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2018 (3) TMI 1203 - AT - Income TaxPenal provisions u/s 272A(2)(k) - delay in filing of the statement of tax-deducted at source within the prescribed time limit - Held that - Taxes have been paid in time and the technological system was new in those years i.e. FY 2009-10 we are inclined to hold that the assessee has shown bona-fide cause and in the circumstances we are of the considered view that penalty is not exigible on the assessee and we hereby order for the deletion of the penalty of 99, 200/- levied by the AO for all the four quarters of financial year 2009-10. We hold that the assessee has shown bonafide cause as is contemplated u/s 273B of the 1961 Act and under the factual matrix of the case the penalty of 99, 200/- levied u/s 272A(2)(k) is hereby ordered to be deleted. The assessee succeeds in this appeal.
Issues Involved:
1. Justification for the penalty under Section 272A(2)(k) of the Income Tax Act, 1961. 2. Reasonable cause for delay in filing TDS returns. 3. Applicability of Section 273B for waiver of penalty. Issue-wise Detailed Analysis: 1. Justification for the Penalty under Section 272A(2)(k): The appeal concerns the penalty of ?99,200 levied on the assessee for the late filing of quarterly TDS statements for the financial year 2009-10. The AO noted delays ranging from 71 to 399 days in filing these statements, invoking Section 272A(2)(k) of the Income Tax Act, 1961, which mandates penalties for such delays. The assessee's argument that the delay was due to technical difficulties with the NSDL e-filing system was rejected by the AO, who found no reasonable cause as stipulated under Section 273B. 2. Reasonable Cause for Delay in Filing TDS Returns: The assessee contended that the delay was due to the cumbersome and user-unfriendly software provided by NSDL for e-filing TDS returns and the inefficiency of the NSDL call center. Despite these issues, the assessee had paid all TDS amounts on time. The CIT(A) upheld the AO's decision, emphasizing the statutory and absolute liability to file TDS returns on time, irrespective of the payment of the deducted tax. 3. Applicability of Section 273B for Waiver of Penalty: The tribunal considered whether the assessee had a reasonable cause for the delay under Section 273B, which allows for the waiver of penalties if such a cause is demonstrated. The tribunal noted that the transition to mandatory e-filing of TDS returns in the relevant financial year was fraught with technological glitches, which the assessee claimed to have faced. The tribunal also acknowledged that the assessee had paid the TDS amounts on time and had filed subsequent returns without delay. Tribunal's Findings: The tribunal observed that the technological issues during the transition to e-filing constituted a reasonable cause for the delay. It cited the Pune tribunal's decision in Nav Maharashtra Vidyalaya v. Addl. CIT, which held that penalties under Section 272A(2)(k) should not be levied when delays are due to initial technical difficulties in the e-filing system. The tribunal concluded that the assessee had shown bona fide cause for the delay and ordered the deletion of the penalty. Conclusion: The tribunal allowed the appeal, recognizing the initial technological challenges in the e-filing system as a reasonable cause for the delay in filing TDS returns. Consequently, the penalty of ?99,200 levied under Section 272A(2)(k) was deleted, and the appeal was decided in favor of the assessee.
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