- (1.) This appeal has been preferred by the Revenue under section 260A of the Income-tax Act, 1961 (in short, "the Act"), against the order dated December 19, 2011, passed by the Income-tax Appellate Tribunal, Chandigarh Bench "B", Chandigarh (for brevity, "the Tribunal") in I.T.A. No. 942/CHD/2011 for the assessment year 2009-10, claiming the following substantial questions of law: (i) Whether, on the facts and in the circumstances of the case, the hon'ble Tribunal was right in law for deleting the penalty levied under section 272B of the Income-tax Act, 1961, amounting to Rs. 19,60,000 for non-quoting/wrong quoting of PANs in 196 cases in the TDS returns 24Q for the assessment year 2009-10 ? (ii) Whether, on the facts and in the circumstances of the case, the hon'ble Tribunal was right in deleting the penalty and giving relief to the assessee merely on the ground that the appellant deducted TDS correctly and revised PAN and filed the revised statement in Form 26Q. While penalty was levied for non-quoting of PANs of deductees in Form 24Q. Thus, accepting additional evidence in contravention to rule 46A of the Income-tax Rules, 1962 ? (iii) Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal is right in law in giving benefit of section 273B of the Income-tax Act, 1961, despite the failure on the part of the respondent to prove that there was a reasonable cause in not furnishing the valid PAN numbers ? (iv) Whether, on the facts and in the circumstances of the case, the findings recorded by the learned Income-tax Appellate Tribunal are perverse and contrary to record ? Briefly, the facts as narrated in the appeal may be noticed. The e-TDS quarterly statement of deduction of tax in Form 24Q for the financial year 2008-09 as required under sub-section (3) of section 200 of the Act was filed on October 16, 2009, by the assessee. During processing, it was noticed that PAN of as many as 196 tax deductees were found to be invalid. Section 139A(5B) of the Act requires that PAN of all persons on behalf of whom tax is deducted should be quoted in the quarterly statement. Accordingly, a show-cause notice was issued to the respondent-assessee as to why penalty under section 272B of the Act be not imposed. The assessee neither appeared nor filed any written submissions. Thereafter, the Income-tax Officer (TDS), Panchkula, passed order dated August 30, 2010, annexure A1 imposing a penalty of Rs. 19,60,000. Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) ("the CIT(A)") which was allowed, vide order dated August 12, 2011, annexure A2 and penalty was deleted. Dissatisfied with the order, the Revenue filed an appeal before the Tribunal which was also dismissed, vide order dated December 19, 2011, annexure A3. Hence, this appeal by the Revenue.
(2.) The issue in this appeal relates to whether there was justifiable cause within the meaning of section 273B of the Act on the basis of which it could be said that sufficient cause had been shown by the respondent-Superintendent of Police in wrongly quoting PAN in respect of 196 employees of the department. The Commissioner of Income-tax (Appeals) had recorded as under: In the instant case, as already observed, the appellant deducted TDS correctly and revised PAN and filed the revised statement on Form 26Q, hence there is sufficient compliance with the provisions of section 139A. In view of the aforesaid discussion, it is held that the Income-tax Officer (TDS) was not justified to levy the penalty of Rs. 19,60,000 at Rs. 10,000 per default. The penalty levied by the Income-tax Officer (TDS) under section 272B(1) is deleted.
(3.) The Tribunal had come to the conclusion that there was sufficient cause on the part of the respondent while quoting PAN of the deductees and as such no penalty was leviable. The tax was deducted and deposited in time in the Government treasury. The error was due to wrong quoting of PAN by the deductees to the assessee. The assessee had rectified the mistake by furnishing the correct PAN as soon as it came to its notice. The revised PAN and the revised statement were accordingly filed. The following findings recorded by the Tribunal may be read: 6. In the instant case, the only question before us is whether there was reasonable cause for alleged failure on the part of the assessee. In the instant case, the Income-tax Officer (TDS) while going through the quarterly return in Form 26Q, filed by the assessee noted that it has omitted to quote PAN had quoted invalid PAN in 196 cases. As regards the reasonable cause, it was pleaded on behalf of the assessee that TDS was deducted and deposited in time in the Government treasury. The default is only with regard to the wrong quoting of PAN of 196 of the deductees, such deductees quoted wrong PAN. However, correct PAN was given as soon as default was brought to the notice of the assessee. In this case, the Commissioner of Income-tax (Appeals) has categorically observed that the assessee deducted TDS correctly and revised PAN and filed the revised statement on Form 26G, hence there was sufficient compliance with the provisions of section 139A. There is no dispute that the assessee quoted invalid PAN for 196 deductees which was corrected on being pointed out by Income-tax Officer (TDS). In the instant case, failure to quote right PAN has occurred as the concerned depositor had misquoted PAN. There is also no dispute that the PAN was corrected after ascertaining the same from the respective deductees.;