2002 (9) TMI 413 - AT - Income Tax

Summary

Issues:
Levy of penalty under section 272A(2)(g) of the Income-tax Act for delay in issuing TDS certificates for the assessment year 1993-94.

Analysis:
1. The Assessing Officer initiated penalty proceedings due to a delay of 2411 days in issuing 8 TDS certificates. The assessee argued that certificates were issued at year-end as requested by concerned persons to prevent certificate loss, with no intention to violate provisions. The penalty order was contested as time-barred.

2. The Assessing Officer, unconvinced, levied the penalty for the 2411-day delay. The assessee appealed to the CIT(A), arguing that the delay was only 425 days excluding a common period, and penalties should not apply for mere delay in issuing certificates.

3. The CIT(A) upheld the penalty, stating the penalty order was not time-barred. He dismissed the AR's arguments and cited that penalties were rightly imposed for each certificate, rejecting reliance on previous decisions and circulars.

4. The assessee then appealed to the Tribunal, claiming the delay was due to bona fide reasons as they were unaware of the law and the concerned parties did not request certificates promptly. The assessee contended that the penalty exceeded the TDS amount and cited relevant case law supporting their position.

5. The Tribunal, after reviewing submissions, found in favor of the assessee. It noted that TDS was deducted and deposited correctly, no revenue loss occurred, and the delay had bona fide reasons. The Tribunal referenced amended laws limiting penalties to the TDS amount and cited a previous case supporting the assessee's argument.

6. Consequently, the Tribunal ruled that there were genuine reasons for the delay, and the penalty under section 272A(2)(g) was not applicable. The penalty was canceled, and the assessee's appeal was allowed.