2011 (11) TMI 645 - AT - Income Tax

Partial success for revenue in appeal on penalty for late filing under Income Tax Act; delay deemed significant.

ITO Versus Kataria Transport Co. Ltd

ITO Versus Kataria Transport Co. Ltd - TMI Issues involved: Delay in filing appeal, deletion of penalty u/s 272A(2)(k) of the I.T. Act, grounds raised by the revenue, reasons for delay in filing appeal, reasons for condonation of delay, justification for penalty deletion, applicability of legal precedents.Delay in filing appeal: The revenue appealed against the condonation of a 529-day delay in filing the appeal without any reasonable cause. The Ld. CIT(A) had accepted the reasons provided by the assessee for the delay, citing issues with the Accounts department. The Tribunal found that the Ld. CIT(A) had the discretion to condone the delay, which was exercised with valid reasons. The revenue's appeal on this ground was rejected.Deletion of penalty u/s 272A(2)(k) of the I.T. Act: The revenue contested the deletion of a penalty for late filing of Form 26Q by 3101 days. The Ld. A.R. argued that the delay was due to the unavailability of PAN for deductees in the transportation business, justifying the penalty deletion. However, the Tribunal found that the quarterly returns were significantly delayed, with no evidence of efforts to obtain PAN earlier. Legal precedents cited were deemed inapplicable as the reasons for delay differed. The penalty deletion was reversed, and the penalty order was restored.Grounds raised by the revenue: The revenue raised multiple grounds, including errors in condoning the delay in filing the appeal and deleting the penalty u/s 272A(2)(k) of the I.T. Act. The Ld. CIT(A) had not upheld the Assessing Officer's order, leading to the revenue's appeal. The Tribunal examined each ground and made decisions based on the arguments presented and legal precedents cited.Reasons for delay in filing appeal: The assessee cited issues with the Accounts department leading to delayed receipt of the order, which was accepted by the Ld. CIT(A) for condonation of the 529-day delay. The Tribunal upheld this decision, emphasizing the Ld. CIT(A)'s discretion in such matters.Justification for penalty deletion: The Ld. A.R. argued that the penalty for late filing of Form 26Q was unjustified due to the nature of the business and as a technical breach. However, the Tribunal found the delay significant and lacking in bona fide reasons, leading to the reversal of the penalty deletion.Applicability of legal precedents: The Tribunal analyzed the applicability of legal precedents cited, including a judgment of the Hon'ble Gujarat High Court and a Tribunal decision. It was concluded that the facts of the present case differed from those in the precedents, rendering them inapplicable to justify the penalty deletion. The Tribunal's decision was based on the specific circumstances and lack of valid reasoning for the penalty deletion.In conclusion, the Tribunal partly allowed the revenue's appeal, reversing the deletion of the penalty u/s 272A(2)(k) of the I.T. Act for late filing of Form 26Q.