By TIOL News Service

MUMBAI, JUNE 21, 2018: THE ISSUE BEFORE THE BENCH IS - Whether when assessee deduct the tax at source and pays the same with Revenue within prescribed time but delayed the filing of TDS returns due to genuine technical problem faced while filing return on line then for such a delay penalty u/s 272A(2)(k) can be imposed. NO IS THE VERDICT.

Facts of the case:

The assessee had filed statement of tax deducted at source in form no. 26Q for FY 2009-10 late beyond the time prescribed in Rule 31A of Income-tax Rules. The AO invoked penal provisions u/s 272A(2)(k) of the Act, as there was a delay in filing of the statement of TDS. The assessee contended before the AO that there was not a single instance of delayed payment of tax after the same was deducted at source at the time of payment to the respective parties. The default in respect of the filing of TDS returns happened because assessee was not fully conversant with E-filing of TDS returns. It was prayed that this difficulties should be considered to be genuine. The AO rejected the contentions of the assessee and observed that assessee had not shown reasonable cause as stipulated u/s. 273B and levied penalty. On appeal, CIT(A) upheld the order of AO.

Tribunal held that,

++ the revenue was initially accepting the TDS return in paper forms which was later on converted into filing in an electronic mode. In this switch over face there were technological glitches as well difficulties which were faced by the taxpayers in filing returns with Revenue. The assessee also claimed to have faced problem in E-filing of TDS returns although it is claimed that taxes were paid in time. The Revenue cannot rebut the same that it got the payment of taxes deducted at source in time. The assessee has also claimed that in subsequent years most of the TDS returns have been E-filed in time. The conduct of the assessee appears to be bona-fide as the assessee was paying taxes in time for the impugned year under consideration while statement of tax deducted at source were filed late as well it has been explained that the taxes have been paid for subsequent years also in time as well TDS returns were also filed in time in majority of the quarters. The assessee has shown bona-fide cause and in the circumstances penalty is not exigible on the assessee. Order was passed for the deletion of the penalty. In the result, the appeal of the assessee is allowed.

(See 2018-TIOL-902-ITAT-MUM)