TURBO TRAVELS INDIA P.LTD,MUMBAI vs. ADDL CIT (TDS) RG 3, MUMBAI

Aggrieved by the penalty order u/s 272A(2)(k) of the Act of the A.O., the assessee filed its first appeal before the ld. CIT(A).

Before the ld. CIT(A) the assessee filed the details of TDS returns for all the financial years and submitted that the delay had occurred for the first year and in the subsequent years the assessee had filed the TDS returns on time without any delay with the prescribed income-tax authority. The ld. CIT(A) considered the submissions of the assessee and observed that in assessee’s case clause (k) of sub-section 2 of Section 272A of the Act requires a person to deliver or cause to be delivered copy of the TDS return/statement ITA 4961/Mum/2014 4 within time specified under section 200(3) of the Act. As per the provisions of Section 200(3) of the Act read with Rule 31A, a person deducting tax at sources is required to prepare a statement in the prescribed form and deliver the same to the prescribed income-tax authority after paying the tax deducted at source to the credit of the Central Government. The liability of assessee is a statutory and absolute liability. Fiscal statute has to be strictly construed so that nobody can avoid the responsibility of deposit of tax so deducted and file the return on time with the prescribed income-tax authority. The ld. CIT(A) observed that breach of the provisions of section 200(3) of the Act will attract penalty leviable u/s 272A(2)(k) of the Act. The learned CIT(A) observed that the plea of the assessee that the submission of TDS returns/forms through electronic mode was in its initial phases and that there was difficulty in preparing and submitting the e-forms cannot be held as a genuine explanation for not filing return on time by the assessee. The ld. CIT(A) held that no reasonable cause has been furnished by the assessee for delay in filing the e-TDS return. The learned CIT(A) held that the several case laws cited by the assessee cannot come to its rescue in view of the clear provisions of section 272A(2)(k) of the Act . It was observed by the learned CIT(A) that Section 200(3) of the Act places a statutory mandate on every person to file e- TDS return/statements’ in prescribed form and in the prescribed manner by the due date and on breach of provisions of Section 200(3) of the Act , penalty is leviable u/s 272A(2)(k) of the Act. The ld. CIT(A) accordingly confirmed the penalty order of the A.O. passed u/s 272A(2)(k) of the Act , vide appellate orders dated 19-05-2014.

Aggrieved by the appellate orders dated 19-05-2014 passed by the ld. CIT(A), the assessee is in appeal before the Tribunal.

The ld. Counsel for the assessee submitted that the concept of e-filing of the TDS return introduced by the Revenue was in the initial stages during ITA 4961/Mum/2014 5 the previous year relevant to the impugned assessment and there were difficulties in preparing and submitting the e-forms as several new changes were introduced by the Income-tax Department including technological platform compatible requirements . It is submitted that the assessee has remitted the tax deducted at source (TDS) on the due date to the credit of Central Government and no loss/prejudice has been caused to the Revenue in the late filing of the TDS returns. It was submitted that e-TDS returns were filed voluntarily by the assessee albeit delayed without any notice from Revenue. The taxes were remitted to Government in time. There is no deliberate delay on the part of the assessee in filing TDS return with the Department and the assessee has not benefitted from this technical breach in filing TDS return late with the Department. In support, the ld. Counsel placed reliance on the decision of Hon’ble Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa,(1972) 83 ITR 26(SC). The learned counsel also relied upon Hon’ble Gujarat High Court decision in the case of CIT v. Harsiddh Construction (P) Ltd., (2000) 244 ITR 417(Guj.) and also the decision of the ITAT, Chandigarh Bench in the case of Corporation Bank v. JCIT in , whereby the facts were identical and the penalty was deleted. The ld. Counsel submitted that there was no case for levy of penalty u/s 272A(2)(k) of the Act as the assessee had a reasonable cause for not filing the TDS return in time.

We have considered the rival contentions and also perused the material available on record including the case laws relied upon. We have observed that the penalty has been imposed by the A.O. on the assessee u/s 272A(2)(k) of the Act of Rs. 25,065/- as the assessee has delayed in filing the e-TDS returns in Form No. 24Q and 26Q with the prescribed income-tax ITA 4961/Mum/2014 6 authority as per the chart in the preceding paras . We find that the assessee has deposited the taxes deducted at source (TDS) in time to the credit of Central Government and hence there was no loss/prejudice caused to the Revenue. However, there was a delay in filing the TDS return as the submission of e-TDS forms through electronic mode was in initial stages and there were difficulties in preparing and submitting the TDS return forms in form no 24Q and 26Q by the assessee , however, taxes deducted at source were paid in time by the assessee. It is a matter of common knowledge that the Department has switched over the annual filing system of TDS returns in manual form to quarterly e-filing of TDS returns in form no. 24Q and 26Q and in this process there were various technological platforms / systems to be put in place and upgraded from time to time . Similarly, the tax-deductors also faced initial glitches as well faced gestation period in understanding and adapting to new regime of e-filing of TDS returns in electronic mode/formats during switch over phase from regime of manual filing of TDS returns to e- filing of TDS returns in electronic mode. The assessee has also claimed to have faced difficulties in upgrading and adjusting to the new regime/ system of quarterely e-filing of TDS returns and in our considered view , keeping in view facts and circumstances of the case and detailed discussions as set-out above, penalty levied by the A.O. u/s. 272A(2)(k) of the Act for breach of provisions of Section 200(3) of the Act is not exigible in this case as the assessee has come out with a plausible and bona-fide explanation as set-out above explaining delay in filing of the e-TDS returns with the Revenue which in our considered view is a reasonable cause as contemplated u/s. 273B of the Act for delay in filing of e-TDS returns with the prescribed income-tax authority and hence we order deletion of the penalty of Rs.25,065/- levied by the A.O. u/s. 272A(2)(k) of the Act and as confirmed by the ld. CIT(A). We order accordingly.

In the result, the appeal filed by the assessee in 2009-10 is allowed.