2018 (9) TMI 289 - AT - Income Tax

Levy of penalty u/s 272A(2)(k) - failure to deliver or cause to deliver a copy of the statement (e-TDS return and e-TCS return) within the time specified in sub-section (3) of Section 200 or the proviso to sub-section 3 of Section 206(c) - Held that - The statement/returns to be furnished by the assessee within the time were entirely depending upon the information to be supplied by the purchasers. The assessee explained that the purchaser/licensee being small operator did not obtain PAN, therefore, particulars could not be filed in time. This was the reason for not filing the return/statement within the period of limitation. The Manager, Accounts was ill, therefore, there was delay in making compliance. These facts clearly show that assessee had a reasonable cause for failure to comply with the provisions of Law. On filing the belated returns/statements, Revenue has not suffered any loss because tax deducted was already deposited on time with the Revenue Department. Therefore, a technical or venial breach to the provisions contained in the Act for submitting return statement of tax deducted at source. The above reasons are sufficient to hold that the penalty need not be levied in the facts and circumstances of the case - Decided in favour of assessee.

Summary

Issues:
Challenge against penalty under section 272A(2)(k) of the I.T. Act, 1961 for delayed filing of TDS/TCS returns.

Analysis:
1. Facts of the Case:
The appeals by the assessee contested the penalty imposed by the Ld. CIT(A) for delayed filing of TDS/TCS returns. The delays ranged from 21 days to 689 days for various quarters and years. The assessee explained that delays were due to non-receipt of PAN from purchasers and the absence of the Accounts Manager due to illness.

2. Assessee's Arguments:
The assessee contended that there was no loss to the Revenue as taxes were deducted and deposited on time. They argued that penalties should be imposed only for contumacious conduct, not technical breaches. Citing the Hindustan Steel Ltd. case, they emphasized the importance of bonafide mistakes and plausible reasons.

3. Decision of Ld. CIT(A):
The Ld. CIT(A) upheld the penalty, stating that the assessee failed to comply with statutory requirements to deduct tax and submit statements as per Section 200(3) of the I.T. Act.

4. Appellate Tribunal's Decision:
The Appellate Tribunal considered precedents and statutory provisions. They noted that the assessee had deducted and deposited taxes on time but faced delays due to non-receipt of PAN from purchasers and the ill health of the Accounts Manager. The Tribunal found these reasons to constitute a reasonable cause for the delays, leading to a technical or venial breach rather than willful non-compliance. Consequently, they set aside the penalties for both years.

5. Legal Precedents Considered:
The Tribunal referred to various decisions, including the Hindustan Steel Ltd. case emphasizing the discretionary nature of penalty imposition and the importance of reasonable cause. They also cited cases where penalties were canceled due to technical breaches supported by reasonable causes.

6. Conclusion:
The Tribunal concluded that the delays in filing TDS/TCS returns were due to genuine reasons beyond the assessee's control. As the taxes were deposited on time and no loss was incurred by the Revenue, they canceled the penalties for both years, ruling in favor of the assessee.

In summary, the Appellate Tribunal canceled the penalties imposed on the assessee for delayed filing of TDS/TCS returns, considering the genuine reasons provided for the delays and the absence of any loss to the Revenue.