Loading judgment…
Facts
The assessee faced penalties under Section 272A(2)(k) of the Income-tax Act for delayed filing of quarterly TDS returns. The assessee explained the delays were due to paucity of funds and difficulties in obtaining PANs, noting that they had already remitted the TDS along with applicable interest under Section 201(1A) suo moto. The Assessing Officer and CIT(A) upheld the penalty.
Held
The Tribunal held that the assessee's explanations for the delays were reasonable and not found to be false. Since the assessee had already paid interest on the late remittance and there was no loss to the exchequer, the Tribunal deemed the delay a mere technical/venial breach not warranting a penalty under Section 272A(2)(k) of the Act, relying on judicial precedent.
Key Issues
Whether penalty under Section 272A(2)(k) for delayed filing of quarterly TDS returns is justified when the assessee has a reasonable cause and has already paid interest on late remittance without any loss to the revenue.
Sections Cited
272A(2)(k), 201(1A)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “A”: NEW DELHI
Before: SHRI M. BALAGANESH & SHRI ANUBHAV SHARMA
O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in for AY 2010-11, arises out of the order of the Commissioner of Income Tax (Appeals)-27, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. 27/10073/2009-10 dated 18.05.2022 against the order of assessment passed u/s 272A(2)(k) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 25.02.2021 by the Assessing Officer, JCIT, Range-73, New Delhi (hereinafter referred to as ‘ld. AO’) and appeal in ITA Nos. 1634 and 1635/Del/2022 for AYs 2009-10 and 2010- 11, arises out of the order of the Commissioner of Income Tax (Appeals)-27, New Page | 1
ITA Nos. 1634, 1634/Del/2022 (Ambience Developers & Infrastructure Pvt. Ltd) (Ambience Commercial Developers Pvt. Ltd)
Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. 27/10053/2008-09 dated 20.05.2022 against the order of assessment passed u/s 272A(2)(k) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 09.03.2021 by the Assessing Officer, JCIT, Range-73, New Delhi (hereinafter referred to as ‘ld. AO’). Identical issues are involved in all these appeals and hence they are 2. taken up together and disposed of by this common order for the sake of convenience.
The only effective issue to be decided in all these appeals is as to 3. whether the ld. CIT(A) was justified in confirming the levy of penalty u/s 272A(2)(k) of the Act in the facts and circumstances of the instant case.
We have heard the rival submissions and perused the materials 4. available on record. It is not in dispute that the assessee had furnished its TDS returns on a quarterly basis with certain delays, which are tabulated in pages 2 and 3 of the order of the ld. CIT(A). The assessee had explained that the delay in filing of TDS returns was due to the paucity of funds with the assesses and accordingly the assessee had remitted the TDS with applicable interest u/s 201(1A) of the Act to the account of the Central Government. The TDS returns could not be filed electronically without remitting the requisite taxes. Further it was explained that some of the parties had not furnished their Permanent Account Number (PAN), without which the assessee could not file its TDS returns electronically. Hence there was a delay on the part of the assessee to file the TDS returns in time. The Quarterly TDS returns were suo moto filed by the assessee after due remittance of TDS with applicable interest without receiving any notice from the income tax department. Accordingly, it was pleaded that there was only a technical venial breach committed by the assessee , for which it should not be invited with the levy of penalty u/s 272A(2)(k) of the Act. The ld. Page | 2
ITA Nos. 1634, 1634/Del/2022 (Ambience Developers & Infrastructure Pvt. Ltd) (Ambience Commercial Developers Pvt. Ltd)
AO however did not heed to the aforesaid contentions of the assessee and proceeded to levy penalty u/s 272A(2)(k) of the Act for the delayed filing of quarterly TDS returns. This action of the ld. AO was upheld by the ld. CIT(A).
We find that the assessee had duly explained the reasons for the 5. delayed filing of TDS returns. The reasons explained by the assessee were not found to be false by the revenue. We find that the assessee had already suffered the interest u/s 201(1A) of the Act for the late remittance of TDS. Hence there is no loss to the exchequer by the delayed filing of TDS returns by the assessee. For a mere technical venial breach, the assessee should not be invited with penalty u/s 272A(2)(k) of the Act. Our view is further fortified by the decision of Delhi Tribunal in the case of Haryana Distillery Ltd vs JCIT reported in 97 taxmann.com 571 dated 4.9.2018.
In view of the aforesaid observations and respectfully following the 6. judicial precedent relied upon hereinabove, we hold that this is not a fit case for levy of penalty u/s 272A(2)(k) of the Act. Accordingly, the grounds raised by the assessee for all the years under consideration are allowed.
In the result, the appeals of the assessee are allowed. 7.