The Income Tax Appellate Tribunal ( ITAT) , Delhi bench held that the failure on the part of the professional to file TDS returns would constitute a ‘reasonable cause’ for the delay to avoid the penalty under the provisions of the Income Tax Act.
The assessee, M/s. Oriental Insurance co. ltd was treated as an assessee-in-default by the Assessing Officer. While explaining the cause for the delay, the assessee claimed that the work was entrusted to an outside professional who did not complete it within the time. Therefore, it was submitted that the delay has caused because of the non-performance of the outside professional as promised. In support of the contention, the assessee also submitted the letter of the professional. However, the moment the assessee came to know about the non-filing of TDS return same were filed immediately.
While allowing the contentions, the Tribunal bench noted that “Admittedly, the assessee has deposited the tax in time to the credit of the Central Govt. However, there was the delay in filing of the return due to the above cause. The provision of section 272A providing the penalty for various offences is subject to the provision of Section 273B of the Income Tax Act. That section provides that no penalty shall be imposed under the specified section if there was a reasonable cause proved by the assessee for the said failure. On looking at the reason we find that there was a reasonable cause in the delay in filing the above forms by the assessee. It is further to be noted that the assessee has stated that this single default by the assessee which too was unintentional and with a reasonable cause.”
Subscribe Taxscan Premium to view the Judgment
