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Income Tax Appellate Tribunal, MUMBAI BENCH “J”, MUMBAI
Before: SHRI C.N. PRASAD & SHRI ASHWANI TANEJA
Per C.N. Prasad, Judicial Member:
This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-14, Mumbai [(hereinafter referred to as the CIT(A)] dated 03.11.2014 for the assessment year 2010-11 in sustaining the penalty of Rs.99,796/- levied under section 272A(2)(k) of the Income Tax Act.
Briefly stated the facts are that the assessee for the financial years 2009- 10 filed TDS statements in form No.24Q and 26Q beyond the stipulated time limit. The Assessing Officer required the assessee to explain as to why penalty should not be levied for the delay in filing the TDS statements. In response to the notice the assessee submitted that it has paid all the TDS amount deducted during the year 2009-10, into government account within time. However the filing of TDS returns has been delayed due to delay in receipt of PAN details
2 M/s. Havistha Steel Fab P. Ltd. from the deductees without which TDS returns cannot be filed. Therefore the assessee submitted that delay in filing the TDS returns is not willful and it is only a technical fault and requested to drop the penalty proceedings. However, the Assessing Officer passed order under section 272A(2)(k) of the Act levying penalty of Rs.99,796/- for delay in filing return in form No.26Q stating that assessee had committed default without any reasonable cause.
On appeal, the Ld. CIT(A) sustained the order of the Assessing Officer in levying penalty observing that non availability of PAN does not constitute reasonable cause.
The Ld. Counsel for the assessee submits that the assessee has remitted in time the TDS deducted into government account and there is no delay in depositing the TDS. The Ld. Counsel for the assessee submits that there is a delay in filing TDS returns because of the fact that assessee could not collect the PAN details from the deductees. The Ld. Counsel submits that there is no loss to the Revenue as the TDS was remitted in time into government account. The delay in furnishing the TDS returns is only a venial breach for which there should not be any penalty. For this proposition he places reliance on the following decisions: 1) Punjab National Bank vs. Addl. CIT [59 DTR 381 (Lucknow)] 2) State Bank of India vs. JCIT (68 SOT 370) (Cuttack) 3) Rajasthan Tribal Area Development Cooperative Federation Ltd. vs. ITO 60 TTJ (JP) 427.
The Ld. D.R. supports the order of the Ld. CIT(A).
We have heard the rival submissions and perused the orders of the authorities below. It is an admitted fact that the assessee has remitted the TDS in time to the government account and there is no loss to the Revenue. There is delay in filing TDS returns for the reason that the assessee could not collect PAN details from the deductees which is a reasonable cause for the delay in filing the TDS returns. On an identical situation the penalty was deleted in the 3 M/s. Havistha Steel Fab P. Ltd. case of Rajasthan Tribal Area Development Cooperative Federation Ltd. (supra) by following the decision of the Hon’ble Supreme Court in the case of Hindustan Steel Ltd. vs. State of Orissa (83 ITR 26) holding as under: “4. After considering the submission from both the sides, and having gone through the orders of the lower authorities, we have noticed that there is no default on the part of the appellant either in deducting the tax at source or in depositing the same into Govt. account. This fact has not been disputed even by the learned Departmental Representative. The only default is in furnishing statement of TDS in Form No.26 which in view of appellant’s explanation, is only a technical default, for which we are of the opinion that such a penal action is not justified, because the appellant default is purely of a technical or venial nature. In support of this conclusion, we rely on the observations of the Hon’ble Supreme Court in the case of Hindustan Steel Ltd. vs. State of Orissa (1972) 83 ITR 26 (SC), which are reproduced as under:
“An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose the penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute”.
In view of the above facts and circumstances, we cancel the penalty under appeal and the assessee’s appeal is allowed.”
Respectfully following the said decision, we delete the penalty levied for delay in filing returns.
In the result, assessee’s appeal is allowed.
Order pronounced in the open court on 30.11.2016.