TMI Blog1998 (6) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... th for itself and for others. The assessee-company commenced its business from asst. yr. 1989-90 and its first return was filed on 3rd November, 1989, annexing the audited P L a/c and balance sheet. The return was signed by one Shri Abdul Aziz Bagadia, the main director of the company. The assessee-company paid ₹ 38,236 to one of the contractors, viz., Hidayat Associates at Haji Husain Chawl, Mhatrewadi Road, Dahisar (W), Bombay-68. The payment to the contractor was made on 31st March, 1989, and the assessee was obliged to deduct on amount of ₹ 803 towards TDS. In fact, the said amount was deducted and the amount was also paid in instalments as per challan Nos. shown in column No. 10 at page No. 1 of the assessee's paper-b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additionally stated that for the asst. yr. 1990-91 also a similar notice was sent for not submitting the statement under s. 206 of the Act in time and on receipt of a similar reply from the assessee, the AO dropped the penalty proceedings for asst. yr. 1990-91. In fact, at p. 8 of the compilation, the order of the AO dt, 23rd January, 1992, dropping the proceedings for asst. yr. 1990-91 is furnished. The AO, however, did not agree with the explanation tendered and levied penalty of ₹ 100 per day for every day of default which worked out to a total sum of ₹ 67,900. Against the said penalty order dt. 20th July, 1993, for the year under consideration, the assessment went in appeal before the CIT(A)-XV, Mumbai. It was explained to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was fully deposited with the Government and merely due to delay in filing the annual return of TDS there was no loss of revenue to the Government. The default was merely technical or venial. (ii) Prior to the amendment of s. 206 by the Finance (No. 2) Act, 1961, w.e.f. 27th September, 1991, the provision was silent about the time within which the annual return of TDS was to be delivered to the prescribed authority and, therefore, the penalty provisions of s. 272A(2)(c) were not attracted for the year under consideration. This view was upheld by the Bombay Tribunal in an earlier decision. Held On merits as well as on legal ground, this is a case in which penalty under s. 272A(2)(c) cannot be sustained. Following the above decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26C should be filed by the assessee. In regard to Notes on Clauses while introducing Finance (No. 2) Act of 1991 explaining the significance and necessity for inserting the words shall, within the prescribed time after the end of each financial year, prepare and deliver or cause to be delivered in CBDT Circular at p. 2. 1895 in Taxman's Direct Tax Circulars, Vol. IV (1995 Edition), the following is explained : Removal of anomalies in s. 206 of the IT Act. 61. The provisions of s. 206 provide that the person responsible for deducting income-tax under Chapter XVII of the Act is to prepare, within the prescribed time after the end of each financial year, and deliver or cause to be delivered the return of such tax deducted at sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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