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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI B R BASKARAN & SHRI AMIT SHUKLA
आदेश ORDER �ी अिमत शु�ला, �या स: PER AMIT SHUKLA, JM: The aforesaid appeal has been filed by the assessee against impugned order dated 08.10.2014, passed by CIT(Appeals)-14, Mumbai in relation to the penalty proceedings under section 272A(2)(k) for the assessment year 2009-10. The assessee is mainly aggrieved by the levy of penalty of Rs.80,018/- under section 272A92)(k).
2 संत अंथ�नीस इं�ट��यूट St Anthony’s Institute ITA 7756/Mum/2014 2. The aforesaid penalty has been levied by the AO on the ground that, assessee has not filed the quarterly TDS statement in Form 26Q within the time specified under section 206/206C r.w. Rule 37 of the Income-tax Rules for the financial year 2008-09, which was required to be filed at the end of the every quarter under the provisions of section 200(3) read with Rule 31A. The provisions provide that quarterly statement of TDS in Form No.26Q is required to be filed by the assessee by 15th July, 15th October, 15th January and 15th June (for last quarter) of the year.
In response to the show cause notice by the AO to the assessee, as to why the penalty under the aforesaid section should not be levied, the assessee submitted that, it is a Charitable Trust carrying on educational activities and promoting various sports. During the relevant accounting years, the Trust had started the renovation of building and construction of new adjacent building. Due to this, the records were misplaced and were not easily traceable. The situation got further aggravated by the lack of staff and lack of support of professional organization due to financial constraints. As a result, even though the tax was deducted at source and deposited in the government treasury, however, the returns could not be filed in time due to non-availability of necessary data for the preparation of the returns. The AO, however, rejected the assessee’s contention and held that, since there is violation of statutory obligation to file the quarterly returns, therefore it has committed default under the provisions of the said section and calculated the penalty in the following manner:-
3 संत अंथ�नीस इं�ट��यूट St Anthony’s Institute ITA 7756/Mum/2014 Qtr. No. of days delay TDS Amount Penalty Amount restricted to 26Q -1st 373 x 100 = 37300 35593 35593 26Q -2nd 281 x 100 = 28100 21725 21725 26Q -3rd 189 x 100 = 18900 22086 18900 26Q -4th 38 x 100 = 3800 36659 3800 Amount levied 80018
Before the Ld. CIT(Appeals), the assessee had submitted and sated as under:- “The Trust had deposited the TDS in the Government Treasury within time and this fact has not been disputed by the Assessing Officer. Therefore, there was no loss to the revenue. There was no loss to the revenue. There was only a delay in the quarterly returns. The institution is a public charitable institution and it’s income is exempt from taxation. It is not carrying on any activity for profit. From AY 2010-11 till dated there has been no delay in filing the returns. In subsequent years the returns were filed in time and no penalties have been levied on the assessee trust. The trust has been regular in filing it’s returns and complying with other procedure as laid down by the Income Tax Act, 1961. This is the only period that there has been a delay due to above mentioned circumstances which were beyond the control of the Trustees. The Assessing officer has merely brushed aside the reason given by the Trust for the delay and has passed a non-speaking order for levy of penalty u/s 271A(2)(k) which is very harsh in view of the facts and the circumstances of the case. In fact the Trust has deposited excess amount of TDS in the Govt. Treasury for all the quarters as under which fact the Assessing Officer has not considered:
4 संत अंथ�नीस इं�ट��यूट St Anthony’s Institute ITA 7756/Mum/2014 Quarter TDS to be deposited TDS deposited Excess deposited Q1 35593 39470 3877 Q2 31725 25563 3838 Q3 22086 30546 8460 Q4 36659 40287 3628
The excess amount was deposited on account of error in calculating due to unavailability of records. The Officer should have considered this fact at the time of levy of penalty as no refund has been granted to the assessee for the excess amount paid. There has been absolutely no loss to revenue. On the contrary excess amount has been paid which should have been considered at the time of levy of penalty as this clearly indicates that there was no intention to withhold any tax”
However, the CIT(Appeals) held that the liability of the assessee under the statute is absolute liability which has to be strictly construed and followed and nobody can avoid the responsibility of the mandate of the statutory liability. He observed that section 272A(2k) contemplates that an offence is committed on the non-filing of return filed in time. Hence, penalty has to be levied.
After hearing both the parties, we find that it is an undisputed fact that the assessee has deducted the TDS and also deposited the same in the Govt. treasury within time. However, the quarterly return could not be filed in time and were filed beyond the due dates prescribed. The reasons stated by the assessee which has been (incorporated above) was that, during the relevant financial year, there were certain unavoidable circumstances due to which the returns
5 संत अंथ�नीस इं�ट��यूट St Anthony’s Institute ITA 7756/Mum/2014 could not be filed timely, otherwise, the assessee in the earlier as well as in the subsequent years has timely filed the quarterly returns of TDS. Here it is also an undisputed fact that the assessee-trust has deposited the excess amount of TDS in the Govt. treasury for all the quarters. Under these facts, we are of the opinion that, assessee’s case falls within the ambit of ‘reasonable cause’ as stipulated in section 273B for failure to furnish the quarterly return in time. In any case, it is a technical breach of law and is venial in nature and no loss to the revenue has occurred, because already excess amount of tax has been deposited to the Govt. treasury. Thus, under the facts and circumstances of the case, we hold that no penalty should be levied as there was a ‘reasonable cause’ for the failure to file quarterly return. Thus, penalty levied of Rs.80,018/- is directed to be deleted.
In the result, appeal of the assessee stands allowed. Order pronounced in the open court on 3rd August, 2016.
Sd/- Sd/- (बी आर भा�करन) (अिमत शु�ला) लेखा सद�य �याईक सद�य (B R BASKARAN) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Date: 3rd August, 2016 ��त/Copy to:- 1) अपीलाथ� /The Appellant. 2) ��यथ� /The Respondent. 3) The CIT –14, Mumbai. 4) The CIT(TDS) /Concerned -____, Mumbai 5) िवभागीय �ितिनिध “ए”, आयकर अपीलीय अिधकरण, मुंबई/
6 संत अंथ�नीस इं�ट��यूट St Anthony’s Institute ITA 7756/Mum/2014 The D.R. “A” Bench, Mumbai. 6) गाड� फाईल \ Copy to Guard File. आदेशानुसार/By Order / / True Copy / /
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, मुंबई Dy./Asstt. Registrar I.T.A.T., Mumbai *च�हान व.िन.स *Chavan, Sr.PS