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Income Tax Appellate Tribunal, B Bench, Mumbai
Before: Shri R.C. Sharma & Shri Ravish Sood
These are appeals filed by the assessee against the order of the CIT(A)- 1, Thane for A.Y. 2010-11, in the matter of order passed under Section 272A(2)(k) of the Income Tax Act (hereinafter “the Act”).
The brief facts of the case are that the assessee filed quarterly statements of TDS under Section 200(3) r.w. Rule 31A of the I.T. Rules, 1962 as under-
Tax Amt. Max. S. Form Date of Qrtr F.Y. RPRNo. Due date Delay deducted penalty No No. filing (in Rs.) leviable (in Rs.) 1 26Q Q1 2009-10 30170200345106 15.07.09 14.07.11 729 61,562 61,562 2 26Q Q2 2009-10 30170200345110 15.10.09 14.07.11 637 46,861 46,861 3 26Q Q3 2009-10 30170200345121 15.01.10 14.07.11 545 36,449 36,449 4 26Q Q4 2009-10 30170200345132 15.06.10 14.07.11 394 73,919 39,400 TOTAL 1,84,272 As there was delay in filing the TDS statements for the above four quarters for the year under consideration the AO issued show cause notice to the 2 to 2918/Mum/2016 Shri Raviraj Relempaddu assessee asking it to explain why penalty u/s. 272A(2)(k) of the I.T. Act should not be imposed in his case. Being not satisfied with the reply of the assessee, the AO imposed penalty under Section 272A(2)(k) of Act amounting to ` 61,562/- for Q1 i.e. Appeal No. 789 due to delay in filing the TDS statement. By the impugned order the CIT(A) has confirmed the penalty so imposed by the AO, against which the assessee is further in appeal before us.
At the outset the learned A.R. placed on record the order of the Tribunal in the case of Gulam Mustafa Khan dated 12th April, 2017 for assessment years 2009-10 and 2010-11 wherein under similar facts and circumstances penalty so levied was deleted by the Tribunal. It was contended by the learned A.R. that the facts and circumstances during the year under consideration are same as has been dealt with by the Tribunal in its order in the case of Gulam Mustafa Khan dated 12.04.2017.
4. We have considered the rival contentions and found that submissions of assessee before the lower authorities were as under: -
"2.1. The appellant's business is managed by low qualified staff. During the course of audit only, it was noticed that no tax was deducted. Appellant immediately paid the tax. 2.2. However, after payment of tax, it became very difficult for the appellant to collate the date for past year. 2.3. You will also appreciate that the delay was only procedural and default if any, was not deliberate and intentional. There could be no deliberate intention of delaying the submission of TDS returns. 2.4 Late filing of TDS returns is a technical default. One should not be penalized for technical default. This view has been taken by various Tribunals and courts. In view of the foregoing and the fact that penalty provisions been amended in budget 2012 by incorporating new section 234E to levy fee of Rs. 200 per day for delay in filing TDS return indicating thereby penalty should not be levied in a case where taxes were paid in time and there is no loss to revenue. 2.5. The Ld. AO has levied the penalty stating that "due to delay in filing the TDS returns by the deductors, the deductee have to suffer a lot as they do not get credit of TDS till the time TDS statements are uploaded by the deductors". In this respect we wish to state as follows :-
3 to 2918/Mum/2016 Shri Raviraj Relempaddu a. Deductees claim credit for TDS only on filing of their return of income. Return can be filed only after release of Forms / Returns. The first due date of filing return for F. Y. 2008-09 i.e. A. Y. 2009-10 was 31.07.2009. b. The credit can also be claimed by the deductees without TDS credit being reflected in their 26AS. c. After filing the TDS returns, it is reflected and credit is allowed. d. Therefore, levy of penalty upto release of forms through which credit can be claimed, may be deleted. 2.6. We wish to draw your attention to CBDT no.07/2014 dtd. 04.03.2014 in context of levy of late fee u/s. 234E of Rs. 200/- per day. It extended the due date of filing TDS returns of government deductees for F.Y. 2012-13 and first three quarters of F.Y. 2013-14 to 31.03.2014. Inspite of the government departments having machinery and manpower for compliances, the blanket extention is awarded citing some technical issues only to government deductees. This is sheer discrimination as the small deductors like assessee can also face lot of administrative problems. 2.7. In support of our claim we have relied on following decisions - A) CIT v. ARK Corpn. (2008) 172 Taxman 339 (Delhi) where it was held that revenue was seeking to levy penalty only because it had power to do so without exercising the discretion. In such technical defaults, there is hardly any reason to levy penalty. B) Branch Manager, Punjab National Bank v. Addl CIT (2011) 140 TTJ 622/16 iaxman.com 318 (Lucknow) where it was held Non-filing of quarterly statements does not involve any revenue loss & is a mere technical default. Even otherwise, there was only a technical & venial breach of the provision contained in rule 31A of income tax Rules, 1962 requiring the assessee to submit quarterly statements of deduction of tax under sec. 200(3) within the time prescribed. Such delay had not caused any loss to the revnue. C) Rajathan Tribal Area Development Co-operative Federation Ltd. Vs. ITO (60 TTJ 427 Jp Trib) where it was held that for mere failure to furnish TDS returns, penalty was not justified as there was no default in deducting tax at source or in depositing the tax in government Treasury.”
5. We have gone through the order of the Tribunal dated 12.04.2017 wherein the penalty imposed under Section 272A(2)(k) has been deleted after having the following observation: - 4 to 2918/Mum/2016 Shri Raviraj Relempaddu “3. The Ld. Counsel for Assessee [AR] raising similar contentions pleaded that the assessee was an individual transport operator working in the unorganized sector and was not fully conversant with the complex TDS provisions and compliances thereof. He was fully dependent upon the tax consultant to comply with these TDS provisions and deducted / deposited TDS as per the instructions of the consultants from time to time and therefore there was no deliberate default on the part of the assessee so as to attract the penalty. Further, it took some time for the assessee to convince the petty transporters about TDS provisions. Moreover, the assessee deposited the due TDS along-with applicable interest, which do not justify the penalty. Reliance was placed on the order of Rajkot Tribunal (SMC) in Bharat Kumar Manilal Vs. JCIT [121 Taxman 361order dated 1/11/2001]. Per contra, Ld. DR, Dr. Anupama Singla, drew our attention to the express penal provisions as contained in Section 272A to contend that the late filing of TDS returns would certainly entail imposition of penalty at prescribed rates. Further, the assessee incurred the same default over several years, which do not justify deletion of penalty.
We have heard the rival contentions and perused the relevant material on record which prima facie reveals that the assessee has deposited the TDS with interest as applicable from time to time. We find some strength in the arguments of the Ld. AR that assessee was an individual working in the unorganized sector and therefore, not fully conversant with the complex TDS provisions and had to depend upon some experts to comply with these provisions as TDS provisions certainly require certain higher degree of understanding of TDS provisions and manner of compliances thereof. We also note the fact that the TDS compliances have undergone frequent changes over the last decade in terms of deduction, deposit, e-filing of TDS returns and generation of TDS certificates etc. Therefore, without delving much deeper into the issue on merit, we are inclined to delete the said penalty on the facts and circumstances of the case and accordingly, allow assessee’s appeal.
Now we take up ITA No.4207/M/2016 for AY 2010-11 where the assessee is saddled with a penalty of Rs. 58,200/- in similar manner for late filing of quarterly TDS return for all quarters of impugned AY and the same has been assailed before us. There being no change in the facts and circumstances except for dates / figures and minor variations, taking the same stand, we delete the impugned penalty and allow assessee’s appeal.”
The facts and circumstances during the year under consideration are exactly the same, therefore, respectfully following the order of the Tribunal cited above we find no merit for the penalty levied under Section 272A(2)(k) of the Act.