2018 (7) TMI 1936 - AT - Income Tax

Levy of penalty u/s 272A(2)(k) - late filing of the quarterly returns - introduction of E-TDS filing - as explained before the CIT (A) that the accounting staff of the assessee were not conversant with the newly introduced procedures and that is the reason why the delay occurred which was rejected - HELD THAT - CIT (A) acknowledged the fact that in the F.Y. 2005-06 filing of e-TDS return was introduced and there was a change from filing annual returns to quarterly return. In respect of the first quarter also there occurred some delay. It is therefore clear that with the introduction of the e-TDS return filing and change from the filing of annual returns to quarterly returns the delay was caused. There is nothing unacceptable in the explanation of the assessee that the cause of delay was the non-acquaintance of the staff with the newly introduced procedures. The violation in this respect is a venial breach of law and does not attract penalty proceedings in the very first year of introduction of the new procedures. We therefore delete the addition. - Decided in favour of assessee.

Summary

Issues:
Levy of penalty for late filing of quarterly returns for F.Y. 2005-06.

Analysis:
The appeal before the Appellate Tribunal ITAT Delhi concerned the levy of a penalty on the Assessee for late filing of quarterly returns for the second and third quarters of the Financial Year (F.Y.) 2005-06. The Assessee explained to the Ld. CIT (A) that the delay was due to the accounting staff's unfamiliarity with the newly introduced procedures. However, the Ld. CIT (A) dismissed the appeal, disagreeing with the explanation provided by the Assessee.

Upon examining the impugned order, the Appellate Tribunal noted that the introduction of e-TDS return filing and the shift from annual to quarterly returns in F.Y. 2005-06 had caused delays, including in the first quarter. The Tribunal found the Assessee's explanation reasonable, attributing the delay to the staff's lack of familiarity with the new procedures. Considering this, the Tribunal concluded that the delay was a minor breach of law, especially in the initial year of implementing new procedures. Consequently, the Tribunal decided to delete the penalty imposed, ruling in favor of the Assessee.

In its final decision, the Appellate Tribunal allowed the Assessee's appeal, overturning the penalty for late filing of quarterly returns for F.Y. 2005-06. The order was pronounced in open court on 11.07.2018.