2011 (9) TMI 1184

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....ase are that the assessee is a Public Limited Company engaged in the business of General Insurance etc. The Addl.CIT, TDS Range, Ahmedabad ascertained from the assessee's records for the FY 2006-07 that it was required to file returns in Form No.24Q i.e. quarterly statement of deduction of tax at source in respect of salary and the statement of deduction of tax in respect of payments other than salary in Form No.26Q under the provisions of section 200(3) of the Act. The AO from the records ascertained that there was a default of 2509 days in respect of Form No.24Q and 2509 days in respect of Form No.26Q. In view of this she issued a show cause notice to the assessee asking as to why penalty should not be levied on it for such default under ....

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....d. Therefore, the default of first quarter is to be considered if at all to be considered and not cumulative default. From the chart enclosed your Honor will appreciate that there is no loss to the Government treasury since the TDS has been paid with interest wherever there is nominal delay." In support of his contentions the ld. AR placed reliance on the following decisions :- 1.CIT vs. Accounts Officer Telcom 281 ITR 302 (Allahabad) 2.Dr. Prannoy Roy vs. CIT 254 ITR 755 (Del) It was also pointed out that Hon'ble Gujarat High Court in the case of Harsiddh Construction (P) Ltd. vs. CIT 244 ITR 417 has confirmed the decision of Hon'ble ITAT, Ahmedabad for deleting the penalty levied u/s 272A(2)(g) of the Act in the similar circu....

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....onsequently the returns of other quarters got delayed. In the given circumstances, I do agree with the contentions of ld. AR that belief so entertained by the appellant constitutes a reasonable cause within the meaning of sec.273B of the Act. Sec.273B of the Act lays that the penalty shall not be imposed in respect of a default relating to the provisions mentioned therein if the person or the assessee concerned can show that there was a reasonable cause for default in question. Section 272A(2)(k) falls within the ambit of sec.273B of the Act. 4.6Hon'ble Supreme Court in the case of Hindustan Steel Ltd. vs. State of Orissa 83 ITR 27 has held that:- "That in order to impose penalty for failure to carry out a statutory obligation is the ....

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.... question of law arose for reference." 4.8Therefore, in view of the aforesaid legal position a clear cut view emerges that the levy of penalty is not mandatory in venial breach of law. Further, the appellant has deposited the requisite tax deducted at source with interest before the initiation of proceedings for levy of penalty under reference. There was a reasonable cause for the appellant for delay in filing of form no.24Q and 26Q. Therefore, under these circumstances, there is no basis for levy of penalty u/s 272A(2)(k) as laid down by the Hon'ble Gujarat High Court in the case of Harsiddh Construction (P) Ltd. vs. CIT 244 ITR 417. 4.9Therefore, keeping in view the totality of the facts and the legal position as discussed above, th....