TaxTMI 
TaxTMI 
2018 (10) TMI 494
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....of Income Tax (Appeals) erred in confirming the penalty of Rs. 46,200/- without appreciation of factual matrix. 2. The learned Commissioner of Income Tax (Appeals) did not appreciate that the appellant had reasonable cause for the delay in filing the statement under section 200(3). 3. The learned Commissioner of Income Tax (Appeals) has failed to consider the fact that there was no loss of revenue to the department on account of delay in filing the quarterly return statements, and the default was technical in nature. Further, the appellant is regular in depositing the TDS to the credit of the Central Government within the due dates specified by the Act and the Rules. 4. The learned Commissioner of Income Tax (Appeals) erred in confirming the penalty considering the same as Technical in nature without appreciating the fact that the appellant had filed their future returns before the due date. 5. The Appellant craves leave to add alter or amend any of the grounds of appeal at any time before or at the time of hearing." 3. The AO observed that the assessee has not filed quarterly statement of income-tax deducted at source ( TDS returns) within th....
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....bject to provisions of Section 273B of the 1961 Act. It was submitted that the assessee has gradually improved in filing of TDS returns in time and subsequently quarterly TDS returns were either filed in time within due date or small delay took place. The assessee relied upon decision of Lucknow Tribunal in the case of PNB v. ACIT (2011) 140 TTJ 0622 (Lko.) to contend that penalty levied by the AO u/s 272A(2)(k) of the 1961 Act be deleted. However, the explanation submitted by assessee did not found favour with Ld. CIT(A) who dismissed the appeal of the assessee vide appellate order dated 10-01-2017 and confirmed the penalty levied by the AO u/s 272A(2)(k) of the 1961 Act. 5. Aggrieved by the appellate order dated 10.01.2017 passed by learned CIT(A), the assessee has now come in appeal before the tribunal . The assessee has filed paper book containing 46 pages . It is claimed that two written replies/submissions were given before Ld. CIT(A) , both date 03.01.2017 which are placed in aforesaid paper book filed with the tribunal. The assessee has submitted that it is mainly because of large number of employees more than 200 spread all over country for which collection of data took....
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....ate beyond the time stipulated under Rule 31A of the Income-tax Rules, 1962 which ultimately triggered levying of penalty amounting to Rs. 46,200/- u/s 272A(2)(k) of the 1961 Act by the AO which was later confirmed by learned CIT(A). The details of filing of quarterly TDS returns in form no. 24Q for all the four quarters of previous year 2011-12 by the assessee are as under:- TDS Return Periodicity Due date Date of filing Delay by days TDS amount Penalty (in Rs.) 24Q Q1 15.07.2010 7.3.2011 235 2324013 23500 24Q Q2 15.10.2010 9.03.2011 145 3357245 14500 24Q Q3 15.01.2011 9.03.2011 53 6236068 5300 24Q Q4 15.05.2011 13.06.2011 29 9662026 2900 46200 We have observed that the assessee has given explanation as to late filing of statement of quarterly TDS returns in form 24Q for the year under consideration as having employed more than 200 employees spread all over several locations across country making it difficult to collate the information to prepare these quarterly returns in time as these employees were travelling ....
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.... discussed by Pune-tribunal and thereafter Penalty levied by Revenue u/s 272A(2)(k) were deleted in those case where income-tax deducted at source was deposited in time but only filing of statement of quarterly deduction of income-tax at source was delayed beyond prescribed time and rightly so with which we also concur while deciding this appeal, wherein Pune-tribunal 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 ....
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....e with the provisions of the Chapter shall pay within the prescribed 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 per....
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....tees. Further, the deductor was required to furnish the particulars of 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 n....
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....lty. Another plea raised before us is that charging of fees for each day of default and then, 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 leviab....
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....essee before us have paid the tax deducted at source to the Treasury within time frame but have defaulted 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) ....
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....iling e-TDS statements in time could not be overlooked. In such circumstances, the Hon'ble High court held that it 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 ....
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....efore us, which admittedly relate to different quarters of assessment year 2011-12. Where for the first time, there was requirement of e-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 s....
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....one in such payment in the e-TDS return and thereafter only the e-TDS return can be validated and uploaded in the IT system. The same has been the position of the CBDT vide its notification dated 31.5.2010. The assessee has submitted that since there were large number of deductees scattered throughout the country, a fact not disputed by the Revenue, it took them some time to collect the PANs of these deductees and thereafter, it was able to upload the e-TDS returns in the IT system maintained by the Revenue. Further, the taxes have deducted and deposited at the prescribed rate with delay of few days. Hence, there is no loss to the Revenue which is caused due to the delay in filing of the e-TDS returns which is totally unintentional. Further, our attention was drawn to the decision of the Coordinate Benches in case of Collector Land Acquisition (supra), Branch Manager (TDS), UCO Bank (supra) and Branch Manager SBI (supra) wherein non availability of PAN was held to be a reasonable cause for delay in filing of the e-TDS return. Given the pecularity of the facts in the present case where there was a change effected in the IT system for mandatory requirement of PANs of all deductees be....
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.... Form No. 24Q and 95 per cent for Form No. 26Q without which the TDS return will not be accepted. Shri R.N. Shukla, learned counsel for the assessee submitted that the assessee had no alternative but to collect the PAN of the deductee by individually contacting them to comply the statutory requirement because even the 40 per cent PANs of the deductees were not available with the assessee. Collection of PAN from the deductees was not an organizational problem because the assessee has no statutory power to collect the PAN, except to request the individual deductee to supply the PAN. However, the bank is authorized under r. 114B of the IT Rules, 1962 to make the time deposits by accepting the declaration in Form No. 60 in those cases where the PAN is not available. Shri R.N. Shukla, learned counsel for the assessee further pointed out that knowing the statutory requirement of PAN, the assessee tried his best and contacted personally with the deductees and after collecting the PAN filed the e-TDS statements in Form Nos. 24Q and 26Q. According to the learned counsel for the assessee, there was sufficient cause which prevented the assessee from filing the e-TDS return within the limitati....
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....deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute." In view of the above, I am of the opinion that there was no justification in imposing the penalty under s. 272A(2)(k) of the Act on the assessee and therefore, I cancel the same. 5. In the result, the appeal is allowed. There are several other appeals decided by tribunal wherein under similar circumstances, the penalty levied by Revenue u/s 272A(2)(k) stood deleted. The provisions of Section 272A(2)(k) are subject to provi....
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.... F.Y. 2013- 14 DUE DATE DATE OF FILING DUE DATE DATE OF FILING DUE DATE DATE OF FILING Ql 15/07/2013 13/07/2013 15/07/2013 13/07/2013 15/07/2013 13/07/2013 Q2 15/10/2013 15/10/2013 15/10/2013 15/10/2013 15/10/2013 15/10/2013 Q3 15/01/2014 13/01/2014 15/01/2014 13/01/2014 15/01/2014 13/01/2014 Q4 15/05/2014 15/05/2014 15/05/2014 15/05/2014 15/05/2014 15/05/2014 24Q 26Q 27Q F.Y. 2014 - 15 DUE DATE DATE OF FILING DUE DATE DATE OF FILING DUE DATE DATE OF FILING Ql 15/07/2014 15/07/2014 15/07/2014 15/07/2014 15/07/2014 15/07/2014 Q2 15/10/2014 14/10/2014 15/10/2014 14/10/2014 15/10/2014 14/10/2014 Q3 15/01/2015 13/01/2015 15/01/2015 13/01/2015 15/01/2015 13/01/2015 Q4 15/05/2015 15/05/2015 15/05/2015 15/....