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Income Tax Appellate Tribunal, DELHI BENCH : SMC-I : NEW DELHI
Before: SHRI R.S. SYAL
(Appellant) (Respondent) Appellant by : Dr. Ram Samujh, Advocate Respondent by: Shri N.K. Bansal, Sr.DR Date of Hearing : 03.11.2016 Date of Pronouncement: 04.11.2016 ORDER
This appeal by the assessee is directed against the order passed by the CIT(A) on 24.12.2013 in relation to Assessment Year 2011-12.
This is a recalled matter inasmuch as the earlier ex parte order passed by the Tribunal was subsequently recalled by the Tribunal.
The only issue raised in this appeal is against the confirmation of penalty imposed by the Assessing Officer (AO) u/s 272A(2)(k) of the Income Tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the A.Y. 2011-12.
Briefly stated, the facts of the case are that the assessee is a unit of North Delhi Municipal Corporation. It was created on 6.1.2010 for Parking management for the North Delhi Municipal Corporation (MCD) which was receiving revenue from Parking Management and collecting the taxes at source from contractors/sub-contractors. The MCD was required to pay the amount of taxes collected at source and to file the TDS statements with the Income-tax Department. The AO imposed penalty u/s 272A(2)(k) of the Act totalling Rs.18.75 lac for the Financial years 2007-08 to 2010-11 on the ground that the assessee failed to comply with the provisions of section 200(3) read with proviso to section 206A(3) as it did not file the quarterly e-TDS statements. The ld. CIT(A) deleted the penalty for the Financial years 2007-08, 2008-09 and 2009-10 on the ground that this unit was not responsible for collecting the TCS for parking and, hence, there was no requirement of filing e-TDS returns. However, for the assessment year under consideration, it was noticed that the TCS was deposited on 5.3.2012 and Form No.227EQ was filed on 24.10.2013. The assessee is aggrieved against the confirmation of penalty.
I have heard the rival submissions and perused the relevant material on record. There is no denial of the fact that the assessee failed to furnish TCS returns in time, thereby attracting the penalty u/s 272A(2)(k).
However, it is relevant to mention that the penalty imposed under this provision is subject to section 273B which provides that if there is a reasonable cause for non-compliance with the provisions attracting penalty, then, such penalty shall be waived.
Adverting to the facts of the instant case, it is noticed that the assessee has pleaded before the ld. CIT(A) and also mentioned the same through written submissions before the Tribunal that the work relating to parking management was centralized to the Remunerative Project Cell (Appellant) vide order no.OSD(RPC) 2010/D-348 dated 06.01.2010. Thereafter, it was directed to shift its office from Kashmere Gate, Old Hindu College Building to the 25th Floor, Civil Centre, New Delhi vide order dated 08.09.2009. Then, MCD was bifurcated into three different corporations vide Notification dated 29.12.2011. It has been further pleaded that though the work relating to Parking Management was assigned to the appellant vide letter dated 06.01.2010, yet the transfer of files/records from twelve zones of the MCD took time for more than one year. It has also been contended that the work for filing the returns of the income tax relating to for Parking Management was new to the appellant and the officers/officials became aware about the work relating to Parking Management only after receipt of complete files/records from twelve zones of the MCD. It is clear from the above that the non-compliance with the relevant provisions was not without reasons. In my considered opinion, there was a reasonable cause on the part of the assessee in not complying with the provisions requiring e-filing of TCS returns. As the non-compliance was necessitated due to reasonable cause, I hold that the penalty is not sustainable. The same is directed to be deleted.