2015 (5) TMI 758 - AT - Income Tax

Penalty u/s 272A(2)(K) - delay filing the TDS return - Held that - In the present case of the assessee, either Government bodies or aided by Govt., are public office and since the tax deduction and payment are made by treasury and there is undisputedly no default. There arises, no reason for non-filing of TDS return with an intentional act or willful act to attract a quasi-criminal, imposition of penalty. The assessee has relied on the decisions of CIT Vs. Superintendent Engineer 2002 (5) TMI 13 - RAJASTHAN High Court and Royal Metal Printers Pvt. Ltd. Vrs. Asst CIT 2010 (1) TMI 938 - ITAT, Mumbai wherein held that for such technical or venial breach supported by reasonable cause, penalty under sec. 272(A)(2) is not leviable and imposition of penalty is not justified for the reason that it was for the first time the requirement to convert the hard-copy into soft-copy was to be learnt by respective Government DDOs from the department officials. There is reasonable cause for delay in filing ETDS return U/s 273B. Considering the facts and circumstances of the cases in its entirety, we are of the considered view that the penalty so levied in the case of the assessee is not all justified. We, therefore, cancel the penalty levied u/s.272A(2)(k) for the assessee for the respective AYs. - Decided in favour of assessee.

Summary

Issues:
Appeal against penalty order imposed for delay in filing TDS returns.

Detailed Analysis:
The appeals were directed against separate orders of the ld. CIT (A) for the A.Ys. 2010-11 & 2011-12, with the common issue being the penalty order imposed for delay in filing TDS returns. The appellant raised several grounds challenging the penalty, alleging serious errors by the CIT (A) in not quashing the penalty order, contrary to the law and evidence on record, and without considering relevant decisions. The short facts revealed that the penalty was imposed for delays in filing quarterly e-TDS statements, resulting in substantial delays over multiple quarters in both A.Ys. The JCIT (TDS) calculated the total delay days and levied penalties accordingly.

The appellant contended that the penalty provisions should consider reasonable cause under section 273B of the Income Tax Act, citing a decision by the ITAT, Cuttack Bench. They argued that the technical default did not result in revenue loss, thus warranting deletion of the penalty. The appellant's position was supported by the argument that the penalty was mechanically imposed without due consideration of the circumstances leading to the delays in filing the TDS returns. The appellant emphasized that the delay was unintentional and occurred due to reliance on external service providers for filing, lacking technical competency to do so independently.

In contrast, the learned DR supported the CIT (A)'s order upholding the penalty. The Tribunal extensively analyzed the contentions of both parties, emphasizing the bonafide nature of the delays and the lack of willful negligence or malafide intent on the part of the appellant. The Tribunal noted that the delays were technical in nature, beyond the appellant's control, and did not involve intentional non-compliance. Relying on precedents and legal principles, the Tribunal concluded that the penalty under section 272(A)(2) was not justified in the appellant's case. The Tribunal highlighted that a bonafide breach should not attract penalty, especially when the delays were due to reasonable causes and technical constraints.

Ultimately, the Tribunal allowed both appeals for the respective assessment years, canceling the penalties imposed under section 272A(2)(k) based on the detailed analysis of the circumstances and legal precedents cited by the appellant. The decision was made in consideration of the facts and circumstances of the cases, emphasizing the technical nature of the delays and the absence of intentional non-compliance by the appellant. The Tribunal's ruling highlighted the importance of reasonable cause and bonafide belief in determining the applicability of penalties for delayed filing of TDS returns.