Tribunal Modifies Penalties for Late TDS Filing, Considers Payment Dates

The Tribunal partially allowed the appeals against the confirmation of penalties under section 272A(2)(k) of the Income-tax Act, 1961. It held that penalties should be levied from the date of TDS payment to the filing of e-TDS statements, considering the financial difficulties faced by the assessee. The Tribunal emphasized aligning penalties with payment dates and referred to precedents from other benches to support its decision. The penalties were modified based on this reasoning, indicating a more lenient approach towards penalties for delayed filing of quarterly returns/statements.

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Issues:
- Whether the CIT(A) was justified in confirming the penalty imposed u/s 272A(2)(k) of the Income-tax Act, 1961.

Analysis:
1. The appeals were directed against two orders of CIT(A) for the assessment years 2010-11 & 2012-13. The common issue raised was whether the penalty imposed under section 272A(2)(k) of the Act was justified.

2. The penalty was imposed by Jt. CIT(TDS) for delayed filing of quarterly returns/statements. The Jt. CIT(TDS) relied on a Delhi High Court judgment, stating that non-furnishing of prescribed statements within the due date affects tax credit for TDS, justifying the penalty.

3. The CIT(A) upheld the penalty, emphasizing the technical nature of the requirement under section 200(3) and its impact on deductees' tax credit claims. The delay in filing caused difficulties for assessing officers, leading to justifiable penalties.

4. The assessee appealed to the Tribunal, arguing that the penalty should be restricted from the date of TDS payment to the filing date of the statement. The Tribunal referred to precedents from Cuttack and Pune Benches, modifying penalties based on payment dates.

5. The Tribunal considered the financial difficulties faced by the assessee, leading to delayed TDS payments. It noted that penalties should align with the date of TDS payment to the Central Government, as separate provisions exist for non-payment defaults.

6. Relying on judicial pronouncements, the Tribunal directed the Assessing Officer to levy penalties from the date of TDS payment up to the filing of e-TDS statements, as filing without payment is not feasible. The appeals were partly allowed based on this reasoning.

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