AMIT BAJAJ ADVOCATE

Mr. Pankaj Jain, Advocate for the appellant-assessee.  
Mr. Rajesh Katoch, Standing Counsel for the respondent-Revenue.  

AJAY KUMAR MITTAL, J.  

This appeal under Section 260A of the Income-tax Act, 1961 (for short “the Act’”) has been filed by the assessee against the order dated 10.9.2003, passed by the Income Tax Appellate Tribunal, Chandigarh Bench ‘B’, Chandigarh, (in short “the Tribunal”) in ITA No. 861/CHANDI/01, relating to the assessment year 2000-2001. The assessee has claimed the following substantial questions of law for determination by this Court:

1- Whether under the facts and circumstances of the case and on an interpretation of Section 272A(2)(f), the Tribunal is justified in upholding the levy of penalty?

2- Whether under the facts and circumstances of the case the Tribunal was right in law in upholding the levy of penalty u/s 272A(2)(f) even if the assessee has committed a default under a bona fide belief and as a reasonable cause that forms have to be sent annually?

3- Whether under the facts and circumstances of the case the Tribunal was justified in upholding the levy of penalty on the basis of number of days delay?

4- Whether under the facts and circumstances of the case the Tribunal was justified in not following its own decision where one of the members of the Bench was the same in which case the penalty under the similar circumstances was deleted and, hence the order of the Tribunal is against the doctrine of judicial consistency and perverse?

The facts necessary for adjudication, as narrated in the appeal, are that the appellant-assessee is the Manager of a Public Sector Bank. He was under a legal obligation to deduct income tax at source, under Section 194A(3) (vii) of the Act, on the amount of interest paid/ credited, exceeding Rs. 10,000/- during the financial year 1999- 2000, relevant for the assessment year under reference. He, however, did not make any deduction on that account in respect of 59 persons for the reason that they had filed declaration under Section 197A in form 15H. Since the said declarations were filed during the financial year 1999-2000, the person concerned was required to deliver one copy thereof in form 15H in the office of the Commissioner of Income Tax [hereinafter referred to as “CIT”] by the 7th of the month following the month in which the declarations were furnished. But the said declarations were furnished late and the delay in that matter varied from 65 to 447 days. The CIT initiated penalty proceedings under Section 272A(2) (f) of the Act against the Manager of the appellant-bank. Reply was filed on behalf of the Manager that the alleged lapse occurred due to bona fide mistake. But the said plea was rejected. It was also sought to be contended on behalf of the Manager that since no loss occurred to the Revenue, no penalty could be levied. The CIT, however, by order dated 22.10.2001 levied minimum penalty of Rs. 1,26,606/- i.e. equal to the amount deductible for committing default under Section 272A(2)(f) of the Act. Feeling aggrieved, the assessee preferred appeal before the Tribunal. The Tribunal after considering the submissions of both the sides dismissed the appeal by order dated 10.9.2003. It is how the assessee is in appeal before us.
We have heard learned counsel for the parties and perused the record.

Whether the CIT and the Tribunal were right and justified in upholding the penalty under Section 272A (2)(f) of the Act is the point in issue that has drawn the attention of this Court in this appeal. Learned counsel for the assessee submitted that the delay which had occurred in furnishing the certificate in Form 15H to the Department was not deliberate and was under a misunderstanding with the officials of the bank whereby it was wrongly taken that Forms 15H were required to be filed at the time of filing of the return in Form 27A of the Act i.e. on 30th of June instead of mandatory date of 7th of the following month in which Forms 15-H were furnished to the Manager/responsible person by the declarants. The assessee had reasonable cause for not furnishing Form 15H within time and, therefore, in terms of Section 273B of the Act, no penalty under Section 272A (2)(f) ought to have been levied. The counsel further submitted that the default was of a technical nature and unless there was an intention in committing the default, no penalty under the aforesaid provisions was called for. Learned counsel placed reliance on the judgment of this Court in The Commissioner of Income Tax Vs. State Bank of Patiala, (2005) 277 ITR 315 wherein it had been held that unless there was a deliberate default in furnishing the certificates and if no loss of revenue had occasioned due to the said unintentional default on the part of the assessee, no penalty was exigible.

Learned counsel for the Revenue, on the other hand supported the order passed by the CIT and upheld by the Tribunal. In State Bank of Patiala’s case (supra), the factual position was that the bank had failed to furnish declaration in Form 15H to the Department within the time envisaged by law. In that situation, this Court had held that as the assessee was not required to deduct any tax at source, and no loss of revenue had occurred to the Department and more so, the default being of a technical nature, no penalty under Section 272A (2) (f) of the Act, was leviable. In our opinion, in the case in hand the explanation furnished by the assessee for the delay in furnishing the declaration in Form 15H to the Department being a plausible one, it cannot be said that noncompliance thereof was deliberate. The aforesaid pronouncement fully supports the case of the assessee. The Tribunal, thus, erred in upholding the penalty under Section 272A (2)(f) of the Act

. Accordingly, the appeal is allowed. The substantial questions of law are answered in favour of the assessee.