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Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE
Before: SHRI. B. R. BASKARAN, ACCOUNTANT & SMT. BEENA PILLAI
IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH : BANGALORE BEFORE SHRI. B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA No.3251 & 3252/Bang/2018 Assessment Years : 2010-11 & 2011-12
M/s JAS Telecom Pvt. Ltd., The Addl. Commissioner No.26-H, Veersandra Industrial of Income-tax, Estate Area, Range-16, Hosur Road, Electronic City, Bangalore. Vs. Bangalore. PAN – AABCJ 1569 K APPELLANT RESPONDENT
Appellant by : Shri Ravishankar, Advocate Respondent by : Shri Manjeet Singh, Addl.CIT
Date of Hearing : 18-06-2020 Date of Pronouncement : 27-07-2020
ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeals are filed by assessee against order dated 28/09/2018 passed by Ld.CIT(A)-13, Bangalore for assessment year 2010-11 and 2011-12 against penalty upheld, under section 272A(2)(k), read with section 200(3) of the Act. 2. Ld.AO noticed that, there was failure on part of assessees to file quarterly returns of TDS in Form 24Q and 26Q for the years under consideration within the stipulated
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time, required by sub-section (3) of section 200 r.w. Rule 31A(2) of the I.T. Rules, 1962. He therefore, initiated penalty proceedings and issued notices under section 274 dated 17/12/2010, requiring assessee to show cause as to why penalty under section 272A(2)(k) should not be imposed for their failure to file TDS returns within stipulated time. In response to the said notices, the following explanation was offered by the assessee. It was been submitted that assessee deducted TDS for various quarters, during financial years 2009-10 and 2010-11, but submitted quarterly statements in Form 24Q & 26Q beyond due dates, and uploaded TDS statements on 16/08/2010, 02/05/2011 and 03/11/2011 respectively. 3. Before Ld.AO assessee submitted that, delay in depositing TDS amount for years under consideration was due to ill-health of the managing director. It was submitted by assessee vide letter dated 30/01/2013 that, assessee deposited payments with interest on 31/03/2010 for A.Y:2010-11 and 2011-12. It was submitted that assessee was not able to mobilise of funds for business activity, due to the health of managing director who was looking over finance and statutory payments. Assessee also submitted that, health of managing director did not stabilise up to 2012, and it was during the month of March 2012, due to kidney transplant surgery, he could not attend office to take necessary steps/actions in this regard. It was submitted that assessee deposited TDS with interest deducted for
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financial years 2009-10 and 2010-11, for all quarters with interest till the date of deposit. 4. According to Ld.AO, there was no reasonable cause highlighted by assessee as per sec. 271B for delay in filing TDS returns for relevant quarters in time and in absence of such reasonable cause put-forth by assessee, they were liable to pay penalties under section 272A(2)(k)of the Act. Penalties under section 272A(2)(k) were thus imposed by Ld.AO for years under consideration as under :
Periodicity TDS Amount Form Num Delay (Days) Penalty Amount Q1 387 39,700 24Q 25,73,760 24Q Q2 27,92,527 30,500 305 - 24Q 21,300 27,92,527 213 Q3 24Q Q4 63 6,200 27,92,527 Q1 26Q 3,36,058 385 38,500
26Q Q2 3,36,058 293 29,300
26Q 3,36,058 201 20,100 Q3
26Q 3,57,088 50 5,000 Q3
TOTAL Rs. 1,90,600/-
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Periodicity TDS Amount Form Num Delay (Days) Penalty Amount Q1 476 47,600 24Q 5,89,680 24Q Q2 5,89,680 384 38,400 - 24Q . , 29,200 5,89,680 292 Q3 24Q Q4 172 17,200 5,89,680 Q1 26Q 1,92,872 291 29,100
26Q Q2 2,55,372 199 19,900
26Q 255,372 107 10,700 Q3
TOTAL Rs. 1,92,100/-
Aggrieved by penalty imposed by Ld.AO, assessee preferred appeal before Ld.CIT(A). 6. Ld.CIT(A) while upholding penalty, observed as under: “It can be seen from Sec. 200(3) that the duties of the person deducting tax and remitting to the Government account has the subsequent responsibility of preparing and furnishing the statements of tax deducted to the Income Tax Authority within the prescribed time. The deductor in fact is acting in a fiduciary capacity as an agent of the Revenue, the amount of tax deducted belongs to the Revenue. Non-submission of the said statements and failure to upload the same result in non-allowance of credit of TDS/TCS to the genuine tax payers and avoidable litigations for no fault of the tax payers on the one hand and on the other that of Revenue due to mismatches in TDS/TCS and non-grant of credit of TDS to deductees, Looking at the magnitude of the problem that can be caused to the Tax Payer due to delay or default in uploading the correct statements, it will be difficult to hold that non-furnishing of the prescribed statements u/s 200(3) within the due dates is a venial breach of the provisions. In the instant case, the deductor has relied on the Financial & Administrative difficulties, for due compliance with the provisions, oblivious of the resultant magnitude of the hardship to the Tax Payers and resultant litigations. The appellant had also failed to furnish sufficient proof to substantiate his claim to invoke the governing provisions of Sec.271B of the Income Tax
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Act. Identical issue, however, has been decided by the Mumbai ITAT in the case of Dr. Khan Industrial Consultants (P) Ltd., Vs. Addl. Commissioner of Income-tax (TDS), Range Thane [2017} 81 tamann.com 219 (Mumbai - Trib.17.)”
Aggrieved by order of Ld.CIT(A), assessee is in appeal before us now. 8. Admittedly, assessee deposited TDS amount to the credit of Government with interest as on 31/03/2010 and 04/08/2010 for assessment year 2010-11, and for A.Y:2011-12 on 12/04/2011, 10/09/2011 and 29/09/2011. It is also an admitted fact that assessee filed all four quarterly returns on 04/08/2010 and 16/08/2010 for A.Y:2010-11, and for A.Y:2011-12 on 02/05/2011 and 03/11/2011. Copies of TDS deposit challan and filing of quarterly returns for assessment years under consideration has been placed at pages 31-53 of paper book. 9. Ld.AR submitted that even after depositing TDS amount to credit of Government, assessee was not in a position to file returns immediately, as there was no accountant with assessee, since 28/02/2009. He placed reliance on page 141 of paper book wherein resignation letter of the accountant employed with assessee was placed. It was been submitted that on 15/08/2010 another accountant was appointed. Ld.AR placed eliance on page 145 in support. Ld.AR relied on decision of ITAT Pune Bench in case of Nav Maharashtra Vidyalaya vs.ACIT(TDS) reported in (2016) 74 taxmann.com240, wherein in similar circumstances penalty was restricted to first quarter which
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is in default and for overlapping default no penalty was directed to be levied. 10. Ld.Sr.DR submitted that, facts are different since in present case, assessee did not deposit TDS for all quarters on same day. As well as, quarterly returns were also upheld on different dates. He objected for the accountant not available with assessee, date of appointment of new accountant was 15/08/2020. Assessee failed to upload the TDS returns immediately after it was deposited with Government. He thus placed reliance on view taken by Ld.CIT(A). 11. We have perused submissions advanced by both sides in light of records placed before us. 12. Admittedly, penalty has been levied only for late filing of TDS returns, and delay cannot be considered to be technical. Reason for delay in filing the returns was non availability of accountant. From documents placed at page 35- 53, for assessment year 20010-11, assessee filed 26Q return of 04/08/2010 and 24Q return was filed on 16/08/2010. For assessment year 2011-12, 26Q returns was filed on 05/05/2011 and 24Q was filed on 03/11.2011. From letter placed at page 145, it is crystal clear that, new accountant took charge with assessee’s office on 15/08/2010. Therefore, reasoning that, assessee was unable to file returns, due to non availability of accountant cannot be accepted atleast for assessment year 2011-12. 13. However, considering the illness of Managing Director, during relevant period, alternate submission of Ld.AR to
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restrict penalty to be computed from date of payment of TDS amount to the credit of Government could be accepted. Accordingly Ld.AR was directed to file a chart by computing penalty from the date of making payment for both years under consideration which is, reproduced herein below:
No. of AY 2010-11 Date of months payment of since order Date of filing Delay TDS Interest Total of penalty - Penalty (Page 31-34) TDS return in U/s 220 penalty May 2013 (Page 19) days upto Jan 2019 31/03/2010 04/08/2010 126 12,60 69 8,694 21,294 26Q 0 04/08/2010 16/08/2010 12 1,200 69 828 2,028 24Q 23,322
No. of mo,---is Data of AY 2011- since order of , 12 Date of filing penalty - May Delay in Interest Total payment of Penalty TDS return 2013 upto Jan days U/s 220 penalty (Page 20) TDS (page 2019 47-49) 12/04/2011 02/05/2011 20 2,000 69 1,380 3,380 10/09/2011 26Q and 24Q '29/09/2011 03/11/2011 5,400 69 3,726 9,126 54
12,506
Total penalty 21,200 14,628 35,828
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Ld.AO is directed to verify the same and restrict Penalty u/s.272(k)(2) to such amount as computed from date of deposit of TDS with Government. Accordingly, grounds raised by assessee in both appeals stands allowed partly. In the result, appeals filed by assessee stands allowed partly. Order pronounced in the open court on 27th July, 2020
Sd/- Sd/- (B. R. BASKARAN) (BEENA PILLAI) Accountant Member Judicial Member
Bangalore, Dated, the 27th July, 2020. /Vms/
Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore 6. Guard file
By order
Assistant Registrar, Income-Tax Appellate Tribunal. Bangalore
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Date Initial On Dragon 1. Draft dictated on Sr.PS -07-2020 2. Draft placed before Sr.PS author -07-2020 3. Draft proposed & placed JM/AM before the second member -07-2020 4. Draft discussed/approved JM/AM by Second Member. -07-2020 5. Approved Draft comes to Sr.PS/PS the Sr.PS/PS -07-2020 6. Kept for pronouncement Sr.PS on -07-2020 7. Date of uploading the Sr.PS order on Website -- 8. If not uploaded, furnish Sr.PS the reason -07-2020 9. File sent to the Bench Sr.PS Clerk 10. Date on which file goes to the AR 11. Date on which file goes to the Head Clerk. 12. Date of dispatch of Order. No 13. Draft dictation sheets are Sr.PS attached