INCOME TAX ACT, 1961

Section 272A(2)(k)

Penalty under section 272A(2)(k) - Failure to file timely TDS return due to demise of accountant - Accountant of assessee left -

Penalty was imposed under section 272A(2)(k)/274 of the Income Tax Act, 1961, on assessee for late submission of Quarterly TDS Statements (Form 26Q). Assessee contended that AO was not justified in imposing the penalty, as there was a reasonable cause for the failure of the submission of the Quarterly TDS statement. Held: Assessee had deducted TDS and the same was deposited within the due date at the Government Exchequer. Therefore from the financial point of view, there was no loss to the Revenue and there was no question of assessee getting any financial benefit by the assessee for such delay in filing the return. In other words, there was neither any objective nor any factor motivating the assessee to file the return in a delayed manner. On the other hand, the delay had occurred due to sudden departure of the accountant who left the service without notice, without clearing pending jobs. Thus, there was cogent reason for non--compliance of TDS returns in due time and such reasons do definitely create 'reasonable cause', so as to impose penalty.

Followed:Hindustan Steel Limited v. State of Orissa (1972) 83 ITR 26 (SC) : 1972 TaxPub(DT) 9 (SC) Azadi Bachao Andolan. v. Union of India (2001) 252 ITR 471 (Del) : 2001 TaxPub(DT) 1253 (Del-HC) ITO. v. Dishergarh Power Supply Co. Ltd. (2001) 71 TTJ 725 (Cal) : 2001 TaxPub(DT) 1376 (Cal-Trib)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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