M/S LUXMI RICE MILLS,KURUKSHETRA vs. JCIT (TDS), KARNAL

As per information available with Department, assessee had deducted TDS for each quarter and the same but delay occurred in filing of quarterly returns. Details of delay is as under:

Ld. AO issued notice for initiation of penalty proceedings under section 272 A (2) (K) of the Act. In reply to the notice, assessee submitted that TDS deducted was deposited within time, however due to inadvertent circumstances returns could not be filed on time, and assessee had no intention to defy law.

Ld. AO after considering reply filed by assessee, rejected the same on basis that assessee was solely responsible to comply with necessary regulations. He thus held assessee to be in default for not filing of tedious return in time and imposed penalty as under:

Aggrieved by penalty levied, assessee preferred appeal before the Ld. CIT (A) who upheld the order passed by Ld.AO. Aggrieved by the order of Ld. CIT (A) assessee is in appeal before us now. 5. Ld.AR submitted that there was genuine difficulty during relevant financial year in filing of TDS returns due to E- compliance, that was introduced for 1st time. He submitted that there was a reasonable cause for assessee to file returns belatedly, and benefit under section 273B of the Act must be applicable to present facts of the case.

On the contrary, Ld. Sr. DR submitted that assessee had not established reasonable cause as argued. She submitted that before Ld. AO assessee had not expressed any hardship, and therefore it cannot be accepted. Placing reliance upon the orders passed by authorities below, Ld. Sr. DR supported the order of Ld.AO. We have perused the submissions advanced by both the sides and the light of the records placed before us.

In the facts prevalent for us admittedly, there has been no delay in depositing the TDS to government Treasury. However delay occurred in filing of quarterly TDS returns. It is an admitted position that during financial year 2010-11, there was a switchover of filing of TDS return in paper forms to e-filing, by way of

It is observed that various High Courts, including jurisdictional High Court being Hon’ble Punjab and Haryana High Court, in case of HMT Ltd vs. CIT reported in (2004) 140 Taxmann 606 as well as Hon’ble Delhi High Court and coordinate benches of this Tribunal, has taken note of this change at various occasions which constituted hardships to assessee. It has been consistently observed for relevant period by various authorities, that due to software installed by revenue for e-filing of TDS returns, initial technological glitches has caused delay in filing of quarterly statements of TDS, for which no penalty can be levied on assessee. In present facts, assessee has also submitted to have faced similar difficulties due to which delay occurred.

We therefore respectfully following observations laid down in aforestated cases, do not agree with order passed by Ld. CIT (A) in levying penalty for late filing of TDS returns. Accordingly we delete penalty levied, and grounds raised by assessee stands allowed.

In the result appeal filed by assessee stands allowed. Order Pronounced in the Court on 16 /10/2018. Sd/- Sd/- (N.K. SAINI) (BEENA A PILLAI) VICE PRESIDENT JUDICIAL MEMBER Dated: 16/10/2018 SH