Reasonable cause defeats penalty for delayed TDS statement filing when tax was duly deducted and deposited on time.

Penalty under section 272A(2)(c) for delayed filing of Form No. 26 was treated as unwarranted where tax was deducted and deposited in time, the default arose from reasonable cause, and no revenue loss was shown. The analysis notes that the TDS reporting requirement was newly introduced for the relevant year, the assessee's accountant could plausibly have been unaware of the filing timeline, and there was no material showing disregard of advice from the regular tax consultant. On this basis, the penalty was held to be not sustainable and was cancelled.

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Issues: Whether penalty under section 272A(2)(c) of the Income-tax Act, 1961 was leviable for delay in filing Form No. 26 despite deduction and deposit of tax at source in time.

Analysis: The delay was examined in the light of the fact that the provision relating to deduction of tax at source from rent, etc. had been introduced for the first time for the assessment year in question, and the assessee's accountant could plausibly have been unfamiliar with the requirement of timely filing of Form No. 26. The record did not show that any advice from the regular tax consultant had been ignored. It was also noted that the claim of no loss of revenue had not been rebutted. On an overall view, the default was treated as arising from reasonable cause and not as a case warranting penal action.

Conclusion: The penalty under section 272A(2)(c) was not sustainable and was cancelled, in favour of the assessee.

Ratio Decidendi: Penalty for delay in filing the prescribed TDS information is not exigible where the default is shown to be due to reasonable cause and the revenue has suffered no loss.

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