COMMISSIONER OF INCOME TAX (TDS) vs. M/S SWARANBHUMI FOREST (INDIA) LTD.

ITA/106/2009HC Punjab & HaryanaPHHC01084178200910 August 2009Author: MR. JUSTICE ADARSH KUMAR GOEL,MRS JUSTICE DAYA CHAUDHARY2 pages
AI SummaryDismissed

What were the facts?

The Revenue, represented by the Commissioner of Income Tax-I, Chandigarh, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench. The ITAT's order, dated 25.5.2005, pertained to assessment year 1997-98 and concerned penalty proceedings initiated by the Assessing Officer (AO) under Section 272A(2)(g) of the Act. The AO had levied penalty for delayed issuance of Tax Deducted at Source (TDS) certificates. The Commissioner of Income Tax (Appeals) [CIT(A)] had partly allowed the assessee's appeal, holding that the default was technical and should not be treated separately for each employee. The ITAT upheld the CIT(A)'s view.

What did the High Court hold?

The High Court held that no substantial question of law arose from the ITAT's order. The court noted that the assessee had admittedly issued the requisite certificates under Section 272A(2)(g) of the Act. The default, if any, did not result in the evasion of tax. In these circumstances, the court found no ground to interfere with the impugned order of the ITAT, which had upheld the CIT(A)'s view that the penalty should not be levied separately for each employee due to the technical nature of the violation. The appeal was accordingly dismissed.

What were the issues?

1. Whether, in the facts and circumstances of the case, the ITAT erred in holding that the CIT(A) was justified in reducing the penalty levied by the AO by considering the default as one instance, rather than a default committed in respect of each certificate, despite the wording of Section 272A(2)(g) which prescribes a penalty of Rs. 100 for every day the failure continues? Assessee's Contentions: The judgment does not record any specific contentions made by the assessee before the High Court. However, the underlying reasoning suggests the assessee argued that the violation was technical and did not result in tax evasion, and that penalty should not be levied for each certificate individually. Revenue's Contentions: The Revenue contended that the penalty should be levied for each certificate separately, as per the language of Section 272A(2)(g) of the Act, which states a penalty of Rs. 100 for every day the failure continues.

Which sections of the Income-tax Act were involved?

Section 260A,Section 272A(2)(g)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.106 of 2009 (O&M) Date of decision: 10.8.2009 The Commissioner of Income Tax-I, Chandigarh. -----Appellant Vs. M/s Swaranbhumi Forest (India) Ltd. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MRS. JUSTICE DAYA CHAUDHARY Present:- Mr. Yogesh Putney, Sr. Standing Counsel for the appellant. -----

ORDER:

1.

The Revenue has preferred this appeal under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order of Income Tax Appellate Tribunal, Chandigarh Bench ‘B’ passed in I.T.A. Nos.543 and 544/Chandi/2002 dated 25.5.2005 for the assessment year 1997-98, proposing to raise following substantial question of law:- “Whether in the facts and circumstances of the case the ITAT has erred in holding that the Ld. CIT(A) was justified in reducing the penalty levied by the A.O. considering the default as one and not the default committed in respect of each certificate inspite of the words used in Section 272-A(2)(g) according to which if any person fails to furnish a certificate as required by section 203 or section 206 C, he shall pay, by way of penalty, a sum of 100/- rupees for eve

The order continues below.

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