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2018 (2) TMI 169 - AT - Income TaxPenalty levied u/s 272A(2)(k) r.w.s. 200(3) - delay in submission of e-TDS return - Held that - The case of the assessee before us is that the delay in submission of e-TDS return was because of the problem of awareness of Return Preparation Utility, which was updated by NSDL in the first year i.e. assessment year 2011-12. Because of the requirement of e-TDS furnishing of TDS statement arising for the first time in assessment year 2011-12, there were problems faced by the assessee and hence, the delay in filing quarterly TDS return late. The assessee had reasonable cause in not furnishing the same in time and in view of the provisions of section 273B, we hold that the assessee is not liable to levy of penalty under section 272A(2)(k). Assessing Officer is directed to delete the same. - Decided in favour of assessee.
Issues Involved:
1. Legality and justification of the CIT(A)'s order dismissing the appeal. 2. Legality and justification of the penalty imposed under section 272A(2)(k) of the Income-tax Act, 1961. 3. Consideration of reasonable cause under section 273B for the delay in filing TDS returns. 4. Impact of technical and procedural difficulties on compliance with e-TDS filing requirements. 5. Application of precedents and relevant case laws to the issue of penalty imposition. Detailed Analysis: 1. Legality and Justification of the CIT(A)'s Order Dismissing the Appeal: The assessee contested the order passed by the CIT(A)-I, Aurangabad, dated 01.01.2016, dismissing the appeal against the penalty levied under section 272A(2)(k) of the Income-tax Act, 1961. The Tribunal noted that despite the service of notice, the assessee did not appear, and no application for adjournment was moved. The Tribunal proceeded to decide the appeal based on the submissions of the learned Departmental Representative for the Revenue. 2. Legality and Justification of the Penalty Imposed Under Section 272A(2)(k): The core issue was whether the penalty under section 272A(2)(k) r.w.s. 200(3) of the Act was justified. The assessee failed to file the quarterly TDS return in Form No.26Q for the second quarter of the financial year 2010-11 within the due date, resulting in a delay of 383 days. Consequently, the Assessing Officer initiated proceedings and levied a penalty of ?38,300/-. 3. Consideration of Reasonable Cause Under Section 273B: The assessee argued that the delay was not deliberate but due to a lack of knowledge and technical difficulties in e-filing TDS returns. The Tribunal referred to various cases where the issue of reasonable cause under section 273B had been considered. It was highlighted that if an assessee could establish a reasonable cause for the delay, no penalty should be imposed. 4. Impact of Technical and Procedural Difficulties: The Tribunal acknowledged that the assessment year 2011-12 was the first year for mandatory e-filing of TDS returns. Due to this new requirement, many assessees faced technical difficulties and system issues, which led to delays. The Tribunal noted that the authorities had made several amendments to make the e-filing system user-friendly. The Tribunal emphasized that the onus was on the authorities to provide a functional platform for compliance. 5. Application of Precedents and Relevant Case Laws: The Tribunal referred to several precedents, including the Hon'ble Punjab & Haryana High Court in HMT Ltd., Tractor Division Vs. CIT, and the Hon'ble Allahabad High Court in Raja Harpal Singh Inter College Vs. Prl. CIT. These cases supported the view that where there was no loss to the revenue and the delay was due to reasonable cause, penalties should not be imposed. The Tribunal also considered the decision in Nav Maharashtra Vidyalaya Vs. Addl. CIT (TDS) Range, Pune, where similar issues were adjudicated favorably for the assessee. Conclusion: The Tribunal concluded that the assessee had reasonable cause for the delay in filing the e-TDS returns due to the new and complex requirements of e-filing introduced in the assessment year 2011-12. The Tribunal held that the assessee was not liable for the penalty under section 272A(2)(k) of the Act, directing the Assessing Officer to delete the penalty. The appeal of the assessee was allowed, and the order was pronounced on January 25, 2018.
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