TMI Blog2010 (1) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee is in appeal before us. 2. Admittedly, the assessee deducted the tax at source and deposited the same within the time provided under the Act. However, TDS returns in Form 26Q and Form 24Q, referable to four quarters ending on 15-7-2006, 15-10-2006, 15-1-2007 and 15-6-2007 respectively, were filed belatedly. Form 26Q TDS returns were in the electronic form, which were filed on 30-6-2007 whereas, under Form 24Q returns were filed on 10-7-2007 resulting in substantial delay for each quarter. It may be noticed that because of the change in the provisions, the assessee was under an obligation to file quarterly returns within 15 days from the end of the quarter whereas assessee claimed to have been under the impression that the annual return has to be filed on or before 15-6-2007 but filed the quarterly returns for all the four quarters, referable to Forms 26Q and 24Q, on 30-6-2007 and 10-7-2007 respectively. So far as Form 26Q is concerned, the delay with regard to first quarter works out to 372 days, second quarter by 280 days, third quarter by 188 days and for the 4th quarter there was delay of 37 days. Similarly under Form 24Q quarterly returns were delayed and for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of a reasonable cause. He, therefore, submitted that the assessee was unaware of the procedure of filing the returns in electronic form and, thus, had to assign the job to a third party, soon after realizing the correct procedure. Had the assessee been aware of the correct procedure at least one of the quarterly returns would have been filed, though belated, before the regular due date for filing the annual returns as per the old provisions. It was further submitted that the assessee who has been consistently complying with the procedures under the Act in all the earlier years would not have taken a risk of filing the quarterly returns belatedly to invite punitive action of levy of penalty equivalent to the tax deductible or collectible and this in itself shows that the assessee was under the bona fide belief that the returns have to be filed annually. Placing reliance upon the following decisions of the Hon'ble Rajasthan High Court in CIT v. Dy. Housing Commissioner,Raj.Housing Board[2003] 133 Taxman 93, CIT v. Superintending Engineer[2003] 260 ITR 641, the learned counsel appearing on behalf of the assessee submitted that penalty under section 272A(2)(c) of Act should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontended that failure to furnish annual returns would attract penalty under section 272A(2)(c) of the Act whereas failure to furnish quarterly TDS returns in terms of rule 37A will not attract the provisions of section 272A(2)(c). 6. On the other hand, learned Departmental Representative submitted that there is a substantial delay in filing the quarterly returns and the assessee cannot plead ignorance of law as a reasonable cause and in this regard relied upon the decision of the Hon'ble Karnataka High Court in the case of Saraswathi Electronics v. ITO [2007] 292 ITR 411. He further submitted that the judgments of the Hon'ble Rajasthan High Court (supra) are distinguishable on facts. The Court was concerned with the default by a Government body in deducting tax at source on account of ignorance of law and, thus, cancelled penalty on the facts of the case. The Hon'ble Court observed that the tax authorities should have evolved a method of advising the head of office by way of notice or reminder providing an opportunity to comply with the provisions, as otherwise penalty should not normally be levied. He submitted that the assessee is engaged in the business and had the benefit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessment years under consideration are important. If the assessee is able to show a reasonable cause for his failure to comply with the requirements of section 44AB before the due date, no penalty is leviable under section 27IB. What is "a reasonable cause", in a given set of facts depends upon the peculiar facts of that case. A cause which a reasonable man accepts it as a reasonable one can be taken as a reasonable cause. The expression 'reasonable cause' requires to be interpreted liberally in a fair and reasonable manner so as to advance the cause of justice, since harsh legalistic approach should be mitigated by soft practical approach in applying penal provisions." 9. It is well-settled that ordinarily an assessee is duty bound to know the provisions of statute but in the event of making a claim of ignorance of law it is for the revenue to examine the plea judiciously keeping in mind the fact that assessee who has deducted tax and deposited the same within the stipulated time could have normally been said to be a law abiding citizen/ assessee and the delay, under such circumstances, cannot ordinarily be attributable to wanton negligence, particularly when the penal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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