By C. N. Vaze, Shailesh Kamdar, Jagdish T. Punjabi, Bhadresh Doshi
Chartered Accountants
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Section 272A(2)(k) — Penalty for failure to file TDS return is leviable only for the delay from the date of payment of taxes by the assessee.
Facts:
There was delay in submitting quarterly statement in Form No. 26Q and for such delay the AO imposed penalty u/s.272A(2)(c) and (k) @ Rs.100 per day of delay. Before the CIT(A), the assessee contended that it was incurring losses and there was financial crisis and therefore due to non-availability of funds there were delays in making the payments and filing the returns. However, the CIT(A) confirmed the penalty levied.
Held:
The clause (c) of section 272A(2) is not applicable as the same related to return/statement u/s.133, 206 and 206C. The case of the assessee is that it had deducted the TDS at the time of crediting amounts in the books of account and the payment could not be made due to financial difficulties and since the payments had not been made, the TDS returns could not be filed, as the same required data relating to payment of TDS.
As regards the default in not paying the tax to the Central Government in time or for non-deducting the tax at source, there are other provisions for ensuring compliance. In case the assessee fails to deduct tax at source or after deducting fails to pay the same to the Central Government, the assessee is deemed to be in default u/s.201(1) and is liable for penalty. The assessee is also liable to pay interest for the period of default till the payment of tax u/s.201(1A). Therefore, the period for levying the penalty has to be counted from the date of payment of tax, because the delay in filing the return till the date of payment of tax is already explained on the ground that the assessee could not pay the taxes for which separate penal provisions exist.
