ITO (TDS), Panchkula v. Superintendent of Police, Yamunanagar

ITA 942/CHANDI/2011 | 2009-2010
Pronouncement Date: 19-12-2011 | Result: Dismissed

Appeal Details

RSA Number 94221514 RSA 2011
Bench Chandigarh
Appeal Number ITA 942/CHANDI/2011
Duration Of Justice 2 month(s) 26 day(s)
Appellant ITO (TDS), Panchkula
Respondent Superintendent of Police, Yamunanagar
Appeal Type Income Tax Appeal
Pronouncement Date 19-12-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 19-12-2011
Assessment Year 2009-2010
Appeal Filed On 23-09-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI H.L.KARWA HON'BLE VICE PRESIDENT AND SHRI D.K.SRIVASTAVA ACCOUNTANT MEMBER ITA NO. 942/CHD/2011 ASSESSMENT YEAR: 2009-10 THE ITO (TDS) VS SUPERINTENDENT OF POLICE PANCHKULA SP OFFICE MINI SECRETARIAT YAMUNANAGAR RTKS05662G (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. JAISHREE SHARMA RESPONDENT BY : NONE DATE OF HEARING : 28.11.2011 DATE OF PRONOUNCEMENT : 19.12.2011 ORDER PER H.L.KARWA VP THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF CIT(A) PANCHKULA DATED 12.8.2011 IN CANCELING THE PENALTY OF RS. 19 60 000/- LEVIED BY THE ITO (TDS) U/S 272B(1) OF THE INCOME TAX ACT 1961 (IN SHORT 'THE ACT') RELATING TO ASSESSMENT YE AR 2009-10. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A CENTRAL / STATE GOVERNMENT BODY. DURING THE LAST QUARTER OF FINANCIAL YEAR 2008-09 IT HAS FILED ITS TDS RETURN WELL WITH IN TIME UNDER RECEIPT 2 NO. RRR 062730100004924. IN THIS RETURN THE ASSES SEE SUBMITTED THE RECORD OF 258 DUDUCTEES OUT OF WHICH 196 PAN WERE NOT AVAILABLE. AS PER THE ASSESSING OFFICER THE ASSESSEE WAS GIVEN O PPORTUNITIES TO EXPLAIN ITS POSITION AND FILE THE CORRECT DETAILS I N THIS REGARD. HOWEVER THE ASSESSEE DID NOT FILE ANY REPLY DUE TO WHICH TH E ASSESSING OFFICER CONCLUDED THAT ASSESSEE COMMITTED A DEFAULT U/S 139 (A)(5B) FOR WHICH PENALTY U/S 272B OF THE ACT WAS LEVIABLE . THE ITO (TDS) THEREFORE LEVIED A PENALTY OF RS. 19 60 000/- @ RS. 10 000/- PER DEFAULT VIDE HIS ORDER DATED 30.8.2010 3. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) THE ASSESSEE SUBMITTED WRITTEN SUBMISSIONS WHICH READ AS UNDER:- I) WE HAVE REVISED OUR TDS RETURN ON 19.7.2011 AND 2.8.2011 VIDE ACKNOWLEDGMENT NO. 026720100035143 026720100035123 AND 026720100036346. THESE RETURNS HAVE BEEN SHOWN AS DULY ACCEPTED AT NSDL SI TE AS PER CORRECTION STATEMENT IN C-5. AFTER THIS REV ISED RETURN PAN OF ONLY 5 EMPLOYEES ARE PENDING WHICH ARE DECEASED AND PAN NO. COULD NOT BE GOT IN THOSE CASES. 4. THE CIT(A) DELETED THE PENALTY FOLLOWING THE DEC ISION OF THE ITAT AHMEDABAD BENCH D IN THE CASE OF FINANCIAL CO-OPERATIVE BANK LTD VS ITO WARD 2(3) SURAT (2009) 116 ITD 358 (A HD). 3 5. WE HAVE HEARD THE LD. DR AT LENGTH AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THIS CASE THE I TO (TDS) HAS LEVIED THE PENALTY FOR DEFAULT U/S 139 (A) (5B) (IV) AS PER WH ICH A PERSON WHO IS RESPONSIBLE FOR DEDUCTING TAX UNDER CHAPTER XVII-B SHALL QUOTE THE PAN NUMBER OF A PERSON TO WHOM SUCH INCOME/SUM HAS BEE N PAID IN ALL THE STATEMENTS PREPARED AND DELIVERED IN ACCORDANCE WIT H THE PROVISIONS OF SECTION 200(3) OF INCOME TAX ACT. SECTION 272B (1 ) PROVIDES THAT IF A PERSON FAILS TO COMPLY WITH THE PROVISIONS OF SECTI ON 139 A THE ASSESSING OFFICER MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY A SUM OF RS. 10 000.. IN THE INSTANT CASE THE LD. CIT(A) HAS DELETED / CANCELLED THE PENALTY ON THE GROUND THAT THERE WAS A REASONABLE CAUSE FOR THE SAID FAILURE. SECTION 273B OF THE AC T PROVIDES AS UNDER:- NOTWITHSTANDING ANYTHING CONTAINED IN THE PROVISIONS OF SECTION 272B NO PENALTY SHALL BE IMPOSABLE ON THE PERSON OR THE ASSESSEE AS THE CAS E MAY BE FOR ANY FAILURE REFERRED TO IN THE SAID PROVISIONS IF HE PROVES THAT THERE WAS A REASONABL E CAUSE FOR THE SAID FAILURE. 6. IN THE INSTANT CASE THE ONLY QUESTION BEFORE US IS WHETHER THERE WAS REASONABLE CAUSE FOR ALLEGED FAILURE ON THE PAR T OF THE ASSESSEE. IN THE INSTANT CASE THE ITO (TDS) WHILE GOING THROUGH THE QUARTERLY RETURN IN FORM NO. 26Q FILED BY THE ASSESSEE NOTED THAT I T HAS OMITTED TO QUOTE PAN / HAD QUOTED INVALID PAN IN 196 CASES. AS REGA RDS THE REASONABLE CAUSE IT WAS PLEADED ON BEHALF OF THE ASSESSEE THA T TDS WAS DEDUCTED AND DEPOSITED IN TIME IN GOVERNMENT TREASURY. THE D EFAULT IS ONLY WITH 4 REGARD TO THE WRONG QUOTING OF PAN OF 196 OF THE DU DUCTEES SUCH DUDUCTEES QUOTED WRONG PAN. HOWEVER CORRECT PAN WAS GIVEN AS SOON AS DEFAULT WAS BROUGHT TO THE NOTICE OF THE AS SESSEE. IN THIS CASE THE CIT(A) HAS CATEGORICALLY OBSERVED THAT THE ASS ESSEE DEDUCTED TDS CORRECTLY AND REVISED PAN AND FILED THE REVISED STA TEMENT ON FORM NO. 26G HENCE THERE WAS SUFFICIENT COMPLIANCE OF THE P ROVISIONS OF SECTION 139A. THERE IS NO DISPUTE THAT THE ASSESSEE QUOTE D INVALID PAN FOR 196 DUDUCTEES WHICH WAS CORRECTED ON BEING POINTED OUT BY ITO(TDS). IN THE INSTANT CASE FAILURE TO QUOTE RIGHT PAN HAS BE EN OCCURRED AS THE CONCERNED DEPOSITOR HAD MISQUOTED PAN. THERE IS AL SO NO DISPUTE THAT THE PAN WAS CORRECTED AFTER ASCERTAINING THE SAME F ROM THE RESPECTIVE DUDUCTEES. IN THE CASE OF FINANCIAL CO-OPERATIVE B ANK LTD V ITO WARD 2(3) SURAT (2009) 116 ITD 358 (AHD) IT WAS HELD A S UNDER:- HAVING CONSIDERED THE PROVISIONS OF SECTION 139A(5 ) AND (6) AND RULES 114B( C ) 114B( F ) 114C(2)( C ) AND 114D OF THE INCOME-TAX RULES 1962 IT WAS OPINED THAT : ( I ) AN OBLIGATION TO QUOTE PAN OR GIR NUMBER IN THE DOCUMENTS FOR ENTERING INTO THE TRANSACTIONS OF THE TYPE MENTIONED IN ABOVE PROVISIONS IS OF THE CUSTOMERS AND NOT OF THE BANK; ( II ) RULE 114C(2)( C ) IMPOSES AN OBLIGATION ON MANAGER OR AN OFFICER OF A BANK ONLY TO ENSURE THAT THE PERSON ENTERING INTO TRANSACTION OF THE NATURE REFE RRED TO IN SECTION 139A(5)/139A(6) HAS QUOTED HIS PAN IN THE R ELEVANT DOCUMENTS. FURTHER FROM THE SECOND PROVISO TO RULE 114B IT IS CLEAR THAT PERSON WHO DOES NOT HAVE A PAN BU T ENTERS INTO ANY TRANSACTION SPECIFIED IN RULE 114B IS TO MAKE A DECLARATION IN FORM NO. 60 GIVING THEREIN THE PARTI CULARS OF SUCH A TRANSACTION. 5 ( IV ) RULE 114D REQUIRES THAT THE BANK MANAGER WILL FORWARD A COPY OF FORM NO. 60 TO THE CIT (CENTRAL) INFORMATION BRANCH HAVING PERIPHERAL JURISDICTION O VER THE AREA IN WHICH THE TRANSACTION HAS BEEN ENTERED INTO . THE CUMULATIVE ANALYSIS OF AFORESAID RULES LEADS O NE TO BELIEVE THAT THE ONLY OBLIGATION OF THE BANK MANAGE R IS AS PER RULE 114C(2)( C ) AND THE SAME IS ONLY TO ENSURE THAT A PERSON ENTERING INTO TRANSACTION OF THE NATURE SPEC IFIED UNDER RULE 114B HAS QUOTED HIS PAN DULY AND CORRECT LY. IN OTHER WORDS NONE OF THOSE RULES CASTS AN OBLIGATIO N ON THE MANAGER OF A BANK TO ENSURE THAT FORM NO. 60 FILED BY THE CUSTOMER HAS BEEN DULY FIL LED UP OR NOT. [PARA 9] SIMILARLY NONE OF THE PROVISIONS OF SUB-SECTION (5 ) OR (6) OF SECTION 139A CASTS SUCH AN OBLIGATION ON THE BAN K MANAGER OR THE BANK. [PARA 9.1] THE CUMULATIVE ANALYSIS OF SECTION 139A AND RULES 1 14B TO 114D SHOWS THAT AN OBLIGATION TO QUOTE PAN OR GIR NUMBER OR TO FILE FORM NO. 60 IS THAT OF THE CUSTOM ER AND NOT THAT OF THE BANK. [PARA 9.2] COMING TO THE PROVISIONS OF SECTION 272B SUB-SECTI ON (1) SPEAKS OF LEVY OF PENALTY ON A PERSON WHO HAS FAILE D TO COMPLY WITH THE PROVISIONS OF SECTION 139A; MEANING THEREBY THAT SO FAR AS INSTANT CASE WAS CONCERNED THE BANK COULD BE PENALISED. THE OBLIGATION OF THE BANK UNDE R SUB- SECTION (6) OF SECTION 139A IS ONLY TO ENSURE THAT THE PAN OR GIR NUMBER HAS BEEN DULY QUOTED IN THE DOCUMENTS FURNISHED BY A PERSON IN RELATION TO A TRANSACTION PRESCRIBED UNDER CLAUSE ( C ) OF SUB-SECTION (5) OF SECTION 139A WHICH IN TURN LEADS TO THE RULES 114B TO 114 D AND SO FAR AS RULES 114B TO 114D AND FORM NO. 60 ARE CONCERNED AS ALREADY OBSERVED AN OBLIGATION OF THE BANK UNDER THESE RULES IS ONLY TO ENSURE THAT THE CUSTOM ER HAS QUOTED PAN OR GIR NUMBER CORRECTLY AND IF THE CUSTO MER DID NOT HAVE THE PAN OR GIR NUMBER THEN TO SEE THA T THE PERSON HAS FURNISHED A DECLARATION IN FORM NO. 60 GIVING THEREIN THE PARTICULARS OF TRANSACTION AND TO FORWA RD A COPY OF SUCH A DECLARATION I.E. FORM NO. 60 TO THE CONCERNED COMMISSIONER (CENTRAL) INFORMATION BRANC H. THEREFORE IT COULD BE SAID THAT THE FURNISHING OF INCOMPLETE DECLARATION BY THE CUSTOMER WAS A MISTAK E COMMITTED BY THE CUSTOMER AND NOT BY THE BANK; THE FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 139A AS E NVISAGED IN SUB-SECTION(1) OF SECTION 272B WAS THAT OF THE CUSTOMER AND NOT OF THE BANK; MEANING THEREBY THAT IF PENALT Y UNDER 6 SECTION 272B(1) WAS TO BE IMPOSED IT WAS TO BE IMP OSED ON THE CUSTOMER AND NOT ON THE BANK. A BANK CAN BE PEN ALISED IF IT FAILS TO COMPLY WITH THE PROVISIONS OF SECTIO N 139A(6) OR RULE 114D(2) I.E. FOR ITS FAILURE TO ENSURE THAT PAN OR GIR NUMBER IS QUOTED BY THE CUSTOMER AND FOR ITS FA ILURE TO FORWARD THE COPIES OF FORM NO. 60 BUT NOT FOR ANY OTHER DEFAULT. [PARA 10] SUB-SECTION (2) OF SECTION 272B CLEARLY PROVIDES TH AT IF A PERSON IN ANY DOCUMENT REFERRED TO IN CLAUSE OF SU B- SECTION (5) OR SUB-SECTION (5A) OF SECTION 139A QU OTES OR INTIMATES THE PAN WHICH IS FALSE AND WHICH HE EITH ER KNOWS OR BELIEVES TO BE FALSE OR DOES NOT BELIEVE T O BE TRUE IS LIABLE TO PAY PENALTY OF RS. 10.000. [PARA 11] IN VIEW OF AFORESAID INTERPRETATION OF PROVISIONS O F SECTIONS 139A(5) 139A(6) 272B(1) AND OF 272B(2) AND RULES 114B TO 114D IT CAN BE SAID THAT PENALTY FOR FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 139A CAN BE IMPOSED ONLY ON THE CUSTOMER AND NOT ON THE BANK EXCEPT WHEN THE B ANK FAILS TO COMPLY WITH PROVISIONS OF SECTION 139A(6) OR RULE 114D(2). [PARA 11.1] SO FAR AS LEVY OF PENALTY FOR FAILURE TO COMPLY WIT H RULES IS CONCERNED FIRST OF ALL THERE IS NO PROVISION I.E. SECTION 272B DOES NOT PRESCRIBE LEVY OF ANY PENALTY FOR SUC H FAILURE AND SECONDLY EVEN IF IT IS ASSUMED THAT THERE IS A NY PENALTY FOR SUCH A FAILURE THEN THERE BEING NO FAILURE ON THE PART OF THE ASSESSEE TO COMPLY WITH THE PROVISIONS OF RULES 114B TO 114D THE ASSESSEE WOULD NOT BE LIABLE TO ANY PENAL TY UNDER SECTION 139A(6) OR RULE 114D(2). [PARA 12] IN VIEW OF AFORESAID THE PENALTY-IN-QUESTION WAS T O BE CANCELLED. [PARA 13.1] WITHOUT PREJUDICE TO THE AFORESAID CONCLUSION EVEN IF IT WAS TO BE ASSUMED THAT IT WAS THE ASSESSEES OBLIGA TION TO PROCURE DULY FILLED IN FORM NO. 60 AND SUPPORTING E VIDENCE THEREOF AND THE PENALTY UNDER SECTION 272B WAS LEVI ABLE FOR SUCH A FAILURE OF THE ASSESSEE THEN ALSO THE ASSES SEE HAVING PROCURED FORM NO. 60 THOUGH DEFECTIVE IT SHOULD H AVE BEEN ALLOWED AN OPPORTUNITY TO MAKE GOOD THAT DEFIC IENCY BUT WAS NOT A FIT CASE FOR LEVYING OF ANY PENALTY U NDER SECTION 272B. [PARA 14] IN THE RESULT THE ASSESSEES APPEAL WAS TO BE ALLO WED. 7 7. IN THE ABOVE CASE THE TRIBUNAL HELD THAT CUMULA TIVE ANALYSIS OF SECTION 139A AND RULES 114B TO 114D SHOWS THAT AN O BLIGATION TO QUOTE OF PAN / GIR NUMBER OR TO FILE FORM NO. 60 IS THAT OF CUSTOMER AND NOT THAT OF THE BANK. CONSIDERING THE ENTIRE FACTS AN D CIRCUMSTANCES OF THE PRESENT CASE AND ALSO KEEPING IN VIEW THE DECISION OF ITAT AHMEDABAD D BENCH IN THE CASE OF FINANCIAL CO-OPERATIVE BAN K LTD V ITO WARD 2(3) SURAT (SUPRA) WE HOLD THAT THERE WAS A REASO NABLE CAUSE FOR THE DEFAULT IF ANY COMMITTED BY THE ASSESSEE AND HENC E NO PENALTY U/S 273B OF THE ACT IS LEVIABLE. IN OUR VIEW THE LD. CIT(A ) HAS CORRECTLY APPRECIATED THE FACTS OF THE PRESENT CASE AS WELL A S SETTLED LEGAL POSITION AND THEREFORE WE DO NOT FIND ANY VALID GROUND IN I NTERFERING WITH THE ORDER OF CIT(A). CONSEQUENTLY APPEAL FILED BY THE REVENUE IS DEVOID OF ANY MERIT AND DESERVES TO BE DISMISSED. 8. IN THE RESULT APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF DECEMBER 2011. SD/- SD/- ( D.K.SRIVASTAVA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : DECEMBER 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR 8