2015 (4) TMI 1308 - AT - Income Tax

Levy of penalty u/s 272A(2)(k) - where assessee deducted income tax paid to contractors and the TDS so collected deposited in the account of Central Government in time? - default of the assessee is the late filing of quarterly returns electronically and the same is due to ignorance of technical knowledge, lack of interest infrastructure support at Ghazipur - It is the prayer of the assessee this is the first time default and seeks lenient approach and delayed the penalty levied by the AO and confirmed by the Ld. CIT(A) - HELD THAT - On hearing, the Ld. DR for the revenue, we find that there is no dispute on the facts that it is the first time default and, otherwise the assessee is regular in furnishing the statements in the subsequent assessment years. This is known truth that there are infrastructural problems relating to Internet, man power etc. Electricity is not continuous available in the said locations. We are of the opinion this is not a fit case levy of penalty in these two appeals. Accordingly, ground raised by the assessee in all these appeals are allowed.

Summary

Issues:
Levy of penalty u/s 272A(2)(k) of the Income Tax Act for late filing of quarterly returns electronically due to technical knowledge ignorance and lack of infrastructure support.

Analysis:
The judgment by the Appellate Tribunal ITAT Allahabad involved five appeals by the assessee against the common order of the Ld. CIT(A) Allahabad for the assessment years 2008-09 to 2012-13. The primary issue in all appeals was the levy of penalty under section 272A(2)(k) of the Act. The assessee had deducted income tax paid to contractors and deposited the TDS collected in the Central Government's account on time. However, the default of the assessee was the late filing of quarterly returns electronically, attributed to ignorance of technical knowledge and lack of infrastructure support at Ghazipur. The assessee contended that it was the first-time default and sought a lenient approach to delay the penalty imposed by the Assessing Officer (AO) and upheld by the Ld. CIT(A).

During the hearing, the Ld. DR for the revenue acknowledged that it was indeed the first-time default by the assessee and noted that the assessee had been regular in furnishing statements in subsequent assessment years. The tribunal recognized the infrastructural challenges faced by the assessee, such as internet connectivity issues, lack of manpower, and intermittent electricity supply at the location. Considering these circumstances, the tribunal opined that this was not a suitable case for the imposition of a penalty. Consequently, the tribunal allowed the grounds raised by the assessee in all appeals, leading to the decision that all appeals filed by the assessee were allowed. The order was pronounced in the open court on April 30, 2015.