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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI R.C. SHARMA & SHRI PAWAN SINGH
Present appeal preferred by the assessee is directed against the impugned order dated 4th March 2014, passed by the learned CIT(A)– 14, Mumbai, for the assessment year 2010–11, in the matter of order under section 272A(2)(k) of the Income Tax Act, 1961 (for short "the Act").
Brief facts are, the assessee is an individual carrying on business of courier services in the name and style of “M/s. Eagle Couriers”. The 2 M/s. Eagle Couriers Assessing Officer, however, levied penalty for delay in filing the TDS return. During the financial year ended 31st March 2010, relevant to assessment year 2010–11, the assessee has deducted tax at source under section 194A, 194C, 194I and 194J of the Act. The tax deducted at source has been paid to the credit of the Central Government. There is also no disallowance under section 40a of the Act for this assessment year. The assessee has filed letters with the Assessing Officer on 3rd August 2011, 16th August 2011 and 30th November 2011 giving reasons for the delay in filing the TDS statements and requesting him that a lenient view be taken in this matter and the delay in filing the quarterly TDS statements be condoned. However, the Assessing Officer did not agree with the assessee and levied penalty under section 272A(2)(k) for delay in filing of TDS returns.
By the impugned order, learned CIT(A) confirmed the action of the Assessing Officer against which the assessee is in further appeal before us.
We have considered the submissions of the parties and perused the material available on record. We find that there was a reasonable cause for delay in filing the TDS returns which have been duly explained before the Assessing Officer vide letters dated 3rd August 2011, 16th August 2011 and 30th November 2011. There was no loss to 3 M/s. Eagle Couriers the Revenue. The Tribunal, Mumbai Bench, in Royal Metal Printers Pvt. Ltd. v/s ACIT, ITA no.6840/Mum./2008, had categorically held that “the delay in filing the TDS returns even if they are characterized as negligence on the part of the assessee, can only be considered as a technical or venial breach of law for which penalty should not be levied automatically”.
We also find that the assessee is around 66 years of age and is suffering from brain hemorrhage since May 2014 and he is unable to take care of himself. The Court order attached certifies the mental illness of the appellant and authorizes appellant’s wife to act on behalf of the assessee. We also find that the assessee has been regular in filing its TDS returns in other assessment years and has also been regular in filing income tax returns in all the assessment years. The delay was only procedural and default, if any, was not deliberate and intentional. There could be no deliberate intention of delaying the submission of TDS returns. This shows the bonafide of the assessee in complying with the provisions of law. Late filing of TDS returns is a technical default. One should not be penalized for technical default. This view has been taken by various Benches of Tribunal and High Courts. The Tribunal, Lucknow Bench, in Punjab National Bank v/s ACIT, [2011] 140 TTJ 622 : 16 taxmann.com 318 (Lucknow), held that non–filing of quarterly statements does not involve any revenue loss
4 M/s. Eagle Couriers and is a mere technical default. Even otherwise, there was only a technical and venial breach of the provision contained in rule 31A of the I.T. Rules, 1962, requiring the assessee to submit quarterly statements of deduction of tax under section 200(3) within the time prescribed. Such delay had not caused any loss to the Revenue. The Tribunal, Jaipur Bench, in Rajasthan Tribal Area Development Co–Op. Federation Ltd. v/s ITO, 60 TTJ 427 (Jai.) held that for mere failure to furnish TDS returns, penalty was not justified as there was no default in deducting tax at source or in deposing the tax in government treasury. The Tribunal, Mumbai Bench, in Royal Metal Printers Pvt. Ltd. v/s ITO, [2010] 37 SOT 139 (Mum.), had categorically stated that the delay in filing the TDS returns even if they are characterized as negligence on the part of the assessee, can only be considered as a technical or venial breach of law for which penalty should not be levied automatically. In view of the above, we do not find any merit in imposing penalty for technical default in delay in filing TDS returns. Consequently, the grounds raised by the assessee are allowed.