2013 (7) TMI 978 - AT - Income Tax

Tribunal reduces penalty for PAN non/quoting in TDS Returns under Income Tax Act

The Tribunal upheld the CIT (Appeals) decision to reduce the penalty under section 272B of the Income Tax Act, 1961 from Rs. 5,30,000 to Rs. 10,000 for ... - Issues involved: The appeal concerns the penalty levied u/s 272B of the Income Tax Act, 1961 for non-quoting/wrong quoting of PANs in TDS Returns for the A.Y. 2008-09. The Revenue challenges the reduction of penalty by the CIT (Appeals) from Rs. 5,30,000 to Rs. 10,000. The assessee, a Bank, contests the imposition of penalty citing efforts made to obtain correct PANs from deductees and lack of provision for recovery from them.Revenue's Grounds of Appeal: The Revenue contends that the CIT (Appeals) erred in reducing the penalty, citing non-compliance with section 139A(5B) requiring PANs to be quoted in quarterly statements. Failure to provide PANs led to inconsistencies in tax deductions and hindered TDS claims, justifying the original penalty amount. The Revenue seeks cancellation of the CIT (Appeals) order and restoration of the Assessing Officer's decision.Assessee's Grounds of Appeal: The Bank argues that the CIT (Appeals) erred in upholding the penalty, emphasizing efforts to obtain correct PANs and citing reasonable cause for the delay. The Bank asserts that it deserves no penalty due to the fault of deductees and seeks to amend or delete grounds of appeal as necessary.Factual Background: The assessee failed to quote PAN numbers for 53 deductees in the e-TDS quarterly statement, resulting in a penalty of Rs. 5,30,000 by the Assessing Officer. The CIT (Appeals) reduced this penalty to Rs. 10,000 based on section 272B(1) of the Act. The Revenue appeals this decision, while the Bank files a Cross Objection against the penalty.Decision: The Tribunal upholds the CIT (Appeals) decision to restrict the penalty to Rs. 10,000, citing section 272B(1) provisions for non-compliance with PAN requirements. Previous Tribunal cases supported penalties at Rs. 10,000 for similar defaults. Despite the Bank's efforts to collect PANs, the Tribunal finds no reasonable cause for the default, dismissing both the Revenue's appeal and the Bank's Cross Objection.Precedents and Rulings: The Tribunal references past cases where penalties under section 272B were upheld at Rs. 10,000, emphasizing consistency in penalty imposition. While the Bank cited a case where penalties were deleted, the Tribunal found no merit in the Bank's arguments, ultimately dismissing both appeals.Conclusion: Both the Revenue's appeal and the Bank's Cross Objection are dismissed, affirming the penalty of Rs. 10,000 under section 272B of the Income Tax Act, 1961. The Tribunal's decision was pronounced on July 15, 2013.