2024 (1) TMI 854 - AT - Income Tax

Levy of penalty u/s 272A(2)(k) - Delay on the part of the assessee to file the TDS returns in time - technical venial breach or willful breach - Quarterly TDS returns were suo moto filed by the assessee after due remittance of TDS with applicable interest without receiving any notice from the income tax department, thus as pleaded that there was only a technical venial breach committed by the assessee - HELD THAT - We find that the assessee had duly explained the reasons for the delayed filing of TDS returns. The reasons explained by the assessee were not found to be false by the revenue. We find that the assessee had already suffered the interest u/s 201(1A) of the Act for the late remittance of TDS. Hence there is no loss to the exchequer by the delayed filing of TDS returns by the assessee. For a mere technical venial breach, the assessee should not be invited with penalty u/s 272A(2)(k) of the Act. Our view is further fortified by the decision of Haryana Distillery Ltd vs JCIT 2018 (9) TMI 289 - ITAT DELHI . Thus we hold that this is not a fit case for levy of penalty u/s 272A(2)(k) of the Act - Decided in favour of assessee.

Summary

Issues involved:
The appeal concerns the levy of penalty under section 272A(2)(k) of the Income-tax Act, 1961 for delayed filing of quarterly TDS returns.

Summary:
The appeal before the Appellate Tribunal ITAT Delhi involved identical issues arising from orders of the Commissioner of Income Tax (Appeals) regarding the levy of penalty under section 272A(2)(k) of the Income-tax Act, 1961. The main issue in all appeals was whether the penalty was justified in the circumstances. The assessee had explained that delays in filing TDS returns were due to fund shortages and missing PANs of parties, leading to technical breaches. The Assessing Officer (AO) imposed penalties disregarding the explanations, a decision upheld by the CIT(A).

The Tribunal found that the assessee's reasons for delayed filings were genuine and not disputed by the revenue. Despite late remittance of TDS, there was no loss to the government. Citing a precedent, the Tribunal concluded that for minor technical breaches, penalty under section 272A(2)(k) should not apply. Accordingly, the Tribunal allowed the assessee's appeals for all years in question, holding that penalty imposition was unwarranted.

In conclusion, the Tribunal ruled in favor of the assessee, stating that the penalty under section 272A(2)(k) was not applicable in this case. The grounds raised by the assessee were accepted, and the appeals were allowed. The order was pronounced in open court on 16/01/2024.