1997 (8) TMI 104 - AT - Income Tax

Accounting Year Assessing Officer Assessment Year Failure To Furnish Information In Part S. 10 Tax At Source Tax Deducted At Source

Summary

Issues:
1. Penalty imposed under section 272A(2)(g) of the Income Tax Act.
2. Interpretation of provisions related to furnishing TDS certificates.
3. Application of penalty for non-issuance of certificates within stipulated time.
4. Consideration of nature and reasons for default in imposing penalty.

Detailed Analysis:
1. The judgment deals with an appeal against the imposition of a penalty under section 272A(2)(g) of the Income Tax Act. The penalty of Rs. 3,19,000 was confirmed by the Commissioner of Income-tax (Appeals) and challenged by the assessee. The penalty was imposed for the delay in issuing TDS certificates to parties from whom the assessee firm had raised loans. The penalty amount was calculated at Rs. 100 per day for 3,192 days of delay in issuing the certificates.

2. The issue of furnishing TDS certificates was analyzed in detail. The assessee argued that there was a procedural change in the format of TDS certificates, and they had mistakenly issued a consolidated certificate to each payee at the year-end. The assessee contended that the penalty was unwarranted as they believed only one certificate needed to be issued. The legal representative cited various tribunal decisions to support the argument that the breach was technical and not intentional.

3. The tribunal examined the provisions of section 203 of the Act, which mandate the issuance of TDS certificates to parties from whom tax is deducted at the source. The penalty under section 272A(2)(g) is applicable for failure to furnish such certificates. The tribunal noted that the penalty for non-issuance of certificates is calculated on a daily basis and can range from Rs. 100 to Rs. 200 per day. The tribunal considered the nature of the default and the reasons behind it before deciding on the penalty.

4. The tribunal observed that the assessee's default in issuing TDS certificates could be categorized as a technical breach rather than a deliberate violation. The tribunal noted that the assessee had deposited the tax deducted at the source in time and that the payees did not suffer any loss due to the delayed issuance of certificates. Citing judicial precedents, the tribunal emphasized that tax laws should be interpreted reasonably and in consonance with justice. Ultimately, considering the circumstances, the tribunal decided to cancel the penalty imposed on the assessee.

In conclusion, the tribunal allowed the appeal, emphasizing the technical nature of the default and the absence of any loss to the payees, leading to the cancellation of the penalty levied under section 272A(2)(g) of the Income Tax Act.