TaxTMI 
TaxTMI 
2013 (8) TMI 599
X X X X Extracts X X X X
X X X X Extracts X X X X
....as provided u/s 139-A(5B) of the Act. (ii) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in relying upon a decision of the Hon'ble Supreme Court in the case of Hindustan Steels Ltd. Vs. State of Orrissa reported in 1983 ITR 26(SC) despite the same having no applicability in the facts of the present case." The appeal is admitted on the above noted two questions. With the consent of the parties, we now proceed to decide the appeal. Briefly stated the facts giving rise to the present appeal are that the respondent-assessee is a public sector undertaking which is under the control of Ministry of Petroleum and Gas, Government of India. It has been deducting income tax at source as per the provisions of Section 194-C and 194-J of the Act on all the payments made to contractors/professionals during the financial year 2002-03. The tax so deducted was also deposited by it in the government treasury in time. The annual return of TDS as per the provisions of Section 203 of the Act, was also filed in the prescribed 'Form-26-C' and TDS certificates were issued to contractors/professionals. However, penalty at the rate of Rs.10,000/- for each 350 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sed the record. We find that the Appellate Tribunal has discussed in detailing the facts and circumstances of the case and the relevant provisions of the Act and recorded the following findings in paragraph-3 of the impugned order. "There is no dispute with regard to the fact that the appellant had deducted tax at source in all these cases and had also deposited the same, in time, in the government treasury. It also filed annual returns of TDS as per provisions of section 203 of the Act in Form No.26C, in time, and also issued requisite TDS certificates to the deductees. But it is a fact that in 350 cases, to whom payments were made and on account of which tax at source was deducted, but in Form No.16A, issued to these persons, their PAN was not mentioned. The arguments of the learned AR, to ward off the impugned penalty, are that the assessee honestly tried to follow the tax laws in this connection by deducting the tax at source and also deposited the tax in time with the government department. The appellant does not stand to gain by committing breach of the statutory provisions of the Act and is bound to deduct tax within time and to comply with other provisions of section 192 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that case, it has been held that 'when there is a venial or technical breach of the provisions of the Act or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute, the imposition of penalty would not be justified. 'Since the assessee is bound to deduct tax at source and to deposit the same in time and the payees may not in the circumstances, comply with the directions of the appellant, but if the assessee fails to deduct TDS, to deposit the same in the Government Treasury, to file the annual returns etc., various complex penalties are attracted. So given the peculiar circumstances, non mentioning of PAN in Form 16A, simpliciter, would not render the assessee exigible for this penalty. Consequently, by holding that only for pedantic reasons, i.e., non-mentioning of PAN without any purpose, would remove the assessee from the purview of penalty under section 272B of the Act. Consequently, we order to delete the entire penalty and allow the appeal of the assessee." We have given our thoughtful consideration to the submissions made by the learned counsel for the appellant and the respondents and perused the record i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-section shall apply in respect of any class or classes of persons : Provided further that nothing contained in sub-sections (5A) and (5B) shall apply in case of a person whose total income is not chargeable to income-tax or who is not required to obtain permanent account number under any provision of this Act if such person furnishes to the person responsible for deducting tax, a declaration referred to in section 197A in the form and manner prescribed thereunder to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be nil. 273-B. Notwithstanding anything contained in the provisions of [clause(b) of sub-section (1) of] [section 271, section271A, [section 271AA,] section 271B [section 271BA], [section271BB], section 271C,[section 271 CA,] section 271D, section 271E, [section 271F,[section 271FA] [section 271FB] section 271G,] [section 271H] clause or clause(d) of sub-section (1) or sub-section (2) of section 272A, sub-section (1) of section 272AA] or [section 272B or] [sub-section (1) [or sub-section (1A)] of section 272BB or] [sub section (1) of section 272 BBB or] clause(b) of sub-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....visions of Section 273-B provides that no penalty shall be imposable on the person or the assessee, as the case may be, for any failure under section 272-B, if such person or the assessee proves that there was reasonable cause for the said failure. The use of word "may" in Section 272-B read with the words "there was reasonable cause for the failure", used under section 273-B, makes it clear that the penalty under section 272-B is not mandatory. It can be imposed only when the authorities do not accept the explanation given by the assessee for reasons to be recorded in writing. The use of the word 'may' in section 272-B, makes the levy of penalty discretionary, subject to the reasonable cause to be furnished by the assessee. We have also perused the provisions of Rule 114B to 114D of the Income Tax Rule 1962 and do not find anything which may run contrary to the interpretation given by us to section 272B, 139A (5A) and 139B(5B) of the Act. The contention of the learned counsel for the appellant that the law laid down by the Hon'ble Supreme Court in the case of Hindustan Steels Ltd. Vs. State of Orissa reported in 1983 ITR 26(SC) is not applicable with regard to the levy of penal....