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II. Direct Tax Case laws:
1. ITO Vs. Mr. Gope M. Rochlani, ITA No. 7737/Mum./2011, Date of Order: 24.05.2013, ITAT - Mumbai
Section 271(1)(c) of the Income Tax Act, 1961
Whether
penalty u/s 271(1)(c) of the Act can be levied on additional income
offered in belated return filed u/s 139(4) of the Act.
Held: No
Explanation 5A
to section 271(1)(c) of the Act, provides that if the income is offered
in the return is filed by the “due date”, no penalty can be imposed.
The provisions of section 139(4) is an extension of the due date of
section 139(1) and the due date for filing of the return of income can
also be reckoned with the date mentioned in section 139(4). Since, the
legislature has not specified the “due date” as provided in section
139(1) in Explanation 5A, thus by implication, it has to be taken as the
date extended u/s 139(4). In the present case, the assessee is eligible
for the benefit / immunity under clause (b) of Explanation to section
271(1)(c) because the assessee has filed its return of income within the
“due date” and, therefore, the penalty levied by the AO cannot be
sustained. In view of the interpretation of Explanation 5A to section
271(1)(c) penalty is deleted and consequently, appeal of the revenue is
dismissed.
(Please click here for judgment)
2. CIT Vs. M/s Gail (India) Ltd., ITA No. 460/2009, Date of Decision: 19.08.2013, High Court of Allahabad
Section 139A (5A) & 272 B (1) of Income Tax Act, 1961
Whether AO
is justified in imposing the penalty u/s 272B(1) of the Act in the case
where payee has failed to provide PAN to the assessee (deductor) but the
assessee has made all statutory compliances.
Held_No
The assessee
has deducted income tax at source u/s Sec.194-C & 194-J on all
payments made to contractors/professionals and fulfill all the statutory
compliance regarding filing of TDS return & payment of TDS but had
not mentioned PAN of some of contractors in Form 26C as same were not
provided by them to the assessee. The AO imposed penalty on the assessee
u/s 272B.
Hon’ble High
Court has upheld the order of the ITAT of deleting the penalty levied
U/s 272-B as there was a reasonable cause preventing the assessee to
obtain and quote PAN of the deductees as provided u/s 139-A(5B) of the
Act. The reliance is placed on the decision of the Hon'ble Supreme Court
pronounced in the case of Hindustan Steels Ltd. v. State of Orissa, 83
ITR 26(SC) in which it was held that an order imposing penalty for
failure to carry out a statutory obligation is the result of a
quasi-criminal proceeding and penalty will not ordinarily be imposed
unless the party obliged either acted deliberately in defiance of law or
was guilty of conduct contumacious or dishonest or acted in conscious
disregard of its obligation. Penalty will not also be imposed merely
because it is lawful to do so. Whether penalty should be imposed for
failure to perform a statutory obligation is a matter of discretion of
the authority to be exercised judicially and on a consideration of all
the relevant circumstances. Even if a minimum penalty is prescribed, the
authority competent to impose the penalty will be justified in refusing
to impose penalty, when there is a technical or venial breach of the
provisions of the Act or where the breach flows from a bonafide belief
that the offender is not liable to act in the manner prescribed by the
statute.
(Please click here for judgment)
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