Penalty shall be levied from date of deposit of TDS instead of due date of filing return for late filing of TDS return

 

Where assessee filed TDS returns after due date due to non- payment of TDS to Central Government in time due to non-availability of funds, penalty under section 272A (2)(k) shall be levied from date of payment of tax. Thus, penalty shall be levied from date of deposit of TDS instead of due date of filing return for late filing of TDS return.

 

Case: N.K. Media Ventures (P.) Ltd. vs. Joint Commissioner of Income Tax

 

Facts:

The assessee being a company filed the quarterly e-TDS statements in Form Nos. 24Q and 26A for different quarters. These e-TDS statements were filed after the due date. Due to delay in filing of e-TDS statements, proceedings under section 272A (2)(k) were initiated.

During the assessment proceedings, the AO imposed the penalty. The penalty was levied from due date to the actual date of filing the quarterly return.

On appeal, CIT (A) confirmed the penalty levied by the AO. Thus, assessee appealed to the Tribunal.

 

Held:

As perthe provisions of section 200(3), read with rule 31A, a quarterly statement of TDS in Form No. 26Q is required to be filed by the assessee by 15th July, 15th October, 15th January & 15th June for 1^st, 2^nd, 3^rd and last quarter of the year respectively.

As per the facts of the case, there was delay in filing of TDS return. Therefore, penalty was levied at the rate of Rs. 100 per day of default starting from the due date to the date of filing the quarterly return.

The assessee argued that it has deducted the TDS at the time of crediting amounts in the books of account. However, the payment could not be made due to financial difficulties. Thus, due to non-payment of TDS, the TDS returns could not be filed as the same require date relating to payment of TDS.

Highlighting the provision of section 272A(2)(k), penalty shall be levied from the date of payment of tax as the statement under section 200(3) is required to be filed only after payment of tax to the Central Government.

Therefore penalty has to be levied for delay only from the date of paying the tax to the Central Government

For supporting, assessee filed the copies of profit & loss account and balance sheet to substantiate the claim that it was incurring losses.

The Tribunal marked that as the delay in payment of tax was explained satisfactorily, penalty under section 272A (2)(k) cannot be levied for the period till payment of tax. Thus, the penalty levied by the AO was deleted.

Hence, penalty shall be levied from date of deposit of TDS instead of due date of filing return for late filing of TDS return.