TaxTMI 
TaxTMI 
TaxTMI 
2002 (5) TMI 205
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....lub, in existence since 1875, is a non profit making organisation aimed at promoting social, cultural and sporting activities. It is one of well-known clubs in Calcutta rendering valuable services to the society at large and, in particular, to its Members. The assessee-club is a tenant and when the assessee-club paid rent for the hired premises, it did not deduct the tax at source under section 194-1 of the Act, which was brought into effect since 30th June, 1994 i.e., within the financial year in appeal before us. This lapse was pointed out by the Club's auditor M/s Lovelock & Lewes, in their audit report. It is not in dispute that immediately on assessee realising its mistake of non-compliance with the newly introduced provisions of secti....
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....illed in these columns, TDS return cannot be filed. The DCIT, however, was not impressed. He rejected this contention of the assessee by stating as follows : "However, the claim of the assessee cannot be accepted on the following grounds: The assessee has taken the plea that as there was no deduction of tax at source during the FY, so there is no necessity to file annual return. However, this plea does not stand logical scrutiny. The assessee should have in the first place deducted tax at the source and filed the return within the due date. It is not relevant fact in this case that when. The TDS was deducted but the relevant fact is that when the assessee should have deducted the tax and filed annual return. For non-deduction of the tax a....
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....or not filing the annual return in time. If the interpretation of the learned counsel is to be accepted the purpose behind the enactment of separate penal provisions for non-submission of the return in terms of section 206 will be defeated. That could never be the intention of Legislature." The assessee is aggrieved and in further appeal before us. 5. We have heard Smt. Sushmita Basu, learned counsel for the assessee and Shri Kai Sang, learned departmental representative. We have also carefully perused the orders of the authorities below and have deliberated upon judicial precedents cited at the Bar. 6. We may mention that while the CIT(A) himself has admitted that when tax is not deducted at source an assessee will not obviously be i....
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....rly in the light of CIT(A)'s categoric observation that "filing of annual return will normally follow the deposit of tax at source", we are of the considered view that there was reasonable cause for the assessee's failure to file Form No. 26J in time, inasmuch as the assessee filed the aforesaid return immediately upon deducting and depositing the taxes in question. Accordingly, the case before us is clearly covered by the provisions of section 273B and the penalty under section 272 is not leviable on the present case. As far as assessee's lapse of not deducting tax at source in time is concerned, such a lapse entails distinct penal consequences and, therefore, we are not inclined to address ourselves to that aspect of the matter while deal....
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....is envisaged under section 44AA and on failure to do so the assessee shall be guilty and liable to be penalised under section 271A. Even after maintenance of' books of account, the obligation of the assessee does not come to an end. fie is required to do something more i.e., by getting the books of account audited by an accountant. But when a person commits an offence by not maintaining the books of account as contemplated by section 44AA the offence is complete. After then there can be no possibility of any offence as contemplated by section 44AB and, therefore, in our opinion, the imposition of penalty under section 271B is erroneous. The Tribunal has overlooked this aspect of the matters. Of course, it is apparent from the records that t....