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2016 (5) TMI 1109 - ALLAHABAD HIGH COURT

2016 (5) TMI 1109 - ALLAHABAD HIGH COURT - [2016] 386 ITR 327 - Penalty under Section 272A(2)(k) - non filing of e-TDS statement - e-TDS statements were submitted on 8.2.2013 and 9.2.2013 for the Assessment Year 2008-09 - Held that:- It is necessary for the deductor to file e-TDS statements in time so as to enable the processing of the returns in time. The Assessing Authority has also emphasised this aspect in the order dated 22 April 2013. It has been stated that filing of e-TDS statements not .....

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n that adequate opportunity had been granted to the appellant but the appellant failed to utilize the opportunities that had been granted. In fact even when the appellant had appeared through a counsel, only an adjournment was sought and even thereafter no explanation was offered before the Assessing Authority. 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 the appellant that a regul .....

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ssed by the Income Tax Appellate Tribunal, Allahabad Bench, Allahabad the tribunal by which the appeals preferred by the College against the orders of the Commissioner of Income Tax (Appeals) partly confirming the penalty levied under section 272-A(2)(k) read with section 200(3) of the Act have been dismissed. The questions of law that have been framed in this appeal are as follows : "I. Whether, the Income Tax Appellate Tribunal as well as, authority below were justified to levy the penalt .....

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nal, was justified to reject the appeal outrightly without going into the merit of the case, as well as, no intention and no loss of the revenue because the tax has been deposited always within time. IV. Whether, the Income Tax Appellate Tribunal, was justified in rejecting the appeal despite the fact that in compliance of notice dated 13.12.2012 the return (statement) was filed between 08.02.2013 to 15.03.2013 and order was passed by the Joint Commissioner Income Tax (TDS) on 22.04.2013." .....

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owever, did not respond to the aforesaid notice. Consequently, another notice dated 13 December 2012 was issued. The appellant was reminded about the earlier notice dated 12 October 2012 in regard to the violation of the provisions of section 200(3) of the Act and the fact that the appellant had neither appeared on the date fixed nor furnished any explanation. The appellant was, therefore, given a final opportunity to furnish an explanation by 26 December 2012 failing which it was stated that th .....

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ity nor any reply was submitted in the office. Subsequently, a letter dated 16 January 2013 was submitted by the appellant. This letter mentions that the regular Principal had joined the College on 25 January 2010 and was collecting the necessary papers and that there was no intention to violate any provision of law. It was also stated that one month's time may be given for filing the e-TDS statements. The appellant, however, did not furnish any explanation for the delay in filing the e-TDS .....

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100/- per day was imposed. The details are as follows : Financial year/s Form No. Deductible Amount Due Date of filing Date of Return filed No. of Days Delayed Amount @Rs.100/- per day Amount leviable 2007-08 24Q 2,23,647/- 15/07/2007 Not filed 2102 2,10,200/- 2,10,200/- 2008-09 24Q 1,85,939/- 15/07/2008 Not filed 1737 1,73,700/- 1,73,700/- 2009-10 24Q 5,74,761/- 15/07/2009 Not filed 1372 1,37,200/- 1,37,200/- 2010-11 24Q 8,09,208/- 15/07/2010 Not filed 1007 1,00,700/-1,00,700/- 2011-12 24Q 7,14 .....

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of TDS were made properly, TDS was deposited in Government account well within time. Only the return was not filed within due dates. Again the appellant reproduced the facts for causes of non-filing of TDS return within due dates as under :- i) The Principal of the college Sri Triloki Nath Singh was retired on 30.06.2006; ii) And the senior lecturer, Pt. Moolchand Pandey was appointed as Principal on temporary basis. Mr. Pandey was basically a lecturer of Chemistry was no experience of administ .....

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t to mention here that on 18/12/2008, the Manager Sri Kunwar Sripal Singh was passed away suddenly and because of it, the administrative as well as financial decision/works were hampered totally. Since the payment was released by DIOS, the deduction and deposit of TDS was done well in time in Govt. A/c but the e-filing of TDS returns could not be done timely. Since 25/01/2010 onwards finally the Service Commission has appointed Dr. Rama Kant Singh as Principal and the compliance process for e-fi .....

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incumbent holding the charge of Principal since 30.03.2006 until Dr. Rama Kant Singh was appointed as the Principal on 25.01.2010. There is enough reason to be in agreement with the appellant that the lecturers holding the charge of Principal did not have administrative experience. Therefore, to my considered view, the appellant was prevented by sufficient cause to file the e-TDS statements relating to F.Ys. 2007-08, 2008-09 and 2009-10. But I hold that the new incumbent should have filed the s .....

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-arranging the records etc." It would, therefore, to be seen that the appellate Authority calculated the penalty with effect from 1 April 2010 as the regular Principal of the College assumed charge of the office on 25 January 2010. The College filed an appeal before the Tribunal which was dismissed by order dated 21 January 2016. The Tribunal found that since the assessee had not filed the e-TDS statements in time, the Assessing Authority had issued a show cause notice dated 12 October 2012 .....

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d that the Commissioner of Income Tax (Appeals) had reduced the penalty by calculating the same with effect from 1 April 2010 as the regular Principal had joined the College on 25 January 2010. Having found that no satisfactory explanation had been offered by the appellant for non-filing of the e-TDS statements after 1 April 2010, the Tribunal dismissed the appeals. Sri N.C. Gupta, learned counsel for the appellant has submitted that it cannot be said that opportunity was provided to the appella .....

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ng Authority for the delay in filing the e-TDS statements but sufficient explanation had been offered before the First Appellate Authority for not furnishing the e-TDS statements in time but as this explanation has not been considered in its correct perspective, no penalty could have been imposed upon the assessee. Learned counsel also submitted that non-filing of the e-TDS statements has not resulted in any loss to the revenue and so no penalty could have been imposed and that in similar circum .....

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44 (P&H). Sri Piyush Agarwal, learned counsel for the respondents has, however, submitted that questions of law do not arise for consideration in this appeal as the Tribunal has on a careful appreciation of facts, dismissed the appeals. His contention is that the penalty was correctly imposed on the assessee as the e-TDS statements were not filed in time and no satisfactory explanation was offered. Learned counsel, to support his contention, has placed reliance upon the decision of the Bomba .....

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ral Government or as the Board directs. (2) Any person being an employer, referred to in sub-section (1A) of section 192 shall pay, within the prescribed time, the tax to the credit of the Central Government or as the Board directs. (3) Any person deducting any sum on or after the 1st day of April, 2005 in accordance with the foregoing provisions of this Chapter or, as the case may be, any person being an employer referred to in sub-section (1A) of section 192 shall, after paying the tax deducte .....

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of any mistake or to add, delete or update the information furnished in the statement delivered under this sub-section in such form and verified in such manner as may be specified by the authority." Section 272A(2)(k) of the Act provides that if any person fails to deliver or cause to be delivered a copy of the statement within the time specified in section 200(3), then penalty of ₹ 100 shall be paid for every day during which the failure continues provided that the amount of penalty .....

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deducting tax at source but had not filed the e-TDS statements in time for five successive assessment years namely 2008-09, 2009-10, 2010-11, 2011-12 and 2012-13. The Assessing Authority, in such circumstances, issued a notice dated 12 October 2012 requiring the appellant to ensure compliance by 26 October 2012 but despite service of notice, the appellant did not ensure compliance. Accordingly, another notice dated 13 December 2012 was issued granting a final opportunity to the appellant to fur .....

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on that since the Principal had joined the College only on 25 January 2010, it would take some time to collect the records for filing the e-TDS statements. A request was, therefore, made for granting one month time for filing the e-TDS statements. It needs to be noted at this stage that the appellant did file the e-TDS statements on 8 February 2013/9 February 2013. The contention of learned counsel for the appellant is that since no order was passed by the Assessing Authority on this application .....

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fore, in the absence of any explanation having been offered by the appellant, levied penalty under section 272A(2)(k) of the Act. It is only before the Commissioner of Income Tax (Appeals) that the appellant, for the first time, offered any explanation. The explanation basically was that prior to the joining of a regular Principal in the College on 25 January 2010, only officiating Principals had been working who did not have an idea that e-TDS statements were required to be filed. The Tribunal .....

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"The most important objective of the TDS provisions is to extend the reach of Income Tax Department so as to make tax administration more effective and efficient and to reduce opportunities for tax evasion so as to bring equity in the system. To achieve this objective, person/s in each organization, who is responsible to make certain payments required to deduct tax at source on or before making such payment and furnish e-TDS quarterly statement online before the NSDL on quarterly basis. Suc .....

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se who pay the taxes and adhere to tax laws as against those who do not. Thus, it not only brings equity in the tax system but also acts as an effective deterrent against possible tax evasion." The Bombay High Court in Rashmikant Kundalia (supra) also emphasised the necessity of filing e-TDS statement in time and observed : "13. It is not in dispute that as per the existing provisions, a person responsible for deduction of tax (the deductor) is required to furnish periodical quarterly .....

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urnished by the deductor within the prescribed time. The timely processing of returns is the bedrock of an efficient tax administration system. If the Income-tax returns, especially having refund claims, are not processed in a timely manner, then (i) a delay occurs in the granting of credit of TDS to the person on whose behalf tax is deducted (the deductee) and, consequently, leads to delay in issuing refunds to the deductee, or raising of infructuous demands against the deductee; (ii) the confi .....

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f filing e-TDS statements in time cannot be overlooked. The Department cannot accurately process the returns on whose behalf tax has been deducted until information of such deduction is furnished by the deductor within the prescribed time and as emphasised by the Bombay High Court "timely processing of returns is the bedrock of an efficient tax administration system". It is, therefore, necessary for the deductor to file e-TDS statements in time so as to enable the processing of the ret .....

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