9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (12) TMI 362 - AT - Income TaxPenalty of Rs. 30,000 u/s 272B - Default for the failure on the part of the assessee to quote correct PAN in terms of provisions of section 139A - The learned counsel has contended that section 272B of the Act nowhere specifically relates to default under section 139A(5B) which casts an obligation on the deductor to quote the PAN of deductees - It has also been contended that due to loss of original return data, the revised return now prepared and uploaded in the system is rejected by the TIN facilitation centre - the admitted fact remains that the PANs of three deductees were wrongly quoted by the appellant in the quarterly returns as is evident from the above stated facts in which the alphabets and number were wrongly entered in the system - In response to a showcause notice before levy of penalty u/s 272B of the Act for not quoting correct PAN in terms of provisions of sec. 139(5B) of the Act, the assessee did not appear nor pleaded any reasonable cause for their failure to quote correct PAN - The only defect in PAN was due to incorrect mention of one alphabet in two cases and one numeric in the third - Decided in favor of the assessee
Issues Involved:
1. Imposition of penalty under section 272B of the Income-tax Act, 1961 for incorrect quoting of PAN in quarterly TDS statements. 2. Applicability of section 273B regarding reasonable cause for failure to comply with section 139A. Detailed Analysis: 1. Imposition of Penalty under Section 272B: The primary issue revolves around the imposition of a penalty of Rs. 30,000/- on the appellant for incorrect quoting of PAN in the quarterly TDS statement (Form 24Q) for the financial year 2008-09. The Assessing Officer (AO) identified that the appellant had furnished incorrect PANs for five tax-deductees, leading to the issuance of a show cause notice under section 272B of the Income-tax Act, 1961. Despite multiple notices, the appellant failed to provide a satisfactory explanation or correct the PANs, resulting in the AO imposing a penalty of Rs. 50,000/- (Rs. 10,000/- per default). Upon appeal, the learned CIT(A) upheld the penalty but reduced it to Rs. 30,000/- considering the repeated mistakes for two deductees. The CIT(A) emphasized that the legal obligation to quote correct PANs lies with the deductor, and failure to comply attracts penalties under section 272B(1). The CIT(A) also referred to the legislative intent behind section 139A(5B) and the necessity of quoting correct PANs to ensure proper credit for TDS and smooth processing of returns. 2. Applicability of Section 273B (Reasonable Cause): The appellant argued that the penalty should not be imposed as the incorrect PANs were due to typographical errors and not willful defaults. The appellant cited a previous case (Packraft Container India Pvt. Ltd.) where a similar penalty was quashed. However, the CIT(A) distinguished the present case by highlighting that the errors were not inadvertent but due to negligence, and the appellant failed to provide a reasonable cause for the mistakes. The Tribunal, upon reviewing the case, noted that the incorrect PANs were due to apparent inadvertence either by the appellant or the deductees. The Tribunal emphasized that the term "reasonable cause" implies an honest belief based on reasonable grounds. The Tribunal referenced the Supreme Court's decision in Hindustan Steel Ltd. v. State of Orissa, which stated that penalties should not be imposed for technical or venial breaches of procedural laws. The Tribunal concluded that the appellant attempted to correct the mistakes upon being informed and there was no evidence of willful intent to quote false PANs. Conclusion: The Tribunal vacated the findings of the CIT(A) and canceled the penalty of Rs. 30,000/-. The Tribunal held that the appellant's actions were not willfully negligent and the errors were technical and venial, thus entitling the appellant to relief from the penalty under section 272B. The appeal was allowed, and the penalty was canceled. Order Pronounced: The appeal was allowed, and the penalty levied by the AO and upheld by the CIT(A) to the extent of Rs. 30,000/- was canceled.
|
