SELMA MEMOIRAL TRUST,THE NILGIRIS vs. JCIT, COIMBATORE

Both the appeals of the assessee are directed against the respective orders of the Commissioner of Income Tax (Appeals) -2, Coimbatore, dated 31.08.2017, for the assessment years 2008-09 and 2009-10, confirming the penalty levied by the Assessing Officer under Section 272A(2)(k) of the Income-tax Act, 1961 (in short 'the Act').

Smt. Nithya Sankaran, the Ld. representative for the assessee, submitted that the assessee-trust established and administering a school in the name of M/s Riverside Public School. According to the Ld. representative, omission to deduct tax and filing of e-TDS returns were not intentional but it was beyond the control of the assessee. According to the Ld. representative, the assessee deducted tax from the rent payment and also salary payments to the Principal at the end of the financial year. Tax so deducted was paid to the Government account. However, according to the Ld. representative, the assessee has filed TDS returns in the last quarter of the year and the inspection was carried on at the premises of the assessee on 07.10.2013. According to the Ld. representative, after verifying the relevant records, there was a demand of ₹60,529/- which was admittedly paid by the assessee. According to the Ld. representative, the omission to file quarterly returns is only circumstantial and not intentional. According to the Ld. representative, the assessee had to engage expertise from outside for filing the e-returns. Since there was no experienced person for filing e-TDS return at Kotagiri, according to the Ld. representative, the assessee had to engage persons from Coimbatore for filing the returns. After the inspection, the assessee has filed the returns.

On the contrary, Shri AR.V. Sreenivasan, the Ld. Departmental Representative, submitted that there was a delay of more than five years in filing the returns for both the assessment years, therefore, the Assessing Officer levied penalty. Placing reliance on the judgment of Punjab & Haryana High Court in Central Scientific Instruments Organisation v. CIT (TDS), the Ld. D.R. submitted that on identical circumstances, the High Court found that the penalty was rightly imposed. A similar view was also taken by Allahabad High Court in Raja Harpal Singh Inter College v. Principal CIT (2016) 386 ITR 327.

We have considered the rival submissions on either side and perused the relevant material available on record. From the material available on record it appears that the assessee deducted tax from the rent paid to the landlord and salary paid to the Principal. The assessee also claims that the payments were made to the Government account. However, e-TDS statements were not filed within the stipulated time. Admittedly, there was a delay of five years in filing the e-TDS statements for both the assessment years.

When the assessee was required to deduct tax and file the statement as required under Section 206C(3) of the Act within the time prescribed under Section 200(3) of the Act, the assessee is expected to comply with the mandates of the Income-tax Act.

In the result, both the appeals filed by the assessee stand dismissed.