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Income Tax Appellate Tribunal, JAIPUR BENCHE-‘B’ JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 649/JP/2016
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE-‘B’ JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 649/JP/2016 fu/kZkj.k o"kZ@Assessment Year :2011-12 cuke Shri Mahaveer Prasad Jain ITO, TDS Vs. 78, Near Jain Nasa, Newai, Tonk Kota LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ACBPJ3276E vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P. C. Jain (CA) jktLo dh vksj ls@ Revenue by : Shri K. C. Meena (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 26/03/2019 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 29/03/2019 vkns'k@ ORDER
PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Kota dated 31.03.2016 for AY 2011-12 wherein the assessee has challenged the sustenance of penalty of Rs. 41,500/- levied u/s 272A(2)(k) of the Act.
This appeal was earlier dismissed in limine by the Co-ordinate Bench vide its order dated 11.07.2017. Subsequently, the Co-ordinate Bench vide its order dated 03.08.2018 has recalled the said appeal and now, the appeal has come up before this Bench.
Briefly stated the facts of the case are that the assessee has deducted an amount of Rs. 41,500/- towards TDS on interest payment and was required to file the quarterly statement for the 4th quarter of the F.Y 2010-11 u/s 200(3) on or before 15.05.2011. However, the said statement was later on filed on 14.07.2012. Given the delay in filing of the quarterly statement, a notice was
ITA No. 649/JP/2016 Shri Mahaveer Prasad Jain, Tonk Vs. ITO TDS, Kota issued as to why penalty u/s 272A(2)(k) should not be imposed for late filing of the quarterly statement by the assessee. In response, the assessee submitted that his accountant was ill at the relevant time so that he could not file the return in time. The assessee also submitted that the default is purely of a technical or venial nature and the delay should be condoned. However, the reply so filed by the assessee was not found acceptable to the Assessing Officer who held that there was no reasonable cause which prevented him from filing TDS statement in time and an amount equivalent to TDS of Rs. 41,500/- was levied as penalty u/s 272A(2)(k) of the Act. On appeal, the ld. CIT(A) has confirmed the said levy of penalty and now, the assessee is in appeal before us.
During the course of hearing, the ld. AR submitted that the CIT(A) has erred in confirming the penalty of Rs. 41,500/- u/s 272 A(2)(K). In this regard, it was submitted that the accountant who was having experience in preparing of data for TDS return was ill therefore we could not prepared the return in time. Although tax was paid on 30.04.2011 which was fully in time and there was not a single day delay in payment of tax. We have filed out TDS returns before issue of any notice by the department. There was no malafide intention on the part of assessee. Neither in previous years nor in succeeding year, no penalty was imposed for filling of TDS return. The delay was neither intentional nor deliberate. The delay was due to reasonable cause. Section 273B of the Act provides an exception to the rigid provisions of section 272A of the Act by proving that in the event of an assessee providing a reasonable cause for the failure, penalty shall not be imposed by the authorities concerned. The expression “reasonable cause requires to be interpreted liberally in a fair and reasonable manner so as to advance the cause of justice. We have replied time to time to all the notices issued by Department. The JCIT is wrong to say that we have not replied the notices. We do not understand why illness of 2
ITA No. 649/JP/2016 Shri Mahaveer Prasad Jain, Tonk Vs. ITO TDS, Kota accountant was not reasonable cause and nothing is mentioned by CIT(A) in his order in the matter of illness of accountant. The case referred by CIT(A) is different from us because in that case reasonable cause was not perfect. We have filed the return voluntarily before any notice by department and tax was paid in time. There was no loss to department because department gives credit of tax after payment of tax and filled of return. The default if any was of technical or venial nature for which penalty should not be levied automatically. The view is supported by the decision in case of Royal Metals Printers Pvt ltd Vs Addl.ClT (ITA NO.6840/MUM/2008 decided on January 20 2010).
It was further submitted that amendment was made in Income tax Rules 2010 and was applicable for the financial year 2010-11. Since e-return was introduced in the said financial year, there was time and again amendment/ correction in order to make system of filled TDS return user friendly. It is quite natural that the change of software would lead to various teething troubles which needs to be addressed and plugged at the initial stage itself so that new module could function smoothly later on. It is well known that migration to a new software would certainly result in lot of issues on account of heads etc. which consumes considerable time for addressing the same. Hence assessee was reasonably prevented from filling its quarterly TDS statement for the 4th quarter. The delay was due to reason beyond the control of the assessee. There were 18 amendments and correction in this regard. The software was not user friendly and required amendment at the end of the government itself from time to time and the compliance being a complex procedure. Therefore as per section 273B it was also a reasonable cause for delay in filled of TDS return. In support, reliance was placed on Tribunal decision in case of Nisar Mehboob Alam Khan vs JCIT (ITA No.2026/PUN/2016 dated 16.10.2018).
ITA No. 649/JP/2016 Shri Mahaveer Prasad Jain, Tonk Vs. ITO TDS, Kota 6. It was further submitted that the order passed by JCIT is undated which does not show when the order was passed. The undated order is invalid order and it was passed without applying mind and order is sketchy order and have no value in the eyes of law.
It was further submitted that the penalty in our case is levied u/s 272A(2)(K) of the Act which talks about the failure to deliver a copy of statement within the time specified in section 200(3) or proviso to section 206C of the Act. In this case, there is no such factual situation rather there is a delay in filling of quarterly e-TDS return which is covered under the provisions of section 272A(2)(C) of the Act. The learned Assessing officer is not clear under which section penalty is leviable. The same view is supported by the decision of ITAT Jaipur Bench Jaipur as held in the case of Argus Golden Traders Ltd. vs. JCIT Jaipur.
The ld DR is heard who has relied on the findings of the lower authorities.
Heard both the parties and perused the material available on record. We find that similar issue has been dealt at length by the Coordinate Bench in case of Nisar Mehboob Alam Khan vs JCIT (supra) wherein it was held as under:
“28. On the other hand, various Benches of Tribunal have time and again held that where there was case of reasonableness, there was no merit in levying the penalty under section 272A(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, 4
ITA No. 649/JP/2016 Shri Mahaveer Prasad Jain, Tonk Vs. ITO TDS, Kota 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 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 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 M/s. Ashirwad Complex Vs. JCIT (TDS) (supra). Accordingly, we hold so.”
In the instant case, the assessee has deducted the TDS on interest payment, however, there is a delay in filing of quarterly statement for the 4th Quarter of the financial year 2010-11. The assessee has explained the reasons for the delay is on account of ill-health of his accountant and secondly on account of e-filing provided for the first time during the financial year 2010-11 5
ITA No. 649/JP/2016 Shri Mahaveer Prasad Jain, Tonk Vs. ITO TDS, Kota and the frequent changes/amendments and updates to the filing software. Following the decision of the Coordinate Bench referred supra, we believe that there was a reasonable cause for delay in filing the quarterly statement for the financial year 2011-11 and the penalty so levied is hereby directed to be deleted.
In the result, appeal of the assessee is allowed.
Pronounced in the Open Court on 29/03/2019.
Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vijay Pal Rao) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 29/03/2019 *Ganesh Kr. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Mahaveer Prasad Jain, Tonk 2. izR;FkhZ@ The Respondent- ITO TDS, Kota 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA No. 649/JP/2016} vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत