Case Law Details
IN THE ITAT AMRITSAR BENCH
General Manager, J&K Project Construction Corpn. Ltd.
v/s.
Income-tax Officer (TDS), Jammu
IT Appeal Nos. 17 to 22 & 26 to 28 (Asr.) of 2012
[Assessment years 2007-08 to 2009-10]
July 17, 2012
ORDER
1. These nine appeals filed by the assessee are directed against the consolidated order of the CIT(A), Jammu, dated 14.10.2011 for the assessment years 2007-09, 2008-09 & 2009-10 respectively. As the issue involved in all these appeals is common, the same were heard together and are being disposed of by this consolidated order for the sake of convenience.
2. The assessee has raised common grounds in all the appeals. However, for the sake of convenience, common grounds raised in ITA No. 17 (Asr)/2012 are reproduced hereunder:
“1. That the ld. CIT(A), Jammu has erred in law and facts. In any case he has not applied his mind to the actual facts and circumstances of the case.
2. That the Ld. CIT(A), Jammu has erred in confirming the action of the ld. ITO, TDS, Jammu for imposing penalty of Rs. 10,000/- under section 272B of I.T. Act, 1961, arbitrarily, illegally and without any justification.”
3. The facts relating to the issue in dispute are that ITO (TDS), Jammu during the course of inspection on 18.02.2010 noticed that the person responsible i.e. the assessee has failed to mention PANs on the form No. 16 & 16A issued to the persons from whom the tax has been deducted at source. He issued a show cause notice to the assessee on 18.01.2010 requiring the person responsible to show cause within seven days from the receipt of the said notice as to why penalty for not quoting PAN on the form No. 16 & 16A may not be imposed. In response to the said notice, the person responsible has not attended the office of the ITO (TDS), Jammu as well as has also not filed any reply to the same. Keeping in view the facts and circumstances, the ITO (TDS) Jammu formed an opinion that the person responsible was not prevented by any reasonable cause for this default and he held the person responsible as a person in default for this failure and imposed a penalty of Rs. 10,000/- in each case for financial year vide his order dated 15th March, 2010. Aggrieved by the same, the assessee filed an appeal before the ld. CIT(A), who vide consolidated impugned order dated 14.10.2011 dismissed all the nine appeals filed by the assessee.
4. Now, the assessee is aggrieved by the impugned order of CIT(A) and is in appeal before this Bench.
5. At the time of hearing, the ld. counsel for the assessee stated that the ld. first appellate authority has passed a wrong order contrary to the law and facts on the file and therefore, the impugned order deserves to be cancelled. He further stated that penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or dishonest. He further stated that if there is any default committed by the assessee i.e. technical for which penalty is not leviable. In support of his contention, he placed reliance on the decision of the Hon’ble Supreme Court, in the case of Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC) and unreported decision of ITAT, Chandigarh Bench “A”, Chandigarh, in the case of ITO (TDS) v. Oriental Bank of Commerce [IT Appeal No. 773/Chandi/2011 for the assessment year 2009-10 dated 19.09.2011]. He has also filed a small paper book containing the said decisions as well as some other documentary evidence i.e. provisional receipts of TDS for the assessment years under dispute.
6. On the contrary, the Ld. DR, relied upon the order passed by the ld. first appellate authority and stated that in view of section 139A(5), every person is duty bound to quote PAN in all his returns or correspondence with any Income-tax authorities and in all documents pertaining to such transactions as well as in all challans for the payment of any sum due under this Act. He further stated that keeping in view section 139A(5B), every person deducting tax under Chapter XVIIB shall quote the Permanent Account Number of the person to whom such sum or income or amount has been paid by him. In the present case, the assessee has failed to do the same. Therefore, the Revenue authorities have rightly levied penalty of Rs. 10,000/- in each financial year. He requested that the appeals filed by the assessee may be dismissed.
7. We have heard both the parties and perused the relevant record available with us. We have thoroughly gone through orders passed by the Revenue authorities, especially the relevant provisions applicable for the present case i.e. Section 139A(5), (5A) & (5B) of the Act. For the sake of convenience, we are reproducing the relevant part of the said section as under:
Permanent Account Number
“139A.(1) Every person,-
(i) if his total income or the total income of any other persons in respect of which he is assessable under this Act during any previous year exceeded the maximum amount which is not chargeable to income tax; or
(ii) carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed [five lakhs] rupees in any previous year; or
(iii) who is required to furnish a return of income under [sub-section (4) of section 139; or
(iv) being an employer, who is required to furnish a return of fringe benefits under section 115WD
and who has not been allotted a permanent account number shall, within such time, as may be prescribed, apply to the Assessing Officer for the allotment of a permanent account number.
139A(5) Every person shall-
(a) quote such number in all his returns to, or correspondence with any income-tax authority.
(b) Quote such number in all challans for the payment of any sum due under this Act;
(c) Quote such number in all documents pertaining to such transactions and entered into by him’
Provided that the Board may prescribe different dates for different transactions or class of transactions or for different class of persons;
Provided further that a person shall quote General Index Register Number till such time Permanent Account Number is allotted to such person:
(d) intimate the Assessing officer any change in his address or in the name and nature of his business on the basis of which the permanent account number was allotted to him.
139A(5A): Every person receiving any sum or income or amount from which tax has been deducted under the provisions of Chapter XVIIB, shall intimate his permanent account number to the person responsible for deducting such tax under that Chapter:
Provided further that a person referred to in this sub-section shall intimate the General Index Register Number till such time permanent account number is allotted to such persons.
(5B) Where any sum of income or amount has been paid after deducting tax under Chapter XVIIB, every person deducting tax under that Chapter shall quote the permanent account number of the person to whom such sum or income or amount has been paid by him-
(i) in the statement furnished in accordance with the provisions of sub-section (2C) of section 192;
(ii) in all certificates furnished in accordance with the provisions of section 203;
(iii) in all returns prepared and delivered or caused to be delivered in accordance with the provisions of section 206 to any income-tax authority.
(iv) In all statements prepared and delivered or caused to be delivered in accordance with the provisions of sub-section (3) of section 200:
Provided that Central Government may, by notification in the official Gazette, specify different dates from which the provisions of this sub-section shall apply in respect of any class or classes of persons:”
7.1 Keeping in view the said relevant provisions of law which are applicable in the case of the assessee, we are of the view that every person, if his total income or the total income of any other person in respect of which he is assessable under this Act during any previous year exceeded the maximum amount which is not chargeable to income tax; or carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed Rs. 5 lakhs in any previous year, is required to furnish a return of income under sub-section 4A of section 139. If he has not been allotted a Permanent Account Number then he is duty bound to apply to the AO for allotment of PAN within the prescribed period. Further, every person is also duty bound to quote such number in all his returns or correspondence with any Income Tax Authorities in the interest of Revenue. Keeping in view the facts and circumstances of the present case, the assessee who is ‘person responsible’ for deducting tax under Chapter XVIIB is duty bound to quote the PAN of the person to whom such sum or income or the amount has been paid by him. No doubt, in view of section 139A(5A) every person receiving any amount or income from which tax has been deducted under the provisions of Chapter XVIIB shall intimate his Permanent Account Number of the person responsible for deducting such tax under that Chapter. We are of the view that the person who receives any sum or income or amount is also duty bound to intimate the PAN to the person responsible for deducting tax at source. But in our view that is only possible, if the person responsible, asks him to provided his Permanent Account Number. In the present case, we find that the assessee has not made any attempt to write a single letter to the receiving person for providing their PAN. As per order dated 15th March, 2010 passed by the ITO (TDS), Jammu, he has issued show cause notice to know the reason why the assessee has not quoted the PAN of the deductee in Form No. 16 & 16A. But the assessee has not given any explanation before the ITO (TDS), even the assessee has also failed to appear before him on the date fixed. It shows the conduct of assessee and obedience to the law being public authority of J & K State. The assessee has failed to establish the reasonable cause for not quoting PAN in Form No. 16 & 16A even before the ITO (TDS), Jammu, ld. CIT(A) and even before us. Keeping in view section 272B of the Act, if a person fails to comply with the provisions of section 139A of the Act, the AO may direct that such person shall pay, by way of penalty, a sum of Rs. 10,000/-. In the present case, the assessee has not made any compliance of section 139A(5B) of the Act and, therefore, liable for penalty of Rs. 10,000/- in each assessment year in dispute.
7.2 We have also gone through the citations cited by the ld. counsel for the assessee i.e. Hindustan Steel Ltd. (supra). This case is of no help to the assessee because the assessee has not established the bonafide for the breach committed by the assessee. Similarly, another decision rendered by the ITAT, Chandigarh Bench “A”, Chandigarh in the case of Oriental Bank of Commerce (supra), is also of no help to the assessee because in this case, the assessee omitted to quote PAN and has quoted invalid PAN in 77 cases. In the cases, where the assessee has omitted to quote PAN, the assessee has quoted the PAN after making quick admission before the ITO (TDS) and in some other cases, the assessee has quoted wrong PANs which were later on corrected without any delay. Therefore, the case laws cited by the ld. counsel for the assessee are not applicable to the facts of the present cases because the assessee has not quoted PANs in Form No. 16 & 16A. The assessee has also not establish any reasonable cause for not quoting the PANs of the deductees in Form No. 16 & 16A. Therefore, we are of the view that the assessee does not deserve any lenient view from this Bench on the issue in dispute. Accordingly, we hold that the orders passed by the lower authorities are reasonable and deserve to be upheld. Hence, we uphold the impugned order by dismissing the appeals filed by the assessee.
8. In the result, all nine appeals of the assessee are dismissed.
