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Issues involved: Dispute regarding the levy of penalty u/s 272A(2)(c) for failure to furnish statement of TDS in Form No. 26 within the stipulated time.
Summary: The appellant challenged the penalty imposed by the AO under s. 272A(2)(c), which was later reduced by the CIT(A). The appellant, a Govt. Federation, had timely filed the TDS statement for salary but delayed the filing for TDS on contract payments due to a belief that only salary TDS statement was required. The appellant argued that the delay was unintentional and technical, with no default in deducting or depositing taxes. The appellant's counsel contended that the penalty was unjustified as the delay in filing Form No. 26 was due to a bona fide belief and not a deliberate act. The Departmental Representative argued against the appellant's plea, stating that filing Form No. 24 negated the appellant's claim of a genuine belief. Upon review of submissions and lower authorities' orders, it was found that there was no default in tax deduction or deposit by the appellant. The delay in furnishing Form No. 26 was considered a technical error, not warranting a penalty, following the principles laid down by the Hon'ble Supreme Court in Hindustan Steel Ltd. vs. State of Orissa (1972) 83 ITR 26 (SC). The Tribunal concluded that the penalty was not justified and canceled it, allowing the appellant's appeal.
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