TMI Blog2017 (1) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in the case of several assessee before us has wrongly come to the conclusion that the provisions of section 273B of the Act do not cover the defaults under section 272A(2)(k) of the Act. We reverse the finding of CIT(A) in this regard. 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 Act. We hold so. In this bunch of appeals, there are cases where the assessee has defaulted in not depositing tax deducted at source in time, in such cases, the returns were delayed because of default on behalf of the deductor. In such cases, penalty under section 272A(2)(k) of the Act is leviabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A No. 234/PN/2016 filed after delay of 44 days and in ITA No.235/PN/2016 filed after delay of 26 days, against which the respective assessee have filed applications for condonation of delay explaining the reasons for said delay. In view of the facts and circumstances, we condone the delay in filing the said appeals belatedly and proceed to decide the same after taking the same on record. 5. The short facts relating to the issue are that admittedly, in the present bunch of appeals, the returns required to be filed by the assessee after deducting tax at source under section 200(3) of the Act for different quarters relating to the financial year 2010-11 have admittedly, been filed late. The Assessing Officer noted that the assessee has failed to explain the delay and no cogent reasons have been offered by the individual assessee. Since the deductees do not get the credit of TDS till the time the TDS statements are uploaded by the deductors, the Assessing Officer was of the view that the assessee should have complied with the time limit prescribed under Rule 31A of the Income Tax Rules, 1962 (in short the Rules ). As there was failure on behalf of the person to deliver the statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Manager, Union Bank of India Vs. Addl. CIT, Range -3, Mathura (2012) 26 taxmann.com 347 (Agra). 7. The CIT(A) noted the provisions of quarterly submissions of TDS statements within stipulated time provided under the Act and noted the fact that the delayed submissions of TDS returns by the deductor would eventually delay the processing of returns of deductees and issue of refunds, if any, to such deductees. The CIT(A) observed that purpose and intention of penalty under section 272A(2)(k) of the Act was to penalize the decutor so as to avoid further hardship to numerous deductees, whose claim of refunds, etc. would depend on the timely furnishing of statements by the dedectors. He further observed that though the assessee had enumerated several reasons behind the impugned delay and he also noted that the same were genuine, however, the CIT(A) held that the said reasons may not help on simple ground that the benefit of reasonable cause as envisaged under section 273B of the Act has not been extended to the defaulted deductors . He further referred to the provisions of section 273B of the Act, under which it is provided that no penalty would be imposable on a person or assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and for e-filing of said returns. Another compliance which had to be made was that 100% PAN of the deductees should be given, whereas earlier, it was the requirement to furnish 85% PAN of deductees . He stressed that initially, there was manual compliance of filing of TDS returns, which was being complied with. However, when electronic filing of TDS statements became mandatory, the difficulties arose as there was no agency helping the small assessee, there was no training provided. The schools were established in remote areas and this being the first default, the same should be accepted and no penalty be levied. The learned Authorized Representative for the assessee placed reliance on the ratio laid down by Mumbai Bench of Tribunal in Oriental Bank of Commerce Vs. Addl. CIT in ITA No.7219/MUM/2014, relating to assessment year 2010-11, order dated 05.07.2016. The second contention raised by the learned Authorized Representative for the assessee was that the penalty, if any, should be restricted for the period from the date of payment of TDS where the tax was paid late to the date of filing the TDS statements, since before the payment of TDS, e-TDS returns could not be furnished. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble for levy of penalty under section 272A(2)(k) of the Act. Further, reliance was placed on the ratio laid down by Chandigarh Bench of Tribunal in Central Scientific Instruments Organization Vs. JCIT (TDS) (2015) 59 taxman.com 273 (Chd-Tri). 13. In rejoinder, Shri Pramod Shingte, the learned Authorized Representative for the assessee pointed out that where the penalty is to be levied for each day of default, so equating the same to the taxes paid was the real hardship. He further stressed that common thread in all the appeals listed before us was that the same related to assessment year 2011-12 and the real hardship was in this year, though the section was inserted from 2005 but in assessment year 2011- 12, there were real genuine reasons for not complying with the provisions and hence, the default. He stressed that the assessee wanted to abide the law but in the absence of expert staff and new complicated compliance, the same could not be filed in time. 14. Another Counsel submitted before us that the TDS statements under section 200(3) of the Act was to be submitted after paying the tax deducted at source and the same had to be further submitted within prescribed time. How ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person, by whatever name called, who is responsible for crediting such sum or tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed. (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 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 authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed: Provided that the person may also deliver to the prescribed au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atement is to be delivered within such time as may be prescribed. 20. In other words, any deductor deducting any sum on or after first day of April, 2005 in accordance with the provisions of Chapter has the following duties i.e. after paying the tax deducted at source credit to the Central Government, the TDS statements within prescribed time shall be prepared and filed. Rules 31A of the Rules provide the time limit for deposit of the tax deducted statement as per section 200(3) of the Act. The TDS statements are to be deposited quarterly i.e. quarter ending 30th June, 30th September, 31st December and 31st March of each financial year and the due date for furnishing the TDS statements is 15th July for the first quarter, 15th October for the second quarter, 15th January for the third quarter and 15th May of the immediately following financial year for the fourth quarter i.e. 31st March. The said statements could 31 be furnished either in paper form or electronically. However, subsequent to the amendment by IT (Sixth) Amendment Rules, 2010 with retrospective effect from 01.04.2010, it was provided that furnishing of statements electronically in accordance with the format and stan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (1) or sub-section (2) of section 272A of the Act. What is relevant for adjudication before us is section 272A(2) of the Act, since penalty has been levied for default in furnishing e-TDS returns under section 272A(2)(k) of the Act. Since section 273B of the Act covers the cases of levy of penalty under section 272A(2) of the Act, then in line with the provisions of said section in case a person establishes its case of reasonable cause for not complying with the provisions of said section, then the section provides that such a person shall not be liable to the penalty imposable for the said failure i.e. under section 272A(2) of the Act. The CIT(A) in the case of several assessee before us has wrongly come to the conclusion that the provisions of section 273B of the Act do not cover the defaults under section 272A(2)(k) of the Act. We reverse the finding of CIT(A) in this regard. 22. Now, coming to the case of reasonableness put up before us by different assessee. The first plea raised by all the assessee is that where the compliance to the provisions of the Act was complicated and difficult and in the absence of any technical support in this regard, default if any, in furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the Government as income is earned. In other words, the said provisions of tax deducted are advance payments of tax as you earn the income. Taxes are deducted by the deductor out of payments due to the deductee and such tax deducted is the income of deductee. The credit for tax deduction at source would be allowed to the deductee only after the tax deducted at source is deposited in the credit of the Government and the deductor files the compliance report in this regard by way of e-TDS returns. Thus, it is obligatory upon the person deducting tax to deposit the tax deducted at source and also to furnish statement declaring tax deduction made from the account of various deductees. Earlier provisions were to be complied with manually by filing the TDS returns in paper form. However, as per IT (Sixth) Amendment Rules, 2010 with retrospective effect from 01.04.2010, the deductor was asked to file e-TDS statements for which infrastructure was provided and it was required that the assessee complies to the said filing of e-TDS returns. However, since assessment year 2011 -12 was the first year of introduction of such facilities of e-TDS returns, there were certain hindrances which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T (supra) for the proposition that where the e TDS statement was not filed in time, then penalty under section 272A(2)(k) of the Act has been held to be leviable. In the facts of the said case before the Hon ble High Court, the assessee was deducting the tax at source but had not filed the e-TDS returns for five successive assessment years starting from 2008-09 to 2012-13. The assessee failed to furnish any explanation before the Assessing Officer for the said default and only on the last date, it was pointed out that since the Principal of college had joined recently, it would take some time to collect the records for filing the e-TDS statements. The assessee however, failed to comply with notice and the Assessing Officer held the assessee to be liable for levy of penalty under section 272A(2)(k) of the Act. Before the CIT(A), the assessee for the first time offered an explanation that prior to joining regular Principal in the college on 25.01.2010, only officiating Principal had been working, who did not have idea of e-TDS statements and requirement of filing the same. The Tribunal noted that the appellate authority had accepted the explanation offered by the assessee and imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed upon by the learned Departmental Representative for the Revenue is on the ratio laid down by the Chandigarh Bench of Tribunal in Central Scientific Instruments Organization Vs. JCIT (TDS) (supra). In the facts of the said case, the assessee had filed TDS returns in Form No.26Q belatedly after expiry of 10 years from prescribed time limit and the assessee had submitted that he was unaware of provisions of section 200(3) of the Act. The assessee had deposited the tax to the Central Government at relevant time, however, the assessee failed to furnish TDS returns. The delay in filing the returns in prescribed form for all four quarters was 6463 days in assessment year 2009-10 and in assessment year 2010-11 for all four quarter was 4966 days and in assessment year 2011-12, the delay was 3474 days. In view of the factual aspects of the case, where the delay is so huge and in the absence of any explanation of the assessee, we find no merit in the reliance placed upon on such decision by the learned Departmental Representative for the Revenue. 28. On the other hand, various Benches of Tribunal have time and again held that where there was case of reasonableness, there was no mer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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