2016 (11) TMI 250 - AT - Income Tax

Penalty u/s 272A (2)(k) - delay in is furnishing return of tds - Held that - We have seen that before levying the penalty neither the ACIT/AO nor the Commissioner (Appeal) while deciding the appeal of the assessee made any observation that the assessee acted deliberately in defiance of law or was guilty by the act of his conduct. As per our considered opinion while levying the penalty the authority must record its satisfaction that the act of the assessee was deliberate and was not condonable. In the present case neither the order of AO nor ld. Commissioner (Appeals) order revealed that the act of assessee was deliberate or in defiance of law or the assessee is guilty of her conduct. We noticed that there is no reference in the order of penalty that there was any wilful negligence or magnified on the part of assessee in the matter of filing return of TDS. Having considered the entirety of the fact, moreover the assessee has not taken any lame excuse while furnishing the reply to the notice of initiation of penalty. She had voluntarily filed return before issuance of the notice for initiation of penalty. In our considered opinion that it is a fit case for deleting the penalty as the assessee came forward with honesty. However, the observation made hereinabove may not be precedent for future references. With these observations we delete the penalty for all three assessment years by accepting appeal of the assessee.

Summary

Issues:
- Appeal against penalty for delay in filing TDS returns under section 272A(2)(k) of the Income Tax Act for Assessment Years 2008-09, 2009-10, and 2010-11.

Analysis:
1. The appeals were filed by the assessee against the penalty imposed by the Assessing Officer (AO) for delays in filing TDS returns. The AO found that the assessee filed the quarterly TDS returns after the due dates, leading to penalties for each assessment year.

2. The assessee contended that being a senior citizen, she voluntarily deposited the tax deducted but filed the returns late. The penalty amounts were calculated based on the number of days of delay in filing the returns. The Commissioner of Income Tax (Appeals) upheld the penalties, leading to the appeals before the Tribunal.

3. During the Tribunal hearing, the assessee argued for leniency, citing previous decisions where penalties were deleted due to reasonable causes for delays in filing returns. The Revenue representative argued that the assessee did not provide a satisfactory explanation for the delays and did not appear before the First Appellate Authority.

4. The Tribunal observed that while the tax was deposited, the issue revolved around the delay in filing the TDS returns. The assessee's contention of being a senior citizen and filing returns voluntarily was noted. The Tribunal emphasized that penalties should only be imposed if the delay was deliberate and not condonable.

5. Referring to a decision by the Ahmadabad Tribunal in a similar case, the Tribunal highlighted that penalties should be imposed only if there was no reasonable cause for the delay. It was noted that the delay in filing returns was not deliberate, and the assessee acted in good faith. The Tribunal found no evidence of wilful negligence on the part of the assessee.

6. Ultimately, the Tribunal decided to delete the penalties for all three assessment years, considering the assessee's honesty and voluntary filing of returns. The Tribunal emphasized that this decision should not set a precedent for future cases. The appeals of the assessee were allowed, and the penalties were deleted for all three assessment years.

This detailed analysis of the judgment provides insights into the legal reasoning behind the decision to delete the penalties imposed on the assessee for delays in filing TDS returns.