Delay in filing of TDS Quarterly Return: No penalty u/s 272A(2)(k) should be levied for a mere technical venial breach

The levy of penalty u/s 272A(2)(k) for delay on the part of the assessee to file the TDS returns in time vs. technical venial breach or willful breach was the issue involved in the case mentioned hereunder:

ITAT DELHI : AMBIENCE DEVELOPERS AND INFRASTRUCTURE PVT. LTD. VERSUS JCIT, RANGE-73, NEW DELHI,No.- ITA Nos. 1634, 1635/Del/2022 And ITA No. 1633/Del/2022

In this case, the auarterly 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, thus as pleaded that there was only a technical venial breach committed by the assessee

ITAT held as under:

We have heard the rival submissions and perused the materials available on record. It is not in dispute that the assessee had furnished its TDS returns on a quarterly basis with certain delays, which are tabulated in pages 2 and 3 of the order of the ld. CIT(A).

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 u/s 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 suomoto 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 u/s 272A(2)(k) of the Act. The ld. AO however did not heed to the aforesaid contentions of the assessee and proceeded to levy penalty u/s 272A(2)(k) of the Act for the delayed filing of quarterly TDS returns. This action of the ld. AO was upheld by the ld. CIT(A).

5. We find that 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. We find that the assessee had already suffered the interest u/s 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 u/s 272A(2)(k) of the Act. Our view is further fortified by the decision of Delhi Tribunal in the case of Haryana Distillery Ltd vs JCIT reported in 97 taxmann.com 571 dated 4.9.2018.

6. In view of the aforesaid observations and respectfully following the judicial precedent relied upon hereinabove, we hold that this is not a fit case for levy of penalty u/s 272A(2)(k) of the Act. Accordingly, the grounds raised by the assessee for all the years under consideration are allowed.

The copy of the order is as under:

 

1705405722-1633, 1634, 1635-Del-2022-Ambience Developers and Infrastructure Pvt Ltd 2