2023 (8) TMI 332 - AT - Income Tax

Penalty u/s. 272A(2)(k) - delay in filing quarterly statements of TDS - ssessee deposited the TDS to the concerned Central Government account in time - HELD THAT - We note that there was no delay in deposit of TDS amounts in the concerned account of Central Government and it is only delay in furnishing of TDS statement which is technical in nature, no penalty is warranted in terms of the finding of this Tribunal in the case of Maharashtra Jeevan Pradhikaran Works Division 2021 (5) TMI 584 - ITAT PUNE as held that mere non-filing of TDS statement being merely a technical default no penalty is warranted. Decided in favour of assessee. Thus, the order of CIT(A) is not justified and grounds raised by the assessee are allowed.

Summary

Issues:
The main issue in the judgment is whether the Commissioner of Income Tax (Appeals) was justified in confirming the penalty imposed by the Additional CIT (TDS) under section 272A(2)(k) of the Income Tax Act for delay in filing quarterly statements of TDS.

Details of the Judgment:

Issue 1: Justification of Penalty under section 272A(2)(k) of the Act
- The assessee, a partnership firm engaged in works contractorship/commission, was penalized for delay in filing quarterly TDS statements under sections 194C, 194I, 194J, and 194H of the Act.
- The Additional CIT imposed the penalty, which was confirmed by the CIT(A) ex-parte.
- The appellant argued that TDS was deposited on time, and the delay in filing the statement was a technical default without causing any revenue loss.
- The Tribunal referred to a similar case where delay in e-TDS return filing was considered due to practical difficulties and technical delays, leading to the conclusion that no penalty was warranted.
- Citing decisions from the Hon'ble High Courts of Punjab and Haryana and Allahabad, the Tribunal held that the delay in filing TDS statements should be liberally construed in cases of genuine difficulties faced by the assessee.
- The Tribunal emphasized that the delay in filing TDS statements, while technical in nature, did not warrant a penalty, especially when the TDS amounts were deposited on time.

Result:
- The Tribunal found that since there was no delay in depositing TDS amounts and the delay in furnishing TDS statements was technical in nature, no penalty was justified.
- The order of the CIT(A) confirming the penalty was deemed unjustified, and the grounds raised by the assessee were allowed.
- Consequently, the appeal of the assessee was allowed.

Conclusion:
The judgment highlighted the importance of considering practical difficulties and technical delays faced by taxpayers in filing TDS statements, emphasizing that penalties should not be imposed in cases where there is no loss to the revenue and the delay is merely technical in nature.