2017 (6) TMI 336 - AT - Income Tax

Penalty u/s 272A(2)(K) - violation of late submission of TDS monthly statements - Held that - As relying on case of State Bank of India vs. JCIT 2015 (5) TMI 753 - ITAT CUTTACK there is reasonable cause in submitting the TDS statement which ultimately became delayed due to the fact that the assessee was not having PAN No. of deductees. Hence, we delete the penalty and allow the appeal of the assessee

Summary

Issues:
Levy of penalty under section 272A(2)(k) for late submission of TDS monthly statements.

Analysis:
The appeal pertains to a penalty imposed by the ACIT, TDS Range, Thane for the Assessment Year 2009-10 under section 272A(2)(k) of the Income Tax Act, 1961. The sole issue in this case is the confirmation of the penalty by the CIT(A) for late submission of TDS statements. The assessee filed quarterly TDS statements under section 200(3) of the Act, but there was a delay due to the absence of PAN details of the deductees, preventing the upload of returns. The AO levied the penalty, which was upheld by the CIT(A). However, the assessee presented a Tribunal's decision in a similar case where the penalty was deleted, arguing that the delay was unintentional and beyond their control due to technical constraints. The Tribunal in that case emphasized the bonafide nature of the delay and the lack of willful negligence on the part of the assessee. The Tribunal concluded that the penalty was not justified, considering the circumstances. Consequently, the penalty in the present case was deleted, and the appeal of the assessee was allowed.

In a detailed analysis, the Tribunal highlighted that the delay in filing the TDS statements was due to the assessee's reliance on external service providers for e-filing, as mandated by the IT Rules. The Tribunal emphasized that the delay was unintentional, technical in nature, and beyond the control of the assessee, who lacked the technical competency to file the returns independently. The Tribunal noted that the delay did not stem from willful negligence or malafide intent but rather from a reasonable cause, as the assessee was dependent on information from the Government's sub-treasury and designated service providers for filing. Citing legal precedents, the Tribunal concluded that a bonafide breach cannot attract a penalty under section 272(A), especially when the delay arises from technical or venial breaches supported by reasonable causes. The Tribunal also considered the public office nature of government bodies involved in the process and the absence of intentional default, leading to the cancellation of the penalty. The decision was further supported by previous rulings from the High Court and other ITAT benches, emphasizing that penalties for technical breaches without willful negligence are not justified under the law.

Overall, the Tribunal's decision focused on the technical constraints faced by the assessee, the absence of willful default, and the reasonable cause for the delay in filing the TDS statements. The Tribunal's analysis underscored the importance of bonafide intent, lack of malafide actions, and the technical complexities involved in the e-filing process, leading to the cancellation of the penalty in this case.