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TMI Blog2005 (5) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... s, would also not arise.- Tribunal was correct in holding that since the tax has not been deducted, there is no violation of the provisions of section 206 and, therefore, penalty is not leviable without appreciating the fact that sections 192 and 206 read with rule 36 of the Income-tax Rules, 1962 are interlinked - - - - - Dated:- 26-5-2005 - Judge(s) : PRADEEP KANT., R. P. YADAV. JUDGMENT Heard learned counsel for the appellant Sri. D. D. Chopra and perused the record. This appeal under section 260A of the Income-tax Act, 1961 has been preferred by the Department on the following substantial questions of law: "1. Whether, on the facts and in the circumstances df the case, the hon'ble Income-tax Appellate Tribunal, Lucknow, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e., he failed to file Form No. 24 by May 31, 1994, for the financial year 1993-94 and filed it on January 20, 1997, a notice was issued to him as to why penalty under section 272A(2)(c) of the Act be not imposed for filing Form No. 24 late. After considering the defence of the assessee, the Assessing Officer held that the assessee has committed default and imposed a penalty of Rs. 93,500 under section 272A(2)(c) of the Act. Under the same circumstances, penalty of Rs. 75,100 was also imposed under the aforesaid provision for the financial year 1994-95. Another show-cause notice was issued to the assessee for non-compliance with the provisions of section 203 of the Act, read with rule 31 of the Income-tax Rules, wherein the assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ividend to a shareholder, furnish to the person to whose account such credit is given or to whom such payment is made or the cheque or warrant is issued, a certificate to the effect that tax has been deducted, and specifying the amount so deducted, the rate at which the tax has been deducted, and such other particulars as may be prescribed. (2) Every person, being an employer, referred to in sub-section (1A) of section 192 shall, within such period, as may be prescribed, furnish to the person in respect of whose income such payment of tax has been made, a certificate to the effect that tax has been paid to the Central Government, and specify the amount so paid, the rate at which the tax has been paid and such other particulars as may be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the prescribed income-tax authority. Failure to comply with the aforesaid provisions would attract the provisions of imposition of penalty as aforesaid. The Commissioner of Income-tax (Appeals) as well as the Tribunal have taken a view that sections 203 and 206 would only be attracted if the assessee has deducted the tax at source but in case the assessee has not deducted the tax at source, there can be no violation of the provisions of sections 203 and 206 of the Act. A bare perusal of the aforesaid provisions would reveal that the said sections, namely, sections 203 and 206 would come into operation when the tax is deducted at source by the persons, who are responsible for deducting the tax at source. The very opening words of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducted the tax. The said provision, therefore, cannot be made applicable in a case where the tax has not been deducted at source. The aforesaid two provisions thus, would become applicable only if the tax is deducted at source by the person concerned and he commits default in complying with any of the provisions of section 203 or section 206 but in case no tax is deducted at source, the aforesaid provisions would not be attracted. For failure of the assessee in deducting the tax at source, penalty can be imposed upon him under section 271C of the Act. Section 271C, which reads as under, prescribes a penalty equal to the amount of tax, which the person concerned failed to deduct or pay: "271C. Penalty for failure to deduct tax at sou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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