TMI Blog1999 (12) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... collect tax from the receipt of amount from the buyer. The authority collecting the tax has to deposit the same to the Government exchequer within the time prescribed. It has also to prepare half-yearly return for the period ending 30th September and 31st March, in each financial year and submit the same to the IT authorities within such time as may be prescribed. The assessee collected tax and deposited the same in time. It also issued a certificate to the buyer to this effect. However, the half-yearly return as prescribed was submitted late. The AO, therefore, initiated penalty proceedings under s. 272A(2)(c) of the Act. In response to initiation of penalty proceedings the assessee submitted that it has already collected the tax and depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s placed on the decision of the Hon ble Supreme Court in Motilal Padampat Sugar Mills Co. Ltd. vs. State of U.P. Ors. (1979) 118 ITR 326 (SC) for the proposition that there is no presumption that every person knows the law. 3. The CIT(A) considered the submissions of the assessee and observed that admittedly the default was committed by the assessee. The purpose for calling upon the half-yearly statement was to know and ascertain the details of liquor contractors who have been awarded contracts and whether they are assessed to income-tax or not. The liquor contractors normally form the firms for an year or so and after expiry of the contract such firms are dissolved and a new firm is formed. Form No. 27EA (half-yearly return) was an imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns rea need not be proved by the Department in penalty proceedings. Hence, the ratio laid down in the case reported in (1972) 83 ITR 26 (SC) was not applicable in the instant case. It was also argued that there was no reasonable cause for the failure of the assessee and hence the assessee was not entitled to the benefits of s. 273B of the Act. Reliance was placed on the cases Superintending Engineer vs. ITO (1996) 54 TTJ (Jp) 608 and Dasrat Lal C. Shah vs. ITO (1988) 33 TTJ (Ahd) 124: (1988) 26 ITD 33 (Ahd). It was argued that on the basis of above facts the order of the CIT(A) deserves to be confirmed. In his counter reply the learned counsel stated that the issue is covered by various decisions of Delhi Bench of the Tribunal and, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttract penalty. Sec. 273B has provided that penalty under s. 272A was not attracted if the assessee proves that the said failure was due to reasonable cause. We find that the imposition of penalty under s. 272A(2)(c) was considered by Delhi Bench in the case of Agarwal Trading Co. wherein it was held as under: "There is no dispute that the assessee deducted and paid the tax within the time permissible, while there is default in furnishing the prescribed return. We note that the default is only venial in nature and the judgment of Hon ble Supreme Court in the case of Hindustan Steels Ltd. vs. State of Orissa (1972) 83 ITR 26 (SC) is squarely applicable to the facts and circumstances of the case." 7. Similarly, the Jaipur Bench of the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon ble Supreme Court in the case of Hindustan Steel deleted the penalty merely on the ground that there was no deliberate or wilful defiance of law, but since then enough water has flown and the reliance was placed on the decision of Hon ble Supreme Court in (1992) 105 CTR (SC) 195 : (1992) 196 ITR 297 (SC). We find that the decision of Hon ble Supreme Court in the case of Hindustan Steels Ltd. was not based merely on this assumption. The Hon ble Supreme Court in its order has observed as under: "Even if a minimum penalty is prescribed the authority competent to impose the penalty will be justified in refusing to impose penalty when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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