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2012 (9) TMI 151 - AT - Income TaxPenalty u/s 272B - default u/s 139A(5B) - quotation of invalid PAN of deductees in TDS returns - Held that - In the instant case, it is an undisputed fact that the amount of tax deducted at source by the assessee was deposited within time allowed under the relevant provisions of the Act. There was no revenue loss to the Income Tax department. It is also an admitted position that the assessee also submitted revised statement in Form No. 24Q on 16.09.2010. The assessee did not derive any benefit whatsoever by filing invalid PAN and PAN was corrected after ascertaining the same from the respective deductees. Even otherwise also, no penalty is leviable when there is a technical or venial breach of the Act - Decided in favor of assessee.
Issues:
- Confirmation of penalty under section 272B of the Income Tax Act, 1961 for financial year 2007-08 due to quoting invalid PAN in e.TDS quarterly statement. - Interpretation of section 272B regarding penalty imposition for failure to comply with section 139A. - Application of precedents in similar cases to determine the validity of penalty imposition. - Examination of whether penalty can be levied when there is no revenue loss to the Income Tax department. - Assessing Officer's jurisdiction in levying the penalty and compliance with statutory provisions. Analysis: The case involved an appeal against the confirmation of a penalty of Rs. 50,000 imposed under section 272B of the Income Tax Act, 1961 for the financial year 2007-08 due to the assessee quoting invalid PAN in the e.TDS quarterly statement. The Assessing Officer held the assessee in default under section 139A (5B) for which the penalty was levied. The CIT(A) confirmed the penalty, leading to the appeal before the Tribunal. The Tribunal analyzed the issue and referred to a previous decision where it was held that no penalty is imposable under section 272B if there is a reasonable cause for the failure. In this case, the assessee explained that the incorrect PANs were due to the deductees' misquoting, and the correct PANs were later ascertained and revised. The Tribunal found that there was sufficient compliance with section 139A and no benefit derived from the incorrect PANs, leading to the conclusion that no penalty was leviable. Furthermore, the Tribunal noted that the tax deducted at source was deposited on time, there was no revenue loss to the department, and a revised statement was submitted. Considering the facts and circumstances, the Tribunal held that no penalty could be validly levied, canceling the penalty imposed by the Assessing Officer and confirmed by the CIT(A). The Tribunal also observed that the Assessing Officer exceeded jurisdiction by levying a penalty of Rs. 50,000, as the section allows a penalty of only Rs. 10,000 for non-compliance with section 139A. Additionally, the Tribunal criticized the Assessing Officer for not applying his mind while passing the penalty order, rendering it bad in law. As a result, the appeal was allowed, canceling the penalty imposed. In conclusion, the Tribunal's decision highlighted the importance of compliance with statutory provisions, the necessity of proving reasonable cause for failures, and the Assessing Officer's jurisdiction in imposing penalties within the limits prescribed by law.
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