2014 (10) TMI 394 - HC - Income Tax

Penalty u/s 272B(1) - Failure to comply with the provisions of section 139A Held that - it cannot be said that, the AO has any discretion in the matter or that the intention of the defaulter has to be gone into for levying penalty - If a failure is disclosed, the penalty is automatic thus, the Court is not convinced that the petitioner s contentions can be sustained Decided against assessee.

Summary

Issues:
Challenge to penalty imposition for failure to comply with TDS return requirements under Income Tax Act, 1961.

Analysis:
1. The petitioner contested the penalty imposed for not specifying PAN numbers in TDS returns filed by the Life Insurance Corporation, as required by Section 139A of the Income Tax Act, 1961. The petitioner claimed to have assumed office after the TDS returns were prepared, but the court noted that ignorance of law cannot be pleaded. The petitioner's signature on the returns implied responsibility for ensuring compliance with the law.

2. The petitioner argued that there was no intentional default, citing the requirement of "mens rea" for imposing penalties as per the Hindustan Steel Ltd. case. However, the court referred to the Union of India v. Dharmendra Textiles Processors case, which clarified that "mens rea" is not essential for imposing penalties for civil obligations or liabilities. The court emphasized that under Section 272B(1), failure to comply automatically triggers a penalty of ten thousand rupees.

3. The court highlighted that the Assessing Officer has no discretion in imposing penalties under Section 272B(1) for non-compliance with Section 139A. The presence of a failure itself warrants the penalty, without the need to establish intent. Consequently, the court upheld the penalty imposed on the petitioner, dismissing the writ petition and leaving the parties to bear their respective costs.