IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES : SMC : NEW DELHI
BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER
ITA Nos.492 to 495/Del/2014
Assessment Year : 2010-11
ITO (TDS), Vs. The Executive Engineer,
Rohtak. Provisional Division,
Public Health, Baag Jawahra,
Jhajjar.
PAN: RTKE00639C
(Appellant) (Respondent)
Assessee By : None
Department By : Shri Amrit Lal, JCIT
Date of Hearing : 15.06.2015
Date of Pronouncement : 15.06.2015
ORDER
These four appeals by the Revenue arise out of a common order
passed by the CIT (A) on 6.12.2013 deleting the penalty imposed u/s
ITA Nos.492 to 495/Del/2014
272B of the Income-tax Act, 1961 (hereinafter also called `the Act') in
relation to the financial year 2009-10.
2. Briefly stated, the facts of the appeal no. 492/D/2014 are that the
assessee filed quarterly e-TDS Quarterly statement of deduction of tax in
Form No.26Q for the first quarter of the financial year 2009-10. On
processing of the aforesaid return, it was observed that PANs of as many
as 56 tax-deductees were invalid and the assessee deductor did not
submit correct PANs in respect thereof. On being show caused as to
why penalty u/s 272B of the Act be not imposed, the assessee furnished
its reply dated 9.1.2012 submitting the copies of correction returns duly
stating PANs of a few tax deductees which were not earlier available.
The AO invoked the provisions of section 139(5B) and imposed penalty
@ Rs.10,000/- per breach amounting in total to Rs.5,60,000/- for the
first quarter of the year. Similar is the position for the remaining three
quarters for which the AO imposed penalty at Rs.9,40,000/-,
Rs.8,16,000/- and Rs.8 lac. The assessee preferred appeals against the
orders passed by the AO u/s 272B of the Act. The ld. CIT(A) concurred
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ITA Nos.492 to 495/Del/2014
with the submissions advanced on behalf of the assessee and ordered for
the deletion of penalty imposed for four different quarters of the
financial year 2009-10. The Revenue is aggrieved against the deletion
of such penalty.
3. I have heard the ld. DR and perused the relevant material available
on record. There is no appearance from the side of the assessee despite
notice. As such, I am proceeding to dispose of these appeals ex parte
qua the assessee.
4. It is observed that the AO imposed penalty u/s 272B for violation
of the provisions of section 139(5B), which read as under:-
"139A.
(5B) Where any sum or income or amount has been paid after deducting
tax under Chapter XVIIB, every person deducting tax under that Chapter
shall quote the permanent account number of the person to whom such
sum or income or amount has been paid by him--
(i) in the statement furnished in accordance with the provisions of
sub-section (2C) of section 192;
(ii) in all certificates furnished in accordance with the provisions of
section 203;
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ITA Nos.492 to 495/Del/2014
(iii) in all returns prepared and delivered or caused to be delivered in
accordance with the provisions of section 206 to any income-tax
authority;
(iv) in all statements prepared and delivered or caused to be delivered
in accordance with the provisions of sub-section (3) of section 200:
...................."
5. A careful perusal of this provision indicates that where an amount
has been paid after deducting tax, then, the person deducting tax is
required to quote the Permanent Account Number in the statements
mentioned in the provision. Non-compliance with the mandate of
section 139A attracts penalty u/s 272B, the relevant part of which reads
as under:-
"Penalty for failure to comply with the provisions of section 139A.
272B. (1) If a person fails to comply with the provisions of section
139A, the Assessing Officer may direct that such person shall pay, by
way of penalty, a sum of ten thousand rupees.
(2) If a person who is required to quote his permanent account number
in any document referred to in clause (c) of sub-section (5) of section
139A, or to intimate such number as required by sub-section (5A) or
sub-section (5C) of that section, quotes or intimates a number which is
false, and which he either knows or believes to be false or does not
believe to be true, the Assessing Officer may direct that such person
shall pay, by way of penalty, a sum of ten thousand rupees.
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ITA Nos.492 to 495/Del/2014
(3) No order under sub-section (1) or sub-section (2) shall be passed
unless the person, on whom the penalty is proposed to be imposed, is
given an opportunity of being heard in the matter."
6. It is obvious that the provisions of sub-section (2) are not attracted
when there is a violation of sub-section (5B) of section 139A. Such
violation shall be covered under the provisions of sub-section (1) which
provides that in case of a failure `to comply with the provisions of
section 139A, the Assessing Officer may direct that such person shall
pay, by way of penalty, a sum of ten thousand rupees.' I am confronted
with a situation in which the assessee originally did not have the correct
PANs of all the persons from whose payments, tax at source was
required to be deducted. Despite that, the assessee did deduct tax at
source and paid the amount to the exchequer well in time. The only
fault of the assessee was in not filling PANs of some of the deductees
which were not available at the time of filing e-returns. As soon as the
AO issued notice for imposing penalty u/s 272B, the assessee obtained
the relevant PANs and complied with the requirement by filing the
revised statement.
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ITA Nos.492 to 495/Del/2014
7. At this juncture, it is pertinent to note that the provisions of section
272B are subject to section 273B of the Act, which provides that
notwithstanding anything contained in the provisions, inter alia, of
section 272B, no penalty shall be imposed for any failure referred to in
the said provision if it is proved that there was a reasonable cause for the
said failure. Considering the entirety of the facts and circumstances
prevailing in the instant case, I find that there was a reasonable cause in
the assessee not mentioning the correct PANs in respect of a few
deductees at the time of originally filing e-TDS quarterly statement of
deduction of tax in Form No.26Q, which were in fact, not available with
the assessee at the material time. As and when the necessary
information was obtained, the assessee corrected the lapse and revised
the statement by furnishing due particulars thereof. In my considered
opinion, the ld. CIT(A) was justified in deleting the penalty by relying
on the judgment of the Hon'ble Supreme Court in the case of Hindustan
Steel Ltd. Vs. State of Orissa (1972) 83 ITR 26 (SC), in which the
Hon'ble Supreme Court has laid down that penalty cannot be ordinarily
imposed unless the party obliged either acts deliberately in defiance of
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ITA Nos.492 to 495/Del/2014
law or is guilty of conduct contumacious or dishonest, or acts in
conscious disregard of its obligation. I find that the judgment of the
Hon'ble Supreme Court is fully applicable in the facts and
circumstances as are instantly prevailing. As such, I approve the view
taken by the ld. CIT(A) in deleting the penalty for all the four quarters of
the financial year 2009-10.
8. In the result, all the four appeals stand dismissed.
The order pronounced in the open court on 15.06.2015.
Sd/-
[R.S. SYAL]
ACCOUNTANT MEMBER
Dated, 15th June, 2015.
dk
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT (A)
5. DR, ITAT
AR, ITAT, NEW DELHI.
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