Initiation of penalty u/s 272A(2)(k) starts from date of issuance of notice

Initiation of penalty u/s 272A(2)(k) starts from date of issuance of notice by competent authority

Issue before tribunal:

• Whether penalty u/s 272 A(2) (k) for filing of e-TDS return in Form no. 24Q, 26Q & 27EQ was righty sustained by the CIT (A).
• Whether penalty was barred by limitation and ITO (TDS) rightly initiated penalty u/s 272 A (2) (k).
• Whether CIT (A) was right in confirming that there was no reasonable cause of delay in filing.

Brief facts:

• Due to survey/verification exercise carried out by the ITO(TDS), serious default on TDS payment were unearthed. It was noted further that the assessee had not filed e-TDS return in form No. 24Q, 26Q and 27EQ and also could not provide any reasonable cause for such action.
• The ITO(TDS) initiated penalty proceedings under sec. 272A(2)(K) of the Act and referred the case to the Office of the Competent Authority i.e. Additional CIT(TDS).
• Thereafter, notice under sec. 272A(2)(K) of the Act was issued on 25.2.2010 to the assessee by the learned Additional CIT(TDS) requiring him to explain the reason for failure to file e-TDS return as per provisions of sec. 206 of the Act.
• The Addl. CIT-TDS, due to non-compliance by assessee, held the default on the part of the assessee as negligent behavior and a deliberate attempt to mislead the department. And failed to establish that there was a reasonable cause for non-filing of e-TDS return.
• The Addl. CIT (TDS) levied penalty under sec. 272A(2)(K) of the Act at Rs.2,99,400 ( i.e. Rs.99,800 each for non-filing of form Nos. 24Q, 26Q and 27EQ).
• On appeal CIT (A) rejected assessee contention that ITO wrongly mentioned default in filing e-TDS return for last two years but for last quarter in actual. Further CIT (A) being agreed with assessee that penalty order was silent on period of default and consequent computation of penalty.

Contention of the revenue: