Case Law Details
ITO (TDS) Panchkula Vs. Bharat Electronics Ltd. (ITAT Chandigarh)– ‘ Tax deductor’ is the holder of tax deduction and collection account Number RTKBO 1838 E. The TDS quarterly statement of deduction of Tax in Form No. 24Q for Financial year 2008- 09 relevant to Assessment Year 2009- 10. as required under sub-sec (3) of Sec 200 of the Act was filed on 22.7.2009.
The ITO (TDS) while going through the quarterly return in Form NO. 24Q filed by the assessee noted that it has omitted to quote PAN/has quoted invalid PAN in 64 cases. The ITO(TDS) has afforded number of opportunities to the assessee to explain his position and file the correct details in this regard. However, the assessee did not file any reply due to which the AO concluded that the assessee has committed a default u/s 139A(5B) for which penalty u/s 272B(1) of the Act is leviable. The ITO (TDS) therefore, levied a penalty of Rs. 6,40,000/- @ of Rs. 10,000/- per default vide his order dated 26.7.2010.
On Appeal ITAT has held that it is apparent from the record that the assessee deducted TDS correctly and revised the PAN and filed revised statement in Form No. 26Q, hence there was sufficient compliance of the provisions of section 139A of the Act. Even otherwise the assessee did not derive any benefit whatsoever, by filing the wrong PANs and PAN was corrected after ascertaining the same from the respective deductees. In our view the assessee has proved that there was reasonable cause for alleged failure and hence no penalty is leviable. Even otherwise also no penalty is leviable when there is a technical or venial breach of the Act.
The Hon’ble Supreme Court in the case of Hindustan Steel Ltd V. State of Orissa (1972) 83 ITR 26 (S.C) has held as under:-
“An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was a guilty or conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute.”
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