2013 (10) TMI 1461 - AT - Income Tax

Whether penalty to be imposed in case of delayed filing of TDS Return - Held that - assessee is a nationalized bank and committed a technical default by not filing e-TDS return in time - sec. 272A(2)(k) has been newly introduced w.e.f. 1.4.2005 and the Branch Manger was not known about these technical formalities - due to unawareness of knowledge, non-availability of parties PAN, pressure of banks accounting works, long absence of Branch Manager due to unhealthy condition return could not be filed on time - penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation as per the decision of Hon ble apex Court in the case of Hindustan Steel Ltd. v. State of Orissa 1972 83 ITR 26 - 1969 (8) TMI 31 - Thus assessee has reasonable cause for non-filing the e-TDS return in time - also this is a technical breach of law and there is no loss to the revenue - Decided in favor of assessee

Summary

Issues:
Penalty imposition for delay in filing e-TDS return for assessment year 2008-09.

Analysis:
The appeal was filed against the order of the CIT(A) confirming the penalty imposed by the AO for the delay in filing e-TDS returns for the financial year 2008-09. The Addl.CIT (TDS) initiated penalty proceedings under section 272A(2)(k) due to significant delays in filing the quarterly e-TDS returns. The Addl.CIT (TDS) found the reasons provided by the assessee for the delay unacceptable, leading to the imposition of a penalty amounting to Rs. 1,05,244 under the mentioned section of the Act.

The Tribunal noted that the assessee did not appear during the proceedings, and an adjournment application was filed. After considering the arguments of the ld. D.R., the Tribunal proceeded to dispose of the appeal ex parte based on the available material. The ld. D.R. argued that the delays in filing the e-TDS returns were substantial, and the explanations provided by the assessee were deemed unsatisfactory. The ld. D.R. urged to uphold the CIT(A)'s order confirming the penalty.

Upon reviewing the case, the Tribunal observed the contentions of the assessee, highlighting that the TDS work was usually delegated to staff unfamiliar with technical formalities. The Tribunal also noted that the newly introduced Section 272A(2)(k) was not well-known to the Branch Manager, resulting in delays in filing the e-TDS returns. The Tribunal found that the reasons provided by the assessee, including difficulties faced in obtaining PAN details of customers and technical complexities, constituted reasonable cause for the delay.

Referring to the principles laid down by the Hon'ble Supreme Court in Hindustan Steel Ltd. v. State of Orissa, the Tribunal emphasized that penalties should not be imposed unless there is deliberate defiance of the law or contumacious conduct. The Tribunal concluded that the technical breach of law by the nationalized bank did not result in revenue loss and that a lenient view should be taken. Consequently, the Tribunal decided to delete the penalty of Rs. 1,05,244 imposed by the AO and upheld by the CIT(A), thereby allowing the appeal filed by the assessee.