2004 (3) TMI 396 - AT - Income Tax

Summary

Issues:
Appeal against deletion of penalty under s. 272A(2)(g) for delay in issuing TDS certificates.

Detailed Analysis:
1. The Addl. CIT imposed a penalty of Rs. 5,83,500 under s. 272A(2)(g) due to a cumulative delay of 5835 days in issuing 104 TDS certificates. The assessee failed to furnish certificates in time without any reasonable cause. The penalty was calculated at Rs. 100 per day of default.

2. The assessee appealed to the CIT(A) stating that certificates were issued in old forms on time, but the new forms were not readily available. The AO reported that old forms did not comply with prescribed standards and new forms were introduced. The delay in issuing new forms was attributed to staff leave and transfers.

3. The CIT(A) found a reasonable cause for the delay and deleted the penalty. He noted that the tax was deducted correctly and deposited on time, with no benefit derived from the delay. The assessee issued certificates in old and later computerized forms, ensuring no loss of revenue to the government.

4. The Departmental Representative argued that the delay constituted a default, emphasizing strict adherence to prescribed dates for issuing TDS certificates. The counsel for the assessee supported the CIT(A)'s decision, citing relevant case laws.

5. The ITAT Pune upheld the CIT(A)'s decision, stating that the delay did not result in any benefit to the assessee and no loss of revenue occurred. Citing a previous case, the tribunal emphasized that penalties under s. 272A aim to ensure compliance and deter deliberate breaches, which were not the case here. The appeal was dismissed, affirming the deletion of the penalty.

This judgment highlights the importance of reasonable cause in penalty imposition cases and the significance of compliance with statutory provisions, ultimately leading to the dismissal of the Department's appeal against the deletion of the penalty.