TaxTMI 
TaxTMI 
2018 (3) TMI 1203
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.... " a) The Learned CIT(Appeals) has erred in ignoring the submissions of the Appellant and confirming the penalty of Rs. 99,200/- under section 272A(2)(k) of the Income Tax Act. The appellant submits that on the facts and in the circumstances of the case, the levy of penalty is not justified and the entire penalty of Rs. 99,200/- ought to have been cancelled. b) The Appellants crave leave to add, alter or amend the above ground either before or at the time of hearing of the appeal." 3. The assessee had filed statement of tax deducted at source in form no. 26Q for financial year 2009-10 which was filed late beyond the time prescribed in Rule 31A of Income-tax Rules, 1962 , as detailed here under: Qtr. TDS Amt. Due date of filing TDS statements Date of filing TDS statement Delay of days Q-l 74485 15.07.2009 18.08.2010 399 Q-2 168595 15.10.2009 18.08.2010 307 Q-3 168547 15.01.2010 18.08.2010 215 Q-4 145218 15.06.2010 25.08.2010 71 4. The AO observed that the assessee has not filed quarterly statements of tax-deducted at source in form no. 26Q for financial year 2009-10 in time. The AO invo....
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.... stated in the Show-cause Notice itself There have been no delays in filing the TDS returns for the next Financial Year as you may verify from your system. You are, therefore, requested to drop the penalty proceedings and oblige. We are enclosing herewith the Xerox copies of all the TDS challans so as to enable you to verify the fact that there is not a single instance of delayed payment of tax after the same was deducted at source at the time of payment to the respective parties. You are requested to dispose of the matter during the hearing fixed on 15th December 2011 on the basis of these written submission." 5. The AO rejected the contentions of the assessee and observed that assessee has not shown reasonable cause as stipulated u/s. 273B and levied penalty of Rs. 99,200/- u/s 272A(2)(k) of the 1961 Act for delay filing of the statement of tax deducted at source, as under:- Quarter TDS statement Form no. No. of days delay TDS Amount (Rs.) 100/ - per day of delays (days xlOOl Penalty Rs. Penalty amount restricted to ( Rs.) Q-l 26Q 399 74485 39900 39900 Q-2 260 307 168595 30700 30700 Q-3 26Q 215 ....
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....led to delay in filing of return. The assessee has to manage his affairs in such manner that statutory compliances are met on time. Therefore, in absence of reasonable cause being demonstrated by the appellant, the action of the A.O. in levying penalty is upheld. Ground is dismissed" 7. The assessee has now filed an appeal before the tribunal and Ld. Counsel for the assessee at the outset submitted that during the relevant period E-filing and paper filing of TDS returns was going on simultaneously and the system of the Revenue was not working properly which led to delay in filing of quarterly statement of tax deducted at source while it is also submitted that all the due taxes which were deducted at source by the assessee had been paid in time as detailed here under:- BAKHTAWAR CONSTRUCTION CO. PVT. LTD STATEMENT OF TDS Deduced AND PAID DURING FINANCIAL YEAR 1.4.2009 TO 31.3.2 Financial Year 2009-10 Section Code Tax deducted & paid Date on which tax deposited Q1 Apr-09 94J 36492 5.5.09 May-09 94C 800 3.6.09 94J 11875 3.6.09 Jun-09 94C 1907 30.6.09  ....
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....,62,234 1,62,234 9 2011 -12 Q1 240 15-7-2011 13-7-2011 070330800711824 0 0 0 10 2011 -12 Q1 26Q 15-7 -201 1 13-7-2011 07033Q300711835 0 1,67,007 1,67,007 11 2011-12 Q2 24O 15-10-2011 14-10-2011 070331100060062 0 0 0 12 2011 -12 Q2 26Q 15-10-2011 14-10-2011 070331100060093 0 85,310 85,310 13 2011-12 Q3 24O 15-1-2012 13-1-2012 070330900146301 0 0 0 H 2011-12 Q3 26Q 15-1-2012 13-1-2012 070330900146312 0 1,69,639 1,69,639 15 2011 -12 Q4 24Q 15-5- U-5-2012 07033Q8QO&19B12 0 0 0 16 2011 -12 Q4 26Q 15-5-2012 14-5-2012 0703 30S DOS 19801 0 1,71,595 1,71,595 17 2012-13 Q1 24Q 15-7-2012 13-7-2012 070330900154082 0 0 0 18 2012-13 Q1 26Q 15-7-2012 13-7-2012 0703309001 54093 0 90,238 90,238 19 2012-13 Q2 24Q 15-10-2012 10-10-2012 070331100073905 0 0 0 20 2012-13 Q2 26Q 15-10-2012 10-10-2012 070331 100Q73916 0 1,34,098 1,34,098 21 20....
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....10 25.08.2010 71 The revenue was initially accepting the TDS return in paper forms which was later on converted into filing in an electronic mode. In this switch over face there were technological glitches as well difficulties which were faced by the taxpayers in filing returns with Revenue . The assessee also claimed to have faced problem in E-filing of TDS returns although it is claimed that taxes were paid in time. The Revenue cannot rebut the same that it got the payment of taxes deducted at source in time. The assessee has also claimed that in subsequent years most of the TDS returns have been E-filed in time. The conduct of the assessee appears to be bona-fide as the assessee was paying taxes in time for the impugned year under consideration while statement of tax deducted at source were filed late as well it has been explained that the taxes have been paid for subsequent years also in time as well TDS returns were also filed in time in majority of the quarters. Thus keeping in view totality of the circumstances and also considering that taxes have been paid in time and the technological system was new in those years i.e. FY 2009-10 , we are inclined to hold that the....
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.... statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed. (3) Any person deducting any sum on or after the 1st 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 statements for such period as may be prescribed and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed: Provided that the person may also deliver to the prescribed authority a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under this sub-section in such form and verified in such manner as may be specified by the authority. " 19. Under section 200(1) of the Act, it is provided that any person deducting any sum i....
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....escribed time shall be prepared and filed. Rules 31A of the Rules provide the time limit for deposit of the tax deducted statement as per section 200(3) of the Act. The TDS statements are to be deposited quarterly i.e. quarter ending 30th June, 30th September, 31st December and 31st March of each financial year and the due date for furnishing the TDS statements is 15th July for the first quarter, 15th October for the second quarter, 15th January for the third quarter and 15th May of the immediately following financial year for the fourth quarter i.e. 31st March. The said statements could be furnished either in paper form or electronically. However, subsequent to the amendment by IT (Sixth) Amendment Rules, 2010 with retrospective effect from 01.04.2010, it was provided that furnishing of statements electronically in accordance with the format and standards prescribed became mandatory. The deductor in the said statement of tax deducted at source was compulsorily required to quote its tax deduction and Collection Account Number i.e. TAN number. Further, quote its Permanent Accountant Number except in the case where the deductor was office of Government and also quote PAN number of al....
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....e Act, then in line with the provisions of said section in case a person establishes its case of reasonable cause for not complying with the provisions of said section, then the section provides that such a person shall not be liable to the penalty imposable for the said failure i.e. under section 272A(2) of the Act. The CIT(A) in the case of several assessee before us has wrongly come to the conclusion that the provisions of section 273B of the Act do not cover the defaults under section 272A(2)(k) of the Act. We reverse the finding of CIT(A) in this regard. 22. Now, coming to the case of reasonableness put up before us by different assessee. The first plea raised by all the assessee is that where the compliance to the provisions of the Act was complicated and difficult and in the absence of any technical support in this regard, default if any, in furnishing the TDS returns late should be condoned. Another plea raised by some of the assessee was that where the tax deducted at source was not paid in time, e-TDS returns as such could not be filed and hence, the assessee was prevented by reasonable cause in not filing e-TDS returns in time and as such, no merit in levy of pe....
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....d to the deductee only after the tax deducted at source is deposited in the credit of the Government and the deductor files the compliance report in this regard by way of e-TDS returns. Thus, it is obligatory upon the person deducting tax to deposit the tax deducted at source and also to furnish statement declaring tax deduction made from the account of various deductees. Earlier provisions were to be complied with manually by filing the TDS returns in paper form. However, as per IT (Sixth) Amendment Rules, 2010 with retrospective effect from 01.04.2010, the deductor was asked to file e-TDS statements for which infrastructure was provided and it was required that the assessee complies to the said filing of e-TDS returns. However, since assessment year 2011-12 was the first year of introduction of such facilities of e-TDS returns, there were certain hindrances which were taken care of by the authorities by way of various amendments introduced in this behalf. The case of the assessee on the other hand, is that they were small taxpayers and in the absence of technical guidance provided and because of technical hitches, the TDS returns could not be filed in time. Most of the assessee b....
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....s 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 said default and only on the last date, it was pointed out that since the Principal of college had joined recently, it would take some time to collect the records for filing the e-TDS statements. The assessee however, failed to comply with notice and the Assessing Officer held the assessee to be liable for levy of penalty under section 272A(2)(k) of the Act. Before the CIT(A), the assessee for the first time offered an explanation that prior to joining regular Principal in the college on 25.01.2010, only officiating Principal had been working, who did not have idea of e-TDS statements and requirement of filing the same. The Tribunal noted that the appellate authority had accepted the explanation offered by the assessee and imposed penalty only from 01.04.2010 though regular Principal had joined the college on 25.01.2010. The Tribunal dismissed the appeal of assessee as no explanation was furnished for non-furnishing TDS statements in time. The Hon'ble High Court thus, in this regard observed that the requirement of filing e....
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....rns 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 deposited the tax to the Central Government at relevant time, however, the assessee failed to furnish TDS returns. The delay in filing the returns in prescribed form for all four quarters was 6463 days in assessment year 2009-10 and in assessment year 2010-11 for all four quarter was 4966 days and in assessment year 2011-12, the delay was 3474 days. In view of the factual aspects of the case, where the delay is so huge and in the absence of any explanation of the assessee, we find no merit in the reliance placed upon on such decision by the learned Departmental Representative for the Revenue. 28. On the other hand, various Benches of Tribunal have time and again held that where there was case of reasonableness, there was no merit in levying the penalty under section 272A(2)(k) of the Act. Thus, in order to adjudicate the issue before us, we accept the case of reasonable cause as relevant to section 273B of the Act put up by the assessee in the respective cases in the appeals before u....