The Executive Engineer, Rohtak vs Department Of Income Tax

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

2 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;

3 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.

4 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 6 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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