Telangana State Medical Services Infrastructure Development Corporation Vs ACIT (ITAT Hyderabad)
No penalty for delay in filing quarterly TDS statement if entire tax along with interest deposited in Government account
Conclusion: Penalty under Section 272A(2)(k) could not be imposed merely for the delay in filing Quarterly TDS Statement as the entire tax along with interest thereon had been deposited in to Govt. account and later, assessee filed quarterly TDS returns for all the quarters and Revenue had not suffered any loss because tax deducted was already deposited on time and there was mere technical or venial breach to provisions contained in Act for submitting return/statements of TDS.
Held: During the course of survey, it was found that, the assessee-deductor had failed to file TDS Quarterly Statements/Returns U/s.200(3) for the F.Y.2008-09 relevant to the AY 2009-10 in respect of all the four quarters in form No.24Q & 26Q. AO levied penalty U/s.272A(2)(k) as assessee-deductor had not filed quarterly TDS statements in Form No.24Q and 26Q for all the four quarters of the F.Y.2008-09 within the time prescribed by the I.T. Act. It was found from the orders of authorities below that the entire tax along with interest thereon had been deposited in to Govt. account and later, assessee filed quarterly TDS returns for all the quarters. Following the decision in the case of Maharashtra Jeevan Pradhikaran Vs. JCIT, in ITA No. 2410/PUN/2017 wherein it was held that Revenue had not suffered any loss because tax deducted was already deposited on time and there was mere technical or venial breach to provisions contained in Act for submitting return/statements of TDS. Therefore, penalty was not to be levied and question was answered in favour of the assessee.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
These three appeals filed by the assessee are directed against CIT(A) – 8, Hyderabad’s separate orders, all dated 22/08/2016 for AYs 2009-10 to 2011-12 involving proceedings u/s 272A(2)(k) of the Income- Tax Act, 1961; in short “the Act”. As the facts and grounds are identical in all these appeals, the same were clubbed and heard together and, therefore, a common order is passed for the sake of convenience. Therefore, the decision taken in AY 2009-10 shall mutatis-mutandis apply to the other appeals as well.
2. The grounds raised by the assessee, which are common in all the appeals, except quantum of additions, are as under:
“1. The CIT (Appeals) is not justified in ignoring the fact that in spite of new filing procedure, the assessee filed TDS quarterly return in respect of Form No. 26Q voluntarily before conducting survey and in 24Q for the applicable quarter.
2. The CIT (Appeals) is not justified in supporting the assessing officer who levied the penalty even though assessee has paid taxes and interest as per the orders of the Assessing officer and not retained any amount of TDS without remittance and also cooperated in all the assessment proceedings.
3. The CIT (Appeals) is not justified in supporting the assessing officer who acted against law in imposing the penalty on the assessee under section 272A (2) (K) without affording him a reasonable opportunity of being heard in the matter.
4. The CIT (Appeals) is not justified in supporting the assessing officer for levying penalty for non-filing of form 24Q where there are no transactions required to be filed.
5. In the first appeal to CIT (appeals) the assessee pleaded that penalty to be waived. The assessee placed the reliance on the Honourable Supreme Court’s decision in the case of Hindustan Steels Vs State of Orissa 83 ITR 26 Where it was held that penalty should not be imposed merely it is lawful to do so and Venial breaches should not be visited with penalties
Even though the assessee being a State Government entity and the case being the technical nature, the CIT (Appeals) has ignored the plea made by the assesse, even the Tax collected along with the interest applicable was duly remitted by the assessee and the delay was only in filling the form 24Q & 26Q. This is only a technical mistake and revenue neutral
Also CIT (appeals) has ignored the penalty levied by the assessing officer for the quarters 1, 2& 3 of A Y.2009-1 0, for non-filing of form 24Q – even though no amounts were collected by the assessee during those quarters
And also in the case of Harsiddh Construction (P) Ltd. vs. CIT244 ITR 417 Hon’ble Gujarat High Court upheld the decision of the tribunal and cancelled the penalty levied
In a similar case between Income-tax Officer TDS-2, Ahmedabad.V/s. The Oriental Insurance Company Ltd. the tribunal has upheld the decision made by the CIT (Appeals) and the grounds raised by the revenue were dismissed (We have attached the copies of the above cases for your kind perusal)”
2.1 The assessee also filed petition for admission of additional grounds. Since none appeared on behalf of the assessee therefore the additional grounds are rejected.
3. Briefly the facts as taken from AY 2009-10 are that the assessee deductor AP Health & Medical Housing Infrastructure Development Corporation is a State Government Organization. A survey operation U/s.133A was conducted in the premises of the assessee-deductor by the Income-tax Officer (TDS), Ward-3(2)r Vijayawada, on 05/01/2011. During the course of survey, it was found that, the assessee-deductor had failed to file TDS Quarterly Statements/Returns U/s.200(3) of the LT. Act for the F.Y.2008-09 relevant to the AY 2009-10 in respect of all the four quarters in form No.24Q & 26Q.
3.1 The AO observed that in the case of assessee-deductor, proposals were forwarded by the Income-tax Officer, Ward-3(2), Vijayawada, to this office for levy of penalty U/s.272A(2)(k) of the Income-tax Act, 1961, as the assessee-deductor had not filed quarterly TDS statements in Form No.24Q and 26Q for all the four quarters of the F.Y.2008-09 within the time prescribed by the I.T. Act.
3.2 On verification of the computerized database of the Income-tax department, it was noticed that the assessee failed to file quarterly TDS statements in form No.24Q & 26Q for all the 4 quarters of the F.Y. 2008-09 as per the provisions of section 200(3) of the I.T. Act. It was further observed that as per the provisions of section 200(3) of the I.T. Act any person deducting any sum in accordance with the TDS provisions is required to prepare and deliver the quarterly TDS statements in form No. 24Q and 26Q in respect of TDS on salaries and on payments other than salaries respectively Within the prescribed time. As per Rule-31A of the IT. Rules, such quarterly TDS statements / returns are required to be filed by 15-07-2008, 15-102008, 15-01-2009 and 15-062009 for the first, second, third and fourth quarters of the F.Y. 2008-09 respectively.
3.3 Keeping in view the failure of the assessee to file quarterly TDS statements/returns in Form No. 24Q & 26Q for all the quarters of the F.Y.2008-09, the AO initiated penalty proceedings u/s.272A(2)(k) of the I.T. Act by issue of notice dated 10/07/2012. As per the said notice, the assessee was requested to show cause as to why an order imposing penalty u/s. 272A(2)(k) of the I.T. Act should not be passed in its case and the case was posted for hearing on 25/07/2012.
3.4. However, in response to the above cited show-cause letter, the assessee neither appeared for the hearing nor filed any written explanation regarding why penalty u/s.272A(2)(k) should not be levied. Further, the assessee did not give any explanation regarding the non-filing of form No.24Q/26Q within prescribed statutory time.
3.5 . In view of the non-response from the assessee-deductor, the AO verified from the AST system whether the TDS statements/returns are filed or not. On verification, it was found that that the assessee filed TDs quarterly return in respect of Form NO.24Q for the fourth quarter On 16-02-2011 and in respect of Form 26Q, for all the four quarters on 13-09-2010, after the stipulated due date i.e. 2 years after expiry of the due dates. The details of the due dates for the quarterly statements, dates of filing of returns and the delay in no. of days are as under:
