Pramod Kumar, J. - (1.) THIS appeal filed by the revenue is directed against the order dated 30 -6 -1994, passed by the Commissioner (Appeals) Calcutta VI, in the matter of penalty under section 271C for the financial year 1991 -92. Revenue is aggrieved of Commissioner (Appeals)'s deleting penalty of Rs. 1,20,000 imposed by the Deputy Commissioner, Range 21, Calcutta.
(2.) RIVAL contentions are heard, orders of the authorities carefully perused and relevant legal provisions deliberated upon.
(3.) IN this case, there was admittedly a short -deduction of tax at source from dividends, and that such a short -deduction amounts to Rs. 1,20,000. This short -deduction is attributed to a programming error. It appears that the computer was programmed to print tax amount in five figures (before decimal points) and surcharge amount in four figures (before decimal points) since, apparently due to a briefing error, the programmer could not visualise that some tax deduction amounts will be more than Rs. 99,999 or that some surcharge amounts will be more than Rs. 9,999. However, there were two cases where these parameters were proved wanting -in the case of Andrew Yule and Co. Ltd. (hereinafter referred to as the AYCL) and Bengal Coal Co. Ltd. (hereinafter referred to as the BCCL), where the relevant details were as follows : JUDGEMENT_44_LAWS(CAL)4_2001.htm Since the computer programmed to recognise only five digit tax and four digit surcharge payments, in the case of AYCL, it printed only Rs. 29,545.67 (as against 1,29,545.67) for tax and Rs. 9,431.85 (as against 19,431.85) for the surcharge. Similarly, in the case of BCCL, while tax amount was correctly printed as the same was below 99,999, the surcharge figure printed was Rs. 2,836.79 (as against due Rs. 12,836.79). These three mistakes account for short deduction of Rs. 1,20,000. The issue before us is whether on the above facts, which are not seriously disputed by the revenue at any stage, levy of penalty under section 271C can be said to be justified. To complete narration of material facts, however, we may also state that the explanations of the assessee were rejected by the Deputy Commissioner proximately for the reason that, according to information gathered by him, in every computer program, there is a check list and if any mistake of the nature pointed out by the assessee occurs, the program flashes an error message. The learned Commissioner (Appeals), on the other hand, has come to a finding of fact that short deduction by the assessee was not a deliberate action and, accordingly, following Hon'ble Supreme Court's judgment in the case of Hindustan Steel Ltd. v. : [1972]83ITR26(SC) , the learned Commissioner (Appeals) has held that penalty is not leviable for such bona fide mistakes.;