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TMI Blog2018 (3) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income Tax (Appeals)-10, Pune dated 15-03-2016 confirming levy of penalty u/s. 272A(2)(k)/274 r.w.s. 200(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for the assessment year 2011-12. 2. The penalty u/s. 272A(2)(k) has been levied for delay of 380 days in filing of quarterly return of TDS. The Assessing Officer issued show cause notice to the assessee on 06-11-2012. Despite service of notice, neither the assessee nor authorized representative of assessee appeared before the Assessing Officer. Accordingly, the Assessing Officer in ex-parte order levied penalty of ₹ 38,000/- @ ₹ 100/- per day for delay of 380 days in filing of e-TDS return for first quarter of Financial Year 2010-11. Aggrieved by the order dated 17-12-2012 levying penalty u/s. 272A(2)(k)/274 r.w.s. 200(3) of the Act, the assessee filed appeal before the Commissioner of Income Tax (Appeals). The reason given by assessee for delay in filing the quarterly return is that the assessee is not conversant with the e-filing of various forms newly introduced by the Department. The Commissioner of Income Tax (Appeals) rejected the reason given by assessee on the ground that unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... une in ITA No. 832/PN/2016 for assessment year 2011-12 decided on 07-10-2016. The relevant extract of the findings of Tribunal deleting penalty levied u/s. 272A(2)(k) of the Act are as under : 21. In view of various provisions of the Act, as pointed out above, the substitution was made by Income Tax (Sixth) Amendment Rules, 2010 and was applicable for the financial year 2010-11. Since e-compliance of TDS returns was introduced in the said financial year, there was time and again amendments/corrections in order to make system of filing TDS returns userfriendly. The learned Authorized Representative for the assessee has pointed out that there were about 18 amendments / corrections in this regard. In the present set of appeals before us admittedly, there was default in furnishing eTDS statements late for the respective quarters by different assessee, but all relating to assessment year 2011-12. The question which arises for adjudication before us is whether in such cases where e-TDS was made compulsory for the instant assessment year and where the software was not user-friendly and required amendments at the end of the Government itself from time to time and the compliance being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deducted at source was not correct. One another aspect of reasonableness was that in case the returns for quarter 1 was filed belatedly, then the returns for consequent quarters also got delayed for no default and as such, no penalty was leviable for such quarters. Different learned Authorized Representatives appearing before us has made reference to the decisions of various Benches of Tribunal. On the other hand, the learned Departmental Representative for the Revenue has placed reliance on the ratio laid down by the Hon ble Allahabad High Court in Raja Harpal Singh Inter College Vs. Prl. CIT (supra) and Chandigarh Bench of Tribunal in Central Scientific Instruments Organization Vs. JCIT (TDS) (supra). One last aspect pointed out by the learned Authorized Representative for the assessee was that the CIT(A) has acknowledged that there was reasonable cause in not furnishing e-TDS returns in time. However, no benefit of the same was given to the assessee because the CIT(A) was of the view that the provisions of section 273B of the Act do not cover penalty leviable under section 272A(2)(k) of the Act. 23. First of all, we shall deal with the last submissions of the assessee that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In some of the cases, there is default in payment of tax deducted at source and consequently, delay in filing the e-TDS returns. The question which arises is whether in the above said scenario, can the provisions of section 273B of the Act be applied in order to decide the issue of levy of penalty under section 272A(2)(k) of the Act. 24. The Hon ble Punjab Haryana High Court in HMT Ltd., Tractor Division Vs. CIT (2005) 274 ITR 540 (P H) had held that where the tax deducted at source had been paid in time and the necessary returns in respect thereto were filed in time with the Income Tax Department, on mere late issue of tax deduction certificate, there was no loss to the Revenue and the delay in furnishing the tax deduction certificate was held to be merely technical or venial in nature and penalty levied under section 272A(2)(k) of the Act was deleted. It may be clarified herein that earlier under section 272A(2)(k) of the Act, penalty was leviable where the tax deduction certificate was not issued in time. However, by Finance (No.2) Act, 2004 w.e.f. 01.04.2005, it has been provided that where a person fails to deliver or cause to be deliver copy of statement within time s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e restricted from the date of payment of TDS to the date of filing e-TDS statements since e-TDS statements cannot be filed without payment of TDS to the credit of Central Government. Similar ratio has been laid down by the Chandigarh Bench of Tribunal in M/s. Ashirwad Complex Vs. JCIT (TDS) (supra). Accordingly, we hold so. 29. Another issue raised in some of the appeals is that where all quarterly returns relating to assessment year 2011-12 were filed on one date i.e. there was default in furnishing the returns for each of the quarters late, the case of the assessee was that because of overlapping default, penalty at best should be restricted to quarter No.1 and no penalty should be levied for the subsequent quarters. We find merit in the above plea of the assessee and accordingly, we direct the Assessing Officer to restrict the penalty leviable to first quarter which is in default and for the overlapping default, no penalty is to be levied under section 272A(2)(k) of the Act. We direct the Assessing Officer to verify the claim of assessee in this regard and work out the penalty accordingly. 30. The issue arising in other appeals before us is identical and following ou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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