2002 (7) TMI 404 - AT - Income Tax

Summary

Issues:
Cross appeals against order on penalty for delay in issue of TDS certificates.

Analysis:
1. Issue of TDS Certificates Delay: The case involved cross appeals against the penalty order passed by the Commissioner of Income-tax (Appeals) due to a delay in issuing TDS certificates. The penalty was levied based on a cumulative delay of 2618 days, despite no allegation of non-deduction or short deduction of TDS. The Assessing Officer held that the delay was deliberate, invoking section 272A(2)(g).

2. Assessee's Submissions: The assessee argued that the delay was unintentional, attributing it to lack of awareness among staff about TDS provisions and changes in regulations. They emphasized that proper tax was deducted and deposited on time, with no revenue loss. The assessee sought to drop the penalty, promising future compliance.

3. Assessing Officer's Decision: The Assessing Officer rejected the assessee's explanations, holding that ignorance of the law was not an excuse. The penalty was imposed at Rs. 2,61,800, calculated at Rs. 100 per day for 2618 days. The Commissioner of Income-tax (Appeals) upheld the penalty for non-compliance with legal requirements.

4. Appellate Tribunal's Decision: The Appellate Tribunal considered the arguments of both parties. While acknowledging that the law applied equally to all categories, they accepted the assessee's contentions. The Tribunal noted that tax was deducted and deposited on time, with no evidence of mala fide intent. Citing precedents and considering the stiff penalty amount, the Tribunal canceled the penalty, following a judgment that emphasized no loss of revenue.

5. Judgment and Outcome: The Tribunal allowed the assessee's appeal and dismissed the Revenue's appeal. They upheld the Commissioner of Income-tax (Appeals) order, canceling the penalty based on the assessee's compliance with tax deduction and deposit requirements, despite the delay in issuing TDS certificates. The decision aligned with the principle of no revenue loss and bona fide belief in compliance, leading to the cancellation of the penalty.