THE COMMISSIONER OF INCOME TAX TDS ,MUMBAI vs. M/S ASHAPURA GARMENTS PVT. LTD..

PDF · subscribers
ITXA/60/2008HC Bombay26 June 2008Bench: HON'BLE SHRI JUSTICE F.I. REBELLO, HON'BLE SHRI JUSTICE K.U. CHANDIWAL5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Tribunal was justified in deleting the penalty. The court analyzed Section 272A(2)(g) and Section 203(1) of the Income Tax Act. Section 272A(2)(g) allows for a penalty if a person fails to furnish a certificate as required by Section 203. Section 203(1) mandates that every person deducting tax shall furnish a certificate to the person to whom credit is given or to whom payment is made, specifying the amount deducted, rate, and other prescribed particulars, within such period as may be prescribed. Rule 31 prescribes the time for issuing such certificates. The court noted that on the facts found by the authorities below, the TDS certificates were sent by speed post on the very next dates after the tax was deducted and deposited. Therefore, there was compliance with the mandatory requirements of Section 203 read with the rules. As there was compliance, no penalty could have been imposed under Section 272A(2)(g). The authorities below, in imposing the penalty, acted without jurisdiction. The appeal was dismissed.

What were the facts?

The Revenue preferred an appeal against an order of the ITAT dated May 7, 2007, which dismissed the Revenue's appeal and upheld the order of the Commissioner (Appeals). The Commissioner (Appeals) had set aside a penalty levied under Section 272A(2)(g) of the Income Tax Act. The facts indicated that TDS amounts were paid into the Government Account on March 1 and March 6, 2004, and TDS certificates were issued on March 2 and March 7, 2004. While the TDS amount was not paid in time, the Commissioner (Appeals) attributed this to financial constraints. The TDS certificates were sent by speed post on March 25, 2004.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the penalty levied under Section 272A(2)(g) of the Income Tax Act? Assessee's Contentions: The judgment does not record specific contentions made by the assessee before the High Court. However, the Commissioner (Appeals) had held that the delay in payment was due to financial constraints, and the TDS certificates were issued and sent promptly after the deposit. The ITAT upheld this view. Revenue's Contentions: The Revenue contended that the Tribunal was not justified in deleting the penalty levied under Section 272A(2)(g) of the Income Tax Act, as there was a failure to furnish the certificate as required by Section 203 within the prescribed time.

Which sections of the Income-tax Act were involved?

Section 272A(2)(g),Section 203,Section 203(1)

AI-generated summary — verify with the full judgment below

HVN IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 60 OF 2008 The Commissioner of Income Tax ... Appellant Versus M/s. Ashapura Garments Pvt. Ltd.... Respondent Mr.A.D. Kango for the Appellant. Mr. S.G. Dalal for Respondent. CORAM: F.I. CORAM: F.I. CORAM: F.I. REBELLO REBELLO REBELLO & K.U.CHANDIWAL,JJ. K.U.CHANDIWAL,JJ. K.U.CHANDIWAL,JJ. DATED: JUNE 26, 2008 DATED: JUNE 26, 2008 DATED: JUNE 26, 2008 ORAL JUDGMENT (Per F.I. Rebello,J.) : . Revenue has preferred this appeal against the order of ITAT dated 7.5.2007 whereby the appeal preferred by the Revenue has been dismissed and the order of the Commissioner (Appeals) has been upheld. 2. The Commissioner (Appeals) vide his reasoned order set aside the penalty levied under Section 272A(2)(g) of the Income Tax Act. The facts on record would indicate that the amount was paid into Government Account on 1st March and 6th March, 2004. The TDS certificates were immediately issued on 2nd March and 7th March, 2004. Admittedly, TDS amount was not paid in time. The Commissioner (Appeals) held that it was on account of financial constraint. We are not concerned with the said issue in the present appeal as failure to pay on due date results in different consequences. It has further come out on record that TDS certificates were sent by speed post on 25.3.2004. CNR No : HCBM020252722007 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:51:24

3.

The question of law as framed by the department is as under : "Whether on the facts and in the circumstances of the case and in law, the Hon’ble Tribunal was justified in deleting the penalty levied u/s. 272A(2)(g) of the Income Tax Act?" . The other question framed in our opinion, need not be answered as answering the question framed would dispose of the appeal. 4. Section 272A(2)(g) reads as under : "272A. (1) If any person ........... (a)............. (b)..........

(c) .......

(d) ....... (2)If any person fails - .........

(g) to furnish a certificate as required by Section 203 (or Section 206C); or......... .................. he shall pay, by way of penalty, a sum of one hundred rupees for every day during which the failure continues. Provided that the amount of penalty for failures in relation to a declaration mentioned in section 1979A, a certificate as required by section 203 and returns under Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:51:24

Sections 206 and 206C, and statements under sub section (3) of section 200 or the proviso to sub section (3) of section 206C shall not exceed the amount of tax deductible or collectable, as the case may be." . Section 203 (1) and (2) reads as under : (1) Every person deducting tax in accordance with the foregoing provisions of this Chapter shall within such period, as may be prescribed from the time of credit or payment of the sum, or, as the case may be, from the time of issue of a cheque or warrant for payment of any dividend to a shareholder, furnish to the person to whose furnish to the person to whose furnish to the person to whose account such credit is given account such credit is given account such credit is given or to whom such payment is made or the cheque or warrant is issued, a certificate to the effect that tax a certificate to the effect that tax a certificate to the effect that tax has been deducted, has been deducted, has been deducted, and specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as may be prescribed. (Emphasis supplied). (2) Every person, being an employer, referred to in sub section (1A) of section 192 shall, within such period, as may be prescribed, furnish to the person in respect of whose income such payment of tax has been made, a certificate to the effect that tax has been paid to the Central Government, and Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:51:24

specify the amount so paid, the rate at which the tax has been paid and such other particulars as may be prescribed." 5. A joint perusal therefore, of Section 272A(2)(g) and Section 203(1) indicates that the penalty can be imposed if certificate of deduction is not issued within the time as may be prescribed. This is the only requirement and that would depend on the facts of each case. . Rule 31 is the relevant rule requiring issuance of certificate. The first proviso to that rule sets out that in the cases like instant case, the certificate under sub rule (1) shall be issued within a week after the expiry of two months from the month income is so credited. We are not concerned with the further provisos. 6. As noted earlier and on the finding of fact recorded by the authorities below, on the tax being deducted and deposited with the Government treasury, the TDS certificates were sent to the persons entitled to by speed post on the very next dates. In other words, there has been compliance of the mandatory requirements of the section. Once there has been compliance of section 203 read with rules, no penalty could have been imposed considering the language of Section 272A(2)(g). The authorities below, therefore, acted without jurisdiction in setting aside the penalty. Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:51:24

7.

In view of the same, appeal dismissed. (K.U.CHANDIWAL, J.) (K.U.CHANDIWAL, J.) (K.U.CHANDIWAL, J.) (F.I.REBELLO, J.) (F.I.REBELLO, J.) (F.I.REBELLO, J.) Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:51:24 Powered by TCPDF (www.tcpdf.org)

More judgments on Section 272A(2)(g)

All 43 judgments and leading authorities on Section 272A(2)(g) →

Recent GST High Court judgments

Search GST case law →