Penalty cannot be imposed for delay in TDS return filing for non availability of PAN

During the financial year 2010- 11 which is under consideration before us, there was a change which was brought about in filing of e- TDS returns wherein there was a necessity to mention 100% valid Permanent Account Numbers of the payee to whom the payment has been made and TDS done in such payment in the e-TDS return and thereafter only the e- TDS return can be validated and uploaded in the IT system. The same has been the position of the CBDT vide its notification dated 31.05.2010. The assessee has submitted that since there were large number of deductees scattered throughout the country, a fact not disputed by the Revenue, it took them some time to collect the PANs of these deductees and thereafter, it was able to upload the e-TDS returns in the IT system maintained by the Revenue. Further, the taxes have deducted and deposited at the prescribed rate with delay of few days. Hence, there is no loss to the Revenue which is caused due to the delay in filing of the e-TDS returns which is totally unintentional. Further, our attention was drawn to the decision of the coordinate Benches in case of Collector Land Acquisition, UCO Bank and SBI(supra) wherein non availability of PAN was held to be a reasonable cause for delay in filing of the e-TDS return. Given the pecularity of the facts in the present case where there was a change effected in the IT system for mandatory requirement of PANs of all deductees before the returns can be validated and uploaded, the fact that there were large number of deductees spread throughout the country and efforts were made by the assessee to obtain their PANs numbers, the fact that taxes have been deducted and deposited, hence no loss to the Revenue, we find that assessee has a reasonable cause for delayed filing of its e-TDS returns in terms of section 273B and the penalty under section 272(A)(K) is hereby deleted.

ORDER

PER SHRI VIKRAM SINGH YADAV, A.M.

This is an appeal filed by the assessee against the order of Ld. CIT(A)- III, Jaipur dated 19.02.2016 for A.Y. 2011- 12 wherein the assessee has challenged the levy penalty of Rs. 1,02,400/- u/s 272A(2)(K) of the Act.

2. The ld. AO imposed penalty U/s 272A(2)(K) of the Act holding that the assessee company has delayed in filing quarterly e-TDS return within the stipulated time frame as per details below:

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