2022 (12) TMI 331 - AT - Income Tax

Levy of penalty u/s 272A(2)(k) - technical breach of the provisions - TDS return for the 3rd quarter filed belatedly - there was a slight delay in filing the appeal before the learned CIT(A) - HELD THAT - Assessee submitted as follows Due to the lack of knowledge and at the same time non availability of Professional person in the Rural Area i.e. at Sonar Pada village Dombivli East, Thane Rural . Thus it is evident that the assessee had no assistance from any professional person to guide them regarding the compliance of statutory provisions. These facts clearly show that the 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 the tax deducted was already deposited on time with the Revenue Department. It was, therefore, a technical breach of the provisions contained in the Act for submitting the 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. Accordingly, the ground raised in the present appeal is allowed and the Assessing Officer is directed to delete the penalty, as affirmed by the learned CIT(A). Appeal by the assessee is allowed.

Summary

Issues: Appeal against penalty under section 272A(2)(k) of the Income Tax Act for delayed filing of TDS return.

Analysis:
1. Background: The appeal challenges the penalty imposed under section 272A(2)(k) of the Income Tax Act for the assessment year 2016-17, arising from the delay in filing the TDS return for the 3rd quarter of the financial year 2015-16.

2. Ex-Parte Hearing: The appeal proceeded ex-parte as neither the assessee nor any representative appeared during the hearing, leading to a decision based on the material available on record.

3. Delay Condoned: A slight delay of 12 days in filing the appeal was condoned in the interest of justice, with no objections raised by the Departmental Representative during the hearing.

4. Grounds of Appeal: The sole grievance of the assessee was against the penalty levied under section 272A(2)(k) of the Act for the delayed filing of the TDS return.

5. Assessee's Submission: The assessee contended that the delay was due to negligence and lack of awareness regarding the importance of timely TDS return filing, with no malafide intention for concealment of TDS amount.

6. Department's Argument: The Departmental Representative emphasized that ignorance of the law is not a valid excuse, supporting the impugned order.

7. Legal Analysis: Section 272A(2)(k) provides for penalties for failure to submit TDS statements on time, with a provision under section 273B allowing exemption if a reasonable cause is proven. The assessee timely deducted and deposited the tax, with the delay attributed to negligence and lack of professional guidance in a rural area.

8. Decision: Considering the technical breach and absence of loss to the Revenue Department due to timely tax deposit, the penalty was deemed unwarranted. The Tribunal directed the Assessing Officer to delete the penalty upheld by the CIT(A), allowing the appeal in favor of the assessee.

9. Outcome: The appeal by the assessee against the penalty under section 272A(2)(k) was allowed, with the decision pronounced in open court on 15/11/2022.