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TMI Blog2010 (1) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act, 1961 [the "Act" for short]. The Learned Assessing Officer from the records ascertained that there was a default of 2583 days in respect of Form No.24Q and 1889 days in respect of Form No.26Q. In view of this, the Learned Assessing Officer issued a show cause notice to the assessee asking as to why penalty should not be levied on it for such default under the provisions of section 272(2)(k). In response thereof the reply filed by the assessee was found to be unsatisfactory by the Learned Assessing Officer. She, therefore, levied the penalty for the aforesaid default @ Rs. 100/- per day for the days of default numbering 4472 days (2583 + 1889). 3 In appeal, the Learned Commissioner of Income-tax (Appeals) deleted the penalty by observing as follows:- "5.5 I have considered the facts of the case and submissions of the Ld. AR carefully. There is no dispute about the fact that the appellant had deposited amount of tax deducted at source under the provisions of the Act with the Government within stipulated time. The default for which penalty has been levied by the AO relates to late submission of form No.24Q and 26Q of the I.T. Rules. It is seen that the AO has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly a failure to forward the certificate and since the Tribunal arrived at the conclusion that it was a bona fide mistake, the inference was based on facts. The Tribunal was justified in cancelling the penalty under section 272(2)(g). No question of law arose for reference." 5.7 Therefore, in view of the aforesaid legal position clear cut view emerges that the levy of penalty is not mandatory in venial breach of law. Further, the appellant has deposited the requisite tax deducted at source within time. There was a reasonable cause for the appellant for delay in filing of Form No.24Q and 26Q. Therefore, under these circumstances, there is no basis for levy of penalty u/s 272(2)(k) as laid down by the Hon'ble Gujarat High Court in the case of Harsiddh Construction (P) Ltd. vs. CIT 244 ITR 417. 5.8 Therefore, keeping in view the totality of the facts and the legal position as discussed above, the penalty levied by the Learned Assessing Officer is hereby deleted." 4 The Learned Senior Departmental Representative Smt. Neeta Shah argued that it is not enough for the assessee to deduct the ITDS and pay to the credit of the Central Government but has also the duty of filing the presc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such delay, is not correct as the section provides for no discretion for the same and for the delay in submitting the quarterly returns, the penalty is leviable. 8 The learned Departmental Representative further argued that para-2.2 of the order at page-3, the Learned Commissioner of Income-tax (Appeals) has stated that there was no deliberate intention on the part of the assessee to avoid compliance of the provisions of the Act which was due to non-awareness of the provisions by Directors or employees of the assessee company due to non-availability of expertise of professional / salaried employees, is also not correct since the assessee is a Limited Company and is assisted by qualified professionals in complying with the various legal requirements of law. 9 She further referred to page-4 para-5.5 of the Learned Commissioner of Income-tax (Appeals)'s order and pointed out that the Learned Commissioner of Income-tax (Appeals) has observed that the Learned Assessing Officer has levied the penalty in a routine manner without bringing the facts on record to establish that the assessee committed the default without a reasonable cause. She submitted that the reasonable cause for the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded by the Rule 31A of the Income Tax Rules inserted by Income -tax (Tenth Amendment ) Rules, 2005 dated 30.3.2005 (w.e.f. 30.3.2005) and therefore to say so that as no forms were prescribed for the filing of the Quarterly returns of TDS deducted before 1.10.2009 and so the assessee could not file the Returns was not factually correct. 15 We have heard the rival submissions and perused the orders of the lower authorities and the materials available on record. In the instant case, the undisputed facts are that the assessee- company was liable to deduct tax as per the provisions contained in Chapter XVII of the Act. The assessee accordingly deducted the tax and also paid the tax so deducted to the credit of the Central Government within time is also not in dispute. Further, the assessee was liable to file quarterly statements in Form No.24Q and 26 is also not in dispute. The assessee has furnished the said quarterly statements with certain delay. The Learned Assessing Officer observing the delay in furnishing of the quarterly statements levied penalty of Rs. 4,47,200/- as the delay was for 2583 days in respect of Form No.24Q and 1889 days in respect of Form, No.26Q. The Learned Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t every person knows the law and it would be contrary to common sense and reason if it were so. It was also stated that "it is impossible to know all the statutory law, and not very possible to know all the common law". Further, the Hon'ble Madras High Court in the case of CIT vs. K P V S Mohammad Rowther & Co. 232 ITR 176 (Mad) held that ignorance of law can be a reasonable cause for the failure and deletion of penalty was justified. Further, it is observed that the Revenue could not bring any material before us to show that any loss to the Revenue was caused because of the aforesaid delay in furnishing of the quarterly statements by the assessee. ON the above facts we do not find any error in the findings of the Learned Commissioner of Income-tax (Appeals) that the breach of provisions by the assessee by filing the quarterly statements with certain delay was a technical or venial breach of law only. Keeping in view the decision of the Hon'ble Supreme Court in the case of Hindustan Steel Ltd. v State of Orissa 83 ITR 26 (SC) and the decision of the Jurisdictional High Court in the case of Harsiddh Construction Pvt. Ltd. Vs. CI?T 244 ITR 417 (Guj), we do not find any good r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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