Income Tax Dept warns public against cash dealings of Rs 2 lakh or more saying that the receiver of the amount will have to cough up an equal amount as penalty.

Delay in Filing of TDS due to sudden Resignation of Accountant is ‘Sufficient Cause’: ITAT

The Income Tax Appellate Tribunal (ITAT), Kolkata bench has held that the delay in filing of TDS return because of the sudden resignation of the assessees accountant would constitute ‘sufficient cause’ for such default.

The income tax department has initiated proceedings against the assessee, a sole proprietor for delayed filing TDS return. The assessee claimed that he was in deep administrative trouble due to the sudden resignation of his accountant. It was also claimed that he was even not at all aware of the fact of non-filing of the TDS return for a considerable time. Only after the new accountant joins and visited NSDL for filing the 26Q for Quarter-3, he was alerted by the NSDL personnel about the lapses and the assessee forthwith filed the pending TDS returns.

Before the Tribunal, the assessee claimed that the late filing of TDS return was not intentional nor it can be viewed as deliberate defiance of law or arising from the conduct of gross negligence.

The Tribunal noted that in the present case, the assessee deducted the TDS and deposited the same.

The Tribunal said that “Even there was no failure to submit the return in Form 26Q. There was the only failure for its timely submission – which by all counts is a technical breach. Further, the delay had happened due to assessee’s ignorance about the lapses caused by his past accountant. The accountant left the job without notice. No list of the pending job was handed over. The new accountant and the assessee was not aware of the fact of non-filing of TDS return till they visited NSDL. And as soon as the same was noticed, returns for both the quarters were filed. Thus the delay had happened due ‘to circumstances beyond the knowledge/control of the assessee.”

“In view the facts and circumstances of the case as stated above and in view of the fact that the assessee had shown reasonable cause for his failure in complying with the provisions of section 200(3) of the Act, hence no penalty could be levied. The assessee had deducted and deposited the tax within the prescribed period and thereby made substantive compliance. The government revenue was not defrauded or deferred. The assessee did not have any motive to make any financial gain. Due to the sudden resignation of the accountant, the assessee could not trace his leftover jobs which include non-filing of TDS returns in Form 26Q for Quarter-1 & Quarter-2 for FY 2010-11. As soon the same was noticed, TDS both the returns were filed. The circumstance shows that the delay in filing the return was not intentional. The assessee was prevented by sufficient cause for making due compliance. Therefore, we note that assessee had shown ‘reasonable cause’ as referred under section 273B of the Act, hence we delete the penalty of Rs. 81,178/,” the Tribunal said.


ITA No.1890/Kol/2018 ,Assessment Year: 2011-12

Sudip Roy Choudhury Vs. JCIT(TDS), Range-59, Kolkata

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