Tribunal overturns penalty for late tax filing due to new e-TDS procedures

The Appellate Tribunal overturned the penalty imposed on the Assessee for late filing of quarterly returns for the Financial Year (F.Y.) 2005-06. The Tribunal considered the delay reasonable due to the introduction of new e-TDS return filing procedures and the shift to quarterly returns that caused initial staff unfamiliarity. Consequently, the Tribunal found the penalty deletion justified, ruling in favor of the Assessee. The decision was pronounced on 11.07.2018.

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Issues:
Levy of penalty for late filing of quarterly returns for F.Y. 2005-06.

Analysis:
The appeal before the Appellate Tribunal ITAT Delhi concerned the levy of a penalty on the Assessee for late filing of quarterly returns for the second and third quarters of the Financial Year (F.Y.) 2005-06. The Assessee explained to the Ld. CIT (A) that the delay was due to the accounting staff's unfamiliarity with the newly introduced procedures. However, the Ld. CIT (A) dismissed the appeal, disagreeing with the explanation provided by the Assessee.

Upon examining the impugned order, the Appellate Tribunal noted that the introduction of e-TDS return filing and the shift from annual to quarterly returns in F.Y. 2005-06 had caused delays, including in the first quarter. The Tribunal found the Assessee's explanation reasonable, attributing the delay to the staff's lack of familiarity with the new procedures. Considering this, the Tribunal concluded that the delay was a minor breach of law, especially in the initial year of implementing new procedures. Consequently, the Tribunal decided to delete the penalty imposed, ruling in favor of the Assessee.

In its final decision, the Appellate Tribunal allowed the Assessee's appeal, overturning the penalty for late filing of quarterly returns for F.Y. 2005-06. The order was pronounced in open court on 11.07.2018.

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