TaxTMI 
TaxTMI 
TaxTMI 
2018 (3) TMI 1203
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....ring 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 invoked penal provisions under section 272A(2)(k) of the Act, as there was a delay in filing of the statement o....
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.... 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 168547 21500 21500 Q-4 26Q 71 145218 7100 7100 TOTAL 99200 6. The assessee filed first appeal before the learned CIT-A which was reject....
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....ying 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 94J 23411 30.6.09 Q2 Jul-09 94J 15790 31.7.09 94C 1006 31.7.09 Aug-09 94J 26346 1.9.09 94C 800 1.9.09 Sep-11 94C 764 1.10.09 94J 123889 1.10.09 Q3  ....
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.... 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 2012-13 Q3 24Q 15-1-2013 14-1-2013 070331100084873 0 0 0 22 2012-13 Q3 26Q 15-1-2013 14-1-2013 070331100084862 0 1,04,139 1,04,139 a 'i 2012-13 Q4 24Q 15-5-2013 14-5-2013 070330800937165 0 2,434 2,434 24 2012-13 Q4 26Q 15-5-2013 14-5-2013 070330800937176 0 1,32,875 1,32,875 25 2013-14 Q1 24Q 15-7- 2013 12-7-2013 070330900171464 0 0 0 26 2013-14 Q1 26Q 15-7-2013 12-7-2013 070330900171475 0 1,71,558 1,71,558 27 2013-14 Q2 26Q 15-10*2013 14-10-2013 070330801004052 0 1,25,592 1,25,592 28 2013-14 Q3 26O 15-1-2014 14-1-2014 07033960 001 0 1,40,378 1,40,378 29 2013-14 Q4 26Q 15-5-2014 13-5-2014 0703B960027S756 0 2,70,258 2,70,258 30 2014-15 Q1 26Q 15-6-2014 14-6-2014 070389600483963 0 2,27,289 2,27,289 Total 24,55,524 24,55,524 Thus the assessee submitted it is only due to faulty software ....
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....use and in the circumstances we are of the considered view that penalty is not exigible on the assessee and we hereby order for the deletion of the penalty of Rs. 99,200/- levied by the AO for all the four quarters of financial year 2009-10. The Pune tribunal in the case of Nav Maharashtra Vidyalaya v. Addl. CIT reported in (2016) 161 ITD 732(Pune-trib) has held as under: "17. We have heard the rival contentions and perused the record. In this bunch of appeals, the issue which arises for adjudication is against the levy of penalty under section 272A(2)(k) of the Act for late filing of TDS statements / returns. In this regard, reference is being made to the relevant provisions of the Act. Under Chapter XVII of the Act, duty is upon the person making certain payments to deduct tax at source under the respective sections. The said tax deducted at source is due to be the income received by the deductee as per section 198 of the Act. Section 199 of the Act further provides that where any deduction is made under the Chapter and paid to the Central Government, then the same is to be treated as payment of tax on behalf of the person from whose income such deduction is made. 18. Sectio....
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....ibed time, the sum so deducted to the credit of the Central Government or as the Board directs. Under section 200(2) of the Act, any person being an employer, as referred to in sub-section (1A) of section 192 of the Act shall pay, within the prescribed time, the tax to the credit of the Central Government or as the Board directs. Under sub-section (2A) of the Act, it is provided that where the sum has been deducted in accordance with foregoing provisions of the Chapter, by the office of the Government, then duty is upon the Treasury Officer or the Drawing & Disbursing Officer or any other person, to deliver or cause to be delivered to the prescribed income tax authorities, or to the person authorized by such authority, statement in such form, verified in such manner, setting forth such particulars within such time as may be prescribed. Under section 200(3) of the Act, similar responsibility is on any person deducting any sum on or after first day of April, 2005 in accordance with foregoing provisions of the Chapter, including any person as an employer referred to in section 192(1A) of the Act. The onus is upon such person that he shall after paying the tax to the credit of Central ....
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.... tax paid to the Central Government including Book Identification Number or challan indication number as the case may be. He was also required to furnish the particulars of amount paid or credited on which tax was not deducted. 21. In view of various provisions of the Act, as pointed out above, the substitution was made by Income Tax (Sixth) Amendment Rules, 2010 and was applicable for the financial year 2010-11. Since e-compliance of TDS returns was introduced in the said financial year, there was time and again amendments/corrections in order to make system of filing TDS returns user-friendly. The learned Authorized Representative for the assessee has pointed out that there were about 18 amendments / corrections in this regard. In the present set of appeals before us admittedly, there was default in furnishing e-TDS statements late for the respective quarters by different assessee, but all relating to assessment year 2011-12. The question which arises for adjudication before us is whether in such cases where e-TDS was made compulsory for the instant assessment year and where the software was not user-friendly and required amendments at the end of the Government itself from tim....
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....n, restricting the same to the tax deducted at source was not correct. One another aspect of reasonableness was that in case the returns for quarter 1 was filed belatedly, then the returns for consequent quarters also got delayed for no default and as such, no penalty was leviable for such quarters. Different learned Authorized Representatives appearing before us has made reference to the decisions of various Benches of Tribunal. On the other hand, the learned Departmental Representative for the Revenue has placed reliance on the ratio laid down by the Hon'ble Allahabad High Court in Raja Harpal Singh Inter College's case (supra) and Chandigarh Bench of Tribunal in Central Scientific Instruments Organization's case (supra). One last aspect pointed out by the learned Authorized Representative for the assessee was that the CIT(A) has acknowledged that there was reasonable cause in not furnishing e-TDS returns in time. However, no benefit of the same was given to the assessee because the CIT(A) was of the view that the provisions of section 273B of the Act do not cover penalty leviable under section 272A(2)(k) of the Act. 23. First of all, we shall deal with the last su....
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....in filing e-TDS statements. In some of the cases, there is default in payment of tax deducted at source and consequently, delay in filing the e-TDS returns. The question which arises is whether in the abovesaid scenario, can the provisions of section 273B of the Act can be applied in order to decide the issue of levy of penalty under section 272A(2)(k) of the Act. 24. The Hon'ble Punjab & Haryana High Court in HMT Ltd. v. CIT [2005] 274 ITR 544/[2004] 140 Taxman 606 had held that where the tax deducted at source had been paid in time and the necessary returns in respect thereto were filed in time with the Income Tax Department, on mere late issue of tax deduction certificate, there was no loss to the Revenue and the delay in furnishing the tax deduction certificate was held to be merely technical or venial in nature and penalty levied under section 272A(2)(k) of the Act was deleted. It may be clarified herein that earlier under section 272A(2)(k) of the Act, penalty was leviable where the tax deduction certificate was not issued in time. However, by Finance (No.2) Act, 2004 w.e.f. 01.04.2005, it has been provided that where a person fails to deliver or cause to be delivered ....
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.... cannot be urged by the Counsel for the assessee that no penalty could have been imposed for non-filing e-TDS returns in time since it had not resulted in any loss to the Revenue. The Hon'ble High Court further took note of the fact that before the Assessing Officer, no explanation was offered. However, an explanation was offered before the appellate authority, which was taken into consideration and the penalty amount was suitably reduced as the case of appellant that regular Principal assumed charge on 25.01.2010, was accepted and the penalty was imposed after that date. The appeal of the assessee in this regard was thus, dismissed. 26. Applying the said ratio laid down by the Hon'ble Allahabad High Court in Raja Harpal Singh Inter College's case (supra), there is no merit in the plea of the learned Departmental Representative for the Revenue that the Hon'ble High Court has laid down the proposition that in every case of default in filing the e-TDS statements in time, penalty under section 272A(2)(k) of the Act is leviable. The Hon'ble High Court in an appeal filed by the assessee dismissed the plea of assessee that no penalty is leviable but has upheld the ....
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....-TDS furnishing of TDS statement and since there were certain complications in e-filing of TDS returns because of system failure, which admittedly, was amended 18 times by the Department, the delay in furnishing the said returns late could not be attributed to the assessee. The onus was upon the authorities to provide platform for easy compliance to newly introduced provisions of the Act. Where such facilities could not be provided by the authorities and the technical support not being available to small assessees, who are in appeal before us, then the delay in furnishing the e-TDS returns late should be liberally construed. Hence, there was practical difficulty on the part of assessee to comply with newly introduced requirement of e-TDS filing of TDS statements, being technical delay and not venial in nature, merits to be considered as reasonable cause for non-levy of penalty as per the requirements of section 273B of the Act. We hold so. In this bunch of appeals, there are cases where the assessee has defaulted in not depositing tax deducted at source in time, in such cases, the returns were delayed because of default on behalf of the deductor. In such cases, penalty under sectio....