THE NEW INDIA ASSURANCE CO. LTD.,HOOGHLY vs. JCIT, RANGE-58(TDS), KOLKATA, KOLKATA
In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that the software migration issues constituted a reasonable cause for the delay in filing TDS statements, as per Section 273B of the Act. It was also noted that the TDS amounts were deposited on time, causing no loss to the exchequer.
What were the facts?
The assessee, New India Assurance Co. Ltd., delayed filing its quarterly TDS statements for the second and third quarters of FY 2009-10. The delay was attributed to problems encountered after migrating to a new software module, 'CWIIS'.
What were the issues?
Whether the delay in filing quarterly TDS statements due to software migration issues constitutes a reasonable cause for waiver of penalty under Section 273B of the Income Tax Act.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH : KOLKATA
Before: Hon’ble Shri Aby. T. Varkey, JM & Shri M.Balaganesh, AM ]
ORDER Per M.Balaganesh, AM
This appeal is directed against the order of the learned Commissioner of Income Tax (Appeals) -24, Kolkata [in short the ld CITA] in Appeal No. 174/CIT(A)- 24/Kol/2012-13 dated 9.5.2016 against the order passed by the JCIT (TDS) Range -58, Kolkata [in short the ld AO] levying penalty u/s 272A(2)(k) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’) in the sum of Rs 94,200/- for the Asst Year 2010-11 dated 1.12.2011.
The New India Assurance Co. Ltd. A.Yr.2010-11 2. The brief facts of this issue is that the assessee had submitted its quarterly TDS statements for the second and third quarters of the financial year 2009-10 with some delay. The ld AO asked the assessee to show cause why a penalty should not be imposed on it for the delays of 517 and 425 days in respect of 2nd and 3rd quarters respectively. The assessee submitted that due to the replacement of the erstwhile Software Module ‘Genesis’ by ‘CWIIS’ Module with effect from October 2009, it had to face various accounting problems. Due to the system lapses and communication gap between the assessee and the service provider , the assessee’s day to day work and the customer service had been hampered. Though the assessee tried its level best to overcome the Software oriented problems, yet because of the lack of knowledge regarding the new Modules, the assessee could not collect the required reports of its agents and surveyors to whom commission had been paid. It was submitted before the ld AO that though the taxes deducted at source had been duly deposited to the credit of the Central Government within the prescribed dates, yet in the absence of the necessary reports, it had not been possible for the assessee to prepare the quarterly statements of TDS and submit the same within the prescribed dates. Later on, the quarterly statements of TDS were duly submitted to the ld AO. The ld AO however, observed that the reasons stated for the delay does not constitute ‘reasonable cause’ within the meaning of section 273B of the Act, and rejected the explanation of the assessee. Accordingly, the ld AO levied penalty of Rs 51,700/- for delay of 517 days for second quarter and Rs 42,500/- for the delay of 425 days for third quarter totaling to Rs 94,200/- u/s 272A(2)(k) of the Act. The order levying penalty u/s 272A(2)(k) of the Act by the ld AO was upheld by the ld CITA. Aggrieved, the assessee is in appeal before us on the following grounds:-
1. That the Commissioner of Income Tax(Appeals) was wrong in confirming the penalty of Rs. 94,200/- imposed by the Assessing Officer u/s 272A(2)(k)/274.
The New India Assurance Co. Ltd. A.Yr.2010-11 2. That without prejudice to the contention raised in Ground No. 1 above, the Commissioner of Income Tax (Appeals) was wrong in not appreciating the fact that there had been reasonable cause for the delays occurred in furnishing Quarterly TDS Statement by the appellant.
That the appellant craves leave to add, alter or withdraw any Ground or Grounds of appeal before or at the Hearing of the Appeal.
3. None appeared on behalf of the assessee. We have heard the ld DR. We find that the fact of change of software from ‘Genesis’ to ‘CWISS’ Module by the assessee has not been disputed by the revenue in the instant case. It is quite natural that change of software would lead to various teething troubles which need to be addressed and plugged at the initial stage itself, so that the new Module could function smoothly later on. It is well known that migration to a new software would certainly result in lot of issues on accounting, accounting heads, etc which consumes considerable time for addressing the same. The assessee in the instant case had to undergo the same problems from October 2009 onwards , which had been duly stated by the senior branch manager of , Serampore Branch, vide letter dated 11.11.2011 , which fact is also acknowledged in the order of the ld CITA. The due date of filing the quarterly statement for the second quarter of financial year 2009-10 falls in October 2009 only. Hence we hold that the assessee was reasonably prevented from filing its quarterly TDS statements for 2nd and 3rd quarters of financial year 2009-10 with delay due to reasons beyond the control of the assessee. We hold that the explanation offered by the assessee would constitute ‘reasonable cause’ within the meaning of section 273B of the Act and hence the assessee would be entitled for immunity from levy of penalty u/s 272A(2)(k) of the Act. Moreover, we find that there is absolutely no loss to the exchequer due to the delay committed by the assessee in filing the quarterly TDS statements as admittedly the entire TDS has been duly remitted within the prescribed time by the assessee to the account of the Central Government. Hence we hold that The New India Assurance Co. Ltd. A.Yr.2010-11 the assessee had committed only a technical venial breach , for which it should not be invited with penalty u/s 272A(2)(k) of the Act. Accordingly, the grounds raised by the assessee are allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the Court on 04.04.2018
More judgments on Section 272A(2)(k)
- Maliwal Bherulal Jagnnath HUF, Jamnagar vs Income Tax Officer Ward 1(3), JamnagarITA 855/RJT/2026[2012-13]Status: Disposed21 Sept 2026AY 2012-13
- Colours Multimedia Private Limited, Delhi vs ITO, Ward 6(1), DelhiITA 6670/DEL/2025[2009-10]Status: Disposed5 Jun 2026AY 2009-10
- Kaushalya Infrastructure Development… vs I.T.O., Ward - 2(1), KolkataITA 180/KOL/2026[2015-2016]Status: Disposed13 Apr 2026AY 2015-2016
- Kaushalya Infrastructure Development… vs I.T.O., Ward - 2(1), TDS, KolkataITA 179/KOL/2026[2014-2015]Status: Disposed13 Apr 2026AY 2014-2015
- Kaushalya Infrastructure Development… vs I.T.O., Ward - 2(1), TDS, KolkataITA 178/KOL/2026[2013-2014]Status: Disposed13 Apr 2026AY 2013-2014
Recent GST High Court judgments
Search GST case law →- Sutlej Textiles And Industries Limited vs. Union Of INDIARajasthan · 26 Oct 2026
- M/S. Ut Corp vs. Union Of INDIARajasthan · 26 Oct 2026
- Sunrise Engineering vs. The State Of Andhra PradeshAndhra Pradesh · 26 Oct 2026
- M/S Kalra Traders vs. Union Of INDIAUttarakhand · 26 Oct 2026
- Ms Isoft vs. The Commissioner State TaxUttarakhand · 26 Oct 2026