TMI Blog1997 (8) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... which had raised loans from certain relatives of the partners to whom interest was payable either annually or half yearly or monthly as per the agreement arrived at with them. The assessee has been paying/crediting the due interest on mutually agreed time intervals (Annexures to Form 26A--P. Nil of Paper Book). The amount of TDS in question at Rs. 8,062 was not only deducted but also deposited in the Treasury within the stipulated time. Harbouring under an impression that as in the case of salaries, a consolidated certificate is to be issued, it also furnished a similar certificate to each of the payees at the year end. In doing so, there was no loss suffered by either of the payees. The learned DCIT imposed a penalty of Rs. 3,19,000 compu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Kumar Swarup Sons [1994] 210 ITR 886/76 Taxman 620 and Allied Motors (P.) Ltd. v. CIT [1997] 224 ITR 677/91 Taxman 205. According to the learned AR, at best there was a technical breach. As the assessee harboured under a bona fide belief that only one certificate has to be issued to the party, the levy of penalty is not called for. Reliance was placed on the following decisions of the various Benches of the Appellate Tribunal :-- (1) Motisagar Estate (P.) Ltd. v. Dy. CIT [1993] 47 ITD 72 (Pune), (2) Executive Engineer v. Dy. CIT [1994] 48 ITD 414 (Pune), (3) Sudershan Auto General Finance v. CIT [1997] 60 ITD 177(Delhi), (4) ITO v. Srichand Hariram [1997] 61 ITD 33 (Mum.) and (5) Nestle India Ltd. v. ACIT [1997] 61 ITD 444 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply for allotment of tax deduction account number which is to be quoted in the certificate (203A of the Act). In the case of the assessee, the tax deducted at source relates to the interest payable on deposits which falls under section 194A of the Act. Rule 31 lays down the procedure in regard to the format of certificates as well time and periodicity for the issue of the same. A comprehensive procedure has, thus, been laid down not only for deduction of tax at source but also the manner in which it is to be done. There are four stages involved in the entire process one when the amount of interest is either credited or paid, second when the tax is to be deposited in the Government Treasury, third the procedure for obtaining account number f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p of nature and reasons for the default for which the penalty has been imposed. As to the nature of default, we find that instead of issuing certificate at the time of credit or payment of the sum or issue of a cheque for payment of any amount as prescribed in section 203 of the Act, the assessee has issued a consolidated certificate to the party after the end of the accounting period. It is not a case where no certificate at all has issued to the party. Thus, at best the default of the assessee could be termed as technical breach. This is more so when we find that as per action points given below the form, the certificate is to be filed along with the return of income for the relevant year and not as and when certificates are issued. This ..... X X X X Extracts X X X X X X X X Extracts X X X X
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