2015 (12) TMI 689 - AT - Income Tax

Penalty imposed under section 272A(2)(k) - delay in filing TDS statements - Held that - Undisputedly, it is a fact on record that there is a delay in filing TDS statements in respect of all the four quarters as far as Form no.24Q is concerned and as far as statements in Form no.26Q is concerned, there is a delay in filing the TDS statement in respect of quarter 2, 3 and 4. On a perusal of the details of filing of TDS statement, it is seen that the delay is substantial ranging from almost one year to about two years. It is also relevant to note that on a specific query from the bench it was submitted by the learned Counsel that in respect of some of the quarters TDS amount was remitted to the Government account beyond the prescribed date. As could be seen, in response to the show cause notice, the assessee has submitted its Explanation by stating that the deductee is the director of the company to whom rent / professional fee was paid and salary was paid to the family members of the company, hence, there is no willful intention to delay or deprive any deductee of the TDS credit. However, before the first appellate authority, the assessee has taken a completely different stand by stating that due to oversight of the staff, TDS statement could not be filed. When the learned counsel was specifically asked by the Bench why this stand taken before the first appellate authority was not taken before the Assessing Officer, he submitted that due to very short time given by the Assessing Officer for submitting the reply, the assessee could not take such stand. However, we are not convinced with the aforesaid submissions of the assessee. It is relevant to note that in response to the show cause notice issued by the Assessing Officer, the assessee did submit its reply. Therefore, the assessee could very well have taken the stand which was taken before the first appellate authority. Therefore, as it appears, the assessee has taken a completely new stand before the first appellate authority which is not available before the Assessing Officer. Moreover, the plea regarding oversight by the staff is very general in nature, hence, cannot be accepted. Neither the assessee has identified the concerned employee nor furnished any affidavit of the employee admitting such fact. Further, considering the period of delay, the plea of oversight by staff is not acceptable. Though, we accept the fact that imposition of penalty under section 272A(2)(k) is not mandatory as the provisions of section 273B is also applicable in case of imposition of penalty under section 272A(2)(k), but, at the same time, the assessee has to show reasonable cause for the default. Therefore, in our view, the assessee having not made out a case of reasonable cause for delay in filing the TDS statement, penalty imposed is justified. - Decided against assessee.

Summary

Issues:
Appeal against penalty under section 272A(2)(k) for failure to file quarterly TDS statements within prescribed dates.

Analysis:
1. The assessee, a Private Limited Company, appealed against a penalty of Rs. 3 lakh imposed under section 272A(2)(k) for not filing quarterly TDS statements on time for the financial year 2009-10.
2. The Assessing Officer found the assessee in default and issued a show cause notice. The assessee admitted the default but requested no penalty. The Assessing Officer imposed the penalty as the default was not due to a reasonable cause.
3. The first appellate authority upheld the penalty, stating strict compliance with TDS provisions is required. The assessee cited staff oversight as the reason for delay, but it was not accepted as a reasonable cause.
4. The assessee argued before ITAT that the delay was not deliberate, TDS amounts were remitted before notice, and penalty should not apply. Case laws were cited to support the argument.
5. The Departmental Representative argued that negligence was evident, and reasonable cause should be based on facts of each case. Previous decisions were cited to support this stance.
6. ITAT noted substantial delays in filing TDS statements, with some remittances made beyond prescribed dates. The assessee's varying explanations and lack of specific details or employee affidavits weakened the oversight claim.
7. ITAT found the assessee's new stance before the first appellate authority inconsistent and not supported by facts. Previous case laws cited by the assessee were deemed factually distinguishable, as the assessee had repeated defaults in TDS remittances and filings.
8. ITAT upheld the penalty, stating the assessee failed to establish a reasonable cause for the delay. The order of the first appellate authority was upheld, and the assessee's appeal was dismissed.