TMI Blog2018 (5) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... of CIT(A), Pune-10, dated 23.12.2015 relating to assessment year 2011-12 against levy of penalty under section 272A(2)(k) / 274 r.w.s. 200(3) of the Income-tax Act, 1961 (in short the Act ). 2. The assessee has raised the following grounds of appeal:- 1. Looking to the facts and circumstances of the case, the learned A.O. has erred in levying the penalty of ₹ 53,200/- u/s 272(2)(K)/274 of the Income Tax Act 1961. Penalty, on the basis of letter signed by the Joint Director Directorate of VJNT, OBC SBC Welfare MS Pune filled before AO should have been dropped, there is no loss of revenue to the Income Tax Department, only technical defect remained. All TDS amount is paid in time. Penalty levied and confirmed by CIT(A)-10 Pune be deleted in full on the facts and law position on penalty preceding (Facts as stated in the Statement of Facts before Addl Commissioner of Income Tax (TDS) Range Pune. 2. Looking to the facts and circumstances of the case, it is submitted that the office of director, VJNT, OBC SBC Welfare is nothing but a part and parcel of the Govt. of Maharashtra. And Government is not person as defined in section 2(31) of the IT Act 1961 and as held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the Act, penalty had to be levied upon the assessee. However, we find that the CIT(A) in the appeal relating to quarter No.IV of assessment year 2011-12 itself had on the other hand, deleted the aforesaid penalty levied under section 272A(2)(k) of the Act, in turn, relying on the provisions of section 273B of the Act and order of the Pune Bench of Tribunal. 7. We find that the Tribunal in bunch of appeals with lead order in Nav Maharashtra Vidyalaya Vs. Addl. CIT (TDS) Range, Pune in ITA No.832/PN/2016, relating to assessment year 2011-12 vide order dated 07.10.2016 has decided the issue of levy of penalty under section 272A(2)(k) of the Act. The relevant findings of Tribunal are as under:- 17. We have heard the rival contentions and perused the record. In this bunch of appeals, the issue which arises for adjudication is against the levy of penalty under section 272A(2)(k) of the Act for late filing of TDS statements / returns. In this regard, reference is being made to the relevant provisions of the Act. Under Chapter XVII of the Act, duty is upon the person making certain payments to deduct tax at source under the respective sections. The said tax deducted at sour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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. 19. Under section 200(1) of the Act, it is provided that any person deducting any sum in accordance with the provisions of the Chapter shall pay within the prescribed time, the sum so deducted to the credit of the Central Government or as the Board directs. Under section 200(2) of the Act, any person being an employer, as referred to in sub-section (1A) of section 192 of the Act shall pay, within the prescribed time, the tax to the credit of the Central Government or as the Board directs. Under sub-section (2A) of the Act, it is provided that where the sum has been deducted in accordance with foregoing provisions of the Chapter, by the office of the Government, then duty is upon the Treasury Officer or the Drawing Disbursing Officer or any other person, to deliver or cause to be delivered to the prescribed income tax authorities, or to the person authorized by such authority, statement in such form, verified in such manner, setting forth such particulars within such time as may be pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement of tax deducted at source was compulsorily required to quote its tax deduction and Collection Account Number i.e. TAN number. Further, quote its Permanent Accountant Number except in the case where the deductor was office of Government and also quote PAN number of all the deductees. Further, the deductor was required to furnish the particulars of tax paid to the Central Government including Book Identification Number or challan indication number as the case may be. He was also required to furnish the particulars of amount paid or credited on which tax was not deducted. 21. In view of various provisions of the Act, as pointed out above, the substitution was made by Income Tax (Sixth) Amendment Rules, 2010 and was applicable for the financial year 2010-11. Since e-compliance of TDS returns was introduced in the said financial year, there was time and again amendments/corrections in order to make system of filing TDS returns user-friendly. The learned Authorized Representative for the assessee has pointed out that there were about 18 amendments / corrections in this regard. In the present set of appeals before us admittedly, there was default in furnishing e-TDS statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised by some of the assessee was that where the tax deducted at source was not paid in time, e-TDS returns as such could not be filed and hence, the assessee was prevented by reasonable cause in not filing e-TDS returns in time and as such, no merit in levy of penalty. Another plea raised before us is that charging of fees for each day of default and then, restricting the same to the tax deducted at source was not correct. One another aspect of reasonableness was that in case the returns for quarter 1 was filed belatedly, then the returns for consequent quarters also got delayed for no default and as such, no penalty was leviable for such quarters. Different learned Authorized Representatives appearing before us has made reference to the decisions of various Benches of Tribunal. On the other hand, the learned Departmental Representative for the Revenue has placed reliance on the ratio laid down by the Hon ble Allahabad High Court in Raja Harpal Singh Inter College Vs. Prl. CIT (supra) and Chandigarh Bench of Tribunal in Central Scientific Instruments Organization Vs. JCIT (TDS) (supra). One last aspect pointed out by the learned Authorized Representative for the assessee was that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mendments introduced in this behalf. The case of the assessee on the other hand, is that they were small tax payers and in the absence of technical guidance provided and because of technical hitches, the TDS returns could not be filed in time. Most of the assessee before us have paid the tax deducted at source to the Treasury within time frame but have defaulted in filing e-TDS statements. In some of the cases, there is default in payment of tax deducted at source and consequently, delay in filing the e-TDS returns. The question which arises is whether in the above said scenario, can the provisions of section 273B of the Act be applied in order to decide the issue of levy of penalty under section 272A(2)(k) of the Act. 24. The Hon ble Punjab Haryana High Court in HMT Ltd., Tractor Division Vs. CIT (2005) 274 ITR 540 (P H) had held that where the tax deducted at source had been paid in time and the necessary returns in respect thereto were filed in time with the Income Tax Department, on mere late issue of tax deduction certificate, there was no loss to the Revenue and the delay in furnishing the tax deduction certificate was held to be merely technical or venial in nature a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pal had joined the college on 25.01.2010. The Tribunal dismissed the appeal of assessee as no explanation was furnished for non-furnishing TDS statements in time. The Hon ble High Court thus, in this regard observed that the requirement of filing e-TDS statements in time could not be overlooked. In such circumstances, the Hon ble High court held that it cannot be urged by the Counsel for the assessee that no penalty could have been imposed for non-filing e-TDS returns in time since it had not resulted in any loss to the Revenue. The Hon ble High Court further took note of the fact that before the Assessing Officer, no explanation was offered. 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 appellant that regular Principal assumed charge on 25.01.2010, was accepted and the penalty was imposed after that date. The appeal of the assessee in this regard was thus, dismissed. 26. Applying the said ratio laid down by the Hon ble Allahabad High Court in Raja Harpal Singh Inter College Vs. Prl. CIT (supra), there is no merit in the plea of the learned Departmental Represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2)(k) of the Act. Thus, in order to adjudicate the issue before us, we accept the case of reasonable cause as relevant to section 273B of the Act put up by the assessee in the respective cases in the appeals before us, which admittedly relate to different quarters of assessment year 2011-12. Where for the first time, there was requirement of e-TDS furnishing of TDS statement and since there were certain complications in e-filing of TDS returns because of system failure, which admittedly, was amended 18 times by the Department, the delay in furnishing the said returns late could not be attributed to the assessee. 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 reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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