TMI Blog2008 (12) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent JUDGEMENT 1. CHANDRAMAULI KR. PRASAD . - The appellant, M/s. Veena Theater Patna, hereinafter referred to as "the assessee", is a partnership firm. For the financial year 1997-98, it failed to file certificate in Form No. 16A as required under section 203 of the Income-tax Act, for short "the Act". The assessee filed the certificate on December 24, 1998, whereas the last date for its filing was 30th of April, 1998. There being delay of 237 days in filing the certificate in the prescribed form, the Assessing Officer issued notice to it under section 272A of the Act, calling upon the assessee to explain as to why penalty be not imposed upon it. The assessee filed its show cases inter alia, contending that during the period of filing return and issue of certificate, one of the creditors and family members of the ex partner criminal case against the existing and the managing partner and in the said criminal case, they were granted anticipatory bail by the Sessions Judge Patna, by order dated November 6, 1998, and this delayed filing the certificate in the prescribed form by 30th of April, 1998. This did not find favour with the Assessing Officer and he inflicted a penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. By order dated October 10, 2006, the appeal was admitted on the following substantial question of law: "(i) Whetehr the Tribunal was justified in imposing the penalty under section 272A(2)(g) of the Income-tax Act in the peculiar facts and circumstances of the case when the assessee was prevented by sufficient cause?" 6. Mr. Ajay Kumar Rastogi, appears on behalf of the appellant-assessee, whereas Mr. Harshwardhan Prasad, appears on behalf of the appellant-assessee, whereas Mr. Harshwardhan Prasad, appears on behalf of the Commissioner Income-tax-Revenue. 7. Section 272A(2)(g) of the Act, inter alia, provides for imposition of penalty of sum of Rs.100 for every day, if the assessee fails to furnish a certificate as required by section 203 of the Act. Proviso (2) to section 272 (2) of the Act puts a limit to the amount of penalty. Section 272A(2)(g) and its proviso, which are relevant for the purpose, read as follows. "272A Penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspection, etc.- (1).... (2) If any person fails - ……. (g) to furnish a certificate as required by section 203 or section 206C; or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withstanding anything contained in the provisions of clause (b) of sub-section (.1) of section 271, section 271A, section 271AA, section 271B, section271BA, section 271BB, section 271C, section 271CA, section 271Dsection 271 E section 271F, section 271FA section 271FB, section 271G, clause (c) or clause (d) of sub-section (1) or sub-section (2)section 272A, sub-section (1) of section 272AA or section 272B or sub-section (1A) of section 272BB or sub-section(1) of section 272BB8 or clause (b) of sub-section (1) or clause (b) or Clause(c) of sub-section (2) of section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reason able cause for the failure." 11 From a plain reading of the aforesaid provision, it is evident that not withstanding anything contained in sub-section (2) of section 272A of the Act, no penalty shall be imposable on the assessee for any failure on carrying out the as contained therein, if it proves that there was reasonable case for failure. However, the question in the present case is as to whether the case shown by the assessee is a reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion of law not formulated by it, if it is satisfied that the case involves such question. Being satisfied that the aforesaid substantial question of law though not formulated, requires to be heat, we have heard the counsel on the aforesaid substantial question of law. 16. Mr. Rastogi submits that penalty is not fit to be imposed as there is no deliberate laches on part of the assessee nor can his conduct be said to be contumacious. According to him, penalty shall not be leviable as failure to furnish the certificate can at best be termed to be venial or technical in nature. In support of the submission, reliance has been placed on a decision of the Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211 ; [ 83 ITR 26 and our attention has been drawn to the following passage from the said judgment (page 29): "Under the Act penalty may be imposed for failure to register as a dealer section 9(1), read with section 25(1)(a) of the Act. But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-crimi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any substance in the submission of Mr. Rastogi and the decisions relied on are clearly distinguishable. It is not the case of the assessee it is not liable to file certificate as required under section 203 of the Act for any reason. Assessee has failed to file the certificate as required under law and the cause shown by him has not been found to be reasonable cause. In my opinion, the question of venial or technical nature of beach would arise in those cases where the assessee under a bona fide belief may consider that a particular act is not required to be done or the act required to be done has in fact done, but while doing so the defect of venial or technical nature has occurred. It is not the case of the assessee that under bona fide belief it thought it is not required to file the certificate and when it has not carried out its statutory obligation, there is no escape from the conclusion that it acted deliberately in defiance of law. In such circumstance, I am of the opinion that the assessee cannot escape from the liability to pay the penalty contending that its action in not submitting the certificate is venial or technical in nature. 19. Now referring to the authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... astogi, then submits that tax was deducted in time and hence no loss has occurred on account of late issue of the certificate. In such circumstances, according to him, penalty ought not to have been levied Reliance has been placed on a decision of the Punjab and Haryana High Court in the case of H. M. T. Ltd., Tractors Division v. CIT [2005] 274 ITR 544 and our attention has been drawn to the following passage from paragraph 12 of the said judgment, which reads as follows (page 548): "In the present case, the tax deducted at source had been paid in time and the necessary return in respect of the same was duly filed in time with the Income-tax Department. No loss of revenue has occurred on account of late issue of tax deduction certificates. None of the contractors has raised any grievance on account of late supply of the certificate. Keeping in view these facts and especially that the default is merely technical or venial in nature, we are satisfied that it is not a fit case for the levy of penalty for this purpose, we find support from the observations of the Supreme Court in Hindustan Steel Limited [1972] 83 ITR 26." 23. Reliance has also been placed on a decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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