TaxTMI 
TaxTMI 
2011 (3) TMI 880
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....xamination of records, noted that the assessee had not filed the TDS returns which were required to be filed at the end of every quarter. Under the provisions of section 200(3) read with Rule 31A, a quarterly statement of TDS in Form No. 26Q is required to be filed by the assessee by 15th July, 15th October, 15th January and 15th June (for last quarter) of the year. The delays in submission of TDS returns for the assessment year 2006-07 quarterlywise were compiled by the AO as under: Type of Return Periodicity Tax deducted Due date Date of filing Delay by days Penalty (In Rs.) 26Q Q I 59635 31-8-05 14-9-07 744 59635 26Q Q II 56417 15-10-05 14-9-07 699 56417 26Q Q II....
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....06-07 and 2007-08 respectively. 3. The assessee disputed the decision of AO and submitted before the CIT(A) that the assessee had incurred certain expenses such as professional fees, rent, contract labour and commission which attracted TDS. The assessee was incurring losses and there was financial crisis and therefore due to non-availability of funds there were delays in making the payments and filing the returns. It was accordingly submitted that there was reasonable cause and penalty should be deleted. Reliance was placed on the judgment of Hon'ble High Court of Allahabad in the case of CIT v. Shriram Memorial Education Society (287 ITR 155) and the decision of Mumbai Bench of Tribunal in the case of Crest Communication Ltd. (11....
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....0(3) could be filed only after paying the taxes. Therefore, penalty, if any, could be levied only in respect of delay after payment of tax. As regards the delay in payment of tax, it was submitted that the assessee had severe financial difficulties. He referred to the PandL a/c. and balance-sheet for the year ended 31-03-2010 to point out that the assessee was incurring losses and there were substantial liabilities on account of sundry creditors. The assessee had deducted tax at the time of credit of the amount in the books of account and payment could not be made due to financial difficulties. The assessee had, however, subsequently paid the amount and also filed TDS returns. It was, therefore, requested that penalty should not be levied. ....
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....00(3) r.w.r. 31A a person deducting tax at source is required to prepare a statement in the prescribed form being the Form No. 26Q and deliver the same to the prescribed income-tax authorities after paying the tax deducted to the credit of Central Government. The said section 200(3) is reproduced below as a ready reference. 200(3) Any person deducting any sum on or after the first day of April, 2005 in accordance with the foregoing provisions of this chapter or as the case may be, any person being an employer referred to in sub-section (1A) of section 192 shall after paying the tax deducted to the credit of the Central Government within the prescribed time, prepare such statement for such period as may be prescribed and deliver or....
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.... prescribed time, the assessee shall prepare a statement as prescribed and submit to the authority concerned within the prescribed time limit. The assessee therefore can file the return only after paying the tax to the Central Government. The quarterly returns of TDS require filling of data relating to payment of taxes and therefore such returns could be filed only after paying the tax to the Central Government. Therefore in our view penalty has to be levied for the delay only from the date of paying the tax to the Central Government. 6.1. As regards the default in not paying the tax to the Central Government in time or for non-deducting the tax at source, there are other provisions for ensuring compliance. In case the assessee fa....