ITO TDS 3(3), MUMBAI vs. SYNCOM FORMULATIONS (INDIA ) LTD, MUMBAI

Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद�य लेखा सद�य, राजे�� राजे�� केकेकेके अनुसार अनुसार/ PER Rajendra A.M.- लेखा लेखा सद�य सद�य राजे�� राजे�� अनुसार अनुसार Challenging the order,dated 10/03/2014,of the CIT (A)-14,Mumbai the Assessing Officer(AO) has filed the present appeal.While examining the records of the assessee, he found that the assessee had filed the TDS returns after the due dates that were required to be filed at the end of every quarter under the provisions of section 200(3) read with Rule 31A of the Income Tax Rules,1962 (Rules).He further found that the quarterly statement of TDS in form number 24Q and 26Q was required to be filed on its specified dates were also not filed.He compiled the delay in submission the TDS returns for the AY.2007-08 as under: Quarter No. of days delay TDS Amount Penalty Amount (in Rs.) 24-Q1 976 22000 22000

3913/M/14-Syncom F(I)L

24-Q2 884 42000 42000 24-Q3 792 20000 20000 24-Q4 641 792427 64100 148100 26-Q1 976 439828 97600 26-Q2 884 359155 88400 26-Q3 792 398188 79200 26-Q4 641 123962 64100 329300 Total 477400 2.He issued a show cause notice to the assessee asking it to explain as to why penalty u/s. 272A(2)(k)of the Act should not be levied.In response to the notice, the assessee admitted that there were occasional delays in filing TDS returns, that there were no major defaults in deduction and payments of the taxes. The AO observed that reasons given by the assessee did not satisfy the requirement of establishing reasonable cause for not fulfilling stated the obligations under the Act. Finally, he imposed a penalty of Rs. 4.77 lakhs invoking the provisions of section 272A(2)(k) of the Act.

3.Aggrieved by the order of the AO,the assessee preferred an appeal before the First Appellate Authority (FAA). Before him, it was argued that the company did not file e-TDS return in time due to unawareness of knowledge, non- availability of parties PAN.s, outsourcing of the work of filing the returns, that there was no intimation that nonfiling of returns on due dates would attract huge penalties. The FAA asked the assessee to file details of deposits of TDS.

3913/M/14-Syncom F(I)L Accordingly a chart-showing the details of tax directed at source and paid along with the delay in filing the return from the date of payment and the acknowledgements of the returns for all the four quarters-was filed before the FAA.

4.After considering the submission of the assessee and the penalty order passed by the AO,the FAA held that clause (k)of the section required the assessee is to deliver or cause to be delivered a copy of the statement within the time specified u/s. 200 (3) of the Act, that the assessee is were required to prepare a statement in prescribed form and to deliver the same to prescribed authority, that there was delay in payment of taxes and filing of returns of TDS, that the assessee had paid taxes along with the interest, that statement could be filed only after taxes were paid by an assessee, that for delay in payment of taxes the assessee had to pay interest u/s. 201 (1A) of the Act.The FAA referred to the case of M/s. Porwal Creation delivered by the Mumbai Tribunal wherein it was held that penalty for late filing of return should be calculated from the date of payment of taxes as the assessee could not have filed before the taxes were paid.Following the order of the Tribunal the FAA directed the AO to modify the order of penalty by re-computing the penalty from the date of payment of taxes to the date of filing of the return.

5.During the course of hearing before us, the Departmental Representative (DR) stated that matter could be decided on merits. As noted earlier, none appeared 3