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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI B.R. BASKARAN (AM) & SHRI AMIT SHUKLA (JM)
PER BENCH:- All the three appeals filed by the assessee are directed against the orders passed by Ld CIT(A)-14, Mumbai for assessment years 2007-08 to 2009-10 confirming the penalty levied u/s 272A of the Act.
In all these years, the assessee has belatedly filed quarterly TDS statements that are required to be filed in Form No.24Q (relating to Salary) and Form No.26Q (relating to interest). Before the AO, the assessee submitted that it is a sick industrial undertaking covered under BIFR scheme and only part of its factory is functioning. It was 2 The New Great Eastern Spinning & Weaving Co. Ltd. 2510 & 2511/Mum/2012 further submitted that it did not have proper staff to comply with the income tax provisions. However, the assessing officer was not satisfied with the said explanations and accordingly imposed penalty u/s 272A of the Act for the belated filing of the above said returns in all the three years under consideration.
The Ld CIT(A) noticed that the assessee has defaulted in paying the TDS amount in time and also failed to pay interest due on belated payment of Tax deducted at source. Accordingly he held that the explanations furnished by the assessee for belated filing of TDS returns are not convincing and accordingly confirmed the penalty levied u/s 272A of the Act in all the three years. Aggrieved, the assessee has filed these appeals before us.
The Ld A.R reiterated the submissions made before the tax authorities and further submitted that the new procedure of filing TDS returns on quarterly basis through electronic filing was introduced from AY 2007-08 onwards and the employees of the assessee were not aware of the new procedure. He further relied upon following decisions rendered by the ITAT/HC to contend that the Tribunal/HC has deleted the penalty under identical set of facts:-
(a) Royal Metal Printers (P) Ltd Vs. Addl CIT (37 SOT 139)(Mum) (b) ACIT Vs. Lok Prakashan Limited (ITA No.2815/Ahd/2009 dated 08-01-2010)
(c) Jaihind Projects Ltd Vs. Addl. CIT (2016) (65 taxmann.com 254)(Ahd.)
3 The New Great Eastern Spinning & Weaving Co. Ltd. 2510 & 2511/Mum/2012 (d) CIT Vs. Harsiddh Construction (P) Ltd (2001)(118 Taxman 760)(Guj).
On the contrary, the Ld D.R submitted that the explanations of the assessee about the new procedure for filing the TDS returns may be applicable to the AY 2007-08 only and the same cannot be extended to other years.
We heard the parties and perused the record. The admitted facts are that the assessee is a sick industrial undertaking covered by BIFR scheme and it was functioning partially. It is also submitted that the employees are not conversant with the new procedure. We also notice that the provisions of sec. 273B provide that the penalty u/s 272A is not imposable if there was a reasonable cause for the failure to filing the TDS returns within the prescribed time.
Now the question that arises is as to whether the explanations furnished by the assessee can be considered as a reasonable cause or not. We notice that the procedure for filing TDS returns on quarterly basis came to be introduced from AY 2007-08 onwards and further they had to be filed electronically. Under these set of facts, various benches of Tribunal has taken the view that the ignorance of new procedure and complexities involved therein would amount to reasonable cause within the meaning of the provisions of sec. 273B of the Act. Accordingly, we are of the view that there was a reasonable cause for the assessee in not filing the returns of TDS in AY 2007-08 within the prescribed time. Accordingly we set aside the order passed by the Ld CIT(A) for AY 2007-08 and direct the AO to delete the penalty imposed u/s 272A of the Act for that assessment year.
4 The New Great Eastern Spinning & Weaving Co. Ltd. 2510 & 2511/Mum/2012
In respect of the other two years, we find merit in the contentions of Ld D.R that the said explanations of the assessee cannot be extended to those years, since the assessee has become aware of the new procedure and its liability thereon. We notice that the assessee has not given any other explanations for filing the TDS returns belatedly in AY 2008-09 and 2009-10. Accordingly, we are of the view that the assessee has failed to show that there was a reasonable cause in filing the returns of TDS in the above said two years. Accordingly, we are of the view that the Ld CIT(A) was justified in confirming the penalty levied u/s 272A of the Act for AY 2008-09 and 2009-10.
In the result, the appeal filed by the assessee for AY 2007-08 is allowed and other two appeals are dismissed.
Pronounced accordingly on 2nd May, 2016.