Income Tax Appellate Tribunal - Rajkot
The Dy. Commr. Of Income Tax, Tds ... vs Jyoti Power Corporation Pvt. Ltd.,, ... on 19 April, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
RAJKOT BENCH, RAJKOT
[Conducted through E-Court at Ahmedabad]
BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER And
SHRI, MANISH BORAD, ACCOUNTANT MEMBER
आयकर अपील सं./I.T.A. No.441/Rjt/2015
( नधा रण वष / Assessment Year : 2014-15)
Deputy Commissioner of बनाम/ Jyoti Power
Income-tax, TDS Circle, Vs. Corporation Pvt. Ltd.
Rajkot.
थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : RKTJO 1382 D
(अपीलाथ /Appellant) .. ( यथ / Respondent)
अपीलाथ ओर से / Appellant by : Shri Avinash Kumar, Sr. DR
यथ क ओर से/Respondent by : Shri D. M. Rindani, AR
ु वाई क तार ख /
सन Date of Hearing 17/04/2017
घोषणा क तार ख /Date of Pronounce ment 19/04/2017
आदे श / O R D E R
PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER :
This appeal has been preferred by the Department is directed against the order of the Commissioner of Income Tax(Appeals)-I, Rajkot, dated 21/07/2015 for the Assessment Year (AY) 2014-15.
2. Department has been taken following Grounds of appeals:
i. The learned CIT(A) has erred in law as well as well as facts of the case in holding that penalty of Rs.83,10,083/- u/s. 271C cannot be sustained merely on the ground of default without considering the existence of reasonable cause.ITA No.441/Rjt/2015
DCIT vs. Jyoti Power Corporation Pvt. Ltd.
Asst.Year - 2014-15 -2- ii. On the facts and in the circumstances of the case, the learned CIT(A) ought to have upheld the order of the Assessing Officer.
3. The relevant facts as culled out from the materials on record are as under:-
It has come to the notice that the assessee company had failed without reasonable cause to deduct tax at source as also the assessee company has failed to pay the amount of TDS to the credit of Government account without specified time during Financial Year 2013-14 and have thus defaulted the legal provisions of Section 271C of the Income-tax Act.
4. Shaw cause notice were issued on 28/08/2014 and 09/09/2014 directing the assessee to show cause as to why penalty u/s. 271C of the IT Act should not be imposed for the default made by it in respect of failure to deduct proper tax or delay in paying the amount of TDS to Government account.
5. Thereafter, reply was filed by the assessee. The assessee's submission has been considered. The assessee has pointed out that due to dispute regarding right of way there was a delay of 252 to 300 days in the projects undertaken by them which has resulted into threats of blacklisting of the company by GETCO, the contractor, which would have put the company into incurring of losses more than 300 cr. The company has also stated that it was not the intention of the company to debit or delay of avoid any statutory liability. The submissions made are contrary to the behavior and attitude of the company towards compliance ITA No.441/Rjt/2015 DCIT vs. Jyoti Power Corporation Pvt. Ltd.
Asst.Year - 2014-15 -3- of statutory TDS liabilities. It was noticed during the survey that the assessee has deducted TDS to the extent of Rs.51,62,474/- for the period from 04/2013 to 10/2013 but had failed to deposit the same into the Government account. Effectively the company has retained all these amount belongings to Government unauthorisely and has utilized the same for their business. There is no satisfactory explanation on part of the company which renders it liable for penalty provisions of section 271C of the I.T. Act.
6. Considering all the relevant facts it is clear from the records that the assessee has defaulted in complying with the TDS provisions of the IT Act and has thus rendered itself liable for levy of penalty u/s. 271C of the I.T. Act.
7. Total amount of tax the assessee has failed to deduct or pay to the Govt. Account works out to Rs.83,10,083/- as under:
TDS Payable upto Nov., 2013 -Rs. 41,73,401
TDS on salary upto Oct., 2013 -Rs. 9,89,073
TDS payable from Dec., 2013 to March, 2014 -Rs. 31,47,609
As per provisions of Section 271C of the I.T. Act the assessee company is liable to pay, by way of penalty, a sum equal to the amount of tax which it has failed to deduct or pay as the case may be. Accordingly, Joint Commissioner of Income Tax, it was a fit case for levy of penalty u/s. 271C of the I.T. Act and therefore, he imposed order to levy the ITA No.441/Rjt/2015 DCIT vs. Jyoti Power Corporation Pvt. Ltd.
Asst.Year - 2014-15 -4- penalty of Rs.83,10,083/- i.e. equal to the amount of tax which it has failed to deduct or pay.
8. Against the said order assessee preferred first statutory appeal before the learned CIT(A), who allowed the appeal of the assessee.
9. We have considered the impugned order and heard the rival submissions, in our opinion, learned CIT(A) has mentioned in his order that the appellant is fairly covered within the provisions of the Section 273B as it had a reasonable cause for late deposit of TDS to the credit of the Govt. and further that the actual payment of tax with interest and that too before due date u/s. 139(1) also in my considered view, shows bona fides on the part of the appellant.
10. Learned AR cited judgments of Supreme Court:
(i) CIT vs Bank of Nova Scotia (2016) 380 ITR 0550 (SC):
It has been held with regard to levy of penalty u/s. 271C, it was necessary to establish that there was contumacious conduct on part of assessee. The assessee had already paid amounts of TDS.
(ii). Indo Nissin Foods Ltd. vs JCIT(2004) 3 SOT 0495 Bang Tribunal:
Payment of tax and interest having been made voluntarily before any detection by the Department albeit with delay, there was a bona fide belief not attracting penalty u/s 271C.ITA No.441/Rjt/2015
DCIT vs. Jyoti Power Corporation Pvt. Ltd.
Asst.Year - 2014-15 -5-
(ii) CIT vs Itochu Corporation (2004) 268 ITR 0172 Del HC:
Since the assessee had paid the tax along with interest voluntarily and there existed a bona fide belief for not deducting the tax at source on account of emoluments paid to the expatriate employees outside India, no penalty Under Section 271C is exigible by the alleged default. Further, the assessee had co- operated in regard to the TDS matters with the Department, we feel that there existed a reasonable cause which is covered by the provisions of Section 273B.
11. Respectfully, following the above said order, we are not incline to interfere in the order passed by the learned CIT(A). In the result, appeal filed by the Department is dismissed.
12. In the result, appeal filed by the Department is dismissed.
This Order pronounced in Open Court on 19/04/2017
Sd/- Sd/-
(MANISH BORAD) (MAHAVIR PRASAD)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 19/04/2017
Priti Yadav, Sr. PS
ITA No.441/Rjt/2015
DCIT vs. Jyoti Power Corporation Pvt. Ltd.
Asst.Year - 2014-15
-6-
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबं'धत आयकर आयु)त / Concerned CIT
4. आयकर आय)
ु त(अपील) / The CIT(A)-I, Rajkot.
5. ,वभागीय /त/न'ध, आयकर अपील य अ'धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड4 फाईल / Guard file.
आदे शानुसार/ BY ORDER, स या,पत /त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील$य अ%धकरण, अहमदाबाद / ITAT, Ahmedabad True Copy
1. Date of dictation 17/04/2017 (dictation-pad 6 pages attached at the end of this appeal-file)
2. Date on which the typed draft is placed before the Dictating Member 18/04/2017
3. Other Member...
4. Date on which the approved draft comes to the Sr.P.S./P.S.................
5. Date on which the fair order is placed before the Dictating Member for pronouncement......
6. Date on which the fair order comes back to the Sr.P.S./P.S.......
7. Date on which the file goes to the Bench Clerk.....................
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order..................