2017 (5) TMI 1158 - AT - Income Tax

Penalty under section 272A(2)(k) - delay in filing TDS statements within statutory period - legitimate reasons for delay - Held that - The delay in furnishing the statement was due to the reasons that the person who was looking after for furnishing the statement of TDS returns left employment of assessee. The assessee made their effort to bring the employee back in their employment. In support of their contention the assessee has placed on record the copy of e-mail communication with the employee. The lower authorities have not given any finding that non-furnishing of TDS returns was deliberate or the assessee got any benefit due to delay in furnishing the statement. Thus assessee has given sufficient explanation for delay in furnishing the statement of TDS within the prescribed period. Considering the decision of Hindustan Steel Ltd Versus State of Orissa 1969 (8) TMI 31 - SUPREME Court when there was no contemptuous or dishonest act on behalf of assessee in view of the explanation offered by assessee, we accept the explanation offered by the assessee. Thus, respectfully following the decision of Ahmedabad Tribunal in the Acquafill Polymers Co Private Limited (2016 (2) TMI 1079 - ITAT AHMEDABAD) we accept the ground of appeal of the assessee and direct the assessing officer to delete the entire penalty levied under section 272A(2)(k) of the Act. - Decided in favour of assessee.

Summary

Issues:
- Appeal against penalty imposed under section 272A(2)(k) of the Income Tax Act for late filing of TDS returns.

Detailed Analysis:
1. The appeal was made against the penalty imposed by the Additional Commissioner of Income Tax for late filing of TDS returns. The main issue was whether the penalty of ?1,63,807 was justified.

2. The Assessing Officer found that the assessee failed to file quarterly TDS returns on time for the financial year 2009-10. The reasons provided by the assessee for the delay included the departure of their experienced accountant and the subsequent hiring of a new accountant unfamiliar with the filing procedures. The assessee contended that the delay was unintentional and that TDS payments were made on time. However, the Assessing Officer imposed the penalty based on the number of delays in filing the returns.

3. During the appeal, the assessee argued that the delay was due to unforeseen circumstances and cited various legal precedents to support their case. The Revenue, on the other hand, supported the lower authorities' decision to uphold the penalty, claiming that the assessee failed to show sufficient cause for the delay.

4. The Tribunal considered the arguments and evidence presented. It noted that the assessee had paid the TDS amounts in every quarter and had made efforts to rectify the delay caused by the departure of the accountant. The Tribunal referred to legal precedents, including decisions of the Hon'ble Supreme Court and the Ahmedabad Tribunal, emphasizing that penalties should not be imposed for technical or venial breaches if there was a genuine and reasonable cause for the delay.

5. Ultimately, the Tribunal found that the assessee had provided a sufficient explanation for the delay in filing the TDS returns. Citing the decisions of the Superior Courts and the Ahmedabad Tribunal, the Tribunal accepted the assessee's explanation and directed the assessing officer to delete the entire penalty imposed under section 272A(2)(k) of the Act.

6. As a result, the appeal filed by the assessee was allowed, and the penalty was set aside based on the explanation provided for the delay in filing the TDS returns.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, legal precedents cited, and the Tribunal's decision to set aside the penalty based on the assessee's explanation for the delay.