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TMI Blog2019 (6) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... No.1890/Kol/2018 - - - Dated:- 12-6-2019 - SHRI A. T. VARKEY, JM AND DR. A.L.SAINI, AM For The Assessee : Shri Miraj D. Shah, AR For The Respondent : Shri Radhey Shyam, CIT DR ORDER Per Dr. A. L. Saini: The captioned appeal filed by the Assessee , pertaining to assessment year 2011-12, is directed against the order passed by the Commissioner of Income Tax (Appeal)-24, Kolkata, which in turn arises out of a penalty order passed by the Assessing Officer u/s 272A(2)(k) / 274 of the Income Tax Act, 1961 (in short the Act ) dated 28/06/2013. 2. The grounds of appeal raised by the assessee are as follows: 1. For that the Appellate order passed was in violation of principles of natural justice and hence the entire proceeding was bad in law and thus the Appellate Order be cancelled / quashed. 2. For that in the facts and circumstances of the case the learned CIT(Appeals) of Income Tax erred in confirming the penalty u/s 272A(2)(k) of the Income Tax Act, 1961 without accepting the reasonable cause shown within the meaning of Sec 273B the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer was not justified in imposing the penalty as there was a reasonable cause for the failure of the submission of the Quarterly TDS statement and therefore penalty should not be imposed. The ld. DR for the revenue, per contra submitted that assessee did not furnish any evidence to state the nature of the reasonable cause, which had led to the delay in filing of the TDS statements, hence penalty should not be imposed. However, the ld. Counsel for the assessee submitted before us that the matter relating to TDS compliance was delegated by the assessee to its employee who was in charge of such compliances and also to file TDS returns as per norms. The employee without any intimation to the assessee left his employment and for such sudden departure neither the assessee himself nor his new accountant could ascertain a clear picture of his pending jobs including statutory compliances. Much later, with the help of NSDL, the assessee came to know of the delays in filing TDS returns in form no. 26Q for Quarter-l Quarter-2 for the Financial Year 2010-11 and immediately the assessee filed the pending returns. The assessee also realized that because of such events, there was a substantial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty provision of Sec 272A(2)(k) of the Income Tax Act 1961 describes the penalty of ₹ 100 per day for which the failure continues with the maximum limit of the TDS amount. However the penalty leviable u/ s 272A(2)(k) is subject to the provision of Sec 273B of the IT Act 1961 i.e. no penalty shall be imposed if the assessee proved that there was a reasonable cause' over the failure. 8. We note that the term 'reasonable cause' has been explained by the various decisions of courts. Some of the relevant decisions which are applicable to the facts of the assessee narrated above are as follows: i) The Hon ble Delhi High Court in the case of Azadi Bachao Andolan v/s Union of India 252 ITR 471 explained the term reasonable cause as follows: What would constitute reasonable cause cannot be laid down with precision. It would depend upon the factual background and the scope for interference in a reference application or much less in a writ petition is extremely limited and unless the conclusions are perverse based on conjectures or surmises and/ or have been arrived at without consideration. of relevant material and/ or taking i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as guilty of conduct contumacious or dishonest, or acted in conscious disregard to its obligations. 9. We note that in the present case, the assessee deducted the TDS and deposited the same. Even there was no failure to submit return in Form 26Q. There was only failure for its timely submission - which by all counts is a technical breach. Further the delay had happened due to assessee's ignorance about the lapses caused by his past accountant. The accountant left the job without notice. No list of pending job was handed over. The new accountant and the assessee was not aware of the fact of non-filing of TDS return till they visited NSDL. And as soon as the same was noticed, returns for both the quarters were filed. Thus the delay had happened due 'to circumstances beyond the knowledge / control of the assessee. It is further submitted that there was no loss to revenue due to the late filing of return as the tax was deducted and deposited in time and hence the breach of law if any was only a technical default and for that we rely on the landmark judgement of the Hon'ble Supreme Court in the case of Hindustan Steel Ltd 83 ITR 26 wherein the Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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