Reasonable cause for delayed TDS statement filing can defeat penalty where tax was timely deducted and deposited.

Penalty for delayed filing of quarterly TDS statements was examined in light of reasonable cause under section 273B. Although tax had been deducted and deposited within time, the statements in Forms 24Q and 26Q were filed late, creating a default under section 272A(2)(k). On the facts, the Tribunal accepted that the assessee lacked awareness of the filing requirement, the Revenue showed no prior knowledge or revenue loss, and the breach was technical or venial. The explanation was treated as reasonable cause, so the penalty was held not leviable and the deletion of penalty was upheld.

---

---

Issues: Whether penalty under section 272A(2)(k) of the Income-tax Act, 1961 for delay in filing quarterly TDS statements in Forms 24Q and 26Q was sustainable, or whether the assessee had shown reasonable cause under section 273B of the Income-tax Act, 1961.

Analysis: The assessee had deducted tax and deposited it with the Central Government within time, but the quarterly statements were filed belatedly. The Tribunal noted that the statutory obligation to file quarterly statements under section 200(3) existed, and the delay constituted a default attracting section 272A(2)(k) unless reasonable cause was established under section 273B. On the facts, the Tribunal accepted the finding that the assessee lacked knowledge of the filing requirement, and the Revenue did not produce material to show prior awareness or any loss to revenue. Relying on the principle that penalty is not automatic and that a technical or venial breach may be excused where there is bona fide conduct, the Tribunal held that the explanation constituted reasonable cause. The Tribunal also accepted that ignorance of law could, on these facts, amount to reasonable cause.

Conclusion: The penalty was not leviable, and the deletion of penalty was upheld in favour of the assessee.

Ratio Decidendi: Where tax has been deducted and deposited in time, delay in filing quarterly TDS statements may not attract penalty if the assessee establishes reasonable cause under section 273B, including a bona fide lack of awareness of the filing requirement, especially when the breach is technical or venial and causes no revenue loss.

---