TMI Blog2015 (1) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... s amendment does not affect the very ingredients of the default contemplated u/s 206 - Since the appeal is a continuation of the original proceedings the amendment brought about was applicable to the facts of the case, benefit under the amendment was rightly made available to the assessee and the amount of penalty was rightly restricted to the amount of tax deducted at source – thus, the order of the Tribunal is upheld – Decided against revenue. - TAX APPEAL NO. 165 of 2005 - - - Dated:- 3-11-2014 - MR. KS JHAVERI AND MR. K.J.THAKER, JJ. MR SUDHIR M MEHTA, ADVOCATE for the Appellant ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE K.J.THAKER) 1. The appellant is dissatisfied with the order dated 30th June 2004 passed by I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble cause . In the present case, there is no evidence for such reasonable cause so as to justify the delay in issuance of certificate. Accordingly, Commissioner of Income Tax (Appeals) directed the Assessing Officer to restrict the penalty under Section 272A(2)(c) of the Act to the amount of tax deducted at source and the appeal was partly allowed. 2.5 Being dissatisfied with the aforesaid order of Commissioner of Income Tax (Appeals), revenue preferred appeal before the Income Tax Appellate Tribunal. While disposing of the aforesaid appeal by impugned order, by considering earlier judgments, it was held that the penalty should be restricted to the amount of TDS deductible. While holding, as above, it is observed that the reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. Which explains the provisions of Sec.272A as under: Under the existing provisions, penalty under subsection (2) of section 272A of the I.T.Act is imposable for failure to deliver in due time a copy of the declaration under section 197A or for failure by the person deducting tax to furnish a certificate of deduction, to the person to whom such payment is made or credit is given within the prescribed period. These defaults are continuous in nature and attract penalty at the rate of ₹ 100/200 per day without any maximum limit. The Act has amended section 272A of the I.T.Act to provide that the maximum limit of penalty imposable in such cases shall not exceed the amount of tax deductible or collectible, as the case ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enforcement of the beneficial legislation. b. The provision of Sec.272A, prior to the amendment, were somewhat discriminatory which caused hardship to the tax prayer and created an anomalous situation. The legislature must not have intended that hardship. It was with a view to remove such type of hardship that the legislature, in its wisdom, thought it proper to come out with an amendment. c. The amendment in question, besides being beneficial to the appellant also clarifies and explains the intention of the legislature as it always was in enacting the provision of Sec.272A(2). d. The amendment brought about is purely procedural in nature providing for the machinery for having and collecting penalty. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pune Bench in the case of Motisar Estate Pvt. Ltd. wherein it has been held that the quantum of penalty was required to be scaled down to the amount of tax or collectible at source. 4. I have heard the rival contentions and perused the materials available on record. The above Tribunal judgments have held the subsequent amendment as clarificatory in nature to the effect that the penalty should be restricted to the amount of TDS deductible. The revenue has not controverted the fact that nature of the default is not harsh to go beyond the clarificatory nature of amendment. In consideration of all the facts, I am of the view that the CIT (A) has rightly restricted the penalties to the amount of TDS. His orders are upheld. 5. Revenue appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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