2014 (7) TMI 471 - AT - Income Tax

Penalty u/s 272B of the Act PAN not provided in return as per section 139A(5B) of the Act Held that - CBDT has prescribed a threshold limit for compliance i.e., to provide information of PAN data by virtue of section 139A(5B)(iv) of the Act - the connotation not be accepted can be only with reference to the provisions of the Act - only by such interpretation the press release serves any purpose - The sole intention of the press release is to bring down the rigour of the provision of section 139A(5B) and 272B keeping in view the laborious and cumbersome task of compliance - the assessee has furnished PAN data to an extent of 93 per cent of the total deductees - when there is compliance in furnishing the PAN data in accordance with the threshold limit of 90% prescribed in the press release by the CBDT, the penal provisions do not attract Revenue has also not been able to distinguish the decision Decided in favour of Assessee.

Summary

Issues:
Penalty under section 272B for failure to quote correct PAN in e-TDS returns.

Analysis:
The appeals filed by the assessee were against the order of the CIT (Appeals) confirming part of penalties levied under section 272B of the Income-tax Act. The CIT (A) held that penalties under section 272B can be levied in respect of the deductee and not the number of entries. The assessee, a private limited company engaged in manufacturing biscuits, had its registered office in Mumbai and factories in various locations, including Bahadurgarh. The penalties were imposed for not quoting valid PAN of deductees in the e-TDS Quarterly statement of deductions of tax, as required by section 139A (5B) of the Act.

The grounds of appeal in all four appeals were similar, contesting the levy of penalties under section 272B. The appellant argued that the penalties should not exceed a certain limit, irrespective of the number of wrong PAN entries. Additionally, the appellant claimed that after filing revised quarterly statements, the total number of deductees with incorrect PAN was only five. The appellant also cited a decision by ITAT, Bangalore Bench in a similar case, where penalties were deleted based on the interpretation of a Press Release issued by CBDT.

The ITAT, Delhi considered the Press Release of CBDT and the decision of the ITAT, Bangalore Bench in a similar case. The ITAT found that the issue was covered by the decision of the coordinate Bench of ITAT, Bangalore. As the appellant had complied with the threshold limit prescribed in the Press Release by furnishing PAN data to a significant extent, the penal provisions were not attracted. Therefore, the ITAT allowed all four appeals in favor of the assessee, following the decision of the ITAT, Bangalore Bench.

In conclusion, the ITAT, Delhi ruled in favor of the assessee, allowing all four appeals and deleting the penalties imposed under section 272B for failure to quote correct PAN in the e-TDS returns. The decision was based on the interpretation of the Press Release issued by CBDT and the compliance of the appellant with the prescribed threshold limit for furnishing PAN data.