No penalty u/s 272A(2)(k) for delay in filing TDS returns when tds was deposited in within time and delay was due to technological glitches due to switchover of filing of TDS return in paper forms to e-filing- ITAT
ABCAUS Case Law Citation:
ABCAUS 2599 (2018) (10) ITAT
Important Case Laws Cited/relied upon:
HMT Ltd vs. CIT (2004) 140 Taxmann 606
The Assessee was aggrieved by the order of the CIT(A) in upholding the action of the Assessing Officer (AO) in imposing penalty u/s 272A(2)(K) of the Income Tax Act, 1961 (the Act).
The assessee had deducted TDS for each quarter and the same was deposited within the prescribed time but delay ranging from 541 days to 298 days occurred in filing of three quarterly returns.
The AO issued notice for initiation of penalty proceedings under section 272A(2)(k) of the Act. In reply to the notice, assessee submitted that TDS deducted was deposited within time, however due to inadvertent circumstances returns could not be filed on time, and assessee had no intention to defy law.
However, the AO after considering reply filed by assessee, rejected the same on basis that assessee was solely responsible to comply with necessary regulations. He thus held assessee to be in default for not filing of tedious return in time and imposed the impugned penalty.
Aggrieved by penalty levied, assessee preferred appeal before the CIT (A) who upheld the order passed by Assessing Officer (AO).
Before the Tribunal, the assessee submitted that there was genuine difficulty during relevant financial year in filing of TDS returns due to E-compliance, that was introduced for 1st time. He submitted that there was a reasonable cause for assessee to file returns belatedly, and benefit under section 273B of the Act must be applicable to present facts of the case.
The Revenue contended that the assessee had not established reasonable cause as argued. Also, that before the AO assessee had not expressed any hardship, and therefore it cannot be accepted.
The Tribunal observed that there had been no delay in depositing the TDS to government Treasury. However delay occurred in filing of quarterly TDS returns.
The Tribunal observed that it was an admitted position that during relevant financial year, there was a switchover of filing of TDS return in paper forms to e-filing, by way of Amendment in Rules. Assessee has also submitted to have faced problems in e-filing of TDS returns for relevant period.
The Tribunal observed that various High Courts, including jurisdictional High Court and coordinate benches had taken note of this change at various occasions which constituted hardships to assessee. It has been consistently observed for relevant period by various authorities, that due to software installed by revenue for e-filing of TDS returns, initial technological glitches has caused delay in filing of quarterly statements of TDS, for which no penalty can be levied on assessee.
The Tribunal noted that in present facts, assessee had also submitted to have faced similar difficulties due to which delay occurred.
Accordingly, the Tribunal deleted the penalty levied