2015 (7) TMI 1301 - AT - Income Tax

Levy of penalty u/s 272A(2)(k) - person responsible had failed to file quarterly TDS returns in Form No.24Q, 26Q and 27Q for the 4t h quarter by due date - reasonable cause for failure to comply with the provisions of law - Held that - TDS returns were not filed within time prescribed by law. Section 273B of the Act provides exception to the rule if the assessee is able to prove to the satisfaction of the authorities below that there was a reasonable cause for failure to comply with the provisions of law. The assessee has not been able to prove if there was any reasonable cause for failure to comply with the provisions of law. The assessee merely explained that since the consultant was traveling out of country, the TDS returns could not be filed on time. However, it is not specified at what time the consultant was traveling out of country and why no other arrangement was made and whatever plea was taken was not supported by any evidence, would clearly reveal that the assessee has no reasonable cause for failure to comply with the provisions of law - Decided against assessee

Summary

Issues:
Challenging the levy of penalty under section 272A(2)(k) of the Income Tax Act, 1961 for failure to file quarterly TDS returns in time.

Analysis:
The appeal was filed against the order of the Commissioner of Income Tax (Appeals) for the financial year 2011-12, contesting the penalty imposed under section 272A(2)(k) of the Income Tax Act, 1961. The assessee had failed to file quarterly TDS returns in Form No.24Q, 26Q, and 27Q for the 4th quarter within the prescribed time. The explanation provided was that the consultant responsible for filing the returns was traveling abroad, causing the delay. However, the Assessing Officer was not convinced by this explanation and imposed the penalty. The CIT (Appeals) upheld the penalty considering the provisions of law and rules regarding TDS return filing, emphasizing that the direct loss of revenue may not be relevant in this context.

During the hearing, it was established that the TDS returns were indeed not filed within the stipulated timeframe as required by law. Section 273B of the Act allows for an exception if the assessee can prove a reasonable cause for non-compliance. In this case, the assessee failed to demonstrate any reasonable cause for the delay in filing the TDS returns. The explanation provided regarding the consultant's absence due to travel was found to be unsubstantiated, as there was no evidence presented to support this claim. The lack of a clear timeline for the consultant's absence and the absence of alternative arrangements indicated a lack of reasonable cause for the non-compliance with the law. As no errors were identified in the decisions of the lower authorities, the appeal was deemed meritless and subsequently dismissed.

Ultimately, the appeal filed by the assessee challenging the penalty for late filing of TDS returns was dismissed by the Appellate Tribunal. The judgment was pronounced on July 23, 2015, in an open court session.