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TMI Blog2003 (7) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... iated penalty proceedings for default under section 272A(2)(c) read with section 206 of Income-tax Act on the ground that the assessee failed to submit the TDS return in respect of tax at source deducted on interest other than interest on securities during the financial year 1988-89. The assessee stated that the total amount of tax deducted at source was Rs. 22,676 which has been deposited into the Central Government account and further that return under section 206 has been filed on 30-4-1989 which is within the due date. The Assessing Officer, however, rejected the explanation of the assessee on the ground that there was no evidence regarding filing the TDS return by the assessee on 30-4-1989 as claimed during the penalty proceedings. Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return has been filed during the penalty proceedings initiated by the Assessing Officer under section 270A(2)(c). Section 206, prior to amendment by the Finance (No. 2) Act, 1991, w.e.f. 27-9-1991, provide that the assessee shall prepare the return within the prescribed time. There was no specific requirement for furnishing the said return within the prescribed time. This lacuna has been removed subsequently by the legislature by amending the provision by the Finance (No. 2) Act, 1991, w.e.f. 27-9-1991 whereunder it has been provided that the return shall be prepared and delivered to the Income-tax authorities within the prescribed time. This amendment, however, takes effect from 27-9-1991 and would, therefore, not be applicable for the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected. We feel that in the facts and in the circumstances of the case, particularly, keeping in view the bona fide conduct of the assessee whereby tax has been deducted and deposited into the Government treasury, the default, if any, is clearly technical and venial in nature and no penalty in the facts and circum-stances of the case is leviable. Penalty will not be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circum-stances. Decision of Gujarat High Court in the case of CIT v. Harsiddh Construction (P.) Ltd. [2000] 244 ITR 417 cited by the ld. coun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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