Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH: ‘F’, NEW DELHI
Before: SH. AMIT SHUKLA & SH. O.P. KANT
PER O.P. KANT, A.M.: This appeal by the assessee is directed against order dated 06/01/2015 passed by the Ld. Commissioner of Income-tax (Appeals)-41, New Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2007-08 in relation to penalty of Rs. 50,000 upheld for delayed filing of quarterly TDS (tax deducted at source) returns. 2. The grounds of appeal raised by the assessee are reproduced as under:
That the order is against fact and law of the case.
That the appellant was passing through period of personal harassment trauma inasmuch as his son was enticed away by the criminals. The appellant and his family remained under trauma. The Appellate Authority was satisfied on facts and reasons of default but reduced the penalty to Rs.50,000/- instead of deleting the entire amount as the cause was continuous one during the period of alleged default.
That the section under which the penalty has been imposed refers to person liable as company, and therefore, the appellant being an individual not liable the order passed is therefore illegal and merits to be set aside. 4. That the order passed fails to specify correctly the Section and the Rules under which action has been taken against him, thus, adversely affecting his defense in the matter. The appellant prays for an opportunity to make detailed submission at the time of hearing with reference to correct statutory provision in the interest of justice and fair play. 3. Despite notifying, the date of hearing to the assessee, none attended on behalf of the assessee and, therefore, case is heard ex parte qua the assessee. 4. Briefly stated facts of the case are that on the basis of the information received, the Ld. Joint Commissioner of Income Tax, Range 51, New Delhi [in short the ‘Assessing Officer’] observed that the assessee had not filed the quarterly TDS returns for the financial year 2007-08 and accordingly he issued a show cause notice to the assessee, as to why the penalty under section 272A(2)(k) of the Income-tax Act, 1961 (for short ‘the Act’) may not be imposed for not filing the said returns. In response, the assessee submitted that there was no delay in depositing the tax deducted at source and it was duly deposited with the government account. The assessee submitted that quarterly TDS returns have been filed though with certain delay. The Assessing Officer rejected contention of the assessee and levied penalty of Rs.1,14,959/- having details as under:
Form 26Q Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4 Due Date 15.07.2007 15.10.2007 15.01.2008 15.06.2008 Date of filing 25.11 2009 07.09.2009 07.09.2009 07.09.2009 - Default in no. of 864 693 601 449 day Amount of tax 5580 44386 136531 4893 involved Penalty leviable 86400 69300 60100 44900 @ Rs. 100/- per day default Penalty 5,580/- 44,386/- 60,100/- 4,893/- restricted to as per provisions of the Act.
4.1 Aggrieved, the assessee filed appeal before the Ld. CIT(A) and submitted that there was reasonable and sufficient cause for failure in filing the returns on time. It was submitted on behalf of the assessee, that main person, his wife and son had been living in a state of trauma after his son was enticed away by the criminals for ransom and the family had not recovered from the shock and unable to lead a normal life. It was also submitted that assessee was being assisted by his father, who is an old person. The Ld. CIT(A) accepted the contention of the assessee regarding delay in filing the TDS returns, however, restricted the penalty to Rs. 50,000/-. The relevant finding of the Ld. CIT(A) is reproduced as under :
“4.1 The penalty order dated 28.05.2010 as well as the written submissions filed by the authorized representative of the appellant during the appellant’s proceedings have been duly considered. The appellant did commit the mistake of fulfilling the statutory obligation of not filing Quarterly TDS returns within the prescribed time limit. But considering the fact submitted by the Authorized Representative that the mistake was made on account of personal hardship and that the appellant has paid all taxes due. I agree with the argument that there was not willful avoidance of law. The non-filing of Quarterly TDS return in time is merely a technical default. However, I also observe that since the default on part of the appellant has been more than 100 days each, it would be reasonable to restrict the penalty u/s 272A(2)(k) to Rs.50,000/- only.”
4.2 Aggrieved, the assessee is in appeal before the Tribunal.
The Ld. DR relied on the order of the Ld. CIT(A) and submitted that failure in filing TDS returns was more than hundred days, and, therefore, some amount should be sustained as penalty.
We have heard the submission of the Ld. DR and produced the material on record including the impugned order of the Ld. CIT(A). We note that the Ld. CIT(A) considered the fact that the mistake was on account of personal hardship and the assessee has paid all due taxes. This fact has not been disputed by the Ld. DR. The Ld. CIT(A) has further agreed with argument of the assessee that there was no willful avoidance of law on the part of the assessee. In our opinion, when the assessee has explained sufficient cause for non-compliance in filing the TDS returns, particularly the circumstances under which the family lived, we do not find any justification for sustaining a penalty of Rs.50,000/- by the Ld. CIT(A). In our view, either the sufficient and reasonable cause exists or does not exist, there is no halfway in between. Since in the instant case, the reasonable and sufficient cause for non-compliance exist and the assessee has already paid due amount of tax deducted, we do not find any reason for restricting the penalty to Rs.50,000/-. We delete the said penalty of Rs.50,000/- sustained by the Ld. CIT(A). Accordingly, the grounds of the appeal are allowed.
In the result, the appeal filed by the assessee is allowed.
The decision is pronounced in the open court on 12th June, 2018.