2014 (1) TMI 387 - AT - Income Tax

Penalty u/s 272A(2)(k) of the Act No deliberate and contumacious default - Assessee contended that TDS submitted in due time Held that - Relying upon Section 272-A (2)(k) provides that penalty @ Rs. 100 per day may be levied if the person responsible fails to deliver copy of the statement within the time specified - The delay in uploading was on account of the TIN FC agency and the assessee after submitting the statement before due time had no responsibility to upload the same - Thus penalty U/s 272-A(2)(k) could not have been levied on the assessee for the venial breach of the Rule 31-A of the Income Tax Rule - Following Under Secretary & DDO, Panchayati Raj (Gram Panchayat) ITA No.499/CTK/2011 dt.29.6.2012 . Penalty levied u/s 272(2)(k) of the Act set aside Decided in favour of Assessee.

Summary

Issues Involved:
Appeal against penalty under section 272A(2)(k) of the Income Tax Act, 1961 for Assessment Year 2010-11.

Detailed Analysis:

1. Issue 1 - Delay in filing TDS return and penalty imposition:
The assessee appealed against the penalty imposed under section 272A(2)(k) for delay in filing the quarterly e-TDS return. The Assessing Officer found a delay and levied a penalty, which was confirmed by the CIT(A). The appellant argued that as the TDS was deposited on time and the return was handed over to the agency appointed by the Income-tax department in time, there was no deliberate default. Citing the Hindustan Steel Ltd. case, the appellant contended that penalty was unwarranted.

2. Issue 2 - Responsibility for delay in uploading e-filing:
The appellant asserted that the delay in uploading the e-filing was due to the agency appointed by NSDL, not the assessee. The TIN FC agency accepted the return in hard copy but failed to upload it in time, causing a delay of 38 days. The appellant argued that once the return was submitted to the TIN FC, their responsibility ended, and the delay was beyond their control.

3. Issue 3 - Compliance with statutory requirements and penalty imposition:
The appellant claimed substantial compliance with Rule-31-A of the Income-tax Rules and contended that the delay in uploading was not their fault. They argued that the penalty should not have been imposed as they had fulfilled their obligations by submitting the return before the due date and the delay was caused by the TIN FC agency.

4. Issue 4 - Violation of natural justice and penalty imposition:
The appellant alleged a violation of natural justice as the statement of the TIN FC and the Inspector's report were not disclosed to them before imposing the penalty. They argued that the penalty based on the delay caused by the TIN FC was unjust as they were not given an opportunity to explain or rectify any alleged discrepancies.

5. Issue 5 - Tribunal's decision and penalty cancellation:
After hearing both parties and reviewing the facts, the Tribunal noted a similar case where the penalty was deleted for comparable circumstances. The Tribunal canceled the penalty of Rs. 3,800 imposed under section 272A(2)(k) for the Assessment Year 2010-11, based on the precedent and the similarity of facts. The appeal of the assessee was allowed, and the penalty was deleted.

This detailed analysis covers the various issues raised in the appeal and the arguments presented by both parties, leading to the Tribunal's decision to cancel the penalty based on the circumstances and legal precedents.