2015 (7) TMI 332 - AT - Income Tax

Penalty order under sec. 272A(2)(k) - as a result of survey/verification exercise carried out by the ITO(TDS), serious default on TDS payment were unearthed - assessee had not filed e-TDS return in form No. 24Q, 26Q and 27EQ and also could not provide any reasonable cause for such to furnish the e-TDS returns by the due date - whether penalty order barred by limitation? - Held that - FAA for the assessment year 2006-07 on similar issue held that legally the limitation starts from the issue of first notice by the Addl.CIT(TDS) competent authority dated 25-02- 2010. The penalty has been imposed before 30-08-2010 i.e. on 16-03-2010. Therefore, it cannot be said that the penalty order passed U/S 272A(2)(k) of the Act is barred by limitation. It appears that the appellant had taken the date of initiation of penalty U/S 272A(1)(c) of the Act from the date of order passed u/s 201(1)/201(1A) of the Act on 27-06-2008 which is legally incorrect. On the other hand, the action of ITO, (TDS) in initiating proceedings U/S 272A(2)(k) of the Act is not correct in view of the relevant provisions of the Act. The ITO(TDS) instead of initiating proceedings U/S 272A(2)(k) of the Act should have mentioned that the case is being referred separately for imposition of penalty u/s 272A(2)(k) of the Act to the Addl.CIT(TDS) who was the competent authority. Thus it is held that the order passed by Addl.CIT(IDS) u/s 272A(2)(k) of the Act dated 16-03-2010 is held as fully valid. Submissions made by the appellant on the issue of matter being barred by limitation are hereby rejected. A perusal of the aforesaid statement reveal that there is definitely delay in furnishing e-1DS returns in Form Nos.24Q, 26Q and 27EQ for the relevant accounting period. Thus the appellant s contention that there was no default in furnishing e- IDS returns has no force and is accordingly rejected. Thus the action of the Addl.CIT(IDS) in imposing penalty u/s 272A(2)(k) of the Act is upheld in principle. - Decided against assessee.

Summary

Issues involved:
Challenge to first appellate order on various grounds including incorrect levy of penalty under sec. 272A(2)(k) of the Act, time-barred penalty order, lack of computation details in penalty order, and absence of reasonable cause for non-filing of e-TDS returns.

Analysis:

1. Incorrect Levy of Penalty:
The assessee contested the penalty under sec. 272A(2)(k) of the Act, arguing that the penalty order was incorrect on facts and bad in law. The Assessing Officer found the assessee's behavior negligent and deliberate, imposing a penalty of &8377; 2,99,400 for non-filing of e-TDS returns. The first appellate authority upheld the penalty but directed the Assessing Officer to verify the claim and recomputed the penalty for lack of specific details in the penalty order.

2. Time-Barred Penalty Order:
The assessee raised concerns about the penalty order being time-barred under sec. 275 of the Act. The First Appellate Order discussed the limitation period under sec. 272A(3) and clarified that the penalty was imposed within the legal timeframe, starting from the first notice issued by the competent authority.

3. Lack of Computation Details:
The penalty order lacked details regarding the period of default and computation of penalty, leading to ambiguity. The First Appellate Order directed the Assessing Officer to recompute the penalty after verifying the factual position regarding the filing of e-TDS returns.

4. Absence of Reasonable Cause:
The assessee contended that there was a reasonable cause for the delay in filing e-TDS returns, which was not considered by the authorities. However, the penalty was upheld as the appellant failed to establish a valid reason for the non-filing of returns.

5. Overall Assessment:
The First Appellate Order provided a detailed analysis of each issue raised by the assessee, considering submissions and evidence presented. The appellate authority issued reasoned decisions, directing verification and recomputation where necessary. The final judgment upheld the penalties in line with the findings and rejected the grounds of appeal.

Conclusion:
The appeals challenging the first appellate order were dismissed, affirming the penalties imposed under sec. 272A(2)(k) of the Act. The judgment emphasized the importance of providing specific details in penalty orders, adhering to legal timeframes, and establishing reasonable causes for non-compliance.