1982 (11) TMI 74 - AT - Income Tax

Assessee's Penalty Reduced for Form 52 Delay - Relief Granted

The penalty imposed under section 285A(2) for delay in furnishing information in Form No. 52 was contested by the assessee. The Tribunal reduced the ... Penalty under section 285A(2) - failure to furnish particulars in Form No. 52 - ignorance of law as reasonable cause - assessment completed without required informationPenalty under section 285A(2) - ignorance of law as reasonable cause - failure to furnish particulars in Form No. 52 - assessment completed without required information - Whether a penalty under section 285A(2) was exigible in respect of the year 1978-79 - HELD THAT: - The Third Member examined whether the default in not furnishing Form No. 52 attracted a fine under section 285A(2) and concluded that statutory liability to penalty does not make its imposition automatic. The determinative reasoning emphasises assessment of the totality of circumstances: the contract was the assessee's first, the assessee was recently a college student and had not obtained professional assistance, the matter was a petty case, tax was deducted at source and the assessment was completed (resulting in a refund) without the information having been furnished. Given the complexity of tax law, ignorance of the particular statutory/formal requirement in these circumstances can constitute a reasonable cause for delay. A venial or inadvertent breach in such factual setting does not warrant penal consequence. Applying these considerations, the Third Member agreed with the view that no fine should be imposed. [Paras 5, 6]No penalty under section 285A(2) is exigible for 1978-79; the fine is deleted and the appeal is allowed.Final Conclusion: On the facts - first contract, small-scale transaction, tax deducted at source, assessment completed with refund, and the assessee's lack of professional assistance - the Tribunal (Third Member) held that ignorance of the statutory filing requirement amounted to reasonable cause and deleted the penalty under section 285A(2) for assessment year 1978-79. Issues involved:Penalty appeal u/s 285A(2) against delay in furnishing information in Form No. 52 as per rule 120 of Income-tax Rules.Judgment details:1. The assessee failed to furnish required information within the stipulated time frame, leading to penalty proceedings u/s 285A(2). Commissioner imposed a token fine of Rs. 2,000 considering it as the first default by the assessee. Assessee appealed, arguing unawareness of legal requirement due to being a new contractor. Tribunal reduced the penalty to Rs. 1.65 per day till the date of filing the return for the assessment year 1978-79, granting relief to the assessee.2. Accountant Member disagreed with the penalty, emphasizing the complexity of tax laws and the reasonable excuse of ignorance. Noting the small nature of the case, lack of professional assistance, and tax deductions at source, the Member deemed the penalty unjustified and ordered its deletion.Third Member's Resolution:The Third Member resolved the conflict between the previous members by concluding that no fine was imposable in this case. Considering the circumstances of the assessee being a new contractor, lack of professional guidance, tax deductions at source, and refund entitlement upon assessment, the Third Member agreed with the Accountant Member's decision to cancel the fine.