FINANCE & ACCOUNTS OFFICER, DIOS, LUCKNOW.,LUCKNOW. vs. JOINT COMMISSIONER OF INCOME TAX(TDS), LUCKNOW.
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Income Tax Appellate Tribunal, ‘A’ BENCH LUCKNOW
Before: HON’BLE SHRI G. D. PADMAHSHALI & SHRI SUBHASH MALGURIA
IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH LUCKNOW BEFORE HON’BLE SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER AND SHRI SUBHASH MALGURIA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.102 to 106/LKW/2023 निर्धारण वर्ा / Assessment Year : 2008-09 to 2012-13 Finance & Accounts Officer, District Inspector of Schools, Lucknow, 58, Shiksha Bhavan, Jagat Narayan Rd. Lucknow. PAN: AAACF0233P . . . . . . . अपीलार्थी / Appellant
बिधम / V/s. Jt. Commissioner of Income Tax TDS, Lucknow . . . . . . . प्रत्यर्थी / Respondent द्वधरध / Appearances Assessee by : None for the Assessee Revenue by : Mr SK Sharma [‘Ld. DR’] सुनवाई की तारीख / Date of conclusive Hearing : 25/06/2024 घोषणा की तारीख / Date of Pronouncement : 25/06/2024 आदेश / ORDER Per G. D. Padmahshali, AM; This bunch of five appeals arising out of separate orders of National Faceless Appeal Centre, Delhi [‘NFAC’ hereinafter] passed u/s 250 of the Income Tax Act [‘the Act’ hereinafter] which in turn stemmed out of consolidated order of penalty [‘PO’ hereinafter] passed u/s 272A(2)(k) of the Act by the Ld. Joint Commissioner of Income Tax-(TDS), Lucknow [‘Ld. AO’ hereinafter].
This bunch was called thrice, none present at the bequest of the appellant assessee and further there is no application/request for adjournment on record. In absence of appellant upon primary briefing from the Ld. DR, the bench deem it fit to proceed ex-parte u/r 24 of ITAT-Rules, 1963 and adjudicate the matter on merits with the able assistance from the Revenue.
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Finance & Accounts Officer DIOS, Lucknow Vs JtCIT ITA No.102 to 106/LKW/2023
At the outset, after vouching sufficiency of reasons beyond undeliberate 43 days delay in instituting these five appeals, in the larger interest of justice and after placing reliance on ‘Vijay Vishin Meghani Vs. DCIT & Anr.’ [2017 398 ITR 250 (Bom)] and ‘Collector, Land Acquisition, Anantnag & Anr. Vs Ms Katiji and Ors.’ [1987, 167 ITR 5 (SC)] we condoned the same and proceeded the case/s on merits.
Since the facts and solitary issue involved in this bunch of appeals are identical, on no objection from the Revenue, for the sake of brevity these appeals are heard together for a common and consolidated order.
Briefly stated the facts culled out of case records are that; 4.1 The assessee is an office of District Inspector of Schools, Lucknow which holds a TAN : LKNF05198E as the deductor of tax at source [‘TDS’ hereinafter]. On the basis of TDS claimed by individual persons/employees in their respective returns for AY 2008-09 to 2012-13, the Ld. AO initiated the penalty proceedings against the assessee by service of show cause notice [‘SCN’ hereinafter] dt. 06/11/2013 272A(2)(k) r.w.s. 274 r.w.s. 200(3) of the Act for non-filing quarterly 24Q/26Q (as applicable) TDS statements. When the aforestated notice remained unattended, the assessee vide notice dt. 03/12/2013 was given further opportunity which too yielded no results. In absence of any written submission/representation forthcoming the Ld. AO culminated the proceedings by a consolidated order dt. 02/05/2014 and a levied of penalty u/s 272A(2)(k) of the Act equal to 100% of TDS liability spelt-out in SCN as;
Sr ITA No Asstt Year Penalty Levied ( ₹) 1 106/LKW/2023 2008-09 4,75,335 2 105/LKW/2023 2009-10 1,19,751 3 104/LKW/2023 2010-11 8,30,213 4 103/LKW/2023 2011-12 6,50,983 5 102/LKW/2023 2012-13 48,253
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Finance & Accounts Officer DIOS, Lucknow Vs JtCIT ITA No.102 to 106/LKW/2023 4.2 Aggrieved assessee carried the matter in separate appeals before first appellate authority unsuccessfully. Therefore, the assessee came before us in present appeals on as many as 8-9 common grounds which in our considered view not in consonance with rule 8 of ITAT-Rules, 1963. However, the sum and substance of grievance is direct against the action of tax authorities below as contra-legem and devoid of merits.
We have heard the Ld. DR, and subject to rule 18 of ITAT Rules, 1983 perused the material/submission placed on record and considered the facts of the case in the light of settled legal position. In this case penalty has been levied u/s. 272A(2)(k) of the Act for delayed filing of TDS statements/returns. However, it is an undisputed fact as admitted by the parties herein, that no loss has been caused to the Revenue by the action of the appellant assessee. There may have been procedural lapse on the part of the assessee however, such procedural lapse did cause no prejudice to the Revenue.
In challenging the action of levy a reference was made to the relevant provisions of the Act. U/c XVII of the Act, a duty is upon the person making certain payments to deduct TDS under respective sections. The said TDS is due to be the income received by the deductee as per section 198 of the Act. Section 199 of the Act further provides that where any deduction is made under the Chapter and paid to the Central Government, then the same is to be treated as payment of tax on behalf of deductee. Section 200 of the Act lays down the duty of the person deducting tax, which reads as; ‘200. (1) Any person deducting any sum in accordance with the foregoing provisions of this Chapter shall pay within the prescribed time, the sum so deducted to the credit of the Central Government or as the Board directs. (2) Any person being an employer, referred to in sub-section (1A) of section 192 shall pay, within the prescribed time, the tax to the credit of the Central Government or as the Board directs. (2A) In case of an office of the Government, where the sum deducted in accordance with the foregoing provisions of this ITAT-Lucknow Page 3 of 8
Finance & Accounts Officer DIOS, Lucknow Vs JtCIT ITA No.102 to 106/LKW/2023
Chapter or tax referred to in sub-section (1A) of section 192 has been paid to the credit of the Central Government without the production of a challan, the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person, by whatever name called, who is responsible for crediting such sum or tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed. (3) Any person deducting any sum on or after the 1st day of April, 2005 in accordance with the foregoing provisions of this Chapter or, as the case may be, any person being an employer referred to in sub-section (1A) of section 192 shall, after paying the tax deducted to the credit of the Central Government within the prescribed time, prepare such statements for such period as may be prescribed and deliver or cause to be delivered to the prescribed income- tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed: Provided that the person may also deliver to the prescribed authority a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under this sub-section in such form and verified in such manner as may be specified by the authority.” (emphasis supplied)
Under s/s (2A) of the Act, it is provided that where the sum has been deducted in accordance with foregoing provisions of the Chapter, by the office of the Government, then duty is upon the Account officer or Treasury Officer or the Drawing & Disbursing Officer or any other person, to deliver or cause to be delivered to the prescribed income tax authorities, or to the person authorized by such authority, the statement in such form, verified in such manner, setting forth such particulars within such time as may be prescribed. Under section 200(3) of the Act, similar responsibility is on any person deducting any sum on or after first day of April, 2005 in accordance with foregoing provisions of the Chapter, including any person as an employer referred to in section 192(1A) of the Act. The onus is upon such person
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Finance & Accounts Officer DIOS, Lucknow Vs JtCIT ITA No.102 to 106/LKW/2023 that he shall after paying the tax to the credit of Central Government within prescribed time, prepare such statement for such period as may be prescribed and deliver or cause to be delivered to the prescribed income tax authority or any person so authorized, such statement in such form and verified in such manner and setting forth such particulars and within such time as may be provided. The duty is upon a person deducting any sum in accordance with various provisions under the Chapter and also upon an employer who is making deduction out of the payments made to the employees, then sub-section (3) requires that the deductor is to prepare a statement for such period as may be prescribed, which is to be delivered to the prescribed authority, in such form and verified and setting forth such particulars as may be prescribed. In other words, any deductor deducting any sum on or after first day of April, 2005 in accordance with the provisions of Chapter has the following duties i.e. after paying the tax deducted at source credit to the Central Government, the TDS statements within prescribed time shall be prepared and filed. Rules 31A of the Rules provide the time limit for deposit of the tax deducted statement as per section 200(3) of the Act. The TDS statements are to be deposited quarterly i.e. quarter ending 30th June, 30th September, 31st December and 31st March of each financial year and the due date for furnishing the TDS statements is 15th July for the first quarter, 15th October for the second quarter, 15th January for the third quarter and 15th May of the immediately following financial year for the fourth quarter i.e. 31st March. The said statements could be furnished either in paper form or electronically. However, subsequent to the amendment by IT (Sixth) Amendment Rules, 2010 with retrospective effect from 01/04/2010, it was provided that furnishing of statements electronically in accordance with the format and standards prescribed became mandatory. The deductor in the said statement of tax deducted at
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Finance & Accounts Officer DIOS, Lucknow Vs JtCIT ITA No.102 to 106/LKW/2023 source was compulsorily required to quote its tax deduction Number i.e. TAN number. Further, quote its Permanent Accountant Number except in the case where the deductor was office of Government and also quote PAN number of all deductees. Further, the deductor was required to furnish the particulars of tax paid to the Central Government including Book Identification Number or challan indication number & also required to furnish particulars of amount paid/credited on which tax was not deducted.
As pointed out hereinabove, the substitution was made by Income Tax (Sixth) Amendment Rules, 2010 and was applicable for the financial year 2010-11 that is w.e.f. assessment year 2011-12. Therefore, delay in filing statement relating to any quarters in AY 2008-09 to 2010-11 in our considered view could hardly attract any penalty. In consequence the impugned orders in these cases deserves to be reversed.
May it be, in the present set of appeals before us admittedly, there was default in furnishing e-TDS statements late for the respective quarters by the appellant assessee, but all relating to assessment year 2011-12 to 2012-13. The question which arises for adjudication before us is whether in such cases where e- TDS was made compulsory for the instant assessment years and where the software was not user- friendly and required amendments at the end of the Government itself from time to time and the compliance being a complex procedure introduced for the first time and where deductors were originally not in default in depositing the paper TDS returns, does the assessee deductor have reasonable cause for not furnishing the said e-TDS returns in time. In this regard, reference is to be made to the provisions of section 273B of the Act, where it has been provided that in case a person establishes or proves that he had reasonable cause for the failure to comply with the provisions of various sections
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Finance & Accounts Officer DIOS, Lucknow Vs JtCIT ITA No.102 to 106/LKW/2023 provided in section 273B of the Act, then no penalty shall be imposable on such person for the said failure. Reading of section 273B of the Act clearly exhibits that it do also refers to along with many other sections clause (c) or clause (d) of sub-section (1) or sub-section (2) of section 272A of the Act. What is relevant for adjudication before us is section 272A(2) of the Act, since penalty has been levied for default in furnishing e- TDS returns u/s 272A(2)(k) of the Act. Since section 273B of the Act covers the cases of levy of penalty u/s 272A(2) of the Act, then in line with the provisions of said section in case a person establishes its case of reasonable cause for not complying with the provisions, then the section provides that such a person shall be exonerated from levy penalty imposable for the said failure u/s 272A(2) of the Act. 10. In adjudicating the issue before us, we accept the case of reasonable cause as relevant to section 273B of the Act put up by the assessee in the respective cases in the appeals before us, which admittedly relate to assessment year 2011-12 to 2012-13. Where there was requirement of e-TDS furnishing of TDS statement and since there were certain complications in e-filing of TDS returns because of system failure, which admittedly, was amended 18 times by the Department, the delay in furnishing the said returns could not be attributed to the assessee. The onus was upon the authorities to provide platform for easy compliance to newly introduced provisions of the Act. Where such facilities could not be provided by the authorities and the technical support not being available to small assessee like the present, who are in appeal before us, then the delay in furnishing the e-TDS returns belatedly should be liberally construed. Hence, there was practical difficulty on the part of assessee to comply with newly introduced requirement of
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Finance & Accounts Officer DIOS, Lucknow Vs JtCIT ITA No.102 to 106/LKW/2023
e- TDS filing of TDS statements, being technical delay and not venial in nature, merits to be considered as reasonable cause for non-levy of penalty as per the requirements of section 273B of the Act. We find the similar view has been taken by various co-ordinate bench across the country and quote few of them viz; ‘Punjab National Bank Vs ACIT [2011, 140 TTJ 0622 (Lkw)], ‘Nav Maharashtra Vidyalaya Vs Addl. CIT’ [2016, 74 Taxmann.com 240 (Pune)], ‘Argus Golden Trades India Ltd. Vs. JCIT’ [2017, 50 CCH 0071 (Jpr)] and ‘Haryana Distillery Ltd. Vs JCIT [ITA No. 1642/Del/2015]
Respectfully following the aforesaid judicial pronouncements which are in conformity with the facts and circumstances in the present case before us and maintaining the same parity of reasoning, we set aside the impugned orders of Ld. NFAC for AY 2008-09 to AY 2012-13 and direct the Ld. AO to delete penalty in its entirety. The grounds of appeal accordingly stands allowed.
These five appeals of the assessee in result stands ALLOWED. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Tuesday, 25th day of June, 2024
-S/d- -S/d- SUBHASH MALGURIA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिनाांक / Dated : 25th day of June, 2024 आदेश की प्रनिनलनप अग्रेनर्ि / Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A)-NFAC, Delhi (India) 4. The Concerned CIT 5. DR, ITAT, Bench ‘A’, Pune 6. गार्डफ़ाइल / Guard File. आिेशानुसार / By Order, वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्यायादिकरण, पुणे / ITAT, Lucknow
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