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TMI Blog2019 (2) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... factors which explain the delayed deposit of TDS they should be taken into account while taking a decision to impose or not to impose penalty or to determine its extent. Failure to make deduction would however stand on a different footing. In the present case the delay in deposit of TDS for April, May, July, August and October, 2008 ranges from 24 days to 94 days. The Railways should have been conscious of its statutory obligations - Considering the fact that it is not a case of failure to make deduction but of failure to deposit TDS timely and also considering the fact that the matter relates to a Government department, in the facts of the case, the penalty is reduced from ₹ 3,08,296.40/- to ₹ 1541248 i.e. 05% of the TDS. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,928/- was imposed by the Assessing Authority under Section 34(8) of the Act, 2008. The revisionist claims to have deposited ₹ 15,41,482/- on 11.07.2013 as 25% of the penalty imposed. Interest under Section 34(9) on the delayed deposit of TDS had also not been deposited which was deposited only on 30.01.2013 i.e. after the passing of the penalty order on 03.01.2013. Against the order of the Assessing Authority an appeal was preferred by the revisionist before the Additional Commissioner which was rejected. Thereafter, being aggrieved the revisionist preferred a second appeal under Section 57 of the Act, 2008 before the Commercial Tax, Tribunal, which, on a consideration of the facts and circumstances of the case, reduced the penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Firm and the silly mistake committed by it. This was done keeping in mind the provision of Section 271(1)(c) of the Income Tax Act, 1961. The learned Additional Chief Standing Counsel on the other hand contended that mens rea is not a prerequisite for imposition of penalty under Section 34(8) of the Act, 2008. There has been a conscious disregard of the statutory obligation to deposit the TDS amount within time, therefore, the impugned action does not require any interference, specially as, the 200% penalty imposed upon the revisionist has been reduced by the Tribunal to 10%, which is justified. Under the provisions of Section 34 of the Act, 2008 TDS is to be deposited by 20th of every month following that in which the deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to such person an opportunity of being heard, by order in writing, direct that such person shall pay, by way of penalty, a sum not exceeding twice the amount deductible under this section but not so deducted and, if deducted, not so deposited into the Government Treasury. The imposition of penalty under Section 34(8) is in addition to and unaffected by the payment of interest under Section 34(8). Thus, the imposition of penalty is discretionary which is evident from the use of the word may and also from the fact that a prior opportunity of hearing is to be given to such person before taking a decision in this regard, which is obviously for the purposes of facilitating a just and fair consideration of the matter and the exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s extent. Failure to make deduction would however stand on a different footing. In the present case the delay in deposit of TDS for April, May, July, August and October, 2008 ranges from 24 days to 94 days. The Railways should have been conscious of its statutory obligations. Considering the fact that it is not a case of failure to make deduction but of failure to deposit TDS timely and also considering the fact that the matter relates to a Government department, in the facts of the case, the penalty is reduced from ₹ 3,08,296.40/- to ₹ 1541248 i.e. 05% of the TDS. This will act as a deterrent for the future. The order of the Tribunal stands modified accordingly. In view of the aforesaid, the question framed hereinabove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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