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TMI Blog2018 (3) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... ant Member This appeal, filed by the assessee, being ITA No. 6943/Mum/2014 for assessment year 2010-11 is directed against the appellate order dated 07.10.2014 passed by learned Commissioner of Income-tax (Appeals)-14, Mumbai (hereinafter called "the CIT(A)") for assessment year 2010-11, appellate proceedings had arisen before learned CIT(A) from the order dated 04.04.2012 passed by learned Assessing Officer (hereinafter called "the AO") u/s 272A(2)(k) of the Income-tax Act, 1961 (hereinafter called "the Act") levying penalty of ₹ 99,200/- against the assessee. 2. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called "the tribunal") read as under:- " a) The Learned CIT(Appeals) has erred in ignoring the submissions of the Appellant and confirming the penalty of ₹ 99,200/- under section 272A(2)(k) of the Income Tax Act. The appellant submits that on the facts and in the circumstances of the case, the levy of penalty is not justified and the entire penalty of ₹ 99,200/- ought to have been cancelled. b) The Appellants crave leave to add, alter or amend the above ground eithe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in filing the quarterly returns. However, an assessee, who is diligent to deduct Tax at Source and diligent enough to pay the tax within the time limit, must be supposed to be diligent in filing the quarterly returns, which is a mere procedural requirement. There can be hardly any reason for an assessee not to file the quarterly TDS returns after the payment of tax. Hence, it should be appreciated that it is the E-difficulties faced by the assessee, who are not fully conversant with E-filing of TDS returns. The difficulties have to be held to be genuine in the case like this. It can also be seen that a number of days delay in filing 4 quarterly returns has gradually decreased as stated in the Show-cause Notice itself There have been no delays in filing the TDS returns for the next Financial Year as you may verify from your system. You are, therefore, requested to drop the penalty proceedings and oblige. We are enclosing herewith the Xerox copies of all the TDS challans so as to enable you to verify the fact that there is not a single instance of delayed payment of tax after the same was deducted at source at the time of payment to the respective parties. You are requested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legislature, not to levy of penalty on deposit of tax is then the same would have been provided in, section 272(A)(2k) itself. Therefore, the contention that' the taxes are paid so no penalty should be levied cannot be accepted. 5.4 Section 200(3) places a statutory mandate on every person to file TDS return/statement in prescribed form and in the prescribed manner by the due date. On breach of provision of section 200(3) penalty is leviable u/s.272(A)(2k) of the I.T. Act. The appellant stated that software was not user friendly which led to delay in filing of return. The assessee has to manage his affairs in such manner that statutory compliances are met on time. Therefore, in absence of reasonable cause being demonstrated by the appellant, the action of the A.O. in levying penalty is upheld. Ground is dismissed" 7. The assessee has now filed an appeal before the tribunal and Ld. Counsel for the assessee at the outset submitted that during the relevant period E-filing and paper filing of TDS returns was going on simultaneously and the system of the Revenue was not working properly which led to delay in filing of quarterly statement of tax deducted at source while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-1-2012 13-1-2012 070330900146312 0 1,69,639 1,69,639 15 2011 -12 Q4 24Q 15-5- U-5-2012 07033Q8QO&19B12 0 0 0 16 2011 -12 Q4 26Q 15-5-2012 14-5-2012 0703 30S DOS 19801 0 1,71,595 1,71,595 17 2012-13 Q1 24Q 15-7-2012 13-7-2012 070330900154082 0 0 0 18 2012-13 Q1 26Q 15-7-2012 13-7-2012 0703309001 54093 0 90,238 90,238 19 2012-13 Q2 24Q 15-10-2012 10-10-2012 070331100073905 0 0 0 20 2012-13 Q2 26Q 15-10-2012 10-10-2012 070331 100Q73916 0 1,34,098 1,34,098 21 2012-13 Q3 24Q 15-1-2013 14-1-2013 070331100084873 0 0 0 22 2012-13 Q3 26Q 15-1-2013 14-1-2013 070331100084862 0 1,04,139 1,04,139 a 'i 2012-13 Q4 24Q 15-5-2013 14-5-2013 070330800937165 0 2,434 2,434 24 2012-13 Q4 26Q 15-5-2013 14-5-2013 070330800937176 0 1,32,875 1,32,875 25 2013-14 Q1 24Q 15-7- 2013 12-7-2013 070330900171464 0 0 0 26 2013-14 Q1 26Q 15-7-2013 12-7-2013 070330900171475 0 1,71,558 1,71,558 27 2013-14 Q2 26Q 15-10*2013 14-10-2013 070330801004052 0 1,25,592 1,25,592 28 2013-14 Q3 26O 15-1-2014 14-1-2014 07033960 001 0 1,40,378 1,40,378 29 2013-14 Q4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ters. Thus keeping in view totality of the circumstances and also considering that taxes have been paid in time and the technological system was new in those years i.e. FY 2009-10 , we are inclined to hold that the assessee has shown bona-fide cause and in the circumstances we are of the considered view that penalty is not exigible on the assessee and we hereby order for the deletion of the penalty of ₹ 99,200/- levied by the AO for all the four quarters of financial year 2009-10. The Pune tribunal in the case of Nav Maharashtra Vidyalaya v. Addl. CIT reported in (2016) 161 ITD 732(Pune-trib) has held as under: "17. We have heard the rival contentions and perused the record. In this bunch of appeals, the issue which arises for adjudication is against the levy of penalty under section 272A(2)(k) of the Act for late filing of TDS statements / returns. In this regard, reference is being made to the relevant provisions of the Act. Under Chapter XVII of the Act, duty is upon the person making certain payments to deduct tax at source under the respective sections. The said tax deducted at source is due to be the income received by the deductee as per section 198 of the Act. Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section in such form and verified in such manner as may be specified by the authority. " 19. Under section 200(1) of the Act, it is provided that any person deducting any sum in accordance with the provisions of the Chapter shall pay within the prescribed time, the sum so deducted to the credit of the Central Government or as the Board directs. Under section 200(2) of the Act, any person being an employer, as referred to in sub-section (1A) of section 192 of the Act shall pay, within the prescribed time, the tax to the credit of the Central Government or as the Board directs. Under sub-section (2A) of the Act, it is provided that where the sum has been deducted in accordance with foregoing provisions of the Chapter, by the office of the Government, then duty is upon the Treasury Officer or the Drawing & Disbursing Officer or any other person, to deliver or cause to be delivered to the prescribed income tax authorities, or to the person authorized by such authority, statement in such form, verified in such manner, setting forth such particulars within such time as may be prescribed. Under section 200(3) of the Act, similar responsibility is on any person deducting any sum o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction Account Number i.e. TAN number. Further, quote its Permanent Accountant Number except in the case where the deductor was office of Government and also quote PAN number of all the deductees. Further, the deductor was required to furnish the particulars of tax paid to the Central Government including Book Identification Number or challan indication number as the case may be. He was also required to furnish the particulars of amount paid or credited on which tax was not deducted. 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 user-friendly. 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 e-TDS statements late for the respective quarters by different assessee, but all relating to assessment year 2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DS returns as such could not be filed and hence, the assessee was prevented by reasonable cause in not filing e-TDS returns in time and as such, no merit in levy of penalty. Another plea raised before us is that charging of fees for each day of default and then, restricting the same to the tax 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's case (supra) and Chandigarh Bench of Tribunal in Central Scientific Instruments Organization's case (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxpayers and in the absence of technical guidance provided and because of technical hitches, the TDS returns could not be filed in time. Most of the assessee before us have paid the tax deducted at source to the Treasury within time frame but have defaulted in filing e-TDS statements. 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 abovesaid scenario, can the provisions of section 273B of the Act can 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. v. CIT [2005] 274 ITR 544/[2004] 140 Taxman 606 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 earli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation was furnished for non-furnishing TDS statements in time. The Hon'ble High Court thus, in this regard observed that the requirement of filing e-TDS statements in time could not be overlooked. In such circumstances, the Hon'ble High court held that it cannot be urged by the Counsel for the assessee that no penalty could have been imposed for non-filing e-TDS returns in time since it had not resulted in any loss to the Revenue. The Hon'ble High Court further took note of the fact that before the Assessing Officer, no explanation was offered. However, an explanation was offered before the appellate authority, which was taken into consideration and the penalty amount was suitably reduced as the case of appellant that regular Principal assumed charge on 25.01.2010, was accepted and the penalty was imposed after that date. The appeal of the assessee in this regard was thus, dismissed. 26. Applying the said ratio laid down by the Hon'ble Allahabad High Court in Raja Harpal Singh Inter College's case (supra), there is no merit in the plea of the learned Departmental Representative for the Revenue that the Hon'ble High Court has laid down the proposition tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of reasonable cause as relevant to section 273B of the Act put up by the assessee in the respective cases in the appeals before us, which admittedly relate to different quarters of assessment year 2011-12. Where for the first time, there was requirement of e-TDS furnishing of TDS statement and since there were certain complications in e-filing of TDS returns because of system failure, which admittedly, was amended 18 times by the Department, the delay in furnishing the said returns late could not be attributed to the assessee. The onus was upon the authorities to provide platform for easy compliance to newly introduced provisions of the Act. Where such facilities could not be provided by the authorities and the technical support not being available to small assessees, who are in appeal before us, then the delay in furnishing the e-TDS returns late should be liberally construed. Hence, there was practical difficulty on the part of assessee to comply with newly introduced requirement of e-TDS filing of TDS statements, being technical delay and not venial in nature, merits to be considered as reasonable cause for non-levy of penalty as per the requirements of section 273B of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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