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TMI Blog1995 (3) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... urce before making payment of salaries to his employees and also deposited the same with the State Exchequer in time, yet he failed to file the returns of such deductions made in 1987-88 and 1988-89 within the prescribed time. He filed the same on 10th April, 1989 and 15th Jan., 1990 for 1987-88 and 1988-89 respectively. On being asked by the ITO (TDS) to explain the cause for the delay in filing the returns the appellant pleaded ignorance of the provisions of the Act. The Dy. CIT did not feel satisfied with the explanation offered and levied penalty under s. 272A(2)(c) of Rs. 3,450 for delay of 345 days in 1987-88 @ Rs. 10 per day and of Rs. 22,800 for delay of 228 days of 1988-89 @ Rs. 100 per day. 2. In appeals before the learned CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in that provision of the Act thus stood attracted. 6. Ignorance of law is certainly no excuse for a default committed but, at the same time, there is no presumption in law that every body knows the law. The application of this rule would differ from case to case and person to person. In a given case, there may be a person who is quite illiterate, living in remote village, rarely coming in touch with law enforcing machinery and not required to discharge any statutory obligations under a particular law. Ignorance of law may be a good excuse in his case. But in another case there may be an educated person living in civilised atmosphere, coming in touch with the law-enforcing machinery, entrusted to discharge certain official duties and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. That being so, ignorance of law is no excuse in his case and we reject the argument of the learned counsel in that behalf. However, we find sufficient merits in the other limb of the argument of Mr. Chaudhary. 8. Sec. 272A(2), as is relevant for our purpose, reads as under: "s. 272A(2) : If a person fails (c) to furnish in due time any of the returns, statements or particulars mentioned in s. 133 or s. 206. He shall pay by way of penalty, a sum which shall not be less than one hundred rupees, but which may extend to two hundred rupees, for every day during which the failure continues: Provided that the amount of penalty for failure in relation to returns under s. 206 and 206C shall not exceed the amount of tax deductible or co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an incomplete act or an act yet to be done, the later to a completed act or act already done. The amount of tax already "deducted" or "collected" should normally not attract levy of penalty. But the amount of tax which remains to be deducted or collected may also attract penalty. In its wisdom, the legislature has thought it proper to use the terms "deductible" and "collectible" and not the terms "deducted" and "collected" in the language of the proviso to s. 272A(2) of the Act. The penalty intended to be levied for failure to file the return under s. 206 or 206C within the specified time is certainly to have a relation to the duration of the period of default but at the same time such penalty, irrespective of the duration of the period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d apply to those cases of defaults also in which proceedings are still pending on the date of coming of the amendment into force provided the amendment is purely procedural and affected the machinery for levying and collecting penalty only and not the very ingredients of the default. The provisions of taxing statute, particularly those which cast a penal liability on the subject, are required to be so construed as to obviate the hardship of the subject without causing damage to the object sought to be achieved by such provisions. The provisions of s. 272A(2), as they stood at the time of default committed in the present case, required the levy of penalty with reference to the period of default only without having any reference to the gravit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kely to face. The charging provisions in the present case, are contained in s. 206 and the provisions contained in s. 272A(2) are purely procedural providing for the machinery for levying and collecting penalty. The amendment did not affect the very ingredient of the default contemplated by s. 206 or s. 206C. The proviso to s. 272A(2) though inserted w.e.f. 1st Oct., 1991 are, therefore, applicable to those cases of penalties also in which the proceedings are pending on that date. Appeal is simply continuation of the original proceedings. We, therefore, hold that the proviso to s. 272A(2) is applicable to the instant case. That being so, benefit of the proviso to s. 272A(2) is available to the appellant. 12. In view of the above discussio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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