M/S GURUASHISH CONSTRUCTION PVT LTD.,MUMBAI vs. JOINT CIT TDS 1(2), MUMBAI

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ITA 4503/MUM/2019Status: DisposedITAT Mumbai11 June 2021AY 2012-134 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the assessee had deducted and remitted the TDS amounts, albeit with some delay, and there was no loss to the exchequer, the delay constituted a minor technical breach. Therefore, the penalty was not justified.

What were the facts?

The assessee company failed to file TDS statements within the prescribed time, resulting in a significant delay. The Assessing Officer levied a penalty under Section 272A(2)(k) of the Income Tax Act for this delay.

What were the issues?

Whether a penalty under Section 272A(2)(k) can be levied for a technical breach of delay in filing TDS statements when no loss is caused to the exchequer.

Which sections of the Income-tax Act were involved?

Section 272A(2)(k),Section 200(3),Section 273B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘G‘ BENCH

Before: SHRI MAHAVIR SINGH & SHRI M.BALAGANESH

For Respondent: Shri T.S.Khalsa
Hearing: 07/06/2021Pronounced: 11/06/2021

आदेश / O R D E R PER M. BALAGANESH (A.M):

1.

This appeal in A.Y.2012-13 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-59, Mumbai in appeal No.CIT(A)-59/IT-65/2016-17 dated 25/04/2019 (ld. CIT(A) in short) in the matter of imposition of penalty u/s.272A(2)(k) of the Income Tax Act, 1961 (hereinafter referred to as Act).

M/s. Guruashish Construction Pvt. Ltd.,

2.

The only effective issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in upholding the levy of penalty in the sum of Rs.500,700/- u/s. 272A(2)(k) of the Act in the facts and circumstances of the instant case.

3.

None appeared on behalf of the assessee. We have heard ld. DR and perused the materials available on record. We find that in this case, the ld. AO observed that assessee had failed to file TDS statements as required u/s.200(3) of the Act within the prescribed time. The delay in filing the statements are as under:-

Sr. No. Quarter Type Due date Actual date Delay in of Filing of filing number of days 1 26Q Other than salary 15/07/2011 09/01/2015 1273 2 26Q Other than salary 15/10/2011 04/04/2015 1176 26Q Other than salary 3 15/01/2012 28/05/2015 1228 4 26Q Other than salary 15/05/2012 05/01/2016 1330 Total 5007 3.1. For the aforesaid delay, the ld. AO proceeded to levy penalty @100/- per day in terms of Section 272A(2)(k) of the Act and accordingly, arrived at the penalty amount of Rs.500,700/-. This levy of penalty was upheld by the ld. CIT(A) on the ground that assessee had not offered any reasonable cause for delay in filing of TDS statements u/s. 200(3) of the Act.

3.2. We find that assessee is engaged in the business of real estate development. A survey action u/s.133A of the Act was conducted in its premises on 10/02/2014, pursuant to which, the TDS defaults to the tune

M/s. Guruashish Construction Pvt. Ltd., of Rs.2,31,71,365/- was detected leading to the commencement of proceedings u/s.201(1) / 201(1A) of the Act. The assessee had submitted that it had not claimed any tax deduction of expenditure on which TDS default had occurred. It had also submitted that the majority of said default related to interest payments made to an entity identified as IL & FS which had already accounted for the said interest receipts in its return. The assessee also stated that it had paid the balance amount of tax in default amounting to Rs.70,27,550/- prior to the date of commencement of the present penalty proceedings. The assessee submitted that since the tax deducted was not paid in time, the TDS statements could not be filed electronically. According to assessee, the same constituted reasonable cause within the meaning of section 273B of the Act and hence there cannot be any levy of penalty u/s. 272A(2)(k) on it. Admittedly, we find that assessee had duly deducted the tax at source and had also remitted the same, of course with some delay, for which it had already been penalised with interest as per the Act. The interest u/s. 201(1A) of the Act had also been paid by the assessee. Admittedly, the assessee had indeed filed its TDS statements u/s.200(3) of the Act beyond prescribed time. But we find that there is absolutely no loss to the exchequer pursuant to the said delay as the entire taxes that were due to the Government had already been duly remitted by the assessee. Hence, the default committed by the assessee is only a minor technical and venial breach. It is settled law that no penalty could be levied on an assessee for a mere technical venial breach, more especially when there is no loss caused to the exchequer due to such breach.

3.3. In view of the same, we have no hesitation in directing the ld. AO to delete the penalty levied u/s. 272A(2)(k) in the facts and circumstances

M/s. Guruashish Construction Pvt. Ltd., of the instant case. Accordingly, the grounds raised by the assessee are allowed.

4.

In the result, appeal of the assessee is allowed.

Order pronounced on 11/06/2021 by way of proper mentioning in the notice board.

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