Income Tax Appellate Tribunal - Panji
Innoventive Industries Ltd.,, Pune vs Additional Commissioner Of ... on 24 November, 2017
आयकर अपीलीय अिधकरण,
अिधकरण पुणे यायपीठ "बी
बी"
बी पुणे म
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "B", PUNE
ी डी.
डी क णाकरा राव , लेखा सद य
एवं ी िवकास अव थी,
अव थी याियक सद य के सम
BEFORE SHRI D.KARUNAKARA RAO, AM
AND SHRI VIKAS AWASTHY, JM
आयकर अपील सं . / ITA Nos.269 & 270/PUN/2016
िनधारण वष / Assessment Years : 2009-10 & 2010-11
Innoventive Industries Ltd.,
(Erstwhile Arihant Domestic
Appliances Ltd.),
Gat no.1261, Sanaswadi,
Tal. Shirur, Dist. Pune - 412 208
PAN : AABCA4586B .... अपीलाथ /Appellant
Vs.
Addl.CIT (TDS), Pune .... थ / Respondent
Assessee by : None
Revenue by : Dr. Vivek Aggarwal, CIT-DR
सुनवाई क तारीख
/ घोषणा क तारीख /
Date of Hearing : 16.11.2017 Date of Pronouncement: 24.11.2017
आदेश / ORDER
PER BENCH :
There are 2 appeals of the assessee under consideration for the Assessment Years 2009-10 and 2010-11. These appeals are filed against the separate orders of CIT(A)-10, Pune commonly dated 18-12-2015 in connection with the penalty u/s.271C of the Act relating to 'penalty for failure to deduct tax at source' read with section 273B relating to 'penalty not to be imposed in certain cases'.
2. Background facts of these appeals include that there was TDS survey action u/s.133A of the Act on the assessee on 03-03-2009. Assessee is found making payment of interest and other payments on 2 ITA Nos.269 & 270/PUN/2016 Innoventive Industries Ltd., account of processing fee etc., without making TDS as per the TDS provisions u/s.194A of the Act. Soon after the said discovery of TDS default by the assessee, the requisite TDS was paid on 5th, 6th and 8th of March, 2010 and 21st of March 2010. Otherwise, the payments involved include established companies such as: (1) Reliance Capital Ltd. (2) India Bulls Financial Services Ltd. (3) Bajaj Auto Finance Ltd. (4) Religare Finvest Ltd. and (5) GE Capital Services. It is also mentioned that the said assessees are assessed to tax regularly. After granting the reasonable opportunity to the assessee, the AO rejected the explanation offered by the assessee and proceeded to levy the penalty u/s.271C of the Act amounting to Rs.2,90,917/- for A.Y. 2009-10 and Rs.7,23,484/- for A.Y. 2010-11.
3. During the First Appellate proceedings, the CIT(A) also gave reasonable opportunity to the assessee. Assessee submitted that the assessee is assessed to tax for many years and the present failure to make the TDS on these charges/fees constitutes a one-time event and an inadvertent mistake. Further, as per assessee, the parties who received the payments are well established payees and they are regularly assessed to tax. Assessee provided the requisite PAN Numbers of the parties in the written submissions, which is extracted on pages 3 and 4 of the CIT(A)'s order. Assessee also mentioned that, during the A.Y. 2009-10, he has already paid the TDS amounting to Rs.2.63 crores. Rs.2.48 crores is the TDS paid for A.Y. 2010-11. The 'inadvertent mistake' was demonstrated by the fact that assessee immediately complied with the requisite TDS provisions, soon after the survey was over. Assessee also invoked the provisions of section 273B of the Act and requested for considering the assessee's conduct as a 'reasonable cause' in which case, if accepted, the provisions of 3 ITA Nos.269 & 270/PUN/2016 Innoventive Industries Ltd., section 271C of the Act stands overridden. Thus, the CIT(A) considered the said request and did not find the assessee's explanation constitutes reasonable cause. Accordingly, he confirmed the penalty levied by the AO.
Aggrieved with the order of the CIT(A) the assessee in appeal before us in both the assessment years.
4. In the present appeals before us, the issues raised in both the appeals are identical, i.e. confirming of the penalty u/s.271C of the Act. In the grounds, it is argued that the assessee defaulted in complying with the TDS provision and made it up, by the time, the orders u/s.201(1) and 201(A) were passed on 31-03-2010. In that case, the same constitutes a reasonable cause and therefore provision should be deleted. For the sake of reference, we proceed to extract the grounds for A.Y. 2009-10 as under :
"1) a. in confirming the penalty of Rs.2,90,917/- u/s.271C of the Income Tax Act, 1961.
b. in not appreciating that there was no failure to deduct the whole or any part of the tax on the date of passing of the order u/s.201."
5. In the light of the above background facts of the case, during the hearing before us, there was none to represent the case of the assessee despite service on notice 16-10-2017. The acknowledgment is placed on record. However, on considering the simpleness of the issue and speaking order of the lower authorities, we find it relevant to adjudicate these appeals with the assistance of Ld. DR for the Revenue and the material available on record.
6. Dr. Vivek Aggarwal, Ld. DR for the Revenue explained the above said facts of the case and demonstrated that the TDS 4 ITA Nos.269 & 270/PUN/2016 Innoventive Industries Ltd., payments, if any, made by the assessee is the resultant of survey action by the Department. Referring to the reasonableness, Ld. DR relied heavily on the orders of the AO and the CIT(A).
7. We heard the Ld. DR for the Revenue and perused the orders of the Revenue for both the assessment years and the material available on record. There is no dispute on facts that the survey action u/s.133A on the assessee on 03-03-2009 resulted in underlying the non-compliance of assessee to the TDS provision, bringing the requisite TDS to tax. Further, it is a fact that the payer as well as payees are assessed to tax regularly. PAN details are on record. Names of the payees mentioned above indicate the undisputed nature of the above fact. We also appreciate the prompt action by the assessee in making the requisite TDS soon after search party brought out the default, if any, to the notice of the assessee. The same is done immediately within the very first week of the said discovery. Further, it is a fact that entire TDS was deducted and paid by the assessee by the time the AO's orders u/s.201(1) and 201(1A) were passed on 31-03-2010. It is also a fact that assessee is regular in filing the returns and payment of taxes. The details are discussed in the preceding paragraphs relating to background facts of the case. Assessee, who complied with TDS provision and paid TDS amounts in crores and was caught as a defaulter in small amounts, cannot be believed to be an assessee in default with malafide. In our view, it cannot be out of malafide intention.
8. Considering the above undisputed facts, we are of the opinion that no malafide can be attributed to the assessee in both the years which would attract levy of penalty u/s.271C of the Act. Further, the 5 ITA Nos.269 & 270/PUN/2016 Innoventive Industries Ltd., reasons given by the assessee revolves around the 'bonafide' and 'inadvertence' are evident from the facts discussed above. Considering the same, we are of the view that the said reasons given by the assessee constitute a 'reasonable cause' and substantial enough to not to invoke the provisions of section 271C of the Act. Accordingly, we find it relevant to delete the penalty levied by the AO and therefore we reverse the finding of the CIT(A) for both the assessment years. Accordingly, the grounds raised by the assessee for both the years are allowed.
9. In the result, both the appeals of the assessee are allowed.
Order pronounced in the open court on this 24th day of November, 2017.
Sd/- Sd/-
(VIKAS AWASTHY) (D. KARUNAKARA RAO)
याियक सद य /JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER
पुणे Pune; दनांक Dated : 24th November, 2017.
सतीश आदेश क ितिलिप अ ेिषत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. The Respondent यथ /
3. The CIT(A)-10, Pune
4. CIT-10, Pune
5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, "B Bench"
Pune;
6. गाड फाईल / Guard file.
आदेशानुसार
/ BY ORDER,स
स यािपत ित //True Copy//
//True Copy// Senior Private Secretary
आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune