Case Law Details
Hi Techno Control System Pvt. Ltd. Vs CIT (ITAT Mumbai)
Section 272A(2)(k) of Income Tax Act provides a penalty for failure to deliver or cause to deliver a copy of the statement within the time specified in section 200(3) or the proviso to sub-section 3 of s. 206(c). Sec. 273B of the Act provides that no penalty shall be imposed on the person or the assessee as the case may be for any failure referred to in the said provision if the assessee proves that there was a reasonable cause for the said failure. It is an admitted fact that the assessee deducted tax on time and deposited with the Revenue Department on time. There was only a technical breach of the provisions contained above, requiring the assessee to submit the quarterly return statements of tax deducted at source within the time provided under the Law.
It is not a case of the Revenue that the assessee did not file the required statements with the Revenue Department. The requisite statement/returns have been filed belatedly, for which, a penalty have been imposed.
In the present case, the assessee explained that the delay in filing the TDS return is due to negligence on the part of the assessee and non-awareness of the importance of filing the TDS return. From the record, it is also evident that there was a slight delay in filing the appeal before the learned CIT(A). In this regard, the assessee submitted as follows “Due to the lack of knowledge and at the same time non availability of Professional person in the Rural Area i.e. at Sonar Pada village Dombivli East, Thane Rural”. Thus it is evident that the assessee had no assistance from any professional person to guide them regarding the compliance of statutory provisions.
These facts clearly show that the assessee had a reasonable cause for failure to comply with the provisions of law. On filing the belated returns/statements, Revenue has not suffered any loss because the tax deducted was already deposited on time with the Revenue Department. It was, therefore, a technical breach of the provisions contained in the Act for submitting the return statement of tax deducted at source. The above reasons are sufficient to hold that the penalty need not be levied in the facts and circumstances of the case. Accordingly, the ground raised in the present appeal is allowed and the Assessing Officer is directed to delete the penalty, as affirmed by the learned CIT(A).
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present appeal has been filed by the assessee challenging the impugned order dated 23/03/2022, passed under section 250 of the Income Tax Act (‘the Act’) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [‘learned CIT(A)’], for the assessment year 2016–17, which in turn, arose from the order dated 19/02/2020, passed by the Assessing Officer under section 272A(2)(k) of the Act.
2. When this appeal was called for hearing, neither anyone appeared on behalf of the assessee nor was any application seeking adjournment filed. Therefore, we proceed to dispose off this appeal ex–parte qua the assessee after hearing the learned Departmental Representative (‘learned DR’) and on the basis of material available on record.
3. In the larger interest of justice, the slight delay of 12 days in filing the present appeal is condoned. During the hearing, the learned DR also did not raise any objection against the condonation of the aforesaid delay.
4. The only grievance of the assessee in the present appeal is against the levy of penalty under section 272A(2)(k) of the Act.
5. The brief facts of the case as emanating from the record are: The assessee filed the TDS return for the 3rd quarter of the financial year 2015–16 belatedly and therefore, the Assessing Officer levied the penalty of Rs. 85,200 under section 272A(2)(k) of the Act. In its appeal before the learned CIT(A), the assessee submitted that it was not aware of the importance of filing the TDS return so due to this negligence the TDS return could not be filed within the prescribed time. The assessee also submitted that there was no malafide intention for concealment of the TDS amount and the entire default is due to negligence and non-awareness of the law. The learned CIT(A) vide impugned order dated 23/03/2022 dismissed the appeal filed by the assessee and upheld the penalty levied under section 272A(2)(k) of the Act. Being aggrieved, the assessee is in appeal before us.
6. During the hearing, learned DR vehemently relied upon the impugned order and submitted that mere ignorance of the law is no excuse.
7. We have considered the submissions and perused the material available on record. Sec. 272A(2)(k) of the IT Act provides a penalty for failure to deliver or cause to deliver a copy of the statement within the time specified in sub-section (3) of s. 200 or the proviso to sub-section 3 of s. 206(c) of the Act. Sec. 273B of the Act provides that no penalty shall be imposed on the person or the assessee as the case may be for any failure referred to in the said provision if the assessee proves that there was a reasonable cause for the said failure. It is an admitted fact that the assessee deducted tax on time and deposited with the Revenue Department on time. There was only a technical breach of the provisions contained above, requiring the assessee to submit the quarterly return statements of tax deducted at source within the time provided under the Law. It is not a case of the Revenue that the assessee did not file the required statements with the Revenue Department. The requisite statement/returns have been filed belatedly, for which, a penalty have been imposed. In the present case, the assessee explained that the delay in filing the TDS return is due to negligence on the part of the assessee and non-awareness of the importance of filing the TDS return. From the record, it is also evident that there was a slight delay in filing the appeal before the learned CIT(A). In this regard, the assessee submitted as follows “Due to the lack of knowledge and at the same time non availability of Professional person in the Rural Area i.e. at Sonar Pada village Dombivli East, Thane Rural”. Thus it is evident that the assessee had no assistance from any professional person to guide them regarding the compliance of statutory provisions. These facts clearly show that the assessee had a reasonable cause for failure to comply with the provisions of law. On filing the belated returns/statements, Revenue has not suffered any loss because the tax deducted was already deposited on time with the Revenue Department. It was, therefore, a technical breach of the provisions contained in the Act for submitting the return statement of tax deducted at source. The above reasons are sufficient to hold that the penalty need not be levied in the facts and circumstances of the case. Accordingly, the ground raised in the present appeal is allowed and the Assessing Officer is directed to delete the penalty, as affirmed by the learned CIT(A).
8. In the result, the appeal by the assessee is allowed.
Order pronounced in the open Court on 15/11/2022
