Cit v. Karrox Technologies Pvt. Ltd.

ORDER

Joginder Singh, Judicial Member - This appeal is by the Revenue challenging the impugned order dated 1/9/2010 passed by the ld. First appellate authority. The only effective argument advanced by Shri Jeevan Lavadiya-ld. DR is that the ld. CIT(A) wrongly granted relief to the assessee and further erred in concluding that due to unawareness of technical application of electronic filing of return in early stages no technical fault was committed as such, more specifically the tax was duly deposited by the assessee and there is no loss to the Revenue. Whereas the ld. Counsel for the assessee Shri Bhupendra Shah defended the conclusion drawn in the impugned order and took the plea as taken before the ld. CIT(A).

2. We have considered the rival submissions and perused the material available on record. Before coming to any conclusion it is worth reproducing the conclusion drawn in the impugned order for ready reference :-

"5. I have carefully considered the arguments of the appellant, facts of the case and also perused the penalty order u/s.272A(2)(c) of the Income-tax Act, 1961 passed by the Addl. CIT(TDS), Range-2, Mumbai. Admittedly, the delay in filing the quarterly returns is not disputed. The filing of return was delayed because Appellant's staff was not familiar with the new electronic e-TDS system. I find that the delay in this case was mainly due to unawareness of technical application of electronic filing of return on the part of the appellant. But the tax has been paid, deposited to the Government account and there is no revenue loss.

5.1 It is also an admitted fact that the year under consideration was the first year since when submitting quarterly TDS statements in electronic form for the corporate assesses was made mandatory. It is a matter of general public knowledge that almost every corporate assesses have faced almost similar difficulties either in preparing the statements or in filing the same in electronic form. Apparently, the appellant was also not an exception to face such problems and difficulties. Therefore, the claim of the appellant to dono0ne the delay for filing of TDS return is considered. I also find that despite these difficulties the quarterly TDS returns were filed by the appellant himself voluntarily. There were not filed in response to any notice issue for filing by the Department. I also find that no revenue loss having caused to the Department. Evidently the reasons explained for delay are found to be acceptable in terms of section 272A(2)(C) of the Income tax Act-1961, and therefore, levying penalty by the Addl. CIT(TDS), Range-2 is not considered justified. Accordingly, the same is cancelled."

2.3 If the observation and reasoning for imposing penalty u/s. 272A (2)(c) of the Act in the order, conclusion drawn in the impugned order and the assertions made by the ld. Respective counsel are kept in juxtaposition and analyzed we note that the assessment year involved is 2006-07. Uncontrovertedly there is a delay in filing quarterly returns but at the same time the delay was due to the reason that initially the staff was not familiar with new e-TDS filing system. The delay occurred due to unawareness of technical application of electronic filing of return but still fact remains that due tax was duly deposited in the Govt. Exchequer and there is no loss to the Revenue. The year under consideration was the first year of submitting TDS statement in electronic form for the Corporate assessee which was made mandatory. It is also a fact that at that time every Corporate assessee faced almost similar difficulty, thus, on this technical default no penalty should be imposed. Another fact worth mentioning here is that the electronic filing by the assessee was not pursuant to any notice by the Department. In view of this fact and more specifically when no loss was caused to the Revenue the reasons explained by the assessee are convincing in terms of section 272A(2)(c)of the Act. Even otherwise the cause of substantial justice must get precedence over technicalities and practical approach should be preferred under the facts as stated herein above. The object of the constitution is to levy and collect due taxes, therefore, there was no justification to impose penalty by the ld. Additional Commissioner - (TDS). The observation made by the ld. Addl. CIT-(TDS) that the assessee deliberately filed the return late is also not substantiated more specifically when the assessee has already paid the taxes, and there is no gain to the assessee in late filing. Hence, we find no infirmity in the conclusion drawn by the ld. CIT(A) being more sympathetic/practical approach.

3. Finally the appeal of the Revenue is having no merit, therefore, dismissed.