Income Tax Appellate Tribunal - Delhi
Modipon Ltd., Ghaziabad vs Assessee on 26 June, 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH "E" NEW DELHI)
BEFORE SHRI I.C. SUDHIR AND SHRI INTURI RAMA RAO
ITA No. 1044/Del/2013 Assessment Year: 2007-08
ITA No. 2275/Del/2013 Assessment Year: 2006-07
ITA N. 2276/Del/2013 Assessment Year: 2007-08
M/s. Modipon Limited, vs. Additional CIT(TDS),
Modinagar, Hapur Road,
Ghaziabad. Ghaziabad.
(PAN: AAACM2069E)
(Appellant) (Respondent)
Appellant by: Shri Santosh Aggarwal, Adv.
Respondent by: Shri P. Dan Kanunjna, Sr.DR
Date of hearing : 11.05.2015
Date of pronouncement: 26:06.2015
ORDER
PER I.C. SUDHIR: JUDICIAL MEMBER In these appeals, the assessee has questioned first appellate order on the following common grounds:
"1. That the order of the Learned CIT(Appeals), Muzaffarnagar, dated 09.01.2013 is wrong on facts and bad in law'
2. That on the facts and in the circumstances of the case and in law the Learned CIT(Appeals) erred in confirming the levy of penalty order under sec. 272A(2)(k) of the Act;
3. That the Learned CIT(Appeals) having held that the action of the ITO(TDS & Survey), Ghaziabad in initiating proceedings under sec. 272A(2)(k) of the Act was not correct in law erred in 2 not holding that the penalty order dated 16.03.2010 passed under se. 272A(2)(k) was void and illegal;
4. That the Learned CIT(Appeals) erred in holding that the penalty order dated 16.03.2010 passed under sec. 272A(2)(k) of the Act was not time barred as per the provisions of sec. 275 of the Act and as such not bad in law;
4.1 That the Learned CIT(Appeals) erred in holding that the time limit for passing an order under sec. 272A(3)(k) starts from 25.02.2010 the date on which the first notice under the said provisions was issued by the Addl.CIT(TDS); 4.2 That the Learned CIT(Appeals) failed to appreciate that the time limit for passing an order under sec. 272A(2)(k) of the Act starts from 27.06.2008;
5. That the Learned CIT(Appeals) failed to appreciate that the penalty order dated 16.03.2010 passed under sec. 272A(2)(k) of the Act was bad in law being a vague and non-speaking order;
6. That the Learned CIT(Appeals) failed to appreciate that the Addl.CIT(TDS) erred in levying the penalty under sec. 272A(2)(k) of the Act without determining the defaults/failures of the appellant to file the statements/forms;
7. That the Learned CIT(Appeals) failed to appreciate that the provisions of sec.272A(2)(k) of the Act were not applicable and the penalty order was void and illegal;
8. That the Learned CIT(Appeals) failed to appreciate that the alleged failure and/or default to file the Statement/Forms, if any, was on account of a reasonable cause;3
9. That the Learned CIT(Appeals) erred in holding, "the appellant has admitted its default for violation of provisions of sec. 206 of the Act."
10. That the conclusions and inferences of the Addl.CIT(TDS) and/or Learned CIT(Appeals) are based on suspicions, conjectures, surmises and extraneous and irrelevant considerations;
11. That the penalty levied under sec. 272A(2)(k) of the Act may be deleted and the order(s) of Addl. CIT(TDS) and/or Commissioner(A) may kindly be quashed, set aside or annulled or modified;
12. That the aforesaid grounds of appeal are without prejudice to each other."
2. Heard and considered the arguments advanced by the parties in view of orders of the authorities below, material available on record and the decisions relied upon.
3. The facts in brief are that as a result of survey/verification exercise carried out by the ITO(TDS), serious default on TDS payment were unearthed. It was noted further that the assessee had not filed e-TDS return in form No. 24Q, 26Q and 27EQ and also could not provide any reasonable cause for such to furnish the e-TDS returns by the due date. The ITO(TDS) initiated 4 penalty proceedings under sec. 272A(2)(K) of the Act and referred the case to the Office of the Competent Authority i.e. Additional CIT(TDS).
4. Thereafter, notice under sec. 272A(2)(K) of the Act was issued on 25.2.2010 to the assessee by the learned Additional CIT(TDS) requiring him to explain the reason for failure to file e-TDS return as per provisions of sec. 206 of the Act and to show-cause notice as to why penalty under sec.272A(2)(K) of the Act amounting to Rs.10,000 be not imposed for such default. The Additional CIT(TDS) thereafter has noted that there was no compliance and hence case was again fixed for hearing on 09.03.2010 and again the same remained uncomplied with. The Assessing Officer (Additional CIT-TDS) held the default on the part of the assessee as negligent behavior and a deliberate attempt to mislead the department. He noted further that the assessee had not been able to establish that there was a reasonable cause for non-filing of e-TDS return. The Assessing Officer thus levied penalty under sec. 272A(2)(K) of the Act at Rs.2,99,400 ( i.e. Rs.99,800 each for non-filing of form Nos. 24Q, 26Q and 27EQ).
5. The assessee questioned the above action of the Assessing Officer before the First Appellate Order on several grounds. The first appellate 5 authority did not agree with the assessee that ITO(TDS) in the order dated 27.06.2008 under sec. 201(1)/201(1A) of the Act has wrongly inferred that the assessee had not filed e-TDS returns during last two years whereas the default was in respect of last quarter of the financial year; the order levying penalty is barred by limitation and there was sufficient reasons for non-filing of the e-TDS returns in time. The first appellate authority, however, agreed with the assessee that penalty order is silent about the period of default and consequent computation of penalty. The first appellate authority accordingly directed the Assessing Officer to verify the claim of the assessee and accordingly recomputed penalty imposed under sec. 272A(2)(K) of the Act. Similar order has been passed by the learned first appellate authority in all the three years. Being aggrieved with this action of the first appellate authority, the assessee has preferred present appeals before us.
6. The Learned AR has reiterated the submissions made before the authorities below. He drew our attention to page Nos. 14 and 26 of the paper book wherein the Assessing Officer has worked out the amount of penalty as directed by the first appellate authority for the assessment year 2006-07 at Rs.43,500 and for assessment year 2007-08 at Rs. 1,94,300. He submitted that in the assessment year 2008-09, the Learned CIT(Appeals) 6 has upheld the penalty of Rs.1,90,500 levied by the Assessing Officer. The Learned CIT(Appeals) has, however, failed to appreciate that the penalty order in question was barred by time limit under sec. 275 of the Act, there was sufficient reason for not filing of e-TDS return in time and thus within the provisions of sec. 273B of the Act, the penalty was liable to be deleted.
7. The Learned Senior DR on the other hand placed reliance on the orders of the authorities below with this submission that the Learned CIT(Appeals) has discussed the issue in detail before coming to a definite conclusion.
8. Having gone through the orders of the authorities below, we find that the Learned CIT(Appeals) has passed a comprehensive order discussing respective cases of the parties on the issue. In the assessment year 2006-07, the Learned CIT(Appeals) appreciating the submissions of the assessee has already directed the Assessing Officer to verify the factual position regarding filing of e-TDS returns for the quarters under consideration with reference to acknowledgement of e-filing of TDS return and accordingly compute penalty under sec. 272A(2)(k) of the Act. This direction was given by the Learned CIT(Appeals) appreciating the contention of the assessee that 7 the Assessing Officer in the penalty order has not given computation of the penalty imposed under sec. 272A(2)(k) of the Act and statement of e-TDS return was furnished.
9. In the assessment year 2007-08, similar contention was raised that Assessing Officer in the penalty order was silent about the period of default and consequent computation of penalty. Appreciating this contention of the assessee, the Learned CIT(Appeals) has directed the Assessing Officer to verify the claim of the assessee and accordingly re-compute penalty imposed under sec. 272A(2)(k) of the Act.
10. In the assessment year 2008-09, no such grievance regarding period of default and consequent computation of penalty was raised, thus, the Learned CIT(Appeals) has upheld the penalty levied by the Assessing Officer.
11. We thus find that wherever the assessee was justified in their contentions that has been appreciated by the Learned CIT(Appeals) and appropriate order has been passed by him accordingly.
12. For a ready reference, First Appellate Order for the assessment year 2006-07 is being reproduced hereunder:
"In view of above, it is submitted that the order passed by the Additional Commissioner of Income Tax levying penalty of Rs. 8,98,2001- is illegal and time barred and same deserves to be quashed. The Hon'ble CIT(A) may be pleased to quash the 8 order and direct the Assessing Officer to delete the penalty under reference....."
The facts of the case as well as submissions made by the appellant have been carefully considered. It is observed that the AO[Addl.CIT(TDS)] had imposed penalty u/s 272A(2)(k) of the Act at s.8,98,2001- on the ground that assessee had violated provisions of section 206 of the Act by not filing e- TDS returns in Form Nos.24Q, 26Q, 27EQ and as such was liable for penalty u/s 272A(2)(k) of the Act. Further no reasonable cause had been given for such default. On the other hand the appellant' has contended that the ITO(TDS), Ghaziabad in the order u/s 201(1)/201(1A) of the Act dated 27-06- 2008 for FYs.2005-06 to 2007-08 has mentioned that the assessee had not filed. e-TDS returns during last two years meaning thereby that the default was for FYs.2006-07 and 2007-08 only. There was no default during FY 2005-06. Therefore, it has been contended that the Addl.CIT(TDS) has wrongly imposed penalty u/s 272A(2)(k) of the Act. It has further been contended by the appellant that according to the provisions of section 275 of the Act the order levying penalty could be passed either within a period of six months from end of the month in which the order was passed or by the end of financial year in which the order was passed. In terms of section 275 of the Act, the order levying penalty could be passed by 31-03-2009. The order levying penalty has however been passed on 16-03-2010. Therefore, the order is time barred.
Regarding appellant's contentions that the order is barred by limitation, it is observed that the relevant provisions of section 272A(3) of the Act stipulate as under:-
9
"(3) Any penalty imposable under sub-section (1) or sub-section (2) shall be imposed -
(a) .
(b) .
(c) in any other case, by the [Joint] Director or [Joint] Commissioner.
The ITO (TDS) in the order passed u/s 201(1)/201(1A) of the Act dated 27~06-2008 in the appellant's case for AY.2007-08 had though initiated proceedings u/s 272A(2)(k) of the Act for default for non-filing of e-TDS returns in Form Nos.24Q, 26Q & 27EQ of the Act but the same is non-est in the eyes of law as no such powers is conferred upon the ITO(IDS) by the Act. However, ITO(TDS) had rectified his mistake by referring the matter of imposition of penalty u/s 272A( e )(k) of the Act to the competent authority i.e. Addl.CIT(TDS), Ghaziabad. Therefore, legally the limitation starts from the issue of first notice by the Addl.CIT(TDS)[ competent authority] dated 25-02- '2010. The penalty has been imposed before 30-08-2010 i.e. on 16-03-2010. Therefore, it cannot be said that the penalty order passed U/S 272A(2)(k) of the Act is barred by limitation. It appears that the appellant had taken the date of initiation of penalty U/S 272A(1)(c) of the Act from the date of order passed u/s 201(1)/201(1A) of the Act on 27-06-2008 which is legally incorrect. On the other hand, the action of ITO, (TDS) in initiating proceedings U/S 272A(2)(k) of the Act is not correct in view of the relevant provisions of the Act. The ITO(TDS) instead of initiating proceedings U/S 272A(2)(k) of the Act should have mentioned that " the case is being referred separately for imposition of penalty u/s 272A(2)(k) of 10 the Act to the Addl.CIT(TDS)" who was the competent authority. Thus it is held that the order passed by Addl.CIT(IDS) u/s 272A(2)(k) of the Act dated 16-03-2010 is held as fully valid. Submissions made by the appellant on the issue of matter being barred by limitation are hereby rejected.
The appellant has contended that there was no default in furnishing of e- TDS returns in Form Nos.24Q, 26Q and 27EQ for the relevant accounting period. The appellant has furnished statement of the e- TDS returns furnished in Form Nos.24Q, 26Q and 27EQ. A perusal of the aforesaid statement reveal that there is definitely delay in furnishing e-1DS returns in Form Nos.24Q, 26Q and 27EQ for the relevant accounting period. Thus the appellant's contention that there was no default in furnishing e- IDS returns has no force and is accordingly rejected. Thus the action of the Addl.CIT(IDS) in imposing penalty u/s 272A(2)(k) of the Act is upheld in principle.
The AO in the penalty order has also not given computation of the penalty imposed U/S 272A(2)(k) of the Act amounting to Rs.8,98,200/-. The statement of e- TDS returns furnished by the appellant is made part of this order as Annexure - 'A'. Thus the AO is directed to verify the factual position regarding filing of aforesaid e- TDS returns for the quarters under consideration . with reference to acknowledgement of e-filing of IDS returns and accordingly re- compute penalty u/s 272A.(2)(k) of the Act. Grounds of appeal Nos.1 to 12 are dismissed subject to verification as discussed above; 11
3.1 Ground of appeal No.13 is general in nature so as to required separate adjudication."
13. As discussed above, we find that the First Appellate Order is comprehensive and reasoned one wherein the Learned CIT(Appeals) has dealt with all the objections raised by the assessee by speaking order, to which we fully concur with. The grounds are accordingly rejected.
14. Similar order with certain modifications in the assessment year 2008- 09 (in this year, no objection was raised by the assessee regarding consideration of period of default and computation of penalty accordingly) has been passed to which we fully agree with. The same are upheld. The grounds are thus rejected.
15. In result, all the three appeals are dismissed.
Decision pronounced in the open court on 26 .06.2015 Sd/- Sd/-
( INTURI RAMA RAO ) ( I.C. SUDHIR )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 26/06/2015
Mohan Lal
12
Copy forwarded to:
1) Appellant
2) Respondent
3) CIT
4) CIT(Appeals)
5) DR:ITAT
ASSISTANT REGISTRAR
Date
Draft dictated on computer 26.06.2015
Draft placed before author 26.06.2015
Draft proposed & placed before the second
member
Draft discussed/approved by Second Member. 26.06.2015 Approved Draft comes to the Sr.PS/PS 31.06.2015 Kept for pronouncement on 26.06.2015 File sent to the Bench Clerk 31.06.2015 Date on which file goes to the AR Date on which file goes to the Head Clerk.
Date of dispatch of Order.