2015 (10) TMI 71 - AT - Income Tax

Penalty u/s 272A(2)(c) - failure to furnish return of income under section 206 within due date - CIT(A) deleted the penalty - Held that - Penalty under section 272A(2)(c), has been levied on account of failure to furnish return of income under section 206 within due date. As culled out from the impugned orders, the assessee has not deposited the TDS amount in the Government account on the ground that it had no funds due to heavy losses. Due to non deposit of TDS in the Government account, the assessee has already been subjected to heavy interest under section 201(1A) and further penalty under section 271C. The order under section 201(1) and 201(1A) has already been confirmed by the Tribunal. Once, already a penalty under section 271C has been levied for non payment of TDS amount to the Government account, then the assessee had a bonafide reason that the return of income under section 206, giving particulars of TDS deposited and cheque number was not required to be filed, because the requisite details and particulars were not there with the assessee. Under these circumstances, Thus we agree with the findings and the conclusion of the Commissioner (Appeals) that there was a reasonable cause within the meaning of 273B for not imposing penalty. Penalty deleted by the learned Commissioner (Appeals) is upheld. - Decided against revenue. Penalty under section 272A(2)(g) - assessee s main contention was that the TDS certificate could not have been issued to the tax deductee, since the tax deducted at source could not be paid to the Government account and, therefore, the assessee could not have filed the particulars which is required to be mentioned in the certificate - Held that - aAssessee company was not supposed to issue incomplete certificate because no credit could have been received by the deductee. A false certificate could not have been issued. The other explanations were exactly the same as given in relation to the penalty proceedings under section 272A(2)(c). The learned Commissioner (Appeals) has correctly deleted the said penalty on the similar reason holding that the assessee was under bonafide belief that once the tax has not been deposited to the Government account then no certificate under section 203 could have been issued and such a bonafide belief falls within the ambit of section 273B, which envisages that no penalty is leviable if the assessee has bonafide reasons. - Decided against revenue.

Summary

Issues:
- Challenge to impugned orders of penalty proceedings under section 272A(2)(c) and 272A(2)(g) for assessment year 2000-01.
- Whether penalty under section 272A(2)(c) was rightly imposed.
- Whether penalty under section 272A(2)(g) was rightly imposed.

Analysis:

Issue 1: Challenge to impugned orders of penalty proceedings under section 272A(2)(c) and 272A(2)(g) for assessment year 2000-01:
The appeals by the Revenue challenged separate impugned orders dated 25th November 2010 for penalty proceedings under sections 272A(2)(c) and 272A(2)(g) for the assessment year 2000-01. Both appeals pertained to the same assessee and common issues arising from identical facts. The appeals were heard together and disposed of in a consolidated order.

Issue 2: Penalty under section 272A(2)(c):
The assessee company had credited a provision for interest and deducted tax at source but failed to deposit the tax amount to the Government account due to heavy losses. The ACIT (TDS) imposed penalties under sections 271C and 272A(2)(c). The Commissioner (Appeals) deleted the penalty under section 272A(2)(c) citing reasonable cause for non-compliance. The Tribunal upheld this decision, stating that no penalty was warranted as the assessee had a bonafide belief that no TDS return was required to be filed due to non-payment of tax to the Government account.

Issue 3: Penalty under section 272A(2)(g):
In a separate appeal, the Revenue challenged the imposition of penalty under section 272A(2)(g) for the same assessment year. The facts and the assessee's explanations were similar to the penalty proceedings under section 272A(2)(c). The Commissioner (Appeals) deleted the penalty under section 272A(2)(g) based on the bonafide belief of the assessee. The Tribunal affirmed this decision, applying the same reasoning as in the previous appeal.

In conclusion, the Tribunal dismissed the Revenue's appeals against the impugned penalty orders under sections 272A(2)(c) and 272A(2)(g) for the assessment year 2000-01. The Tribunal upheld the decisions of the Commissioner (Appeals) in deleting the penalties, emphasizing the bonafide belief of the assessee in both cases as a reasonable cause for non-compliance with the provisions.