2016 (3) TMI 723 - AT - Income Tax

Levy of penalty u/s 272A(2)(k) - assessee could not upload the quarterly statement in respect of the tax deducted at source - contention of the assessee is that PAN of some of the deductees is not available - Held that - When the assessee deducted tax and paid the same to the Government account, mere failure to upload the quarterly statement as required u/s 200(3) of the Act will not result in levy of automatic penalty. Of course, it is statutory function of the assessee to upload the quarterly statement as required under the statutory provision. The fact remains that unless the PAN of the deductees is available with the assessee, the assessee could not upload the statement. It is not the case of the Department that the assessee can upload the statement in absence of the PAN of the deductees. In those circumstances, this Tribunal is of the considered opinion that in respect of those deductees whose PAN is not available with the assessee, there was a reasonable cause for the delay in uploading the quarterly statement as required under the scheme of the Income-tax Act, 1961. However, in respect of those deductees, whose PANs are available, the assessee is expected to upload the quarterly statement as provided under the Act. In the case before us, the penalty is levied only in respect of those deductees whose PAN is not available with the assessee. Therefore, the Assessing Officer is not justified in levying penalty u/s 272A(2)(k) of the Act - Decided in favour of assessee

Summary

Issues:
Levy of penalty u/s 272A(2)(k) of the Income Tax Act for failure to upload quarterly statement of tax deducted at source due to non-availability of Permanent Account Numbers (PAN) of deductees.

Analysis:
The appeals were against the order of the Commissioner of Income-tax (Appeals)-VII, Chennai, for assessment years 2010-11 and 2011-12 regarding the penalty under section 272A(2)(k) of the Income Tax Act. The representative for the assessee argued that the delay in uploading the statement was due to non-availability of PANs of some deductees, even though the tax was deducted and paid to the Government account. The assessee contended that this constituted a reasonable cause for the delay and thus, the penalty should not be levied.

The Departmental Representative argued that filing the return is a statutory function of the deductor, and non-availability of PAN cannot be an excuse for not filing the return as required. It was asserted that it is the responsibility of the assessee to collect PANs in advance and upload the quarterly statement as mandated by the Act. The CIT(A) upheld the penalty imposed by the Assessing Officer.

Upon review, the Tribunal acknowledged that the tax was deducted by the assessee, but the issue was the failure to upload the quarterly statement due to non-availability of PANs of some deductees. The Tribunal opined that the mere failure to upload the statement does not warrant an automatic penalty, especially when the tax was paid to the Government account. It was noted that without the PANs, the assessee could not upload the statement, and the Department did not argue that the statement could be uploaded without PANs. Therefore, the Tribunal concluded that there was a reasonable cause for the delay in uploading the statement for deductees without PANs. However, for deductees with available PANs, the uploading was expected. As the penalty was imposed only for deductees without PANs, the Tribunal ruled that the penalty under section 272A(2)(k) was unjustified, leading to the deletion of the penalty.

In conclusion, the Tribunal allowed both appeals of the assessee, setting aside the orders of the lower authorities and deleting the penalty imposed under section 272A(2)(k) of the Income Tax Act. The judgment was pronounced on 5th February 2016 in Chennai.