2013 (2) TMI 345 - HC - Income Tax

Penalty u/s 272B Wrong quoting of PAN in TDS return - Whether there was reasonable cause for alleged failure on the part of the assessee Superintendent of Police in wrongly quoting PAN in respect of 196 employees of the department - Held that - Assessee deducted TDS correctly and revised PAN and filed the revised statement on Form 26G, hence there was sufficient compliance with the provisions of section 139A. There was sufficient cause shown which would be a question of fact in the given facts and circumstances In favour of assessee

Summary

Issues:
- Appeal against deletion of penalty under section 272B of the Income-tax Act for non-quoting/wrong quoting of PANs in TDS returns.
- Validity of penalty deletion based on correct TDS deduction and revised PAN filing.
- Benefit of section 273B despite failure to prove reasonable cause for not furnishing valid PAN numbers.
- Whether findings of the Tribunal are perverse and contrary to the record.

Analysis:

Issue 1:
The appeal was filed by the Revenue against the deletion of penalty under section 272B of the Income-tax Act for non-quoting/wrong quoting of PANs in TDS returns. The Tribunal dismissed the appeal, leading to the Revenue's further challenge. The key contention was the imposition of a penalty amounting to Rs. 19,60,000 for invalid PANs of 196 tax deductees in the quarterly statement filed by the assessee.

Issue 2:
The crux of this issue revolved around the justification for deleting the penalty based on correct TDS deduction and revised PAN filing by the assessee. The Commissioner of Income-tax (Appeals) noted that the appellant had deducted TDS correctly and rectified the PAN errors by filing a revised statement in Form 26Q, indicating compliance with section 139A. Consequently, the penalty was deemed unjustified and was deleted.

Issue 3:
The question of whether the respondent proved a reasonable cause for not furnishing valid PAN numbers was examined concerning the benefit of section 273B of the Income-tax Act. The Tribunal found that there was a valid cause for the errors in quoting PANs, attributing it to the deductees' mistakes. The timely deduction and deposit of tax, along with the subsequent rectification of PAN details, were considered as sufficient compliance with the provisions.

Issue 4:
The final issue pertained to the alleged perversity of the Tribunal's findings and their contradiction with the record. The Tribunal upheld the Commissioner's decision, emphasizing that the obligation to quote PAN/GIR numbers or file Form 60 lay with the customer, not the bank. The Tribunal concluded that there was a reasonable cause for any default by the assessee, thereby dismissing the Revenue's appeal as lacking merit.

In conclusion, the Court dismissed the Revenue's appeal, affirming the decisions of the Commissioner of Income-tax (Appeals) and the Tribunal. The findings highlighted the importance of timely compliance, rectification of errors, and the demonstration of reasonable cause in penalty impositions under the Income-tax Act.