Penalty u/s 272A(2)(k) for delay in filing TDS returns deleted as TDS was deposited within due time to the credit of the Central Government
ABCAUS Case Law Citation:
ABCAUS 3057 (2019) (07) ITAT
The instant appeal was filed by the assessee against the appellate order passed by Commissioner of Income Tax (Appeals) confirming the penalty order passed by the Assessing Officer (AO) u/s 272A(2)(k) of the Income-tax Act, 1961 (the Act).
The assessee being a deductor of Income-tax at source had delayed filing of two quarterly statement of income-tax deducted at source in Form 26Q u/s 200(3) of the Act, as provided under Rule 31A of Income-tax Rules, 1962. The delay in filing the said two forms was of 386 and 294 days for Quarter-1 and quarter-2 respectively.
Since there was a delay in filing of quarterly statement of TDS in form no. 26Q for the relevant Financial Year, the AO invoked provisions of Section 272A(2)(k)/274 r.w.s. 200(3) of the 1961 Act for levying penalty u/s. 272A(A)(k) of the Act.
Before, the CIT(A), the assessee explained that only during the course of audit, this mistake was found out and immediately on realising the same , the assessee took the action and filed its return of TDS with the department.
The explanation of the assessee however did not found favour with CIT(A) who was pleased to confirm order of AO levying penalty u/s 272A(2)(k).
The Tribunal noted that admitted position was that assessee had deducted Income-tax at source under Chapter XVII-B of the 1961 Act for Quarter 1 and 2 which was duly deposited by assessee in Government Treasury to the Credit of Central Government within time prescribed under law. Thus the Central Government had duly received the money deducted by the assessee as TDS to it is credit and the only delay was in filing of TDS quarterly statements in Form No. 26Q for Q1 and Q2.
The Tribunal observed that the provisions of Section 272A(2)(k) of the 1961 Act are subject to provisions of Section 273B of the 1961 Act and if the tax-payer brings out reasonable cause for delay in filing of quarterly statements of TDS , the tax-payer will be out of clutches of penalty provision u/s 272A(2)(k).
The Tribunal observed that assessee after deducting income-tax at source had duly deposited in time to the credit of Central Government and did not make any financial gain as the income-tax deducted at source by the assessee from payments made to deductee’s stood deposited with Government Treasury to the credit of Central Government in time within time stipulated under statute.
The Tribunal opined that there was no doubt that by filing these quarterly statement of TDS late , there has been an extra work load on the department to give credit of TDS to the various deductee as well the deductee’s on whose behalf this income-tax was deducted at source were also made to suffer inconvenience due to these delayed credit of TDS to deductees owing to late filing of quarterly statement of TDS by the assessee.
However, the Tribunal also took cognisance of the fact that the assessee was an individual and total TDS deductions were small amount per quarter which were mainly TDS such as payments to contractors, professionals, Rent etc which are other than salaries. The assessee had also come out with an explanation that there was some miscommunication between assessee and its representatives which led to non filing of quarterly statement of TDS. Also, the assessee had claimed that later during the course of audit, it was found out that inadvertently these quarterly statements of TDS were not filed. The assessee had claimed that it took immediately steps by filing its TDS returns.
Thus the Tribunal opined that on touchstone of preponderance of probabilities , the defence’s raised by assessee appeared to be an honest and bonafide explanation which keeping in view entire factual matrix of the case.
The Tribunal accepted the explanation(s) offered by assessee as reasonable within the parameters of provisions of Section 273B of the 1961 Act and directed deletion of penalty imposed by the Assessing Officer u/s 272A(2)(k) of the Act for delay in filing of quarterly statement