2019 (4) TMI 1384 - AT - Income Tax

Levy of penalty u/s 272A(2)(k) - late filing of the quarterly returns - introduction of E-TDS filing - cause of delay was the non-acquaintance of the staff with the newly introduced procedures - HELD THAT - As decided in assessee s own case wherein the ITAT cancelled the penalty levied under Section 272A(2)(k) as held in the F.Y. 2005-06 filing of e-TDS return was introduced and there was a change from filing annual returns to quarterly return. In respect of the first quarter also there occurred some delay. It is, therefore, clear that with the introduction of the e-TDS return filing and change from the filing of annual returns to quarterly returns the delay was caused. There is nothing unacceptable in the explanation of the assessee that the cause of delay was the non-acquaintance of the staff with the newly introduced procedures. The violation in this respect is a venial breach of law and does not attract penalty proceedings in the very first year of introduction of the new procedures. We, therefore, delete the addition. - Decided in favour of assessee.

Summary

Issues:
Levy of penalty under Section 272A(2)(k) for the assessment year 2006-07.

Analysis:
The appeal was filed against the order of the learned CIT(A)-41, New Delhi dated 14th January, 2015, specifically challenging the penalty imposed under Section 272A(2)(k) amounting to `21,400/-. The ITAT considered the arguments presented by both sides and reviewed the material before them. The key issue was whether the penalty was justified. The ITAT referred to a previous decision in the assessee's own case (ITA No.1956/Del/2015) where a similar penalty had been cancelled. In the previous case, it was noted that the delay in filing was due to the introduction of e-TDS return filing and a change from annual to quarterly returns. The ITAT found the delay to be a minor breach caused by staff unfamiliarity with the new procedures. Consequently, the penalty was deemed unjustified and was deleted.

The ITAT concluded that since the circumstances in the current case were identical to those in the previous case, where the penalty had been cancelled, they would follow the same reasoning. Therefore, the penalty levied under Section 272A(2)(k) for the assessment year 2006-07 was cancelled, and the appeal of the assessee was allowed. The decision was pronounced in open court on 22.04.2019.