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

Sudip Roy Chowdhury vs. JCIT, TDS
Case No. – 1890/Kol/2018
Date – 12.06.2019

Fact of the Case
 In the present case the assessee is the sole proprietor of a partnership firm.
 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.

Decision of the Case
The Tribunal noted the followings in the present case –
 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.
 The assessee had shown reasonable cause for his failure in complying with the provisions of section 200(3) of the
Act.

 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 delay in filing of TDS return because of the sudden resignation of the assessees accountant would constitute ‘sufficient cause’ for such default.