Tribunal cancels penalty under Income Tax Act for delay in uploading statement due to missing PANs

The Tribunal allowed both appeals, setting aside the lower authorities' orders and deleting the penalty imposed under section 272A(2)(k) of the Income Tax Act. The penalty was deemed unjustified as the failure to upload the quarterly statement was due to non-availability of PANs for some deductees, despite the taxes being deducted and paid. The Tribunal ruled that there was a reasonable cause for the delay in uploading the statement for deductees without PANs, leading to the deletion of the penalty.

---

---

Issues:
Levy of penalty u/s 272A(2)(k) of the Income Tax Act for failure to upload quarterly statement of tax deducted at source due to non-availability of Permanent Account Numbers (PAN) of deductees.

Analysis:
The appeals were against the order of the Commissioner of Income-tax (Appeals)-VII, Chennai, for assessment years 2010-11 and 2011-12 regarding the penalty under section 272A(2)(k) of the Income Tax Act. The representative for the assessee argued that the delay in uploading the statement was due to non-availability of PANs of some deductees, even though the tax was deducted and paid to the Government account. The assessee contended that this constituted a reasonable cause for the delay and thus, the penalty should not be levied.

The Departmental Representative argued that filing the return is a statutory function of the deductor, and non-availability of PAN cannot be an excuse for not filing the return as required. It was asserted that it is the responsibility of the assessee to collect PANs in advance and upload the quarterly statement as mandated by the Act. The CIT(A) upheld the penalty imposed by the Assessing Officer.

Upon review, the Tribunal acknowledged that the tax was deducted by the assessee, but the issue was the failure to upload the quarterly statement due to non-availability of PANs of some deductees. The Tribunal opined that the mere failure to upload the statement does not warrant an automatic penalty, especially when the tax was paid to the Government account. It was noted that without the PANs, the assessee could not upload the statement, and the Department did not argue that the statement could be uploaded without PANs. Therefore, the Tribunal concluded that there was a reasonable cause for the delay in uploading the statement for deductees without PANs. However, for deductees with available PANs, the uploading was expected. As the penalty was imposed only for deductees without PANs, the Tribunal ruled that the penalty under section 272A(2)(k) was unjustified, leading to the deletion of the penalty.

In conclusion, the Tribunal allowed both appeals of the assessee, setting aside the orders of the lower authorities and deleting the penalty imposed under section 272A(2)(k) of the Income Tax Act. The judgment was pronounced on 5th February 2016 in Chennai.

---