RAJESH BANSAL,CHANDIGARH vs. ADDL. CIT (TDS), CHANDIGARH

आदेश/ORDER Per Sanjay Garg, Judicial Member :

The present appeal has been preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-I (hereinafter referred to as (‘Ld.CIT(A)’ dated 27.8.2018, passed u/s 250(6 of the Income Tax Act, 1961 (in short ‘the Act’), relating to assessment year 2011-12.

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The appeal of the assessee is barred by time for three

days. A separate application for condonation of delay has

been filed, wherein the reason for the delay has been

explained. Considering the reasons explained and the

shortness of period of three days, the delay is hereby

condoned.

‘person responsible’ (hereinafter referred to as ‘PR’) had

not filed the quarterly TDS return for financial year 2011-

12 by respective due date as per the provisions of section

200(3) of the Income Tax Act, 1961 (hereinafter referred to

as ‘the Act’) read with rule 31A of the Income Tax Rules,

1962. The A.O., therefore, levied the penalty for late filing of the TDS returns u/s 272A(2)(k) of the Act.

assessee preferred appeal before the CIT(A) and pleaded

that the delay in filing TDS returns was not intentional

but due to the circumstances beyond his control. Further,

the assessee had already deducted the tax at source and

deposited the same within the stipulated period and there

was no intentional breach of the provisions of the Act.

However, the Ld.CIT(A) did not get satisfied with the

submissions made by the assessee and confirmed the

penalty.

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appellant/PR has come up in appeal before us.

gone through the records. The Ld. counsel has submitted

that though the appellant/PR had deducted the tax at

source on the payments made and deposited the same

within the stipulated period, however, the delay took place

in filing the TDS returns. It has been explained that the

delay was due to the fact that the appellant/PR contacted

his counsel for preparation and filing of the return and the

said return was accordingly prepared and kept ready for

filing much before the due date of filing by the counsel. But

the said return could not be filed due to the fact that the

clerk of the counsel for the appellant/PR misplaced the said

return, which fact was not brought to the notice of the

counsel and also the said return was traced by the clerk of

the counsel very late. However, even on being informed

about the said lapse on the part of the clerk of the counsel

for the appellant/PR, the said return could not be filed

immediately as the counsel for the appellant/PR remained

unwell for sometime. Thereafter, as soon as the counsel for

the appellant/PR could resume work, the said return was

filed without any further delay in the matter.

that so far the appellant/PR was concerned, the

appellant/PR took all reasonable care in complying with the

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provisions of the Act. The delay in filing TDS returns on the

part of the counsel was due to the aforesaid reason, which

was beyond the control of the appellant/PR. The Ld. counsel

for appellant/PR has submitted that since there was no

intentional breach of the provisions of law and there was no

loss to the Revenue since the TDS already deducted at time

and deposited within the due date. He, therefore, has

submitted that the penalty was not leviable in this case

under the provisions of section 272A(2)(k) of the Act. The

Ld. counsel for appellant/PR in this respect has made the

following case law submissions:

The Hon'ble Supreme Court in the caseof Hindustan Steels Ltd. v. CIT (1972) 83ITR 26 "The authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. " M/s Amartex Industries Ltd. vs. ADDITIONAL COMMISSIONER OF INCOME TAX (TDS) ITAT CHANDIGARH BENCHES 'B' ITA No. 1293 to 1295/CHD/2012 "It was held that the default of the assessee was only a technical and venial in nature and when the default was brought to the notice of the assessee. it was removed by filing the E-TDS returns, so, the mistake of the assessee for failure to file statement in form No. 24Q and 26Q was under the bonafide belief and the default was technical in nature. Moreover, there was no loss to the revenue since the TDS deducted was deposited. " COLLECTOR LAND ACQUISITION vs. ADDITIONAL COMMISSIONER OF INCOME TAX (TDS) ITAT CHANDIGARH BENCHES 'B' (2012) 31 CCH 234 Chd. Trib. (2012) 52 SOT 81 (Chandigarh)(URO)

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"it is an admitted fact that the amount of tax deducted at source by the assessee (Person Responsible) was paid within the limit under the relevant provisions of the Act—Assessee was prevented by sufficient case from filing the returns within the statutory period—Even otherwise, there was only a technical and venial breach to the provisions contained in Rule 31A (2) of the Income Tax Rule, 1962 read with section 200(3) of the Act—Assessee has satisfactorily explained the reasons regarding non filing of TDS returns in time, therefore, no penalty should be levied in these cases-— Even otherwise also, the assessee did not derive any benefit whatsoever by not filing the e-TDS returns in time, as the amount of TDS was duly deposited in the government treasury within prescribed time—Such delay has not caused any loss to the Revenue/Income Tax Department. " BRANCH MANAGER, PUNJAB NATIONAL BANK vs. ADDITIONAL COMMISSIONER OF INCOME TAX ITAT, LUCKNOW 'SMC' BENCH (2011) 140 TTJ (Lucknow) 622 : (2011) 59 DTR 381 : (2012) 52 SOT 142 (Lucknow)(URO) "Penalty under s. 272A(2)(k)—Failure to file TDS return— Reasonable cause—Assessee could not collect details of PAN from all deductees—There was only a technical breach— Assessee did not derive any benefit whatsoever by not filing the quarterly TDS statements in time as the amount of TDS was duly deposited in the Government treasury within the prescribed time There was only a technical and venial breach of the provisions contained in r. 31A in belated furnishing of quarterly statements of TDS for which no penalty under s. 272A(2)(k) can be levied. " ROYAL METAL PRINTERS (P) LTD. vs. ADDITIONAL COMMISSIONER OF INCOME TAX ITAT, MUMBAI 'D' BENCH (2010) 131 TTJ (Mumbai)(UO) 59 : (2010) 37 SOT 139 "Penalty under s. 272A(2)(k)—Delay in filing TDS return— Reasonable cause—Assessee has been regular in deducting tax and also paying the same—Delay in filing the returns, even if they are characterized as negligence on the part of the assessee, can only be considered as a technical or venial breach of law for which penalty should not be levied automatically. " 8. The Ld. DR, on the other hand, has submitted that

since there was a default in filing TDS returns on time, the

penalty has been levied by the lower authorities as per the

provisions of law.

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through the records. Admittedly, in this case the assessee

had deducted TDS as per the provisions of law and had duly

deposited the same within the stipulated time. However,

quarterly returns were not filed in time as required as per

the provisions of section 200(3) of the Act read with rule 31A

of the Income Tax Rules, 1962. The assessee has duly

explained the reasons for the delay in filing the TDS returns.

From the above circumstances, it can be gathered that it was

neither an intentional, nor a deliberate defiance of

provisions of law. The delay in filing the TDS returns was a

technical or venial breach of the provisions of the Act and

the appellant/PR has duly explained the reasons for the

same. The Hon'ble Supreme Court in the case of Hindustan

Steels Ltd. Vs. CIT (supra) has held that in the case of mere

technical or venial breach of provisions of the Act, wherein,

the breach flows for bonafide reasons and the party has not

acted deliberately in defiance or disregard of the provisions

of law, the penalty should not be levied, even though a

minimum penalty is prescribed. Following the aforesaid

decision of the Hon'ble Supreme Court in similar

circumstances, the Coordinate Bench of the Tribunal in the

case of M/s Amartex Industries Ltd. Vs. Addl.CIT (supra) has

deleted the penalty. Similarly, the reliance can also be

placed on the decision of the Co-ordinate Bench of the

Tribunal in the case of Collector Land Acquisition Vs.

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Addl.CIT (supra). Considering the aforesaid decisions vis-à- vis the facts of the case, we do not think that this is a fit case of levy of penalty u/s 272A(2)(k) of the Act. The penalty levied by the lower authorities, therefore, is ordered to be deleted.

Order pronounced in the Open Court on 05.04.2019.

Sd/- Sd/- एन. के. सैनी संजय गग� (N.K. SAINI (SANJAY GARG ) उपा�य�/ Vice President �याय�क सद�य/ Judicial Member

�दनांक /Dated: 5th April, 2019 *रती* आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to :

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar