RAVIRAJ RELAMPADDU,NAVI MUMBAI vs. DCIT 23(1), MUMBAI

The issue arising in this appeal relates to imposition of penalty under section 272A(2)(k) of the Act.

Brief facts are, while processing the TDS statement filed in Form no.26Q for different quarters of financial year 2009–10, the Assessing Officer found that all such statements have been filed belatedly. Thus, the Assessing Officer issued a show cause notice requiring the assessee to explain why penalty should not be imposed under section 272A(2)(k) of the Act for delayed filing of TDS statement. As alleged by the Assessing Officer, the assessee did not comply to the notice issued. Proceeding further, the Assessing Officer observed that there are substantial delay of 394 to 729 days in filing TDS statement, which makes the assessee amenable to imposition of penalty 272A(2)(k) of the Act. Accordingly, he proceeded to impose penalty of various amounts depending upon the quantum of delay in different quarters as under:–

However, in the present appeal, we are concerned with the penalty of ` 39,400, imposed for the fourth quarter. Be that as it may, challenging the imposition of penalty under section 272A(2)(k) of the Act, the assessee filed appeals before the first appellate authority.

Learned Commissioner (Appeals), however, confirmed the penalty imposed by the Assessing Officer.

The learned Authorised Representative submitted, while deciding assessee’s appeal filed in respect of penalty imposed for quarters no.1 to 7, where the Tribunal has deleted penalty imposed by holding that there is no malafide intention of the assessee to filed the TDS statement belatedly. Thus, he submitted, the issue has to be decided in favour of the assessee.

The learned Departmental Representative relied upon the observations of the Assessing Officer and learned Commissioner (Appeals).

We have considered rival submissions and perused the material on record. As could be seen from the facts discussed above, the Assessing Officer had imposed penalty under section 272A(2)(k) of the Act for different quarters of the financial year 2009–10 due to delay in filing of TDS statements. However, while deciding assessee’s appeals

In the result, appeal is allowed.

The only issue arising in the present appeal relates to imposition of penalty under section 271C of the Act due to failure on the part of the assessee to deduct tax at source.

Brief facts are, from the report generated by the ITD system for the financial year 2009–10, the Assessing Officer noticed that the assessee has defaulted in depositing TDS of ` 1,31,533, for a period of more than 365 days. Accordingly, show cause notices were issued to the assessee for initiation of prosecution proceeding under section 276B of the Act. In response, it was submitted by the assessee that while finalizing their account and auditing them came to know that TDS has not been deducted from the parties, however, noticing this lapse, the assessee paid the TDS amount from pocket along with interest. Thus, it was submitted that there is no malafide intention for 5 Shri Raviraj Relampaddu not deducting tax at source. Subsequently, the Assessing Officer issued a show cause notice under section 271C of the Act for imposition of penalty due to non–deduction of tax at source. Though, the assessee explained that due to bonafide belief, tax was not deducted. However, the Assessing Officer rejecting the explanation of the assessee imposed penalty of ` 1,31,533, under section 271C. 12. The learned Commissioner (Appeals) confirmed the penalty imposed by the Assessing Officer.

The learned Authorised Representative submitted, without declaring the assessee as an assessee in default under section 201(1) of the Act, the Assessing Officer cannot impose penalty under section 271C of the Act. In support of such contention, learned Authorised Representative relied upon the following decisions:–

We have considered rival submissions and perused the material on record. The fact that the Assessing Officer has not passed any order under section 201(1) of the Act treating the assessee as an assessee in default has not been disputed by the Revenue. In the decisions relied upon by the learned Authorised Representative, it has been categorically held that without declaring the assessee as assessee in 6 Shri Raviraj Relampaddu default under section 201(1) of the Act, no penalty under section 271C of the Act can be imposed. Respectfully following the ratio laid down in the decisions cited supra, we delete the penalty imposed under section 271C of the Act. Ground raised by the assessee is allowed.

In the result, appeal is allowed. Order pronounced in the open Court on 13.03.2020