TaxTMI 
TaxTMI 
2010 (1) TMI 938
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....quarter. It may be noticed that because of the change in the provisions, the assessee was under an obligation to file quarterly returns within 15 days from the end of the quarter whereas assessee claimed to have been under the impression that the annual return has to be filed on or before 15-6-2007 but filed the quarterly returns for all the four quarters, referable to Forms 26Q and 24Q, on 30-6-2007 and 10-7-2007 respectively. So far as Form 26Q is concerned, the delay with regard to first quarter works out to 372 days, second quarter by 280 days, third quarter by 188 days and for the 4th quarter there was delay of 37 days. Similarly under Form 24Q quarterly returns were delayed and for the first quarter it was late by 382 days, second quarter by 290 days, third quarter by 198 days and for 4th quarter by 47 days. For the total delay of 877 days in filing Form 26Q and 917 days with regard to Form 24Q the penalty, at the rate of Rs. 100 per day, works out to Rs. 87,700 and Rs. 91,700 respectively whereas, the tax deducted at source being less than the aforementioned figures penalty was restricted to Rs. 35,661 and Rs. 78,227 respectively resulting in levy of penalty of Rs. 1,13,888 ....
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....he assessee who has been consistently complying with the procedures under the Act in all the earlier years would not have taken a risk of filing the quarterly returns belatedly to invite punitive action of levy of penalty equivalent to the tax deductible or collectible and this in itself shows that the assessee was under the bona fide belief that the returns have to be filed annually. Placing reliance upon the following decisions of the Hon'ble Rajasthan High Court in CIT v. Dy. Housing Commissioner,Raj.Housing Board[2003] 133 Taxman 93, CIT v. Superintending Engineer[2003] 260 ITR 641, the learned counsel appearing on behalf of the assessee submitted that penalty under section 272A(2)(c) of Act should be levied in case of wanton negligence but not on assessees who are ignorant of the provisions, particularly when there was an amendment to the provision which was not informed by the tax authorities. In other words, when there is a delay in filing the first quarterly return, the Assessing Officer ought to have issued a notice or informed the assessee but no such action was taken by the Assessing Officer and, thus, the assessee had no occasion to realise the mistake stemming out of i....
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....sion of the Hon'ble Karnataka High Court in the case of Saraswathi Electronics v. ITO [2007] 292 ITR 411. He further submitted that the judgments of the Hon'ble Rajasthan High Court (supra) are distinguishable on facts. The Court was concerned with the default by a Government body in deducting tax at source on account of ignorance of law and, thus, cancelled penalty on the facts of the case. The Hon'ble Court observed that the tax authorities should have evolved a method of advising the head of office by way of notice or reminder providing an opportunity to comply with the provisions, as otherwise penalty should not normally be levied. He submitted that the assessee is engaged in the business and had the benefit of advice of tax professionals apart from engaging an accountant in the office and, hence, the company cannot plead ignorance of law. Learned DR submitted that penalty is otherwise leviable under section 272A(2)(k) of the Act and, thus, mere wrong reference to a provision should not vitiate the proceedings since such technical defaults are saved by the provisions of section 292B of the Act. 7. We have heard the rival submissions and carefully perused the record. A....
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....le cause' requires to be interpreted liberally in a fair and reasonable manner so as to advance the cause of justice, since harsh legalistic approach should be mitigated by soft practical approach in applying penal provisions." 9. It is well-settled that ordinarily an assessee is duty bound to know the provisions of statute but in the event of making a claim of ignorance of law it is for the revenue to examine the plea judiciously keeping in mind the fact that assessee who has deducted tax and deposited the same within the stipulated time could have normally been said to be a law abiding citizen/ assessee and the delay, under such circumstances, cannot ordinarily be attributable to wanton negligence, particularly when the penalty leviable can be equivalent to the tax deducted or deductible. In the case of Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh [ 1979] 118 ITR 326, the Apex Court observed at page 339 of the report that it is impossible to know all the statutory provisions of law and, hence, the principle that 'everyone is presumed to know the law', is not applicable universally since it is of a very different scope and application. Similarly in the....