At, High Court of Judicature at Bombay
By, THE HONOURABLE MR. JUSTICE F.I. REBELLO & THE HONOURABLE MR. JUSTICE K.U. CHANDIWAL
For the Appellant: A.D. Kango, Advocate. For the Respondent: S.G. Dalal, Advocate.
F.I. Rebello, J.
Revenue has preferred this appeal against the order of ITAT dated 7.5.2007 whereby the appeal preferred by the Revenue has been dismissed and the order of the Commissioner (Appeals) has been upheld.
2. The Commissioner (Appeals) vide his reasoned order set aside the penalty levied under Section 272A(2)(g) of the Income Tax Act. The facts on record would indicate that the amount was paid into Government Account on 1st March and 6th March, 2004. The TDS certificates were immediately issued on 2nd March and 7th March, 2004. Admittedly, TDS amount was not paid in time. The Commissioner (Appeals) held that it was on account of financial constraint. We are not concerned with the said issue in the present appeal as failure to pay on due date results in different consequences. It has further come out on record that TDS certificates were sent by speed post on 25.3.2004.
3. The question of law as framed by the department is as under:
"Whether on the facts and in the circumstances of the case and in law, the Hon?ble Tribunal was justified in deleting the penalty levied u/s. 272A(2)(g) of the Income Tax Act?"
The other question framed in our opinion, need not be answered as answering the question framed would dispose of the appeal.
4. Section 272A(2)(g) reads as under:
"272A. (1) If any person ...........
(2)If any person fails - .........
(g) to furnish a certificate as required by Section 203 (or Section 206C); or...........................he shall pay, by way of penalty, a sum of one hundred rupees for every day during which the failure continues.
Provided that the amount of penalty for failures in relation to a declaration mentioned in section 1979A, a certificate as required by section 203 and returns under Sections 206 and 206C, and statements under sub section (3) of section 200 or the proviso to sub section (3) of section 206C shall not exceed the amount of tax deductible or collectable, as the case may be."
Section 203 (1) and (2) reads as under :
(1) Every person deducting tax in accordance with the foregoing provisions of this Chapter shall within such period, as may be prescribed from the time of credit or payment of the sum, or, as the case may be, from the time of issue of a cheque or warrant for payment of any dividend to a shareholder, furnish to the person to whose account such credit is given or to whom such payment is made or the cheque or warrant is issued, a certificate to the effect that tax has been deducted, and specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as may be prescribed. (Emphasis supplied).
(2) Every person, being an employer, referred to in sub section (1A) of section 192 shall, within such period, as may be prescribed, furnish to the person in respect of whose income such payment of tax has been made, a certificate to the effect that tax has been paid to the Central Government, and specify the amount so paid, the rate at which the tax has been paid and such other particulars as may be prescribed."
5. A joint perusal therefore, of Section 272A(2)(g) and Section 203(1) indicates that the penalty can be imposed if certificate of deduction is not issued within the time as may be prescribed. This is the only requirement and that would depend on the facts of each case.
Rule 31 is the relevant rule requiring issuance of certificate. The first proviso to that rule sets out that in the cases like instant case, the certificate under sub rule (1) shall be issued within a week after the expiry of two months from the month income is so credited. We are not concerned with the further provisos.
6. As noted earlier and on the finding of fact recorded by the authorities below, on the tax being deducted and deposited with the Government treasury, the TDS c
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ertificates were sent to the persons entitled to by speed post on the very next dates. In other words, there has been compliance of the mandatory requirements of the section. Once there has been compliance of section 203 read with rules, no penalty could have been imposed considering the language of Section 272A(2)(g). The authorities below, therefore, acted without jurisdiction in setting aside the penalty. 7. In view of the same, appeal dismissed.