COMMISSIONER OF INCOME TAX (TDS), CHANDIGARH vs. EXECUTIVE ENGINEER, PROVINCIAL DIVN. NO. 1, PWD, B& R, ROHTAK

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.425 of 2009 (O&M) Date of decision: 19.8.2009 Commissioner of Income Tax (TDS), Chandigarh. -----Appellant Vs. Executive Engineer. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MRS. JUSTICE DAYA CHAUDHARY Present:- Mr. Yogesh Putney, Sr. Standing Counsel for the Revenue. ----- ORDER: 1. The Revenue has preferred this appeal under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order dated 22.12.2008 of Income Tax Appellate Tribunal, Delhi Bench ‘B’ passed in I.T.A. No.509/DEL/2008 for the assessment year 2004-05, proposing to raise following substantial questions of law:- “i. Whether the Ld. Income Appellate Tribunal is justified in deleting the penalty under section 272A(2)(g) on the ground that there is no loss of revenue and the fault committed by the assessee is only of Technical and Venial in the nature?.

ITA No.425 of 2009 ii. Whether on the facts and circumstances of the case, the Ld. Income Tax Appellate Tribunal is right in law in deleting the penalty ignoring the mandatory provisions of section 272A(2)(g) where in the legislature has used the word “Shall”?” 2. The assessee is a department of Haryana Government. It committed default in issuing TDS certificates under Section 203 of the Act. The Assessing Officer initiated penalty proceedings and levied penalty under Section 272A(2)(g) of the Act. The stand of the assessee was that it was under bonafide belief that TDS certificates were to be issued and submitted with the annual return. On that account, there was delay. No loss was caused to the Revenue as the deduction of tax had already taken place. The Assessing Officer did not accept this plea. On appeal, the CIT (A) accepted the explanation of the assessee and deleted the penalty, which order has been affirmed by the Tribunal. The Tribunal observed:- “3. We have considered the facts of the case and rival submissions. We find that the tax was properly deducted and paid in time in the treasury. Thus, the revenue did not suffer in any manner in so far as collection of tax is concerned. There were delays in issuing certificates to the payees, for which a satisfactory explanation has been furnished. The payee has not raised any grievance in this matter. Therefore, the default, if any, is technical and venial in nature, not justifying the levy of penalty.” 2

ITA No.425 of 2009 3. We have heard learned counsel for the appellant. 4. The basis for imposing penalty is a mere technical violation and having regard to facts and circumstances, the CIT (A) as well as the Tribunal found valid explanation for the technical violation. 5. No substantial question of law arises. 6. The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE August 19, 2009

DAYA CHAUDHARY ) ashwani JUDGE 3