TaxTMI 
TaxTMI 
TaxTMI 
2011 (12) TMI 362
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....of tax in form no.24Q for the financial year 2008-09 revealed that the assessee furnished incorrect Permanent Account Number[ PAN] for as many as 5 tax-deductees. Accordingly, the Assessing Officer i.e ITO(TDS)(A.O. in short) issued a show cause notice u/s 272B of the Income-tax Act, 1961 (hereinafter referred to as the Act). In response, the assessee did not file any reply nor any reasons for not quoting correct PAN in the quarterly statement in respect of five deductees. In response to another notice dated 7th June, 2010, the assessee replied that their counsel being out of town, the matter may be adjourned. Despite granting adjournment to 29.06.2010, the tax-deductor neither attended nor submitted any reply leading to the conclusion that it has nothing to say in the matter. Accordingly, the AO imposed a penalty of Rs.50,000/- @ Rs.10,000/- per default for the failure on the part of the assessee to quote correct PAN in terms of provisions of section 139A of the Act. 3. On appeal, the learned CIT(A) upheld the findings of the AO in the following terms:- "6. I have considered the submissions of learned counsel for the appellant and gone through the relevant document....
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.... 200: It is abundantly clear from the above provisions that a legal obligation has been cast upon every person (deductor) to quote PAN where:- i) any sum or income or amount has been paid after deducting tax under Chapter XVIIB; (ii) every person deducting tax under that Chapter shall quote the permanent account number of the. person to whom such sum or income or amount has been paid. Thus, the legal obligation to quote the PAN is on the person who has deducted the tax at source and has paid any amount after such deduction to the deductee. The learned counsel has contended that section 272B of the Act nowhere specifically relates to default under section 139A(5B) which casts an obligation on the deductor to quote the PAN of deductees. The AO has misunderstood the provisions of section and erred in imposing penalty under section 272B of the Act. The reliance has also been placed on the order dated 07.10.2009 passed by my Ld. predecessor in appeal No. 136/2008-09 in the case of Packraft Container India Pvt. Ltd. for A.Y.2008-09 in which penalty imposed in the identical facts has been deleted. It has also been contended that due to loss of original retu....
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....9A of the Act is found to be false. Therefore, the penal provisions under sub section (2) of section 272B are attracted in the cases of deductees only for false quoting or false initiation of PAN. The non compliance to other provisions of section 139A would attract penalty under sub section (1) of section 272B of the Act which may be imposed. on both the 'deductors' or the 'deductees', as the case may be. To elaborate further, a penalty may be imposed under sub section (1) of section 2728 on a deductee for failure to comply with the provisions of section 139A(1) of the Act whereas a penalty under the same provisions may be imposed on a deductor for non compliance to the provisions of section 139A(5B) of the Act. Therefore, the learned counsel does not appear to have understood the provisions of law correctly. I have gone through the order of my learned predecessor passed in the case of Packraft Container India Pvt. Ltd. for A.Y.200B-09, the operative part of which reads as under: "It is found that the bare reading of the contents of section 272B would reveal that it does nowhere specifically relate to the default u/s 139A(5B) which in fact casts an obligation on the "deduct....
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....espect of the first three quarters of the financial year and on or before the 15th June following the last quarter of the financial year. The requirement of filing an annual return of TDS has been done away with effect from 1-4-2006. The quarterly statement for the last quarter filed in Form 24Q (as amended by Notification No. S.O. 704(E), dated 12-5-2006) shall be treated as the annual return of TDS. It is now mandatory for all offices of the Government and all companies to file quarterly statements of TDS on computer media only in accordance with the "Electronic Filing of Returns of Tax Deducted at Source Scheme, 2003" notified vide Notification No. S.O. 974(E), dated 26-8-2003. (Annexure-V), The quarterly statements are to be filed by such deductors in electronic format with the e- TDS Intermediary at any of the TIN Facilitation Centres, particulars of which are available at www.incometaxindia.gov.in and at http://tin.nsdl.com. If a person fails to furnish the quarterly statements in due time, he shall be liable to pay by way of penalty under section 272A(2)(k), a sum which shall be Rs.100 for every day during which the failure continues. However, this sum shall not exce....
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....under section 272A(g} on the ground of delay in issue of consolidated certificate at the end of the accounting period. Hence, the decisions in these cases are not applicable to the facts of present case as the penalty in those cases was levied for the defaults of altogether different nature. In the case of Packraft Container India Pvt. Ltd., my learned predecessor placed reliance on the, decision of Hon'ble Ahmedabad 'D' Bench in the case of Financial Co-operative Bank Ltd. vs. ITA (117 TTJ 782). The head note of the decision in this case is reproduced below: "Section 272B, read with section 139A of the Income-tax Act, 1961 and rules 114B to 1140 of the Income-tax Rules, 1962 - Penalty - For failure to comply with provisions of section 139A - Assessment year 2006-07 Assessee, engaged in business of banking, was to get either Permanent Account Numbers (PANs) of depositors or Form No. 60 duly filled in by them as specified in section 139 A and rules 114B to 114D - Assessee obtained Form No. 60 from depositors who did not have PANs but in some cases either said form had not been completely filled up or supporting evidence with respect to addresses of depositors was not availab....
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....g of PAN cannot be inferred to be a compliance as per the provisions of section 139A (5B) of the Act and consequently, the penal provisions of section 272B(1) would be attracted. In respect of two deductees, wrong PANs have been quoted twice. The appellant has not submitted as to what was the reasonable cause for not quoting the PAN correctly. Hence, I hold that the appellant was in default in view of the provisions of section 272B r.w.s 139A(5B) of the Act in not quoting the correct PANs of three deductees despite having their correct PANs. The copies of their PAN cards have been filed by the appellant with the submissions before me. However, since in two records of two deductees, the mistake was repeated on account of their being quoted wrongly in the first place, the same may be considered as a reasonable cause. Accordingly, it would be fair and reasonable to impose penalty in respect of three defaults of quoting the PAN wrongly in the case of three deductees and to restrict the penalty to Rs.30,000/- Hence, the order passed by the AO imposing penalty to the extent of Rs.30,000/- is confirmed. The balance' penalty of Rs.20000/- is deleted. 4. The assessee is now in appea....
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....educed The Penalty To 30,000/-, there being repetition of PAN in the case of two deductees, observing, inter alia, that the assessee did not give any reasonable cause for quoting incorrect PAN. We find that though the assessee quoted PAN of the aforesaid three persons in form no. 24Q, one alphabet each in the PAN of Shashi Talwar and Shikha Talwar as also one numeric in the PAN of Shri Naresh Kumar was mentioned incorrectly. According to the assessee, they quoted PAN as per details given by these three persons and only after processing the form 24Q mistake was brought to their knowledge by the AO.. The ld. CIT(A), without even verifying this contention as to whether details of PAN quoted by the assessee in form 24Q, were given by the aforesaid three persons incorrectly or the assessee alone quoted incorrect PAN, upheld the levy of penalty. In these circumstances, especially when the assessee quoted incorrect PAN in form 24Q due to apparent inadvertence on the part of either the assessee itself or the aforesaid three persons, levy of penalty is unjustified. Whether or not there was reasonable cause within the meaning of provisions of sec. 273B of the Act is a question of fact. There....