|Kul Bharat (JM), Vikram Singh Yadav (AM)
|penalty, TDS deduction
|May 24, 2017 (Date of pronouncement)
|May 30, 2017 (Date of publication)
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|Penalty u/s 272A(2)(c) for delay in filing TDS returns cannot be levied if the delay was caused due to requirement to collect PAN of payees. The non-availability of the PAN of the payees is a reasonable cause. The delay is unintentional and it causes no loss to the revenue as the TDS has been deducted and deposited in the treasury. Wrong levy of penalty u/s 272A(2)(k) (failure to deliver TDS certificate) instead of u/s 272A(2)(c) (delay in filing TDS returns) shows that AO is not clear of the charge and vitiates the penalty proceedings
(i) Penalty has been levied u/s 272A(2)(K) of the Act which talks about the failure to deliver a copy of the statement within the time specified in section 200(3) or proviso to section 206C (3) of the Act. In the instant case, there is no such factual situation before us rather there is a delay in filing of quarterly e-TDS returns which is covered under the provisions of section 272A(2)(C) of the Act. Hence, on this ground itself, where the Assessing Officer is not clear about basis of the charge, the levy of penalty cannot be sustained.
(ii) On merits, it is noted that during the financial year 2010-11 which is under consideration before us, there was a change which was brought about in filing of e-TDS returns wherein there was a necessity to mention 100% valid Permanent Account Numbers of the payee to whom the payment has been made and TDS done in such payment in the e-TDS return and thereafter only the e-TDS return can be validated and uploaded in the IT system. The same has been the position of the CBDT vide its notification dated 31.5.2010. The assessee has submitted that since there were large number of deductees scattered throughout the country, a fact not disputed by the Revenue, it took them some time to collect the PANs of these deductees and thereafter, it was able to upload the e-TDS returns in the IT system maintained by the Revenue. Further, the taxes have deducted and deposited at the prescribed rate with delay of few days. Hence, there is no loss to the Revenue which is caused due to the delay in filing of the e-TDS returns which is totally unintentional. Further, our attention was drawn to the decision of the Coordinate Benches in case Collector Land Acquisition v. ACIT (2012) taxmann.com 22(Chd.), CIT Branch Manager (TDS), UCO Bank vs. ACIT  35 taxmann.com 45 (Cuttack – Trib) and Branch Manager, State Bank of India v. ACIT  41 taxmann.com 268 (Cuttack – Trib) wherein non availability of PAN was held to be a reasonable cause for delay in filing of the e-TDS return. Given the peculiarity of the facts in the present case where there was a change effected in the IT system for mandatory requirement of PANs of all deductees before the returns can be validated and uploaded, the fact that there were large number of deductees spread throughout the country and efforts were made by the assessee to obtain their PANs numbers, the fact that taxes have been deducted and deposited, hence no loss to the Revenue, we find that assessee has a reasonable cause for delayed filing of its e-TDS returns in terms of section 273B and the penalty under section 272(A)(K) is hereby deleted.