Tribunal cancels penalty for delayed tax form submission citing reasonable cause

The Tribunal allowed the assessee's appeal, canceling the penalty imposed under section 272A(2)(f) of the IT Act for delayed submission of Form No. 15H. The delay of 648 days was attributed to the sickness of the accountant, which was deemed a reasonable cause for the delay. The Tribunal emphasized that penalties should not be imposed for technical breaches, leading to the cancellation of the penalty based on the valid explanation provided by the assessee.

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Issues:
Penalty under section 272A(2)(f) of the IT Act for delayed submission of Form No. 15H.

Analysis:
The appeal was against the penalty levied by the CIT under section 272A(2)(f) of the IT Act amounting to Rs. 6,48,000 for the assessment year 1993-94. The delay in submitting Form No. 15H was found to be 648 days, leading to the penalty imposition. The assessee's explanation for the delay due to the sickness of the accountant was not initially accepted by the CIT, resulting in the penalty being upheld. The assessee contended that there was a reasonable cause for the delay and that the penalty was unjustified.

The learned counsel for the assessee argued that the delay in submitting Form No. 15H was due to the sickness of the accountant, who was responsible for the task. The accountant fell ill in March 1993, and most of the forms were received during his illness period. The annual return in Form No. 27A was filed immediately upon his recovery, but due to an oversight, the Form No. 15H was not enclosed. The counsel emphasized that there was a valid reason for the delay, and the penalty imposition was unwarranted.

The Departmental Representative supported the CIT's decision, stating that there was no valid explanation for the 648-day delay in submitting Form No. 15H. The representative argued that the penalty under section 272A was rightly imposed and should not be interfered with. The representative contended that the delay was substantial and without justification.

Upon careful consideration of the submissions and relevant provisions of the law, the Tribunal found that the delay in submitting Form No. 15H was indeed due to the sickness of the accountant, as explained by the assessee. The Tribunal noted that the explanation provided by the assessee was not refuted by the CIT or supported by any contrary evidence. Citing the Hindustan Steels Ltd. case, the Tribunal emphasized that penalties should not be imposed for technical or venial breaches. Therefore, the Tribunal concluded that the delay due to the accountant's sickness constituted a reasonable cause under section 273B, justifying the cancellation of the penalty.

In conclusion, the Tribunal allowed the assessee's appeal, ruling in favor of canceling the penalty imposed under section 272A(2)(f) of the IT Act.

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