2015 (6) TMI 894 - AT - Income Tax

Penalty u/s. 272A (2)(k) - not filing the TDS returns in time for all the four quarters of F.Y. 2010-11 - Held that - In the present case the assessee had deducted TDS from the payment and paid it to the Government treasury. The assessee was required to file return as per section 200(3) of the Act which the assessee failed to do. This had attracted levy of penalty u/s.272A(2)(k) of the Act. The assessee has explained the reason for failure to file return of TDS as required, that the work was handled by few staff who were changed on transfer. There is no finding by the lower authorities that the reason advanced by the assessee is not genuine. Further, from the default of the assessee, no loss was caused to the Department as the deduction of tax had already paid to the Government treasury and there is no grievance in any manner to the Revenue. The payee has also not raised any grievance before the Revenue authorities. Therefore, the default, if any, is technical and venial in nature, not justifying the levy of penalty in this case. The explanation offered by the assessee is bonafide and the default is only technical in nature. We are inclined to delete the penalty for the above assessment years. - Decided in favour of assessee.

Summary

Issues:
Levy of penalty u/s. 272A (2)(k) of the Income Tax Act for delay in filing appeals before the Tribunal and for failure to file e-TDS returns as per sec. 200(3) of the Act for assessment years 2008-09 and 2010-11.

Issue 1: Delay in filing appeals before the Tribunal
The assessee appealed against the levy of penalty u/s. 272A (2)(k) due to a delay of 153 days in filing the appeals. The assessee attributed the delay to administrative reasons and frequent office changes. Citing the judgment in Collector, Land Acquisition vs. Katiji, the assessee sought condonation of delay, emphasizing the need for substantial justice. The Departmental Representative did not object to condoning the delay. The Tribunal found the reasons for delay valid, as they were beyond the assessee's control, and admitted the appeals for adjudication.

Issue 2: Failure to file e-TDS returns for assessment year 2010-11
The JCIT imposed a penalty of I3,37,600 for FY 2009-10 on the assessee for not filing TDS returns on time. Similarly, a penalty of I6,29,900 was levied for FY 2007-08. The Commissioner of Income Tax (Appeals) upheld the penalties, stating that failure to file returns on time invites penalties under sec. 272A(2)(k) of the Act. The assessee's explanation of staff shortage was deemed insufficient, and the penalties were confirmed. However, the Tribunal found the default technical and venial, as the tax had been paid to the Government treasury, causing no loss to the Department. Consequently, the penalties for both assessment years were deleted.

Conclusion:
The Tribunal allowed both appeals, deleting the penalties imposed for delay in filing appeals and failure to file e-TDS returns. The Tribunal's decision was based on the technical nature of the default, the bonafide explanation provided by the assessee, and the absence of any loss to the Department or grievances raised by the payee.