- (1.) BY this Reference under Section 256(1) of the Income Tax Act, 1961, the following question of law was referred to this Court: Whether on the facts and circumstances of the case the Hon'ble Tribunal has correctly interpreted the provisions of Section 206 of IT Act with regard to the requirements of preparation and filing of statements prior to amendment and after the amendment (Amendment was brought about by Finance (No. 2) Act, 1991 w.e.f 27.9.91 thereby cancelling the penalty of Rs. 30,400 levied Under Section 272A(2).
(2.) THE facts of the case in brief are that the assessee is a Secretary of Zila Parishad. He was called upon to pay a penalty of Rs. 30,400/ - under Section 272A(2) in failure to file form No. 26C. This form was to be filed by a person who is deducting the tax at source before payment to the contractors and sub -contractors. Admittedly taxes were adequately deducted and deposited in. time within the Government Treasury. The stand of the appellant in the show cause was that since Form 26C was not available, therefore, the necessary provisions were not complied with. The Tribunal in the order of reference has observed as under: He further observed that the requisite form was available at a little distance i.e., Jamshedpur. The learned CIT (A) endorsed the view of the learned DC (Admn.) and confirmed the penalty. The appellant further went in appeal to the Tribunal. The Tribunal after hearing both the parties observed as under: I have considered the rival submissions, facts and materials on record. Section 272A(2) is purely a penal provision. So the approach to the interpretation of the Act should be strictly grammatical. This penalty is leviable for non -compliance of provisions of Section 206. A part of Section in the relevant period was as follows (Assessment year 1989 -90): Shall prepare within the prescribed time after the end of each financial year and deliver a cause to be delivered.This part was amended from 27.9.1991 as follows: Shall within the prescribed time after end of each financial prepare deliver a cause to be delivered. The difference in placing 'within prescribed before and after the words 'prepare' connotes the difference of liability of penalty in two situations. To explicate: Before the amendment if the prescribed form is prepared within stipulated time no penalty could be levied even if it was not delivered as no time was stipulated in the section for submission of the return. The legislature consured the lacuna and, therefore, section was suitably amended to prescribed the time for delivery of the form. The case before me is for preamendment period hence time limit for the delivery of the form was non -est. No penalty could be levied for non -delivery of the same for which penalty was levied. I am aware that this interpretation of mine may make section as obvious and nonunctionary, but I am unable to read a penal section longer than it has been worded.
(3.) From what has been enumerated above, the above question does arise which we refer to the Hon'ble High Court for its esteemed opinion. Having regard to the subsequent amendments made in the Act and also having regard to the fact that one policy decision was taken by the Government in Circular No. 279/126/98 dated 27th March, 2000, we do not find it necessary to answer the reference especially in the facts of the present case. However, this will not create precedence.;