TaxTMI 
TaxTMI 
2008 (12) TMI 333
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....ner criminal case against the existing and the managing partner and in the said criminal case, they were granted anticipatory bail by the Sessions Judge Patna, by order dated November 6, 1998, and this delayed filing the certificate in the prescribed form by 30th of April, 1998. This did not find favour with the Assessing Officer and he inflicted a penalty of Rs.29,525 order dated February 24, 1999. The assessee preferred appeal before the Commissioner of Income-tax (Appeals), who reduced the penalty from Rs.29,525 to Rs.23,700 by order dated November 14, 2000, calculate at the rate of Ps. 100 per day for delay of 237 days. 2. The assessee thereafter field appeal before the Patna Bench of the Income-tax Appellate Tribunal, hereinafter referred to as, "the Tribunal". It was contended before "the Tribunal". It was contended before the Tribunal on behalf of the assessee that on account of dispute between a old partner and a creditor, a warrant of arrest was issued against its managing partner and on account thereof, he was unable to perform his day-to-day. It was further pointed out that the managing partner was granted anticipatory bail by order dated November 6, 1998, and onl....
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....ction 272A(2)(g) and its proviso, which are relevant for the purpose, read as follows. "272A Penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspection, etc.- (1).... (2) If any person fails - ……. (g) to furnish a certificate as required by section 203 or section 206C; or he shall pay, by way of penalty a sum of one hundred rupees for every day during which the failure continues: Provided that the amount of penalty for failures in relation to a declaration mentioned in section 197A, a certificate as required by section 203 and returns under section 206 and section 206C and statements under sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C shall not exceed the amount of tax deductible or collectible, as the case may be." 8. Mr. Rastogi draws our attention to the aforesaid provision and contends the assessee having filed the certificate, it cannot be said that it has failed to furnish the same. This submission has been noted only to be rejected Section 203 of the Act, inter alia, provides for issuance of certificate in the prescribed form within a period prescribed. Undisputedly....
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....ng anything contained in sub-section (2) of section 272A of the Act, no penalty shall be imposable on the assessee for any failure on carrying out the as contained therein, if it proves that there was reasonable case for failure. However, the question in the present case is as to whether the case shown by the assessee is a reasonable cause or not. The Assessing Officer, the Commissioner of Income-tax (Appeals) and the Tribunal have concurrently held that the assessee has not proved that there was reasonable case for the failure There is no reason, much less compelling reason to upset the aforesaid finding. As stated earlier, the assessee's plea was that as warrant was issued against its managing partner, he became irregular in day-to-day work and, therefore, did not file the certificate within time stipulated. It is relevant here to state that a complaint petition was filed impleading the managing partner as accused and it was on November 6, 1998 court passed the order for issuance of process for arrest of the managing partner and partners of the assessee. As observed earlier, the last date for filing of certificate was April 30, 1998, and it is not the case of the asse....
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....r the Act penalty may be imposed for failure to register as a dealer section 9(1), read with section 25(1)(a) of the Act. But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conducted contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration, of all the relevant circumstances stances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Those in ....
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.... escape from the conclusion that it acted deliberately in defiance of law. In such circumstance, I am of the opinion that the assessee cannot escape from the liability to pay the penalty contending that its action in not submitting the certificate is venial or technical in nature. 19. Now referring to the authority of the Supreme Court in the case of Hindustan Steel Limited [1972] 83 1TR 26, same is clearly distinguishable. In the said case, the Supreme Court on fact found that the assessee was under the bona fide belief that it was not a dealer and under such a belief failed to register itself a dealer under Sales Tax Act and in the background thereof it was observed that penalty shall not be leviable. 20. So far as the decision of this court in the case of Indian Oil Corporation Ltd. [2003] 3 PLJR 561 is concerned, same is also distinguishable. In the said case, the question was as to whether the assessee was required to pay tax from the date of the judgment of the Supreme Court when it upheld the validity of the Act or coming into force of the Act. This court considered the plea of the assessee in the said case and found that the belief of the assessee was bona fide and ....
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....the default is merely technical or venial in nature, we are satisfied that it is not a fit case for the levy of penalty for this purpose, we find support from the observations of the Supreme Court in Hindustan Steel Limited [1972] 83 ITR 26." 23. Reliance has also been placed on a decision of the Madhya Pradesh High Court in the case of CIT v. Gabriel India Ltd. [2006] 282 ITR 58 and our attention has been drawn to the following passage from paragraph 6 of the said judgment, which reads as follows (page 60): "We find no fault in the impugned order of the Tribunal, when it was held by the Tribunal that the explanation offered by the assessee is bona fide, genuine and sufficient to set aside the penalty. It is a clear case where no loss was occasioned to the Revenue due to some delay in issuing the certificate in favour of a person from whom the tax was deducted in time. He too never complained and used the same for his assessment in claiming the benefit. It was, therefore, a fit case where no penalty could be levied due to technical/venial breach of a a provision of law. (see Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC)." 24. The submission adva....