2012 (2) TMI 304 - AT - Income Tax

Penalty for non-quoting of PAN in TDS return - Held That - Appellant deducted TDS correctly and revised PAN and filed the revised statement on Form No. 26Q hence there is sufficient compliance of the provisions of section 139A. Reliance placed on Financial Co-operative Bank Ltd. v. ITO (Tribunal). Show Cause Notice - Held That - In absence of issue of show cause notice penalty cannot be levied.

Summary

Issues:
- Appeal against cancellation of penalty under section 272B of the Income-tax Act, 1961 for non-quoting/wrong quoting of PANs in TDS returns.

Analysis:
1. Facts of the Case: The appeal was filed by the Department against the order of the ld. CIT(A) canceling the penalty of Rs. 3,30,000/- imposed by the AO under section 272B of the Income-tax Act, 1961 for non-quoting/wrong quoting of PANs in 33 cases in TDS returns for the financial year 2008-09.

2. Arguments: The Department, represented by the ld. DR, supported the AO's order, while the authorized representative for the assessee relied on the order of the ld. CIT(A).

3. Observations and Decision: The ld. CIT(A) canceled the penalty based on the appellant's correct deduction of TDS, revision of PAN, and filing of the revised statement on Form No. 26Q, ensuring compliance with section 139A. The Tribunal agreed with the CIT(A)'s decision, citing the case of Financial Co-operative Bank Ltd. v. ITO,116 ITD 358. Additionally, the penalty was deemed liable for cancellation as the assessee was not given a hearing before its imposition, rendering the penalty invalid due to lack of service of a show cause notice.

4. Confirmation of CIT(A) Order: The Tribunal confirmed the order of the ld. CIT(A), emphasizing that the penalty was rightly canceled due to the compliance with section 139A, lack of opportunity for a hearing, and absence of service of a show cause notice. Consequently, the appeal filed by the Department was dismissed, upholding the cancellation of the penalty amounting to Rs. 3,30,000/-.

This analysis highlights the key aspects of the judgment, including the grounds for appeal, arguments presented, observations made by the Tribunal, and the final decision rendered in the case.