Tribunal cancels penalty on Bank for late E-TDS filing due to typographical error, emphasizing substance over technicalities.

The Tribunal allowed the appeal, canceling the penalty imposed on the Public Sector Bank for late filing of E-TDS returns. The Tribunal considered the typographical error in the notice as curable under the Income Tax Act, emphasizing the notice's substance over technical errors. It was held that penalties for technical breaches with reasonable cause should not be automatically imposed, leading to the cancellation of the Rs. 27,300 penalty.

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Issues:
1. Validity of penal proceedings under section 272A(2)(k) of the Act.
2. Typographical error in notice issued under section 272A(2)(c) of the Act.
3. Requirement of separate notices for penalty.
4. Imposition of penalty under section 272A(2) of the Act.

Issue 1: Validity of penal proceedings under section 272A(2)(k) of the Act:
The appeal was against the order passed by the CIT(A) confirming the penalty under section 272A(2) of the Act for late filing of E-TDS returns by the assessee, a Public Sector Bank. The CIT(A) upheld the validity of the penalty proceedings based on the notice issued under section 272A(2)(c) of the Act, despite the appellant's objection regarding the absence of a notice under section 272A(2)(k). The CIT(A) considered the notice to be valid, citing typographical errors as curable under section 292B, and emphasized that the notice clearly indicated the default committed by the appellant. The CIT(A) dismissed technical objections raised by the appellant's representative, asserting that the notice was in conformity with the Income Tax Act, 1961.

Issue 2: Typographical error in notice issued under section 272A(2)(c) of the Act:
The CIT(A) rejected the appellant's claim that the mention of clause (c) instead of clause (k) in the notice was a typographical error. The CIT(A) reasoned that the notice clearly identified the default of not filing quarterly returns, and any errors in the notice were considered curable under section 292B. The CIT(A) emphasized that the notice's substance and intent were in accordance with the Act, despite the technical error in mentioning the specific clause.

Issue 3: Requirement of separate notices for penalty:
The appellant argued that separate notices should have been issued for each statement regarding the penalty for late or non-filing of quarterly returns. However, the Tribunal found no provision in the Act mandating separate notices for penalties under section 272A(2). Consequently, the Tribunal confirmed the CIT(A)'s decision and rejected the appellant's contention regarding the necessity of separate notices.

Issue 4: Imposition of penalty under section 272A(2) of the Act:
The CIT(A) confirmed the penalty imposed by the AO for late filing of quarterly returns and non-filing of the fourth quarter return. The CIT(A) considered the explanations provided by the appellant but concluded that there was negligence on the part of the bank's manager in ensuring compliance with filing requirements. The Tribunal reviewed the facts and circumstances, noting that the appellant's first-time compliance with new filing requirements was a reasonable cause for the delays. Citing a precedent, the Tribunal held that penalties for technical breaches supported by reasonable cause should not be levied automatically. Consequently, the Tribunal canceled the penalty of Rs. 27,300 imposed on the appellant.

In conclusion, the Tribunal allowed the appeal filed by the assessee, canceling the penalty based on the reasonable cause for the delays in filing the quarterly returns.

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