Executive Engineer v. Order

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.425 of 2009 (O&M)Date of decision: 19.8.2009 Commissioner of Income Tax (TDS), Chandigarh. Executive Engineer. Vs. -----Appellant -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MRS. JUSTICE DAYA CHAUDHARY Present:-Mr. Yogesh Putney, Sr. Standing Counselfor the Revenue. ----- ORDER: 1. The Revenue has preferred this appeal under Section260A of the Income Tax Act, 1961 (for short, “the Act”) againstthe order dated 22.12.2008 of Income Tax Appellate Tribunal,Delhi Bench ‘B’ passed in I.T.A. No.509/DEL/2008 for theassessment year 2004-05, proposing to raise followingsubstantial questions of law:- “i.Whether the Ld. Income Appellate Tribunal isjustified in deleting the penalty under section272A(2)(g) on the ground that there is no loss ofjustified in deleting the penalty under section272A(2)(g) on the ground that there is no loss of revenue and the fault committed by theassessee is only of Technical and Venial in thenature?.assessee is only of Technical and Venial in thenature?. ii. Whether on the facts and circumstances of thecase, the Ld. Income Tax Appellate Tribunal isright in law in deleting the penalty ignoring themandatory provisions of section 272A(2)(g)where in the legislature has used the word“Shall”?”case, the Ld. Income Tax Appellate Tribunal isright in law in deleting the penalty ignoring themandatory provisions of section 272A(2)(g)where in the legislature has used the word“Shall”?” 2. The assessee is a department of HaryanaGovernment. It committed default in issuing TDS certificatesunder Section 203 of the Act. The Assessing Officer initiatedpenalty proceedings and levied penalty under Section 272A(2)(g)of the Act. The stand of the assessee was that it was underbonafide belief that TDS certificates were to be issued andsubmitted with the annual return. On that account, there wasdelay. No loss was caused to the Revenue as the deduction oftax had already taken place. The Assessing Officer did notaccept this plea. On appeal, the CIT (A) accepted theexplanation of the assessee and deleted the penalty, which orderhas been affirmed by the Tribunal. The Tribunal observed:- “3. We have considered the facts of the case andrival submissions. We find that the tax was properlydeducted and paid in time in the treasury. Thus, therevenue did not suffer in any manner in so far ascollection of tax is concerned. There were delays inissuing certificates to the payees, for which asatisfactory explanation has been furnished. Thepayee has not raised any grievance in this matter.Therefore, the default, if any, is technical and venial innature, not justifying the levy of penalty.” rival submissions. We find that the tax was properlydeducted and paid in time in the treasury. Thus, therevenue did not suffer in any manner in so far ascollection of tax is concerned. There were delays inissuing certificates to the payees, for which asatisfactory explanation has been furnished. Thepayee has not raised any grievance in this matter.Therefore, the default, if any, is technical and venial innature, not justifying the levy of penalty.” 3. We have heard learned counsel for the appellant. 4. The basis for imposing penalty is a mere technicalviolation and having regard to facts and circumstances, the CIT(A) as well as the Tribunal found valid explanation for thetechnical violation. 5. No substantial question of law arises. 6. The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE August 19, 2009(CHAUDHARY )ashwani JUDGE DAYA