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TMI Blog2021 (9) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... spite of new filing procedure, the assessee filed TDS quarterly return in respect of Form No. 26Q voluntarily before conducting survey and in 24Q for the applicable quarter. 2. The CIT (Appeals) is not justified in supporting the assessing officer who levied the penalty even though assessee has paid taxes and interest as per the orders of the Assessing officer and not retained any amount of TDS without remittance and also cooperated in all the assessment proceedings. 3. The CIT (Appeals) is not justified in supporting the assessing officer who acted against law in imposing the penalty on the assessee under section 272A (2) (K) without affording him a reasonable opportunity of being heard in the matter. 4. The CIT (Appeals) is not justified in supporting the assessing officer for levying penalty for non-filing of form 24Q where there are no transactions required to be filed. 5. In the first appeal to CIT (appeals) the assessee pleaded that penalty to be waived. The assessee placed the reliance on the Honourable Supreme Court's decision in the case of Hindustan Steels Vs State of Orissa 83 ITR 26 Where it was held that penalty should not be imposed merely it is lawful to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DS statements in form No.24Q & 26Q for all the 4 quarters of the F.Y. 2008-09 as per the provisions of section 200(3) of the I.T. Act. It was further observed that as per the provisions of section 200(3) of the I.T. Act any person deducting any sum in accordance with the TDS provisions is required to prepare and deliver the quarterly TDS statements in form No. 24Q and 26Q in respect of TDS on salaries and on payments other than salaries respectively Within the prescribed time. As per Rule-31A of the IT. Rules, such quarterly TDS statements / returns are required to be filed by 15-07-2008, 15-10-2008, 15-01-2009 and 15-062009 for the first, second, third and fourth quarters of the F.Y. 2008-09 respectively. 3.3 Keeping in view the failure of the assessee to file quarterly TDS statements/returns in Form No. 24Q & 26Q for all the quarters of the F.Y.2008-09, the AO initiated penalty proceedings u/s.272A(2)(k) of the I.T. Act by issue of notice dated 10/07/2012. As per the said notice, the assessee was requested to show cause as to why an order imposing penalty u/s. 272A(2)(k) of the I.T. Act should not be passed in its case and the case was posted for hearing on 25/07/2012. 3.4. How ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee has not filed TDS returns in the prescribed forms 24Q and 26Q for all the quarters within the stipulated time and, therefore, the AO levied penalty @ 100/- per day for delay in default for filing of TDS returns. Further, we find from the orders of authorities below that the entire tax along with interest thereon had been deposited in to Govt. account and later, the assessee filed quarterly TDS returns for all the quarters. The issue in dispute is squarely covered by the decision of the coordinate bench of ITAT, Pune in the case of Maharashtra Jeevan Pradhikaran Vs. JCIT, in ITA No. 2410/PUN/2017 vide order dated 17th May, 2021 wherein the coordinate bench has held as under: "6. We have perused the case records and heard the rival contentions. We have also considered judicial precedents placed on record. In this case penalty has been levied u/s. 272A(2)(k) of the Act due to late filing of TDS statements/returns. However, it is an undisputed fact as admitted by the parties herein, that no loss has been caused to the Revenue by the action of the assessee. There may have been procedural lapse on the part of the assessee however, due to such procedural lapse no prejudice has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the prescribed time, the sum so deducted to the credit of the Central 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, I.T.A. No.1999/Mum/2017 the tax to the credit of the Central Government or as the Board directs. (2A) In case of an office of the Government, where the sum deducted in accordance with the foregoing provisions of this Chapter or tax referred to in sub-section (1A) of section 192 has been paid to the credit of the Central Government without the production of a challan, the Pay and Accounts 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 provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax authority or any person so authorized, such statement in such form and verified in such manner and setting forth such particulars and within such time as may be provided. The duty is upon a person deducting any sum in accordance with various provisions under the Chapter and also upon an employer who is making deduction out of the payments made to the employees, then sub-section (3) requires that the deductor is to prepare a statement for such period as may be prescribed, which is to be delivered to the prescribed authority, in such form and verified and setting forth such particulars as may be prescribed. The said statement 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fault in depositing the paper TDS returns, does the assessee deductor have reasonable cause for not furnishing the said e-TDS returns in time. In this regard, reference is to be made to the provisions of section 273B of the Act, where it has been provided that in case a person establishes or proves that he had reasonable cause for the failure to comply with the provisions of various sections provided in section 273B of the Act, then no penalty shall be imposable on such person for the said failure. Reading of section 273B of the Act shows that under it, the Section refers to along with many other sections clause (c) or clause (d) of sub- section (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 272A(2)(k) of the Act are referred and in case the person establishes its case of reasonable cause, then no penalty is to be leviable for such defaults. The case put up by the assessee was that where tax was deducted at source and merely because e-TDS statements / returns were not filed in time does not result in any loss of revenue and hence, no merit in levy of penalty under section 272A(2)(k) of the Act. The claim of deduction of tax deducted at source, its payment to the Treasury to the Government and thereafter, the credit to be allowed to the deductee of tax deducted from his account, all work on the principle that the tax is collected and deposited in the account 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 I.T.A. No.1999/Mum/2017 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- T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 200(3) of the Act or the proviso to section 206C(3) of the Act, then he shall pay by way of penalty sum of Rs. 100/- for every day of default. It is further provided under the said sub-section that the amount of penalty for failure shall not exceed the amount of tax deductible or collectable, as the case may be. It is further I.T.A. No.1999/Mum/2017 provided that no penalty shall be levied under clause (a) for failure to furnish the statement under section 200(3) of the Act or proviso to section 206C(3) of the Act, on or after first day of July, 2012. 25. The learned Departmental Representative for the Revenue has placed strong reliance on the ratio laid down by the Hon'ble Allahabad High Court in Raja Harpal Singh Inter College's case (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the orders of authorities below, wherein the CIT(A) had restricted the levy of penalty from the date of 1st April, 2010 in respect of e-TDS statements to be filed for assessment years 2008-09 to 2012-13, since the assessee had explained that regular Principal had assumed charge on 25.01.2010. In other words, the Hon'ble High Court has accepted the explanation offered ITA No. 2410/PUN/2017 A.Y.2011-12 by the assessee regarding reasonableness of cause of delay in furnishing e-TDS returns late partially. Admittedly, the default in filing the said e-TDS returns have not been accepted in full but taking into consideration the reasonableness of explanation, the penalty chargeable under section 272A(2)(k) of the Act has been restricted i.e. suitably reduced in the case of appellant as held by the Hon'ble High Court. 27. Another reliance 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's case (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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n behalf of the deductor. In such cases, penalty under section 272A(2)(k) of the Act is leviable. However, the same is to be restricted from the date of payment of TDS to the date of filing e-TDS statements since e-TDS statements cannot be filed without payment of TDS to the credit of Central Government. Similar ratio has been laid down by the Chandigarh Bench of Tribunal in Ashirwad Complex case (supra). Accordingly, we hold so. 29. Another issue raised in some of the appeals is that where all quarterly returns relating to assessment year 2011-12 were filed on one date i.e. there was default in furnishing the returns for each of the quarters late, the case of the assessee was that because of overlapping ITA No. 2410/PUN/2017 A.Y.2011-12 default, penalty at best should be restricted to quarter No.1 and no penalty should be levied for the subsequent quarters. We find merit in the above plea of the assessee and accordingly, we direct the Assessing Officer to restrict the penalty leviable to first quarter which is in default and for the overlapping default, no penalty is to be levied under section 272A(2)(k) of the Act. We direct the Assessing Officer to verify the claim of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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