No Penalty for Late Quarterly TDS Filing Under Section 200(3) and Rule 31A Due to Technical Lapse

The ITAT Pune held that the appellant's failure to file Quarterly TDS statements within the prescribed time under s.200(3) read with Rule 31A constituted a procedural lapse but caused no loss or prejudice to Revenue. The appellant's explanation regarding difficulty in obtaining deductee PANs was accepted as plausible. The Tribunal found the breach to be technical and venial, not warranting penalty under s.272A(2)(k), relying on precedents from SC and HC. Consequently, the penalty imposed by the AO was deleted, and the appeal was allowed.

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The Appellate Tribunal (ITAT Pune) addressed an appeal by a Government of Maharashtra department against a penalty imposed under section 272A(2)(k) read with section 200(3) of the Income-tax Act for failure to file Quarterly TDS statements within the prescribed time under Rule 31A. The penalty of Rs.1,08,100/- was confirmed by the National Faceless Appeal Centre (NFAC). The Tribunal noted that no loss or prejudice was caused to the Revenue due to the procedural lapse. The appellant's explanation-that the delay was due to difficulty in obtaining deductees' PANs-was found plausible and uncontradicted. Citing the Supreme Court in *Hindustan Steel Ltd. v. State of Orissa* (1972) 83 ITR 26 (SC) and the Gujarat High Court in *CIT v. Harsiddh Construction (P) Ltd.* (2000) 244 ITR 417, the Tribunal held that a mere technical or venial breach does not warrant penalty. Accordingly, the Tribunal held that the penalty was not sustainable and directed deletion of the penalty, allowing the appeal.

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