Jubilee Sports India Technology Pvt. ... vs Department Of Income Tax

ITA No. 1409/Del/2013 Asst. Yr: 2008-09 ITA No. 1410/Del/2013 Asst. Yr: 2011-12 ITA No.1415/Del/2013 Asst. Yr: 2010-11 Income-tax Officer, vs. Jubilee Sports India Ward 50(2), Technology Pvt. Ltd., New Delhi. S-518, Lower Ground Floor, Gr. Kailash, Part-I, New Delhi. (PAN: DELJO6663G) (Appellant) (Respondent)

Revenue by: Shri P. Damkaunjma, Sr. DR Assessee by: Shri Sanjay Jain, CA

Date of hearing : 28.01.2015 Date of pronouncement: 31:03.2015

ORDER

PER I.C. SUDHIR: JUDICIAL MEMBER The Revenue has questioned First Appellate Order on the following

common ground:

"On the facts and in the circumstances of the case as well as in law, the

Learned CIT(Appeals) has erred in:

(i) Restricting the penalty imposed u/s.272A(k) of Rs.20,50,700 to Rs.6,37,800 relying on the decision of Hon'ble Rajasthan High Court in the case of CIT vs. Superintendent Engineer (260 ITR

641), wherein the assessee has deducted the tax and made the payment into Govt. account in time. In this case, the assessee 2

has not deposited the tax in some cases. Therefore, the facts of the case are different from the case of Hon'ble Rajasthan High Court. Further, the AR of the assessee already accepted before the Learned CIT(Appeals) that the penalty should have been limited to Rs.13,95,034."

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 the assessee company is engaged in

providing sports infra-structure to various governments and non-government

clients. During the financial years 2008-09 to 2010-11, the assessee had

undertaken certain projects of common wealth games. In the assessment

years under consideration i.e. assessment years 2008-09, 2010-11 and 2011-

12, the Assessing Officer had imposed a penalty of Rs.20,50,700 under sec.

272A(2)(k)/274 of the Income-tax Act, 1961 for delay in filing statements of

different quarters for the financial years relevant to the assessment years

under consideration. The Learned CIT(Appeals) has deleted the penalty

which has been questioned by the Revenue before the ITAT. 3

4. In support of the ground, the learned Sr.DR has placed reliance on

penalty order. He submitted that the decision of Hon'ble Rajasthan High

Court in the case of CIT vs. Superintendent Engineer - 260 ITR 641 (Raj.) is

not applicable in the case of the assessee as in that case the assessee had

deducted the tax and made the payment into government account in time,

whereas in the present case, assessee had not deposited the tax in some

cases.

5. The Learned AR on the other hand placed reliance on the First

Appellate Order. He reiterated the submissions made before the authorities

below and cited decisions relied upon by him before the Learned

CIT(Appeals). The Learned AR submitted that tax default on the date of

imposition of penalty was at Rs.6,37,800 and payment of the assessee from

DDA, Unity Infra Projects were build up to the tune of Rs.4,50,00,000 and

thus there were genuine reasons to prevent the assessee from paying the tax

deducted at source in time. Moreover as soon as the assessee could arrange

the funds had deposited the tax to the government authorities. He submitted

that it is not the case of the assessee that the assessee had deducted the tax

and not deposited in the government treasure.

6. Having gone through the orders of the authorities below, we find that

the Learned CIT(Appeals) after discussing the issue in detail, has deleted the 4

penalty vide para No.5 of the common First Appellate Order for all the

assessment years under consideration:

"5. I have perused the assessment order, grounds of appeals, written submissions and discussed the matter with the AR of the assessee very carefully. The appellant is a contractor in making infrastructure facilities for CPWD, Delhi Govt. and private parties for commonwealth games like stadium, building infrastructure in this financial year. The Addl. CIT, Range-50, had imposed penalty u/s. 272A(2)(k)/274 on 24.08.12 of Rs.20,50,700 for delay in filing statements for different quarters for A.Y. 07-08, 09-10 & 10-11. There was a survey u/s. 133A of the Income-tax Act, 1961 in the appellant's business premises in October, 2010 after which the TDS assessment has been made. In sec. 200(3) provision there is a clause that penalty amount should be restricted to the amount of tax default on the date of imposition of penalty. The AR argued that in this case, the penalty should have been limited to Rs.13,95,034 which was calculated by him in the chart which is enclosed to this order. The ARs argued that the Addl. CIT has imposed penalty for full period of default without considering the amount of tax (TDS) paid by the appellant. The AR further argued that as per the decision of Hon'ble Rajasthan High Court in the case of CIT vs. Superintendent Engineer (260 ITR 641, if the appellant had collected and paid the tax to the Government of India but had not filed statements before the department then the penalty need not be imposed on the appellant. Considering this judgment the AR made a calculation of tax default on the date of penalty imposition at Rs.6,37,800. The AR further argued that no 5

notice u/s. 274 before imposing the penalty was given to the appellant. He has also emphasis that there is a reasonable cause u/s. 273B of the Income-tax Act, 1961 where there are grounds which prevented the assessee to file the statements before the A.O., no penalty can be imposed. In the appellant's case, the department under computation of TDS, processing of statements and the appellant had no such technical qualified manpower to do the work in time. Secondly, the appellant had taken the work of commonwealth games through CPWD where he has to rush to the work for completion of the infrastructure in time so that there should be proper performance of the Government before the international community and thirdly, the balance pending in the ledger of the appellant as on date is of Rs.4,50,00,000 for which he could not pay the tax in time to Government through TDS. The AR argued vehemently to reduce the demand to NIL u/s.

201(1)/201(1)(A) of the IT Act. Considering the appellant's ground for reasonable cause and other factors involved, I deem it proper to charge penalty u/s. 271A(2)(k)/274 of Rs.6,37,800 for non filing of statements in time. The appellant is directed to pay the demand as early as possible."

7. We find that the Learned CIT(Appeals) has restricted the levy of

penalty to Rs.6,37,800 against Rs. 20,50,700 levied by the A.O. on the basis

that tax default on the date of penalty imposition was Rs.6,37,800 and there

was sufficient reason for not paying tax in time through TDS on the payment

of Rs.4,50,00,000 which was held up from D.D.A., C.P.W.D. and unity 6

infra projects. Considering the reasons shown, the Learned CIT(Appeals)

has accepted the submissions of the assessee that there was reasonable cause

under sec. 273B of the Act which prevented the assessee to file the

statements before the Assessing Officer. We thus find that the first appellate

order on the issue is reasoned one which does not need any interference. The

same is upheld. The ground is accordingly rejected.

8. In result, the ground is rejected.

9. The appeals are dismissed.

Order pronounced in the open court on 31/03/2015.

Sd/- Sd/- ( PRAMOD KUMAR ) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 31/03/2015 Mohan Lal

Copy forwarded to: 1) Appellant 2) Respondent 3) CIT 4) CIT(Appeals) 5) DR:ITAT ASSISTANT REGISTRAR 7

Date Draft dictated on computer 16.03.2015 Draft placed before author 16.03.2015 Draft proposed & placed before the second member Draft discussed/approved by Second Member. Approved Draft comes to the Sr.PS/PS 31.03.2015 Kept for pronouncement on 31.03.2015 File sent to the Bench Clerk 31.03.2015 Date on which file goes to the AR Date on which file goes to the Head Clerk. Date of dispatch of Order.