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2019 (6) TMI 1254 - AT - Income TaxPenalty u/s 272A(2)(k) - delay in filing the TDS return - resignation of the accountant - reasonable cause shown within the meaning of Sec 273B - HELD THAT - Assessee had shown reasonable cause for his failure in complying with the provisions of section 200(3) hence no penalty could be levied. The assessee had deducted and deposited the tax within the prescribed period and thereby made substantive compliance. The government revenue was not defrauded or deferred. The assessee did not have any motive to make any financial gain. Due to sudden resignation of the accountant, the assessee could not trace his left over jobs which include non-filing of TDS returns in Form 26Q for Quarter-1 Quarter-2 for FY 2010-11. As soon the same was noticed, TDS both the returns were filed. The circumstance shows that the delay in filing the return was not intentional. The assessee was prevented by sufficient cause for making due compliance. Therefore, we note that assessee had shown reasonable cause as referred u/s 273B - Decided in favour of assessee.
Issues:
Appeal against penalty order under section 272A(2)(k) of the Income Tax Act, 1961 for late submission of Quarterly TDS Statements. Detailed Analysis: Issue 1: Violation of Principles of Natural Justice The appellant contended that the appellate order violated principles of natural justice, seeking cancellation/quashing of the order. However, the tribunal did not find any merit in this argument. Issue 2: Confirmation of Penalty by CIT(A) The CIT(A) confirmed the penalty under section 272A(2)(k) without accepting the reasonable cause shown by the assessee. The tribunal noted the appellant's argument that the penalty imposition was unjustified due to a reasonable cause for the delay in filing TDS statements. Issue 3: Justification of Penalty Imposition The penalty under section 272A(2)(k) was challenged as unjustified by the appellant. The tribunal considered the circumstances leading to the delay, focusing on the reasonable cause shown by the assessee. Issue 4: Additional Evidences and Grounds The appellant sought to produce additional evidence and press new grounds of appeal, as per Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963. Issue 5: Tribunal's Decision After hearing both parties, the tribunal noted the penalty imposed for late submission of TDS Statements. The appellant argued that the delay was due to the sudden departure of the accountant responsible for compliance. The tribunal considered the reasonable cause shown by the appellant and the lack of financial loss to the revenue. Issue 6: Reasonable Cause for Delay The tribunal analyzed the circumstances, emphasizing that the delay was unintentional and beyond the assessee's control. The appellant's ignorance of the lapses caused by the previous accountant was highlighted as a reasonable cause for the delay. Issue 7: Precedents on Reasonable Cause The tribunal referred to legal precedents defining "reasonable cause," including decisions from the Delhi High Court and ITAT Kolkata. The tribunal emphasized the need for an objective consideration of explanations provided by the assessee. Issue 8: Compliance and Financial Impact The tribunal noted that the TDS was deducted and deposited on time, with no failure in submitting the returns. The delay was attributed to circumstances beyond the assessee's knowledge or control, leading to a technical breach rather than intentional non-compliance. Issue 9: Judicial Discretion on Penalty Referring to the Hindustan Steel Ltd case, the tribunal highlighted that penalties should not be imposed for technical or venial breaches. Considering the substantive compliance by the assessee and lack of financial gain motive, the tribunal concluded that no penalty should be levied. Issue 10: Deletion of Penalty Based on the reasonable cause shown by the assessee and the lack of intentional delay, the tribunal deleted the penalty of &8377; 81,178, as per section 273B of the Income Tax Act, 1961. Issue 11: Appeal Outcome The tribunal allowed the appeal of the assessee, pronouncing the order on 12.06.2019, in favor of deleting the penalty.
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