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2018 (10) TMI 1029 - AT - Income TaxPenalty u/s 272A(2)(K) - late filing of e-TDS return - circumstances & bonafide of the deductor for late filing - technological glitches due to software installation - Held that - In the facts prevalent for us admittedly, there has been no delay in depositing the TDS to government Treasury. However delay occurred in filing of quarterly TDS returns. It is an admitted position that during financial year 2010-11, there was a switchover of filing of TDS return in paper forms to e-filing, by way of Amendment in Rules. Assessee has also submitted to have faced problems in e-filing of TDS returns for relevant period. As observed in case of HMT Ltd vs. CIT 2004 (8) TMI 50 - PUNJAB AND HARYANA HIGH COURT as taken note of this change at various occasions which constituted hardships to assessee. It has been consistently observed for relevant period by various authorities, that due to software installed by revenue for e-filing of TDS returns, initial technological glitches has caused delay in filing of quarterly statements of TDS, for which no penalty can be levied on assessee. In present facts, assessee has also submitted to have faced similar difficulties due to which delay occurred. Thus no penalty for late filing of TDS returns. - Decided in favour of assessee.
Issues:
- Imposition of penalty under section 272A(2)(K) for late filing of e-TDS return for AY 2010-11. Analysis: The appeal was filed against the penalty imposed for late filing of e-TDS returns for the AY 2010-11 under section 272A(2)(K). The assessee had deducted TDS for each quarter but faced delays in filing the quarterly returns. The Assessing Officer (AO) initiated penalty proceedings, and the assessee explained that the TDS was deposited on time but due to inadvertent circumstances, the returns were filed late, with no intention to defy the law. However, the AO held the assessee in default for the late filing and imposed penalties for each quarter. The AO's decision was upheld by the Commissioner of Income Tax Appeals (CIT-A), leading the assessee to appeal to the ITAT Delhi. The assessee argued that there were genuine difficulties during the financial year in filing TDS returns due to the introduction of E-compliance for the first time. The assessee claimed there was a reasonable cause for the delays and sought the benefit under section 273B of the Act. On the contrary, the Senior DR contended that the assessee failed to establish a reasonable cause and had not expressed any hardship before the AO. The ITAT Delhi noted that there was no delay in depositing the TDS to the government treasury but delays occurred in filing the quarterly TDS returns. It was acknowledged that there was a transition from paper forms to e-filing during the relevant period, causing difficulties for the assessee. Referring to precedents, including cases from various High Courts, the ITAT Delhi observed that initial technological glitches in the e-filing software caused delays in filing TDS returns, leading to a consistent stance that no penalty should be levied on the assessee for such delays. The ITAT Delhi, therefore, disagreed with the CIT-A's decision to levy penalties and deleted the penalties imposed, allowing the grounds raised by the assessee. In conclusion, the ITAT Delhi allowed the appeal filed by the assessee, pronouncing the order on 16/10/2018.
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