2017 (4) TMI 1492 - AT - Income Tax

Penalty u/s 272A - late filing of TDS returns - HELD THAT - Assessee has deposited the TDS with interest as applicable from time to time. We find some strength in the arguments of the Ld. AR that assessee was an individual working in the unorganized sector and therefore, not fully conversant with the complex TDS provisions and had to depend upon some experts to comply with these provisions as TDS provisions certainly require certain higher degree of understanding of TDS provisions and manner of compliances thereof. We also note the fact that the TDS compliances have undergone frequent changes over the last decade in terms of deduction, deposit, e-filing of TDS returns and generation of TDS certificates etc. Therefore, without delving much deeper into the issue on merit, we are inclined to delete the said penalty on the facts and circumstances of the case and accordingly, allow assessee s appeal.

Summary

Issues:
Appeals against penalty u/s 272A(2)(k) for late filing of quarterly TDS returns for AY 2009-10 & 2010-11.

Analysis:
For AY 2009-10, the appellant, an individual transport operator, appealed against a penalty of ?67,500 for late TDS return filing. The appellant argued lack of familiarity with TDS provisions and reliance on consultants for compliance. The CIT(A) reduced the penalty to ?67,500 considering the TDS payment date. The ITAT noted the appellant's sector and compliance challenges, leading to penalty deletion based on the facts and circumstances, allowing the appeal.

For AY 2010-11, a similar penalty of ?58,200 for late TDS return filing was challenged. The appellant's arguments mirrored those of the previous year. The ITAT, finding no significant changes, deleted the penalty and allowed the appeal.

Both appeals were allowed, and the penalties were deleted based on the individual's sector, compliance challenges, and reliance on consultants for TDS compliance.