2016 (1) TMI 1293 - AT - Income Tax

Penalty u/s 272A(2)(K) - return of income were filed late - Held that - Considering assessee submission that the employee of the assessee looking after TDS could not do the work because of ill health and mental stress and this came to the knowledge of the Director very late. The Director was busy in the expansion of the business and installation of a new plant at Palsana and therefore, there was no willful intention not to comply with the provision. AS citing of the PAN was mandatory vide circular dated 12/2/2008 and therefore, the GDS return were not accepted by the computer but The PAN was received very late . The facts were not denied by the ld DR, in my opinion, the default was mere a technical breach. It is a case of assessee that he has duly deducted the tax and paid the tax. The provision of Section 273B of the Act mandates that if the assessee was prevented by the reasonable cause, therefore, no penalty should be levied. - Decided in favour of assessee.

Summary

Issues:
Challenge against penalty imposition under section 272A(2)(K) of the I.T. Act, 1961 for the assessment year 2010-11.

Analysis:
The appeal was filed by the assessee against the penalty imposed under section 272A(2)(K) of the I.T. Act, 1961 for the assessment year 2010-11. The issue was whether the penalty was justified or not. The ITAT Jaipur referred to a previous decision in the case of M/s. Kaler Electricals (P) Ltd. vs. ACIT, Circle- Sikar and noted that the assessee had provided a reasonable explanation for the delay in filing the return for the financial year 2009-10. The explanation included the ill health and mental stress of the employee responsible for TDS, delayed receipt of PAN, and the director's involvement in business expansion activities. It was argued that there was no willful intention to breach the provisions, and the default was a technical breach. The ITAT Jaipur, following the decision and the provision of Section 273B of the Act, set aside the penalty imposed by the ld CIT(A) and allowed the appeal of the assessee. The decision was supported by a previous judgment of the Hon'ble Rajasthan High Court in the case of CIT Vs. Superintending Engineer (2003) 131 Taxman 596 (Raj.).

The ITAT Jaipur, in its order, emphasized that the assessee's case was one of technical breach due to genuine reasons such as ill health of the responsible employee and delayed receipt of PAN. The tribunal highlighted that the provision of Section 273B of the Act, which mandates that no penalty should be levied if the assessee was prevented by a reasonable cause, was applicable in this situation. The ITAT Jaipur, therefore, concluded that the penalty imposed under section 272A(2)(K) was not justified in this case and allowed the appeal of the assessee. The decision was in line with the principles established in previous judgments and supported by legal provisions.

In conclusion, the ITAT Jaipur, following the precedent and legal provisions, allowed the appeal of the assessee against the penalty imposed under section 272A(2)(K) of the I.T. Act, 1961 for the assessment year 2010-11. The tribunal considered the genuine reasons provided by the assessee for the delay in filing the return and found that there was no willful intention to breach the provisions. The decision was supported by the provisions of Section 273B of the Act and a previous judgment of the Hon'ble Rajasthan High Court. The penalty was set aside, and the appeal of the assessee was allowed.