1999 (10) TMI 100

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..... for each day of default. The CIT(A) upheld the imposition of penalty but worked out the default at 316 days, instead of 324 days and, thus, reduced the amount of penalty to Rs. 31,600. Against this order of the CIT(A), assessee has come in appeal before us. 3. The ld. A/R, appearing on behalf of the assessee, submitted that assessee deducted and deposited the Tax Deducted at Source under section 194A. Hence it was purely a technical default and since there was no mala fide intention of the assessee, this technical default should have been ignored by the DCIT and the CIT(A). It was further submitted that prior to amendment in section 206 of the I.T. Act, the provisions required "shall prepare within the prescribed time after the end of ea .....

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..... ction 206, read with Rule 37 of the I.T. Rules. Once the assessee deducts the tax and deposits the same with the Government Exchequer, it is presupposed that he is aware of the legal obligations cast upon him vide section 194A/206, read with Rule 37. We are, therefore, of the opinion that non-filing, of the statement required under section 206 cannot absolve the assessee from the default in question. The Income-tax Rules are made to support and supplement the provisions of the I.T. Act and hence the Income-tax Rules are supplementary to the Income-tax Act. The time limit in the case of filing of statement has been specifically mentioned in Rule 37. This is, therefore, not a case of suppression of substantive law by rules prescribed under th .....

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..... ly 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 section 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 gravity or extent of such default. An assessee might have defaulted in not deducting the tax at source of the amount of, say a hundred rupee only and his default might have continued for, say, one month. He was to be visited with a penalty of Rs. 3,000 min .....

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