2018 (5) TMI 1984 - AT - Income Tax

Penalty u/s 272A(2)(k) - delay in filing the TDS statement - HELD THAT - As decided in GULAM MUSTAFA KHAN VERSUS ADDITIONAL COMMISSIONER INCOME TAX THANE 2017 (4) TMI 1492 - ITAT MUMBAI 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. 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 Involved:
Appeal against penalty imposed under Section 272A(2)(k) of the Income Tax Act for delay in filing TDS statements.

Detailed Analysis:

1. Background and Facts:
The appeals were filed by the assessee against the order of the CIT(A)1, Thane for A.Y. 2010-11 regarding the penalty imposed under Section 272A(2)(k) of the Income Tax Act due to delayed filing of TDS statements for four quarters.

2. Contentions and Submissions:
The assessee argued that the delay was procedural, not deliberate, and due to difficulties in collating data. They contended that penalties for technical defaults should not be imposed, especially when taxes were paid on time and there was no revenue loss. The appellant cited various decisions supporting their claim.

3. Tribunal's Observations and Decision:
The Tribunal considered the submissions and noted that the assessee's business was managed by low-qualified staff. The Tribunal referred to a previous order where penalties were deleted under similar circumstances. It was observed that the assessee was not fully conversant with TDS provisions and relied on tax consultants for compliance. The Tribunal found merit in the argument that the assessee, working in the unorganized sector, faced challenges in understanding complex TDS provisions.

4. Decision on Penalty:
The Tribunal, based on the facts and circumstances, deleted the penalties imposed under Section 272A(2)(k) for all quarters of the relevant assessment year. The Tribunal emphasized that the penalties were unjustified given the individual's lack of familiarity with TDS provisions and the frequent changes in compliance requirements. The Tribunal upheld the assessee's appeal and allowed all three appeals filed against the penalties.

5. Conclusion:
In conclusion, the Tribunal, following precedent and considering the specific circumstances of the case, found no merit in the penalties imposed for delayed filing of TDS statements. The appeals were allowed, and the penalties were deleted.

This detailed analysis outlines the background, contentions, Tribunal's observations, decision on penalties, and the final outcome of the appeals filed against the penalty under Section 272A(2)(k) of the Income Tax Act.