Ambience Developers & Infrastructure Pvt. Ltd. vs Joint Commissioner of Income Tax - (Income Tax Appellate Tribunal) (16 Jan 2024)

For a mere technical venial breach, the assessee should not be invited with penalty

MANU/ID/0062/2024

Direct Taxation

The issue to be decided in present appeals is as to whether the learned CIT(A) was justified in confirming the levy of penalty under Section 272A(2)(k) of the Income Tax Act, 1961 (IT Act) in the facts and circumstances of the instant case.

It is not in dispute that, the assessee had furnished its TDS returns on a quarterly basis with certain delays. The assessee had explained that the delay in filing of TDS returns was due to the paucity of funds with the assesses and accordingly the assessee had remitted the TDS with applicable interest under Section 201(1A) of the Act to the account of the Central Government. The TDS returns could not be filed electronically without remitting the requisite taxes. Further, it was explained that some of the parties had not furnished their Permanent Account Number (PAN), without which the assessee could not file its TDS returns electronically. Hence there was a delay on the part of the assessee to file the TDS returns in time.

The Quarterly TDS returns were suo moto filed by the assessee after due remittance of TDS with applicable interest without receiving any notice from the income tax department. Accordingly, it was pleaded that there was only a technical venial breach committed by the assessee , for which it should not be invited with the levy of penalty under Section 272A(2)(k) of the IT Act.

The assessee had duly explained the reasons for the delayed filing of TDS returns. The reasons explained by the assessee were not found to be false by the revenue. The assessee had already suffered the interest under Section 201(1A) of the Act for the late remittance of TDS. Hence, there is no loss to the exchequer by the delayed filing of TDS returns by the assessee. For a mere technical venial breach, the assessee should not be invited with penalty under Section 272A(2)(k) of the Act. Present Tribunal’s view is further fortified by the decision of Delhi Tribunal in the case of Haryana Distillery Ltd vs JCIT. Present is not a fit case for levy of penalty under Section 272A(2)(k) of the Act. Appeals of the assessee are allowed.

Tags : PENALTY IMPOSITION VALIDITY