2018 (6) TMI 1233 - AT - Income Tax

Penalty u/s 272 A(2)(k) - delay in filing e-TDS return u/s 200(3) - genuine reason for delay in filing e- TDS return - Held that - Simply because the assessee deposited the amount to the Government account, it will not go to mitigate the rigors of assessee s failure to file the TDS statements within the stipulated time. Moreover, the assessee being a Government Organization is supposed to make strict compliance of law. The contention of the assessee is further not tenable that there is no loss to revenue due to the delay in filing the TDS statements, as the requisite TDS was deposited to the Govt. account in time. Such an inordinate delay may cause loss to Revenue while processing the refunds, if any, to the deductees which fetches substantial amount of interest to be paid by the Government on such refunds, if paid with delay. Moreover, the change /lack of staff with the assessee-organization is not found substantiated by any evidence on record and such a reason, in our considered opinion, does not constitute to be a reasonable cause to file the TDS statements with such an inordinate delay. No reasonable cause for filing the TDS statements with delay. - Decided against assessee.

Summary

Issues:
1. Imposition of penalty under section 272A(2)(k) for delay in filing e-TDS return.
2. Justifiability of reasons provided for delay in filing e-TDS return.
3. Compliance with TDS provisions and imposition of penalty.

Issue 1: Imposition of Penalty under Section 272A(2)(k) for Delay in Filing e-TDS Return:

The appeal was filed against the order imposing a penalty under section 272A(2)(k) for the assessment year 2011-12. The Assessing Officer found that the assessee had not filed quarterly TDS statements for the financial year 2010-11 within the prescribed due dates. The Assessing Officer issued a show cause notice, and the assessee explained the delay citing reasons related to the Common Wealth Games 2010 and staff changes. The Assessing Officer, however, held that the delay was due to deliberate negligence and imposed the penalty. The first appellate authority confirmed the penalty, stating that the reasons provided did not constitute a reasonable cause for the delay.

Issue 2: Justifiability of Reasons Provided for Delay in Filing e-TDS Return:

The assessee contended that the delay in filing the TDS statements was not deliberate but due to staff changes and non-availability of correct PANs. The assessee argued that all TDS amounts had been deposited to the Government account, ensuring no loss to revenue. The counsel emphasized that the delay should not be considered negligence, especially considering the specific responsibilities assigned for organizing the Common Wealth Games 2010. However, the authorities maintained that the reasons provided did not justify the delay, emphasizing strict compliance with TDS provisions.

Issue 3: Compliance with TDS Provisions and Imposition of Penalty:

The Tribunal observed substantial delays in filing the TDS statements, ranging from 289 to 675 days. Despite the timely deposit of TDS amounts, the Tribunal held that the delay could still impact revenue processing and interest payments on refunds. The Tribunal rejected the contention that staff changes were a reasonable cause for the delay, emphasizing the need for strict compliance by a Government Organization. The Tribunal found no merit in the appeal, upholding the penalty imposed for the breach of TDS filing requirements.

In conclusion, the Tribunal dismissed the appeal, affirming the penalty imposed for the delay in filing e-TDS returns, highlighting the significance of timely compliance with TDS provisions and the impact of delays on revenue processing.