1984 (7) TMI 112 - AT - Income Tax

Tribunal Cancels Penalty Year 1, Upholds Reduced Penalty Year 2 for Payment Delays

YUSUF MIYAJI. Versus ELEVENTH INCOME TAX OFFICER.

YUSUF MIYAJI. Versus ELEVENTH INCOME TAX OFFICER. - TTJ 021, 240, Issues:1. Penalty under section 10 of the CDS (ITP) Act for delay in compulsory deposit payments for two consecutive years.Detailed Analysis:The appeals were filed against the penalties imposed by the ITO under section 10 of the CDS (ITP) Act for two years due to delays in compulsory deposit payments. The ITO levied penalties of Rs. 800 and Rs. 1,762 for the first and second years, respectively, due to delays in payments made by the assessee. The assessee contended that the delay in the first year was inadvertent and only for one day, while the delay in the second year was 11 days. The assessee argued that there was no shortfall in the payment as it was not less than 75% of the amount due, citing decisions where penalties were canceled under similar circumstances. The Departmental Representative relied on the orders of the authorities below.The Tribunal considered the provisions of section 10(1) of the CDS (ITP) Act, 1974, which stipulates penalties for failure to make compulsory deposits. For the first year, the Tribunal found the default to be technical as the full amount was paid with a delay of only one day. Consequently, the penalty for the first year was canceled. However, for the second year, the Tribunal noted that while there was no shortfall in the payment, there was an 11-day delay for which no satisfactory explanation was provided. Therefore, the Tribunal decided to sustain a reduced penalty of Rs. 250 for the second year.In conclusion, the Tribunal canceled the penalty for the first year and reduced the penalty to Rs. 250 for the second year. Any collected balance of the penalty was to be remitted. The appeal for the first year was allowed, while the appeal for the second year was partly allowed.