2011 (9) TMI 1102

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....ing a Banking business under the name and style of Oriental Bank of Commerce. The ITO (TDS) while going through the quarterly return on form No. 26Q filed by the assessee noted that it had omitted to quote PAN/has quoted invalid PAN in 77 cases. The AO has afforded two opportunities to the assessee to explain its position and file the correct details in this regard. However, the assessee did not file any reply due to which the AO concluded that the assessee has committed a default u/s 139A(5B) of the Act for which penalty u/s 272B(1) of the act, was leviable. The ITO(TDS), therefore levied a penalty of Rs. 7,70,000/- @ Rs. 10,000 per default vide his order dated 28.7.2010. 3. Aggrieved by the order passed by the ITO(TDS), Panchkula the a....

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....AN. Correct PAN was given as soon as the default was brought to the notice of the assessee. The ld. CIT(A) categorically observed that tax was deducted correctly revised copy of receipt was also submitted. The ld. CIT(A) observed that the penalty was levied if the default committed u/s 139A. However, in the instant case, the penalty has been levied for default 139A(5B)(iv) as per which a person who is responsible for deducting tax under chapter XVII-B shall quote the PAN of the person to whom such income has been paid in all the statements prepared and delivered in accordance with the provisions of Sec 200(3) of the Act to Income tax authorities. The ld. CIT(A) also categorically mentioned that the assessee quoted invalid PAN for 77 deducte....

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....B, if it is proved by the deductees that there was reasonable cause for the said failure. In this case the assessee has explained that failure to quote right PAN was occurred as the concerned depositor has himself mis-quoted PAN. It is also the case of the assessee that the PAN was corrected after ascertaining the same from respective deductees. In the case of the Financial Cooperative Bank Ltd v. ITO (supra) the Ahmedabad Bench has held as under:- "We are, therefore of the opinion that since the furnishing of incomplete declaration by the customer was a mistake committed by the Customer and not by the Bank, the failure to comply with the provisions of section 139A as envisaged in sub-sec (1) of Sec 272B of the Act was of the custo....