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2016 (8) TMI 508 - PUNJAB AND HARYANA HIGH COURT

2016 (8) TMI 508 - PUNJAB AND HARYANA HIGH COURT - [2016] 385 ITR 617 - Penalty under section 272A(2)(k) - technical default in filing returns late on the part of the appellant - non reasonable cause - Held that:- here was a delay of nearly five years in filing the deduction of tax at source returns/statements as is discernible from the perusal of Form No. 26Q reproduced above for the financial year 2008-09 relating to the assessment year 2009-10. No plausible explanation had been tendered by th .....

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prescribed period. Further, it had also been recorded that the penalties under section 272A(2)(k) of the Act have rightly been imposed upon the appellant in all the three financial years. The assessee had failed to explain that there was any reasonable cause or failure to comply with the provisions of law and the authorities below had concurrently concluded that there was delay in filing the tax deducted at source returns without any justifiable reason or cause. - Decided against assessee - I. T .....

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referred by the assessee under section 260A of the Income-tax Act, 1961 (in short "the Act") against the order dated April 30, 2015 (annexure A-3) passed by the Income-tax Appellate Tribunal, Chandigarh Bench "A", Chandigarh (hereinafter referred to as "the Tribunal"), in I. T. A. No. 54/Chandi/2015, for the assessment year 2009-10, claiming the following substantial questions of law : "(i) Whether in the facts and in the circumstances of the case, the orders ( .....

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nment account in time and the requisite forms have been issued to the deductee as per the provisions of the Act ?" 3. Briefly stated, the facts necessary for adjudication of the instant appeal as narrated therein may be noticed. The assessee filed its return of tax deducted at source (TDS) on May 10, 2013 in Form No. 26Q for the quarters ending on June 30, 2008, September 30, 2008 and December 31, 2008. The return for the 4th quarter ended on March 31, 2009 was filed on May 13, 2013. It had .....

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of penalty under section 272A(2)(k) read with section 274 of the Act. The appellant filed reply dated October 7, 2013 to the said show-cause notice. Respondent No. 2 vide order dated October 21, 2013 (annexure A-1) levied penalty of ₹ 4,84,945. Feeling aggrieved, the appellant filed an appeal before the Commissioner of Income-tax (Appeals) (for brevity "the CIT(A)") who vide order dated October 31, 2014 (annexure A-2) affirmed the penalty order and dismissed the appeal. Being di .....

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by the learned counsel. It was also urged that there was reasonable cause within the meaning of section 273B of the Act on the basis of which there was justification for delay in filing the tax deducted at source returns. Moreover, the tax deducted at source was deposited within time and, therefore, there was no loss of revenue. Relying upon the judgments of this court in CIT (TDS) v. Executive Engineer [2010] 320 ITR 494 (P&H) ; H. M. T. Ltd., Tractors Division v. CIT [2005] 274 ITR 544 (P .....

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on or after the 1st day of April, 2005 in accordance with the forgoing 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 deducted to the credit of the Central Government within the prescribed time, prepare such statements for such period as may be prescribed and deliver or cause to be delivered to the prescribed Income-tax authority or the person authorized by such authority such statement in .....

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at source. 7. Rule 31A(2) of the Rules, which is relevant for the decision of the controversy raised in the appeal, is in the following terms : "31A. (2) Statements referred to in sub-rule (1) for the quarter of the financial year ending with the date specified in column (2) of the Table below shall be furnished by the due date specified in the cor responding entry in column (3) of the said Table : 1. Date of ending of the quarter 30th June Due date of the financial year 15th July of the f .....

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ed in the aforesaid rule. 8. The controversy herein relates to levy of penalty under section 272A(2)(k) of the Act. According to the aforesaid provision, penalty is imposable if any person fails to deliver or cause to be delivered a copy of the statement under sub-section (3) of section 200 within the specified time. The quantum of penalty thereunder is a sum of one hundred rupees for every day default till the date of filing the tax deducted at source return but the same would be limited to the .....

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by the learned counsel for the appellant. Section 200(3) of the Act read with rule 31A(2) of the Rules enjoins upon any person deducting tax at source to file statements of deduction of tax at source within the prescribed period specified thereunder. In our opinion, the penal provisions contained in section 272A(2)(k) of the Act has been inserted for the purpose of compliance of filing of tax deducted at source returns in time in Form No. 26Q by due dates mentioned in rule 31A(2) of the Rules so .....

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: "A plain reading of the provision clearly shows that the question of direct loss of revenue can never occur if the specified statement is not filed within the stipulated time. The Legislature has to be attributed that much intelligence that the penalty for delay in submission of the statement was provided even when there could have been no loss of revenue under any circumstances. Therefore, in such a situation to plead that since there is no loss to revenue, no penalty should be imposed .....

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be mentioned that the information contained in the tax deducted at source statements is utilised by the Department in ensuring proper assessment of tax in the case of the persons from whose income, tax has been deducted at source. Hence, while non-filling of statement by the deductor may not entail a loss to the Revenue in deductor's case, it may result in loss of revenue in the case of deductees and so the contention of the learned counsel that in the absence of loss to the Revenue, the pen .....

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of those taxes for no fault of theirs due to non-filing of statements on time. Therefore, the law enunciated in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC) has no applicability to the present case. 10. The appellant had filed the tax deducted at source returns late as per the details given below : Quarter Due date of filing of TDS return Date of filing of TDS return Delays in filing TDS returns Amount Amount of penalty Penalty restricted to 1st 15-7-2008 10-5-2013 1760 1,46,06 .....

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tendered by the assessee for filing the tax deducted at source returns belatedly and, therefore, the benefit under section 273B of the Act could not be given. 12. Moreover, the authorities below had noticed that the appellant was supposed to mandatorily file the tax deducted at source returns within the prescribed time as provided under rule 31A(2) of the Rules. Since the appellant had failed to do so, it had rightly been treated to be in default for not filing the tax deducted at source returns .....

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