2012 (10) TMI 251

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....nue under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 9.3.2012 passed by the Income Tax Appellate Tribunal, Chandigarh Bench "B", Chandigarh (hereinafter referred to as "the Tribunal) in ITA No. 1230/CHD/2011, for the assessment year 2009-10, claiming the following substantial question of law:- "Whether on the facts and in the circumstances of the case, the ITAT has erred in observing that nonissuance of form 16A to the deductee within time as required u/s 203(1) of the Income Tax Act, 1961 was only technical and venial breach of provisions contained in Rule 31 of the Income Tax Rule, 1962 read with section 203(1) of the Income Tax Act, 1961 whereas the Person responsible had not taken adequate s....

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....sent penalty as well as penalty under Section 272A(2)(k) of the Act. The Additional Commissioner of Income Tax (TDS), Chandigarh vide order dated 28.1.2011 (Annexure A-1) levied penalty under Section 272A(2)(g) of the Act to the tune of Rs. 1,48,08,430/- (equal to the amount of tax deductible/ deducted at source). Against the said penalty, the respondent filed an appeal before the Commissioner of Income Tax (Appeals), Chandigarh [in short "the CIT(A)"]. The CIT(A) vide order dated 13.10.2011 (Annexure A-2) confirmed the penalty imposed under Section 272A(2)(g) of the Act and dismissed the appeal. Still dissatisfied, the assessee filed an appeal before the Tribunal. The Tribunal vide order dated 9.3.2012 (Annexure A-3) allowed the appeal ....

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.... was reasonable cause for not issuing the certificate in Form 16-A within time. Though there is no specific reference to Section 273B of the Act in the order of the Tribunal, but the Tribunal on appreciation of material came to the conclusion that the respondent had deducted the tax in time and deposited the same in the Government account but was prevented by sufficient cause in not issuing the certificate to the person from whom the tax was deducted as no PAN numbers were available with the respondent. The findings recorded by the Tribunal read as under:- "8. We have heard the rival submissions and have also perused the materials available on record. In this case, the Assessing Officer has levied the impugned penalty for the violation o....

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....lay in issuing Form No. 16A. Considering the entire facts and circumstances of the present case, we are of the view that the assessee was prevented by sufficient cause from issuing Certifications in Form No. 16A within period prescribed by the relevant rule and hence no penalty is leviable. Even otherwise also there was only a technical and venial breach of provisions contained in Rule 31 of the I.T. Rule, 1962 read with section 200(3) of the Income Tax Act, 1961, requiring the assessee to furnish a Certificate of deduction at source in Form No. 16A. The TDS was deducted at the rates prescribed by the Income Tax Department. The tax was deposited well in time in the Govt. Treasury. Thus, the assessee has fulfilled its responsibility for dedu....