TDS certificate delay treated as technical breach; reasonable cause protected the assessee from penalty.

Penalty under section 272A(2)(g) was found unwarranted where the default was limited to delayed issuance of TDS certificates after deduction and deposit of tax. The delay was treated as a technical breach, and the assessee's explanation was accepted as reasonable cause under section 273B. As the material showed that compounding consequences had already followed the delayed TDS deposit, the protective provision applied and the penalty could not be sustained.

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Issues: Whether penalty under section 272A(2)(g) of the Income-tax Act, 1961 was sustainable when there was delay only in issuing TDS certificates after deduction and deposit of tax, and whether section 273B protected the assessee for reasonable cause.

Analysis: The assessee had deducted tax at source, and the default was confined to delayed deposit of TDS and delayed issuance of TDS certificates. The delay in issuing certificates was treated as a technical breach, and the assessee had already faced compounding consequences for the delayed deposit of TDS. On the material on record, the explanation for delay was accepted as reasonable cause, bringing the case within the protective scope of section 273B.

Conclusion: The penalty under section 272A(2)(g) was held to be unwarranted and the Revenue's appeal failed.

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