2012 (10) TMI 703 - AT - Income Tax

Penalty u/s 272B - assessee failed to mention PANs on the form No. 16 & 16A issued to the persons from whom the tax has been deducted at source - Held that - Any person who receives any sum or income or amount is duty bound to intimate the PAN to the person responsible for deducting tax at source. But in our view that is only possible, if the person responsible, asks him to provided his PAN. In the present case, assessee has not made any attempt to write a single letter to the receiving person for providing their PAN. Moreover, assessee has not given any explanation before the ITO (TDS), even the assessee has also failed to appear before him on the date fixed. Since assessee has failed to establish the reasonable cause for not quoting PAN in Form No. 16 & 16A, hence, penalty u/s 272B is levied on account of non-compliance of provisions of section 139A - Decided against assessee

Summary

Issues:
Penalty imposition for failure to quote PAN on Form No. 16 & 16A.

Analysis:
The appeals were filed against the CIT(A)'s order for the assessment years 2007-09, 2008-09 & 2009-10. The common issue in all appeals was the imposition of a penalty of Rs.10,000 under section 272B of the Income Tax Act, 1961 for not quoting PAN on Form No. 16 & 16A. The ITO (TDS) Jammu found the person responsible, the assessee, at fault for failing to mention PANs and imposed the penalty. The CIT(A) dismissed all appeals, leading to the current appeal before the ITAT Amritsar.

The main contention of the assessee was that the penalty was imposed arbitrarily and without justification. The assessee argued that penalties should not be imposed unless there is deliberate defiance of the law or dishonesty. The assessee cited legal precedents to support the argument, emphasizing the need for a reasonable cause for penalty imposition. However, the Revenue authorities defended the penalty imposition, citing the duty of every person to quote PAN in all relevant documents as per the Income Tax Act.

The ITAT considered the relevant provisions of the Income Tax Act, specifically Section 139A(5), (5A) & (5B). It highlighted the obligation of every person to quote PAN in returns, correspondence, and documents related to transactions. The ITAT noted that the assessee, as the person responsible for deducting tax, was required to quote PAN of the deductee. The ITAT observed that the assessee failed to establish a reasonable cause for not quoting PAN on Form No. 16 & 16A. Referring to Section 272B, the ITAT upheld the penalty of Rs.10,000 for non-compliance with Section 139A.

The ITAT rejected the citations provided by the assessee, stating that the cases cited did not apply to the current situation where the assessee failed to quote PAN on Form No. 16 & 16A without any reasonable cause. The ITAT concluded that the orders passed by the lower authorities were reasonable and upheld the penalty imposition. Consequently, all nine appeals filed by the assessee were dismissed by the ITAT Amritsar.