Case Law Details
District Mining Officer Vs JCIT (TDS) (ITAT Allahabad)
It is noted that the Assessing Officer has initiated the penalty proceedings u/s 272A(2)(k) of the Income Tax Act for the alleged default of delivering the statement of TDS in Form 26Q within the time specified in section 200(3) read with proviso to section 206(3). In the penalty proceedings, the assessee has raised an objection against levy of penalty and contended that the alleged transactions / amount deductible as TDS as mentioned by the AO do not pertain to the assessee as the assessee has not made any payment or credit any payment which is subjected to TDS. Despite this fact pointed out by the assessee, the AO proceeded to pass the penalty order u/s 272A(2)(k) of the Income Tax Act and levied the penalty for default in / delay in delivering the TDS statement in Form 26Q of the Act. The AO has passed separate order for each Financial Year / Assessment Year. The assessee challenged the action of the AO before the CIT(A) and contended that the order passed by the AO is illegal and invalid ab-initio, erroneous and bad in law. The assessee in the grounds of appeal has also pointed out that there is no justification for levy of penalty and raising demand for not filing of Form 26Q when there was no such obligation on the assessee to deduct TDS or submit Form 26Q. The CIT(A) has decided the appeal of the assessee summarily.
It is clear that the CIT(A) has not even considered the fact that the penalty proceedings were initiated by the AO for default on the part of the assessee on account of non – filing of Form 26Q within the period specified u/s 200(3) read with proviso to section 206(3) of the Income Tax Act. It is pertinent to note that once the assessee has stated on the affidavit and given an undertaking that the assessee has not paid any amount or deducted any TDS on any sum during these assessment years which requires to submit in Form 26Q, the levy of penalty for default of delivering the From 26Q is invalid and consequently the penalty order passed by the AO is bad in law, ab initio. Once the initiation of the penalty is based on some wrong facts and wrong ground which is not an error or mistake due to any incorrect mentioning of provision of law but the very basis of initiation of the proceedings was misconceived by the AO being the TDS statement in Form 26Q was not delivered by the assessee within the specified time. This fact is accepted by the AO while passing an order u/s 154 on 05.06.2014 wherein the AO has accepted that the assessee was not under any obligation to deduct TDS in respect of the alleged transaction but the assessee was under the obligation to collect the tax in respect of various amounts received by the assessee and consequently the assessee was required to submit the statements in Form No. 27EQ. Once the AO has accepted this fact that the assessee was not required to deduct TDS or submit Form 26Q then the initiation of the penalty by the AO for such a non – existing default renders the penalty order invalid. The invalid initiation of the penalty vitiates the entire proceedings and consequently the penalty orders passed u/s 272A(2)(k) based on absolutely non – existing grounds is not sustainable in law. The CIT(A) has summarily dismissed all the appeals of the assessee without even discussing the correct fact brought on record and accepted by the AO while passing 154 order. Hence the impugned penalty orders are not sustainable in law and liable to be quashed. Consequently, the penalty levied by the AO u/s 272A(2)(k) for these assessment years are deleted.
FULL TEXT OF THE ITAT JUDGEMENT
These five appeals by the assessee are directed against five separate orders of CIT(A) all dated 17.10.2017 arising from penalty order passed u/s 272A(2)(k) of the Income Tax Act for the Assessment Year 2008-09 to 2011-12. The assessee has raised common grounds in these appeals. The grounds raised for Assessment Year 2008-09 are as under:
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