TMI Blog2019 (1) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... r.w. other provisions which cast a duty on the assessee to deduct the tax / deposit the tax and file the return and also in the light of Rule 31A of the Act, but nonetheless, the assessee has to make out a case of reasonable cause for not filing the return under Rule 31 of the Rules r.w.section 200(3), In the present case the assessee failed to make out a case of reasonable cause. - decided against assessee. - I.T.A Nos.2176 to 2179/Bang/2017 - - - Dated:- 5-10-2018 - Shri. Jason P. Boaz, Accountant Member And Shri. Laliet Kumar, Judicial Member For the Assessee : Shri. Mukesh Kumar Jain, CA For the Revenue : Shri. Siddappaji R. N. Addl. CIT ORDER PER LALIET KUMAR, JUDICIAL MEMBER : The present appeals are filed by the assessee against the common order of the CIT (A) -13, Bengaluru, for the assessment years 2009-10 to 2012-13, on the following effective grounds : 2. The learned Assessing Officer has erred in not accepting the appellant s contention that there was a reasonable cause for the failure alleged in terms of Section 272A(2)(K). 3. The Learned Commissioner of Income Tax (Appeals) has dismissed the appeal without accepting the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or compliance with the provisions of Chapter XVIIB has been cast on the company itself including the Principal Officer of the company by virtue of the provisions of Sec.204 of the Income Tax Act. Being aggrieved by the levy of penalty, the assessee filed appeals before the CIT (A). 03. Before the CIT (A), again it was reiterated by the assessee that there were financial difficulty and hence there was delay in remitting the TDS amounts to the Government account and consequential delay in filing the returns. The CIT (A) at page 13 had dealt with the contention of the assessee in the following manner : In the present case. be financial crisis is claimed to be a reasonable cause for not filing the quarterly returns in time. However, on perusal of the annual reports filed along with the submission dated 21.06.2017, it is noticed that in the F.Ys. 2008-09, 2009-10, 2010-11 and 2011-12, the company incurred the expenses on employees' cost of RS. 12.10 crores, RS. 12.74 crores, RS. 7.18 crores and RS. 6.64 crores respectively. it is also noticed from the annexures to the financial statements that the legal and professional expenses to the extent of RS. 70.89 lakhs , 1.36 cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he quarter of the financial year ending with the date specified in column (2) of the Table below shall be furnished by the due date specified in the corresponding entry in column (3) of the said Table:- The above rule was substituted by the Income-tax (eighth amendment) Rules 2011 w.e.f. 01.112011 as under :- (2) Statements referred to in sub-rule (1) for the quarter of the financial year ending with the date specified in column (2) of the Table below shall be furnished by (i) The due date specified in the corresponding entry in column (3) of the said Table, i f the deductor i s an of f ice of Government; and (ii) The due date specified in the corresponding entry in column (4) of the said Table, if the deductor is a person other than the person referred to in clause (i) Having considered the submission, it is noticed from the perusal of clause (k) of sub-section (2) of section 272A that 'if a person fails to deliver or cause to be delivered a copy of the statement within the time specified in subsection (3) of section 200 .... he shall pay, by way of penalty, a sum of one hundred rupees for every day during which the failure continues The s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial difficulty and hence was unable to remit the TDS amounts to the Government as also to file the returns in time. He has drawn our attention to the balance sheets for the impugned assessment years. It was submitted that in all the years the assessee had a negative reserve surplus which went to prove that the assessee was facing financial difficulty, hence there was reasonable cause as per section 273B of the Act. AR relied upon following case laws : In addition to the above, reliance was also placed on the following decisions : i) Pravin Chatarbhuj Bajaj v. Addl. CIT [ITA.933/PUN/2016, dt.09.02.2018 ; and ii) Global Ventures Inc v. Addl. CIT [ITA.1871/Bang/2017, dt.18.05.2018] 05. The Ld. DR has vehemently submitted that the order passed by the lower authorities is in accordance with law. Our attention was drawn to the judgment of the Hon ble Allahabad High Court in Raja Harpal Singh Inter College v. Pr.CIT [(2016) 70 taxmann.com 246] and the decision of the ITAT, Chandigarh in World Wide Immigration Consultancy Service Ltd v. JCIT (TDS), [ITA.1020/Chd/2014, dt.23.07.2015]. He further submitted that the decisions relied upon by the assessee are not appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the financials of the assessee clearly shows that there is borrowing from the financial institution and utilisation of fund by the assessee for various purposes. It is also clear that the assessee has been making huge payment to the employees / vendors for which there was no financial difficulty. In the considered opinion of the bench if the assessee can deduct the tax and but chooses not to deposit the same with the Government account and further chooses not to file the return in time, then the law cannot help a delinquent and careless assessee. In the facts of the present case the question of having any financial difficulty does not arise and it has been set up by the assessee only with a view to cover up its misdeeds. If we see the chart reproduced hereinabove, we fail to understand that how in the first quarter of FY 2008-09 when the TDS amount of ₹ 6,42,080/- was paid by the assessee along with the penalty after a period of 58 days, there was any financial difficulty. Similar is the fact with respect to other quarters also. If the assessee was having financial difficulty in the first quarter April to June and the payment was made in August and the tax was deposited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause is established for the said failure. Therefore the statute provides that if there is reasonable cause for the failure, the penalty under the provisions of sub-section (2) of Section 272A of the Act cannot be levied. Then the issue that comes up for consideration is whether the explanation tendered by the appellant in support of delay in submission of quarterly returns can be considered to be plausible. The explanation that the delay was caused on account of delayed remittance of tax deducted amount to the Govt. Account and the ignorance of the provisions of law on the issue as the company was newly set up can be considered to be reasonable having regard to the ratio laid down by the Hon ble Allahabad High Court in the case of Budhan Singh Sons (supra) wherein it was held that when the assessee is in the first year of business operations, ignorance of provisions of law can be held to be reasonable cause for non-compliance of the provisions of law. Further the columns of Form 26Q also contains columns requiring the details as to the date of the deposit of the TDS Amount in the Govt. Account. Therefore, when there is a delay in remittance of the TDS Amount in the Govt. Acc ..... 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