP. MILK PRODUCERS UNION LTD. IN ITA NO.9 41/CHD/2011 IS ATTACHED UNDER WHICH THE PENALTY OF RS.10 000/- UNDER SECTION 272B OF THE ACT HAS BEEN UPHELD AND IT HAS BEEN FUR THER HELD THAT THERE IS NO PROVISION IN SECTION 272B FOR LEVY OF P ENALTY @ RS.10 000/- PER DEFAULT. 10. HOWEVER THE LEARNED A.R. FOR THE ASSESSEE PLAC ED RELIANCE ON THE RATIO LAID DOWN BY THE CHANDIGARH BENCH OF T HE TRIBUNAL IN THE CORPORATION BANK VS. ITO IN ITA NOS.185 TO 187/ CHD/2013 RELATING TO ASSESSMENT YEAR 2009-10 WHEREIN VIDE OR DER DATED 16.4.2013 THE TRIBUNAL HAD DELETED THE PENALTY LE VIED UNDER SECTION 272B OF THE ACT AT RS.10 000/-. THE TRIBUN AL (IN THE DIFFERENT COMBINATION) VIDE ORDER DATED 16.4.2013 H AD DELETED THE SAID PENALTY. HOWEVER IN THE EARLIER DECISIONS TH E CHANDIGARH BENCH OF THE TRIBUNAL HAD UPHELD THE LEVY OF PENALT Y UNDER SECTION 272B OF THE ACT LEVIED FOR DEFAULT IN FURNISHING TH E PAN NUMBER TO THE EXTENT OF RS.10 000/- IN A SERIES OF DECISIONS WHICH WERE NOT TAKEN NOTE OF BY THE OTHER BENCH OF THE TRIBUNAL. WE ALSO FIND THAT THE ASSESSEE HAD DEFAULTED IN NOT BRINGING TO THE K NOWLEDGE OF THE BENCH THE SAID DECISIONS WHICH HAVE BEEN DECIDED EA RLIER TO THE ORDER PASSED ON 16.4.2013. IN ANY CASE THE PERUSA L OF THE ORDER REFLECTS THE EFFORTS BEING MADE BY THE ASSESSEE THE REIN TO COLLECT THE PAN NUMBERS OF THE DEDUCTEES AND NECESSARY DETAILS COULD NOT BE FURNISHED AND THE TRIBUNAL THUS HELD THAT THERE WAS REASONABLE CAUSE IN NOT FURNISHING THE DETAILS AND HENCE NO PE NALTY. HOWEVER THE ASSESSEE HAS FAILED TO ESTABLISH ITS CASE OF RE ASONABLE CAUSE FOR THE DEFAULT. IN VIEW OF THE EARLIER ORDERS OF THE TRIBUNAL ON THE ABOVE SAID ISSUE OF LEVY OF PENALTY UNDER SECTION 2 72B OF THE ACT WE UPHOLD THE IMPOSITION OF PENALTY UNDER SECTION 2 72B OF THE ACT AT RS.10 000/-. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE THUS DISMISSED. 9. THE ISSUE TO BE CONSIDERED IN THE PRESENT APPEAL IS WHETHER THE ASSESSEE HAD REASONABLE CAUSE JUSTIFYING NON LEVY O F PENALTY UNDER 6 SECTION 272 B OF THE ACT. THE ASSESSEE CLAIMED THA T OUT OF 45 DEDUCTEES THERE WAS NO REQUIREMENT TO DEDUCT TAX IN RESPECT O F 34 DEDUCTEES AS THE PAYMENTS TO THEM WERE BELOW THE TAXABLE LIMITS. IN RESPECT OF 10 DEDUCTEES THE ASSESSEE HAD FILED CORRECTION STATEM ENT COPIES OF WHICH HAVE BEEN FILED BEFORE US AND WERE ALSO FILED BEFOR E THE AUTHORITIES BELOW. IN RESPECT OF ONE DEDUCTEE THOUGH TAX WAS DEDUCTED AT SOURCE BUT THERE WAS NO REQUIREMENT TO DEDUCT TAX AT SOURC E AS THE TOTAL AMOUNT PAID TO THE SAID DEDUCTEE WAS BELOW THE TAXABLE LIM IT AND THE PAN NUMBER OF SUCH EMPLOYEE WAS NOT AVAILABLE WITH THE ASSESSEE AS HE HAD LEFT THE SERVICE AND THE SAME COULD NOT BE FILED. WE FIND MERIT IN THE PLEA OF THE ASSESSEE THAT THERE WAS REASONABLE CAUS E JUSTIFYING NON LEVY OF PENALTY UNDER SECTION 272B OF THE ACT. IN RESPE CT OF 34 DEDUCTEES THERE IS NO DEFAULT ON THE PART OF THE ASSESSEE AS THE PAYMENTS TO MADE WERE BELOW THE LIMITS ON WHICH NO TAX HAD TO BE DED UCTED. SO THERE WAS NO REQUIREMENT OF FURNISHING PAN NUMBERS IN RESPECT OF SUCH 34 DEDUCTEES. IN RESPECT OF 10 DEDUCTEES CORRECT PAN NUMBERS WERE AVAILABLE AND ONCE THE INFORMATION IS AVAILABLE WIT H THE ASSESSEE AND GIVEN EFFECT TO THE ASSESSEE IS NOT EXIGIBLE TO LE VY OF PENALTY UNDER SECTION 272B OF THE ACT. HOWEVER THIS CLAIM OF TH E ASSESSEE NEEDS VERIFICATION AT THE LEVEL OF THE ASSESSING OFFICER AND HENCE THE MATTER IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER WHO SHALL AFFORD REASONABLE OPPORTUNITY TO THE ASSESSEE AND IN TURN VERIFY THE CLAIM OF CORRECTION STATEMENT FILED BY THE ASSESSEE. IN CAS E THERE IS NO DEFAULT IN RESPECT OF THE SAID 10 DEDUCTEES THEN NO PENALTY I S LEVIABLE UNDER SECTION 272B OF THE ACT. HOWEVER IF THERE IS DEFA ULT OF NON FURNISHING OF EVEN ONE PAN NUMBER OF ANY OF THE EMPLOYEES THE ASSESSEE IS EXIGIBLE TO LEVY OF PENALTY UNDER SECTION 272B OF T HE ACT AT RS.10 000/-. THE ASSESSING OFFICER SHALL DECIDE THE ISSUE IN LIN E WITH OUR ORDER. 7 10. NOW COMING TO THE DEDUCTEES IN RESPECT OF WHOM PAYMENT IS BELOW THE LIMIT ON WHICH TAX HAD TO BE DEDUCTED. THOUGH THE ASSESSEE HAD DEDUCTED TAX AT SOURCE OUT OF THE PAYMENT MADE TO T HE SAID DEDUCTEE BUT THERE WAS SUCH REQUIREMENT UNDER THE ACT TO DEDUCT THE TAX AT SOURCE AND IN VIEW THEREOF THERE WAS NO LIABILITY UPON THE AS SESSEE TO FURNISH INFORMATION IN RESPECT OF PAN NUMBERS OF SUCH DEDUC TEES. THE SAID DEFAULT OF THE ASSESSEE IN NOT FURNISHING PAN NUMB ERS OF SUCH DEDUCTEES IS NOT GOVERNED BY THE PROVISIONS OF THE ACT AND AT BEST IT COULD BE SAID THAT THE ASSESSEE HAD REASONABLE CAUSE IN NOT FURNI SHING THE SAID PAN NUMBERS OF SUCH DEDUCTEES. NO DEFAULT CAN BE ATTRI BUTED TO THE ASSESSEE IN RESPECT OF SUCH DEDUCTEES. IN VIEW THEREOF THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. 11. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF APRIL 2014. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 16 TH APRIL 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR ITAT CHANDIGARH 8