2002 (8) TMI 16 - HC - Income Tax

Penalty under section 272A(2)(c) - Whether, Tribunal was justified in upholding the levy of token penalty, below the minimum prescribed by the Act by observing that there was a reasonable cause for the delay in filing the annual return and was the Tribunal right in drawing a right inference from the Central Board of Direct Taxes circulars? The penalty under section 272A(2)(c) cannot be levied in a routine manner. The discretion vested with the authority is to be exercised judiciously on consideration of all the relevant circumstances. A bona fide breach cannot lead to a penalty under section 272A(2)(c). - The question is decided in affirmative and in favour of the respondent Deputy Housing Commissioner, and against the Revenue.

Summary

The High Court of Rajasthan upheld a token penalty of Rs. 2,400 imposed on the Deputy Housing Commissioner for a delay in filing the annual return of tax deductions. The court emphasized that penalties should not be levied routinely and must consider relevant circumstances. The judgment favored the Deputy Housing Commissioner, citing that penalties should be imposed only after providing a notice or reminder to comply with tax provisions.