ITO (TDS) 3(2), MUMBAI vs. CHIRAG SHAH, MUMBAI

आदेश / O R D E R Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned orders, all dated 03/03/2014 of the ld. First Appellate Authority, Mumbai. The only ground raised in the present appeal pertains to the direction of the Ld. Commissioner of Income Tax (Appeal) to the Assessing Officer to recomputed the penalty u/s 272A(2)(k) of the Income Tax Act, 1961 (hereinafter the Act) from the date of payment of taxes by the assessee till the date of filing of TDS return, relying upon the decision of M/s Porwal Creative Vision Pvt. Ltd. ignoring the provision of the Act as the assessee fail to furnish TDS return within due dates prescribed in Rule 31A of the Rules.

2.1. We have considered the rival submissions and perused the material available on record. Before coming to any conclusion, we are reproducing hereunder the relevant portion from the order of the Ld. Commissioner of Income Tax (Appeal).

“I have considered the facts of the case, the submission of the appellant and the penalty order u/s 272A(k). It is admitted that clause(k), which requires a person to deliver or cause to be delivered copy of the statement within time specified under section 200(3), was applicable in the case of the assessee. Under the provisions of section 200(3) read with Rule 31A, a person deducting tax at source 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 to the credit of the Central Government. From the statement furnished it is noticed that there is delay in payment of taxes and filing of return. However, it is submitted by A.R. that the taxes have been paid along with interest. It is an un-debatable proposition that the statement can only be filed after the taxes are paid. For the delay in payment of taxes the appellant has to pay interest u/s 201(1A). The Hon’ble Mumbai ITAT in the case of M/s Porwal Creation has held that penalty for the late filing of return should be calculated from the date of payment of taxes as assessee could not have filed return before the taxes are paid.

Following the decision of Hon’ble ITAT, the A.O. is directed to modify the order of penalty from the date of payment of taxes to the date of filing the return.

In the result, appeals of A.Ys. 2009-10, 2010-11 and 2011-12 are partly allowed.”

2.2. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, the only moot question to be adjudicated whether the penalty u/s 272A(2)(k) of the Act is to be calculated from the date of payment of taxes by the assessee or till the date of filing of TDS return. It is noticed that the delay in submission of TDS return has been calculated by the ld. Assessing Officer The stand of the assessee is that tax was duly deducted and paid before filing of return. Admittedly, as per the provisions of section 200(3) of the Act r.w.r. 31A, a person deducting tax at source is required to prepare a statement in the prescribed form and to deliver the same to the prescribed income tax authority after paying the tax deducted to the credit of the Central Government. There is a factual finding in the impugned order that taxes along with interest were paid by the assessee. Considering the totality of facts and the decision of the Tribunal in the case of M/s Porwal Creation, wherein, it was held that penalty for let filing of return should be calculated from the date of payment of taxes, therefore, we find no infirmity in the direction to the Assessing Officer by the Ld. Commissioner of Income Tax (Appeal) to modify the order of penalty and to re-compute the same from the date of payment of taxes to the date of filing of return. The appeals of the Revenue are, therefore, having no merit, consequently, dismissed.