2022 (4) TMI 23 - AT - Income Tax

Penalty u/s 272A(2)(k) - assessee failed to furnish the quarterly TDS statements within the time prescribed under section 200(3) - as per AO assessee failed to file any reply with supporting evidences to establish that there was reasonable cause for late filing of the TDS statements - HELD THAT - Employees of the assessee were not well acquainted with the procedure of e-filing of TDS return which was made effective from assessment year 2008-09. Assessee had submitted, the employees were still at learning stage, as far as computerized system of filing is concerned, since, the bank in the near past had switched over itself from old system to CBS system and the employees are getting acquainted with the new banking software - aforesaid submissions made by the assessee constitute a reasonable explanation under section 273B - there is no justifiable reason for imposing penalty, merely, because there is delay in furnishing the TDS quarterly statements - Commissioner (Appeals) has not gone into the merits of the issue and dismissed assessee's appeal in limine. Even, accepting that assessee's version of delay is not correct and actual delay is of 80 days, in our view, such delay not being fatal should have been condoned as the assessee has made out a case for condonation of delay. When the appeal filed by the assessee is against the imposition of penalty under section 272A(k), we fail to understand what more clarification was required by Commissioner (Appeals) regarding the nature of relief sought by the assessee. In view of the aforesaid, we delete the penalty imposed under section 272A(2)(k) - Decided in favour of assessee.

Summary

Issues Involved:
Assessment of penalty under section 272A(2)(k) of the Income-tax Act, 1961 for the assessment year 2008-09 based on delayed filing of TDS statements.

Detailed Analysis:

1. Delayed Filing of TDS Statements:
The appeal was filed by the assessee against the penalty imposed under section 272A(2)(k) of the Income-tax Act, 1961 for the assessment year 2008-09. The Assessing Officer initiated proceedings due to the failure of the assessee to furnish the quarterly TDS statements within the prescribed time under section 200(3) of the Act. The penalty of ?12,27,000 was imposed for different quarters in the financial year 2008-09. The learned Commissioner (Appeals) dismissed the appeal stating that the delay in filing the appeal was not satisfactorily explained by the assessee, and the grounds raised were not clear.

2. Explanation for Delay:
During the appellate proceedings, the assessee provided a detailed submission explaining the reason for the delay in filing the TDS statements. It was highlighted that the employees of the assessee were not well-versed with the e-filing procedure introduced from the assessment year 2008-09. The transition from the old system to the new CBS system caused a learning curve for the employees. The explanation provided by the assessee was considered reasonable under section 273B of the Act, which allows for a reasonable cause for delay. The Tribunal noted that the delay in filing the TDS statements should not be a sole reason for imposing a penalty.

3. Condonation of Delay:
The Tribunal observed that even if the actual delay in filing the TDS statements was more than initially stated by the assessee, the delay should have been condoned. The Tribunal emphasized that the learned Commissioner (Appeals) did not delve into the merits of the issue and dismissed the appeal without proper consideration. The Tribunal concluded that the assessee had made a case for condonation of delay and that the penalty imposed under section 272A(2)(k) should be deleted.

4. Clarification on Relief Sought:
The Tribunal questioned the need for further clarification by the learned Commissioner (Appeals) regarding the nature of relief sought by the assessee in an appeal against the penalty under section 272A(2)(k). The Tribunal found that the grounds raised by the assessee were sufficient, and there was no requirement for additional clarification. Consequently, the Tribunal allowed the appeal, deleting the penalty imposed on the assessee.

In conclusion, the Tribunal allowed the appeal, setting aside the penalty imposed under section 272A(2)(k) of the Income-tax Act, 1961 for the assessment year 2008-09, based on the delayed filing of TDS statements.