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Income Tax Appellate Tribunal, DELHI BENCH: ‘D’ NEW DELHI
Before: MS SUCHITRA KAMBLE & SHRI PRASHANT MAHARISHI
PER SUCHITRA KAMBLE, JM
This appeal is filed by the assessee against the order of the Commissioner of Income Tax [Appeals]-Rohtak dated 01.05.2013 for Assessment Year 2010-11 (Financial Year 2009-10 4th Quarter).
The Grounds of appeal
are as under:- “1. That the Ld CIT(A) has erred in law while confirming the penalty of Rs.1990000/- imposed by the Ld AO u/s 272B of the Income Tax Act, 1961. The Penalty so confirmed by the Ld CIT(A) is bad in law and may please be deleted.
2. That the Ld CIT(A) has erred in law while confirming the quantum of penalty u/s 272B of the Income Tax Act, 1961 at Rs.1990000/-, inspite of given quantum of penalty leviable under the said section at Rs.10000/-, and therefore relief from penalty to the extent of Rs.1980000 may please be granted to assessee.
3. That we crave to add, alter, delete, modify or withdraw any of the above grounds at the time of hearing.”
3. The assessee (tax deductor) is the holder of tax deduction and Collection Account Number RTKP03027D. The e-TDS Quarterly statement of Deduction of tax in form No.26Q for the 4th Quarter of Financial year 2009-10 as required under sub section (3) of Section 200 of the I. T. Act, 1961. Processing of the aforesaid return on TDS computerized module resulted into detection of contravention of provisions of section 139A of the Income Tax Act, 1961 as the PANs of as many as 199 ‘Tax deductees’ were found to be invalid and deductor did not submit correct PAN in respect of ‘199 deductees’. Sub Section (5B) of Section 27 of Section 139A requires that valid PAN of all persons on behalf of whom tax is deducted, should be quoted in the quarterly statement. The Assessing Officer (ITO TDS) held that this is a fit case for imposition of penalty u/s 272B of the Act and imposed penalty of Rs.19,90,000/- (10,000 X 199) for the failure on the part of the assessee to make appropriate compliance of provisions of Section 139A of the Act.
Being aggrieved by the penalty order, the assessee filed an appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
During the hearing, the Ld. AR submitted that there is delay of 730 days in filing appeal for the reasons set out in the application filed for condonation of delay and also given in the affidavit of Director of the company. The Ld. AR submitted that the assessee company was sick and before BIFR there was no knowledge of the penalty order as company was taken over by banks/creditors. The Ld. DR opposed the cononation of delay.
We have heard both the parties and perused all the relevant materials available on record. The assessee has set out the reason for delay in filing the present appeal. The reasons are genuine and therefore delay of 730 days is condoned. Now we are taking up the appeal for hearing and final disposal.
On merit the Ld. AR submitted that as per the decision of the Hon’ble Delhi High Court in case of CIT vs. DHTC Logistic Limited (2014) 41 taxman.com 439 (Delhi) wherein it is held that CBDT had clarified that penalty u/s 272B is linked to the person i.e. the deductor, and not to the number of defaults regarding the PAN quoted in the form. Therefore, only 10,000/- Rupees is the penalty. The Ld. AR further submitted that the assessee has paid entire TDS to the Government within time and there is no default on part of the assessee. In fact, in case of ‘186 deductees’ correct PAN was given in the revised return.
The Ld. DR relied upon the order of the Assessing Officer as well as order of the CIT(A).
We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that CBDT had clarified that penalty u/s 272B is linked to the person i.e. the deductor, and not to the number of defaults regarding the PAN quoted in the form. Further, the Hon’ble Delhi High Court in case of DHTC Logistic Limited (supra) categorically made it clear that intention of the legislation is to impose the penalty on the deductor and should not take into account the number of deductees. The ratio is squarely applicable in the present case. Hence, the penalty under Section 272 B should be Rs. 10,000/- only. Therefore, we direct the Assessing Officer to imposed penalty of Rs. 10,000/- only. Thus, appeal of the assessee is partly allowed.