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Income Tax Officer, TDS Rohtak Vs. The Executive Engineer, Panchayati Raj, Jhajjar
November, 06th 2015
          IN THE INCOME TAX APPELLATE TRIBUNAL
                DELHI BENCH `D', NEW DELHI
       Before Sh. N. K. Saini, AM And Smt. Beena A. Pillai, JM

     ITA Nos. 6491 to 6494/Del/2013 : Asstt. Year : 2010-11
Income Tax Officer, TDS           Vs The Executive Engineer,
Rohtak                               Panchayati Raj,
                                     Jhajjar
(APPELLANT)                          (RESPONDENT)
PAN No. RTKPO1586E

                 Assessee by : Sh. Naveen Gupta, Adv.
                 Revenue by : Sh. S. K. Jain, Sr. DR

Date of Hearing : 20.10.2015     Date of Pronouncement : 04.11.2015

                                ORDER

Per Bench:

     These four appeals by the department are directed against
the common orders dated 15.10.2013 of ld. CIT(A), Rohtak for
the assessment year 2010-11.

2.   Common issues are involved in these appeals which were
heard together so these are being disposed off by this
consolidated order for the sake of convenience and brevity.

3.   The common grounds raised in these appeals read as
under:
                                    2            ITA Nos. 6491 to 6494/Del/2013
                                                Executive Engineer, Panchayati Raj

     " 1. On the facts and circumstances of the case, Ld.
     CIT(A) has erred in law and facts in deleting the
     penalty u/s 272B of the I.T. Act without any cogent
     reason.

     2. On the facts and circumstances of the case, Ld.
     CIT(A) has erred in law and facts by deleting the
     penalty by holding that assessee PR has filed
     correction statement immediately on receipt of
     show cause notice generated by the system,
     ignoring the fact that assessee PR did not file any
     correction statement in response to the show cause
     notice issued by this office.

     3. On the facts and circumstances of the case, Ld.
     CIT(A) has erred in law and facts in deleting the
     penalty u/s 272B of the I.T. Act ignoring the facts
     that the assessee PR has quoted invalid PAN in
     violation of sub-section (5B) of section 139A of the
     I.T. Act.

     4. The appellant craves leave to add or amend any
     grounds of appeal before the appeal is heard. "

4.   The only grievance of the department in these appeals relates to the
deletion of the penalties levied by the AO u/s 272B Income Tax Act,
1961 (hereinafter referred to as the Act). Facts of the case in brief are
that the AO from the e-quarterly statement of TDS returns filed by the
assessee noted that PAN in respect of 99 deductees was found to be
invalid/missing. Accordingly, penalty proceedings u/s 272B of the Act
were initiated. The AO levied the penalty of Rs. 9,90,000/- for the four
                                    3            ITA Nos. 6491 to 6494/Del/2013
                                                Executive Engineer, Panchayati Raj

quarters and similar penalties amounting to Rs. 70,000/-, Rs.13,40,000/-,
Rs. 15,60,000/- and Rs. 7,40,000/- were imposed for default in respect of
7, 134, 156 and 74 deductees.

5.   Being aggrieved the assessee carried the matter to the ld. CIT(A)
and submitted that the assessee deducted tax correctly and filed
statement in Form No. 24Q as such there was sufficient compliance for
the provisions of Section 139 of the Act. It was further stated that
quarterly returns were filed by the assessee timely and only 18 invalid
PANs of deductees out of total 195 were neither element of "Mens Rea"
nor there was a guilty mind. It was further submitted that the AO failed
to appreciate the fact that it was not the intention of the assessee to
derive any benefit whatsoever by filing the wrong PANs. It was stated
that the PANs were corrected after ascertaining the same from the
respective deductees. The reliance was place on the judgment of the
Hon'ble Supreme Court in the case of Hindustan Steel Ltd. Vs State of
Orissa (1972) 83 ITR 26.




6.   The ld. CIT(A) after considering the submissions of the assessee
deleted the penalties by observing in para 4 of the impugned order as
under:

     "4. I have considered the issue and the written submission.
     From the facts, it is evident that the appellant filed TDS
     correction statement immediately on receipt of show cause
                                      4            ITA Nos. 6491 to 6494/Del/2013
                                                  Executive Engineer, Panchayati Raj

       notice generated by the system and a copy of
       acknowledgement was sent to the AO. The appellant
       received the final show cause notice of penalty beyond the
       specified date of compliance. Since the invalid/missing
       PANs have been made good by filing correction statements
       well before the issue of final penalty notice, the penalty is
       cancelled in view of the case law relied upon by the
       appellant the grounds of appeal are allowed. Since the
       facts for other appeals are similar, the penalty imposed in
       these appeals is also cancelled."

7.     Now the department is in appeal. The ld. DR strongly supported
the order of the AO and further submitted that the assessee either did not
furnish the PAN or furnished the incorrect PAN in respect of the
deductees. Therefore, the penalty u/s 272B of the Act was rightly levied
by the AO and the ld. CIT(A) was not justified in deleting those
penalties.

8.     In his rival submissions the ld. Counsel for the assessee reiterated
the submission made before the authorities below and further submitted
that the assessee corrected the mistakes in the PAN. Therefore, the
penalty was rightly deleted by the ld. CIT(A). The reliance was placed
on the following case laws:

     Ø CIT(TDS) Vs Superintendent of Police (2012) 349 ITR 550
       (P&H)
     Ø ITO(TDS) Vs Executive Engineer (2015) 69 SOT 421 (Del-
       Trib.)
                                   5            ITA Nos. 6491 to 6494/Del/2013
                                               Executive Engineer, Panchayati Raj

      It was further submitted that the assessee furnished the statement
of tax deducted at source in Form No. 24Q timely and the tax was
deducted correctly, so there was no mistake of the assessee because the
PAN number which were supplied by the deductees were mentioned and
where inspite of best efforts the PAN number could not be got the same
could not be furnished but it was beyond the control of the assessee.
Therefore, there was no malafide mistake and penalty u/s 272B was not
leviable. The reliance was placed on the following case laws:

     Ø CIT and Another Vs GAIL (India) Ltd. (2013) 356 ITR 711
       (All)
     Ø Om Prakash Subhash Kumar Vs ITO (2012) 144 TTJ 38
       (Del-Trib.)

      It was also submitted that the AO levied the penalty in respect of
each of the deductees whereas the penalty if at all leviable was to be
levied only on the basis of the return of TDS and not in respect of
individual deductee. The reliance was placed on the decision of the
Hon'ble Delhi High Court in the case of CIT-TDS Vs DHTC Logistics
Ltd. (2014) 41 Taxmann.com 439 (Del).

9.    We have considered the submissions of both the parties and
carefully gone through the material available on the record. In the
present case, it is not in dispute that the assessee deducted the tax
correctly and deposited the same in time. The assessee also filed the
return in Form No. 24Q in time, so there was a sufficient compliance by
                                     6          ITA Nos. 6491 to 6494/Del/2013
                                               Executive Engineer, Panchayati Raj

the assessee and the mistake in respect of the PAN of the deductees
which was noted by the AO, was rectified whenever the assessee
received the information about the correct PAN. In the present case, the
PAN collected by the assessee were those which the deductees informed,
so there was no fault of the assessee and there was also no failure to
comply with the provisions of Section 139A of the Act. On a similar
issue the Hon'ble Jurisdictional High Court in the case of CIT (TDS) Vs
Superintendent of Police (2012) 349 ITR 550 held as under:

     "The assessee quoted invalid permanent account numbers
     for 196 deductees. The error was due to wrong quoting of
     permanent account numbers by the deductees to the
     assessee. The assessee rectified the mistake by furnishing
     the correct permanent account numbers as soon as it came
     to its notice. The revised permanent account numbers and
     the revised statement were filed. The tax was deducted and
     deposited in time in the Government treasury."

It has been further held as under:

     "That there was nothing to show that the findings recorded
     by the Commissioner (Appeals) and the Tribunal were
     erroneous in any manner. On appreciation of the entire
     matter, the Commissioner (Appeals) and the Tribunal
     examined the explanation of the assessee and came to the
     conclusion that there was sufficient cause shown which
     would be a question of fact in the given facts and
     circumstances. Thus, there was no substance in the
     argument raised by the Revenue that there was no
                                     7            ITA Nos. 6491 to 6494/Del/2013
                                                 Executive Engineer, Panchayati Raj

     reasonable cause on the part of the assessee to furnish
     inaccurate permanent account numbers in Form 24Q."

10. In the present case also whatever was the mistake which the AO
pointed out in the PAN numbers of the deductees, was corrected by the
assessee, therefore, the penalty levied by the AO u/s 272B of the Act
was rightly deleted by the ld. CIT(A). On a similar issue the Hon'ble
Allahabad High Court in the case of CIT & Another Vs GAIL (India)
Ltd. (2013) 356 ITR 711 held as under:

     "The penalty under section 272B of the Income-tax Act,
     1961, will not ordinarily be imposed unless the assessee
     has either acted deliberately in defiance of law or was
     guilty of conduct which is contumacious, dishonest or acted
     in conscious disregard to its obligation. The penalty under
     section 272B cannot be imposed merely because it is lawful
     to do so. It can be imposed for failure to perform statutory
     obligation. The imposition of penalty for failure to perform
     a statutory obligation. The imposition of penalty for failure
     to perform a statutory obligation is a matter of discretion
     of the authority to be exercised judicially, after considering
     the explanation of reasonable cause submitted by the
     assessee and on a consideration of all the relevant
     circumstances."

It has further been held as under:

     "That it was the statutory obliteration of the contractors,
     who received certain amounts from the assessee, from
     which tax was deducted under the provisions of Chapter
     XVII-B, to intimate their permanent account numbers to the
                                     8            ITA Nos. 6491 to 6494/Del/2013
                                                 Executive Engineer, Panchayati Raj

     assessee. It is the specific stand of the assessee that certain
     contractors had not intimated their permanent account
     numbers and for that reason they could not be mentioned
     in Form 16A issued to such contractors. Section 139A(5B)
     makes it obligatory for every person deducting tax under
     Chapter XVII-B to quote the permanent account number of
     the person to whom such sum or income or amount has
     been paid by him. Thus, reading both the provisions
     together, namely, section 139(5A) and section 139A(5B)
     the deductor may be at fault under section 139A(5B) if he
     does not quote the permanent account number of the
     persons to whom the amount has been paid, despite the
     intimation of permanent account number by such person to
     the deductor under section 139A(5A). There was nothing
     on record to show that the contractors to whom certain
     amounts were paid by the assessee, had intimated their
     permanent account number to the assessee as required
     under section 139A(5A). Therefore, the assessee had
     explained with reasonable cause under section 273B as to
     why the assessee could not satisfy the provisions of section
     272B."




11. In the present case also the assessee quoted the PAN numbers
which were provided by the deductees, so if there was any mistake in the
PAN numbers that was not on account of the assessee and moreover the
mistake was rectified when the correct PAN numbers were furnished by
the deductees and this fact has been appreciated by the ld. CIT(A) who
categorically stated that since the valid/missing PANs have been mad
good by filing correct statement well before the issue of final penalty
notice. The said observation of the ld. CIT(A) was not rebutted. We,
therefore, do not see any infirmity in the impugned order of the ld.
                                    9            ITA Nos. 6491 to 6494/Del/2013
                                                Executive Engineer, Panchayati Raj

CIT(A) and accordingly do not see any merit in these appeals of the
department.

12. In the result, the appeals of the department are dismissed.
 (Order Pronounced in the Court on 04/11/2015)

       Sd/-                                        Sd/-
  (Beena A. Pillai)                            (N. K. Saini)
JUDICIAL MEMBER                           ACCOUNTANT MEMBER
Dated: 04/11/2015
*Subodh*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5.DR: ITAT
                                                 ASSISTANT REGISTRAR

 
 
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