TaxTMI 
TaxTMI 
TaxTMI 
2017 (1) TMI 722
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....d by different assessee are against respective orders of CIT(A) relating to assessment year 2011-12 against penalty levied under section 272A(2)(k) of the Income-tax Act, 1961 (in short 'the Act'). 2. This bunch of appeals relating to different assessee on similar issue of levy of penalty under section 272A(2)(k) of the Act relating to assessment year 2011-12 were heard together and are being disposed of by this consolidated order. 3. This bunch of appeals were heard on different dates and different Counsels put forward their contentions, which we shall deal in the paras hereinafter. 4. The appeals in ITA No.1 12/PN/2016 filed after delay of 3 days, in ITA No.114/PN/2016 filed after delay of 3 days, in ITA No. 115/PN/2016 filed after delay of 3 days, in ITA No. 116/PN/2016 filed after delay of 3 days, in ITA No. 234/PN/2016 filed after delay of 44 days and in ITA No.235/PN/2016 filed after delay of 26 days, against which the respective assessee have filed applications for condonation of delay explaining the reasons for said delay. In view of the facts and circumstances, we condone the delay in filing the said appeals belatedly and proceed to decide the same after taking the same....
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....lar year, there was strict requirement of e-filing statement and filing of e-TDS returns. Where the tax was deducted at source from the employees' salary and was paid in time to the Government account, however, since the assessee did not have trained staff for doing the work and also in nearby vicinity, no such staff was available and where the school was running only on the grant received from the State Government, non-compliance was for the reasons beyond the control of the school. The assessee pleaded its case of reasonable cause and application of provisions of section 273B of the Act. Reliance in this regard was placed on the ratio laid down by Chandigarh Bench of Tribunal in Collector Land Acquisition Vs. Addl. CIT (TDS) Range (2012) 21 taxmann.com 22 (Chd.) and the Agra Bench of Tribunal in The Manager, Union Bank of India Vs. Addl. CIT, Range -3, Mathura (2012) 26 taxmann.com 347 (Agra). 7. The CIT(A) noted the provisions of quarterly submissions of TDS statements within stipulated time provided under the Act and noted the fact that the delayed submissions of TDS returns by the deductor would eventually delay the processing of returns of deductees and issue of refunds, if ....
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....this regard and it was pointed out that he admits that though there is force in the contention of assessee on reasonable cause but the same cannot help the assessee since under section 273B of the Act, the said section 272A(2)(k) of the Act is not covered. He referred to the provisions of section 273B of the Act in this regard and pointed out that the same is fully covered. The next contention raised by the learned Authorized Representative for the assessee was that between the period of September, 2009 to October, 2012 when it was incumbent upon each deductor to e-TDS file the TDS statements / returns, there was some problem with working of software and 19 times, changes were made in the software. The Department at that particular time was struggling to provide online platform for e-TDS returns and for e-filing of said returns. Another compliance which had to be made was that 100% PAN of the deductees should be given, whereas earlier, it was the requirement to furnish 85% PAN of deductees . He stressed that initially, there was manual compliance of filing of TDS returns, which was being complied with. However, when electronic filing of TDS statements became mandatory, the difficul....
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....had to be filed in time and where the TDS statements were not filed in time, then penalty merits to be levied. He further stated that section levying penalty has no relevance to the tax deduction under section 272A(2)(k) of the Act, where it is provided that for each day of default Rs. 100/- is to be charged. He stressed that the reasonable cause of delay in furnishing the TDS statements has to be seen in each case and penalty is qua default and qua assessee. The learned Departmental Representative for the Revenue pointed out that the Hon'ble Allahabad High Court in Raja Harpal Singh Inter College Vs. Prl. CIT (2016) 70 taxmann.com 246 (Allahabad) has decided the issue against the assessee and had held that where the assessee college did not file e-TDS statements in time, then it was liable for levy of penalty under section 272A(2)(k) of the Act. Further, reliance was placed on the ratio laid down by Chandigarh Bench of Tribunal in Central Scientific Instruments Organization Vs. JCIT (TDS) (2015) 59 taxman.com 273 (Chd-Tri). 13. In rejoinder, Shri Pramod Shingte, the learned Authorized Representative for the assessee pointed out that where the penalty is to be levied for each day ....
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....own the duty of the person deducting tax, which reads as under:- "200. (1) Any person deducting any sum in accordance with the foregoing provisions of this Chapter shall pay within the prescribed time, the sum so deducted to the credit of the Central Government or as the Board directs. (2) Any person being an employer, referred to in sub-section (1A) of section 192 shall pay, within the prescribed time, the tax to the credit of the Central Government or as the Board directs. (2A) In case of an office of the Government, where the sum deducted in accordance with the foregoing provisions of this Chapter or tax referred to in sub-section(1A) of section 192 has been paid to the credit of the Central Government without the production of a challan, the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person, by whatever name called, who is responsible for crediting such sum or tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars a....
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....time, prepare such statement for such period as may be prescribed and deliver or cause to be delivered to the prescribed income tax authority or any person so authorized, such statement in such form and verified in such manner and setting forth such particulars and within such time as may be provided. The duty is upon a person deducting any sum in accordance with various provisions under the Chapter and also upon an employer who is making deduction out of the payments made to the employees, then sub-section (3) requires that the deductor is to prepare a statement for such period as may be prescribed, which is to be delivered to the prescribed authority, in such form and verified and setting forth such particulars as may be prescribed. The said statement is to be delivered within such time as may be prescribed. 20. In other words, any deductor deducting any sum on or after first day of April, 2005 in accordance with the provisions of Chapter has the following duties i.e. after paying the tax deducted at source credit to the Central Government, the TDS statements within prescribed time shall be prepared and filed. Rules 31A of the Rules provide the time limit for deposit of the tax ....
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....being a complex procedure introduced for the first time and where originally the deductors were not default in depositing the paper TDS returns, does the assessee deductor have reasonable cause for not furnishing the said e-TDS returns in time. In this regard, reference is to be made to the provisions of section 273B of the Act, where it has been provided that in case a person establishes or proves that he had reasonable cause for the failure to comply with the provisions of various sections provided in section 273B of the Act, then no penalty shall be imposable on such person for the said failure. Reading of section 273B of the Act shows that under it, the Section refers to along with many other sections clause (c) or clause (d) of sub-section (1) or sub-section (2) of section 272A of the Act. What is relevant for adjudication before us is section 272A(2) of the Act, since penalty has been levied for default in furnishing e-TDS returns under section 272A(2)(k) of the Act. Since section 273B of the Act covers the cases of levy of penalty under section 272A(2) of the Act, then in line with the provisions of said section in case a person establishes its case of reasonable cause for n....
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....er the provisions of section 273B of the Act, the provisions of section 272A(2)(k) of the Act are referred and in case the person establishes its case of reasonable cause, then no penalty is to be leviable for such defaults. The case put up by the assessee was that where tax was deducted at source and merely because e-TDS statements / returns were not filed in time does not result in any loss of revenue and hence, no merit in levy of penalty under section 272A(2)(k) of the Act. The claim of deduction of tax deducted at source, its payment to the Treasury to the Government and thereafter, the credit to be allowed to the deductee of tax deducted from his account, all work on the principle that the tax is collected and deposited in the account of the Government as income is earned. In other words, the said provisions of tax deducted are advance payments of tax as you earn the income. Taxes are deducted by the deductor out of payments due to the deductee and such tax deducted is the income of deductee. The credit for tax deduction at source would be allowed to the deductee only after the tax deducted at source is deposited in the credit of the Government and the deductor files the comp....
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....d in section 200(3) of the Act or the proviso to section 206C(3) of the Act, then he shall pay by way of penalty sum of Rs. 100/- for every day of default. It is further provided under the said sub-section that the amount of penalty for failure shall not exceed the amount of tax deductible or collectable, as the case may be. It is further provided that no penalty shall be levied under clause (a) for failure to furnish the statement under section 200(3) of the Act or proviso to section 206C(3) of the Act, on or after first day of July, 2012. 25. The learned Departmental Representative for the Revenue has placed strong reliance on the ratio laid down by the Hon'ble Allahabad High Court in Raja Harpal Singh Inter College Vs. Prl. CIT (supra) for the proposition that where the e-TDS statement was not filed in time, then penalty under section 272A(2)(k) of the Act has been held to be leviable. In the facts of the said case before the Hon'ble High Court, the assessee was deducting the tax at source but had not filed the e-TDS returns for five successive assessment years starting from 2008-09 to 2012-13. The assessee failed to furnish any explanation before the Assessing Officer for the ....
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....y of penalty from the date of 1st April, 2010 in respect of e-TDS statements to be filed for assessment years 2008-09 to 2012-13, since the assessee had explained that regular Principal had assumed charge on 25.01.2010. In other words, the Hon'ble High Court has accepted the explanation offered by the assessee regarding reasonableness of cause of delay in furnishing e-TDS returns late partially. Admittedly, the default in filing the said e-TDS returns have not been accepted in full but taking into consideration the reasonableness of explanation, the penalty chargeable under section 272A(2)(k) of the Act has been restricted i.e. suitably reduced in the case of appellant as held by the Hon'ble High Court. 27. Another reliance placed upon by the learned Departmental Representative for the Revenue is on the ratio laid down by the Chandigarh Bench of Tribunal in Central Scientific Instruments Organization Vs. JCIT (TDS) (supra). In the facts of the said case, the assessee had filed TDS returns in Form No.26Q belatedly after expiry of 10 years from prescribed time limit and the assessee had submitted that he was unaware of provisions of section 200(3) of the Act. The assessee had deposi....