SHRI HARI TEXTILES P. LTD, MUMBAI V. ADDL CIT (TDS) RG 3,

ITA 6839/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1311 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Assessee
• Bench Allotted: I
• Next Hearing Date: 21-06-2010
• Assessment Year: 2007-2008
• Appeal Filed On: 01-12-2008
• Court: TRIBUNAL
• Department Lawyers: PRADEEP HEDAOO
• Assessee Lawyers: RAMESH JOSHI
• Keywords: Bonafide belief; Reasonable cause; Non compliance; Ignorance of law; TDS; Set aside
• Section: 273B

Judgement Text

ITA NO. 6839/MUM/2008 ASSESSMENT YEAR : 2007-08 PAGE 1 OF 12 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI I BENCH, MUMBAI BEFORE, SHRI N.V. VASUDEVAN (JUDICIAL MEMBER) AND SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) ITA NO. 6839/MUM/2008 ASSESSMENT YEAR 2007-08 DATE OF HEARING : 21.6.2010 M/S. SHRI HARI TEXTILES PVT. LTD. ...... APPELLANT 134/136, ZAVERI BAZAR MUMBAI 400 002 PAN AAACV1450D VS. ADDL. COMMISSIONER OF INCOME TAX (TDS) .. RESPONDENT RANGE 3, MUMBAI APPELLANT BY : SHRI RAMESH JOSHI RESPONDENT BY : SHRI PRADEEP HEDAOO O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSEE HAS CHALLENG ED CORRECTNESS OF ORDER DATED 21 ST OCTOBER 2008. PASSED BY THE LEARNED COMMISSIONER (APPEALS)XXX, MUMBAI, FOR ASSESSMENT YEAR 2007-08. ITA NO. 6839/MUM/2008 ASSESSMENT YEAR : 2007-08 PAGE 2 OF 12 2. THE SHORT ISSUE THAT WE ARE REQUIRED TO ADJUDICATE IN THIS APPEAL IS, WHETHER OR NOT, THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THE PENALTY OF RS.38,817/- IMPOSED ON THE ASSESSEE U/S 272A(2)( C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) FOR ASSESSMENT YEAR 2007-08. 3. BRIEFLY STATED THE MATERIAL FACTS ARE LIKE THIS. TH E ASSESSEE FILED TAX DEDUCTED AT SOURCE (TDS) RETURNS IN FORMS NO.26 Q AND 24Q, AFTER THE TIME LIMIT FOR FILING THE SAID RETURN EXPIRED. THUS, THERE IS ADMITTED DELAY IN FILING TDS RETURNS. THE ASSESSING OFFICER NOTED THAT, INSOFAR AS THE FINANCIAL YEAR WAS CONCERNED, THE RE TURN FOR THE FIRST QUARTER WAS DELAYED BY 392 DAYS, THE RETURN FOR THE SECOND QUARTER WAS DELAYED BY 30 DAYS, THE RETURN FOR THIRD QUARTE R WAS DELAYED BY 198 DAYS AND FINALLY, THE RETURN FOR FOURTH QUARTER WAS DELAYED BY 47 DAYS. THERE WERE THUS DELAYS IN FILING ALL THE FOUR QUARTERLY RETURNS WHICH THE ASSESSEE WAS UNDER OBLIGATION U/S 200(3) OF THE ACT TO FILE WITH THE TAX AUTHORITIES. THE ASSESSING OFFICER, ON THESE FACTS, REQUIRED THE ASSESSEE TO SHOW CAUSE AS TO WHY PENAL TY U/S 271A(2)(C) NOT BE IMPOSED ON THE ASSESSEE FOR DELAYED FILING O F TDS RETURNS. IT WAS EXPLAINED BY THE ASSESSEE THAT THE ASSESSEE COM PANY DID NOT HAVE A FULL TIME ACCOUNTANT IN VIEW OF LOW SCALE OF OPER ATIONS AND THE WORK WAS ASSIGNED TO AN OUTSIDE AGENCY. THE DELAY WAS TH US ATTRIBUTED TO REASONABLE CAUSE. THIS EXPLANATION, HOWEVER, DID NO T SATISFY THE ASSESSING OFFICER AND HE, THUS, PROCEEDED TO IMPOSE THE PENALTY OF RS.38,817/-, AGGRIEVED BY WHICH THE ASSESSEE CARRIE D THE MATTER IN APPEAL BEFORE THE LD. CIT(A). ITA NO. 6839/MUM/2008 ASSESSMENT YEAR : 2007-08 PAGE 3 OF 12 4. BEFORE THE CIT(A), IT WAS CONTENDED THAT THE PROCED URE OF FILING QUARTERLY TDS RETURN WAS INTRODUCED W.E.F. 2006-07 ONLY AND PRIOR TO THAT TDS RETURNS WERE FILED ON ANNUAL BASIS. IT WAS SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE WAS UNDER BONAFIDE IMPRE SSION THAT THE RETURNS ARE TO FILED ON THE ANNUAL BASIS. IT WAS AL SO STATED THAT THE COMPANY HAD EMPLOYED PART TIME ACCOUNTANT AND THAT THE ACCOUNTANT HAD LEFT THE JOB BECAUSE OF WHICH ASSIGNMENT OF FIL ING THE RETURN AT TO BE GIVEN TO AN OUTSIDER. IT WAS FURTHER POINTED OUT THAT THE ACCOUNTANT WAS NOT ACQUAINTED WITH THE PROCEDURE OF FILING THE RETURN ELECTRONICALLY WHICH ALSO RESULTED IN THE DELAY. RE LIANCE WAS PLACED ON JUDICIAL PRECEDENCE IN THE CASE OF CIT VS SUPERINT ENDING ENGINEER, UDAIPUR, 260 ITR 641 (2003), RAJASTHAN HIGH COURT,, CIT VS DY. HOUSING COMMISSIONER, RAJASTHAN HOUSING BOARD, JODH PUR, 265 ITR 686 (2003), RAJASTHAN HIGH COURT, AND HINDUSTAN STE EL LTD. VS STATE OF ORISSA, (1973) 83 ITR 26 (SC). NONE OF THESE SUBMIS SIONS, HOWEVER, IMPRESSED THE LD. CIT(A) EITHER. THE LD. CIT(A) WAS OF THE VIEW THAT ADMITTEDLY THERE WAS DELAY IN FILING OF THE RETURNS , THAT THE CONDUCT OF THE ASSESSEE CANNOT BE IGNORED WHILE DECIDING THE A PPEAL OF THE ASSESSEE AND THAT THE APPELLANT HAD SUBMITTED THAT THERE WAS A BONAFIDE BELIEF THAT RETURNS ARE REQUIRED TO BE FIL ED ANNUALLY, WHICH COULD NOT BE A GOOD GROUND FOR NOT FILING THE QUART ERLY TDS RETURNS IN TIME. THE LD. CIT(A) REFERRED TO THE DECISION OF HO NBLE KARNATAKA HIGH COURT IN THE CASE OF SARASWATI ELECTRONICS VS ITO, 292 ITR 411, WHEREIN IT WAS SAID TO HAVE BEEN HELD THAT IGNORANC E OF INCOME TAX LAWS COULD NOT BE A GROUND FOR NOT MAKING COMPLIANC E WITH THE STATUTORY PROVISIONS. THE LD. CIT(A) NOTED THAT THE SUBMISSIONS OF THE APPELLANT THAT THE APPELLANT WAS NOT AWARE ABOUT TH E CHANGES OF THE ITA NO. 6839/MUM/2008 ASSESSMENT YEAR : 2007-08 PAGE 4 OF 12 QUARTERLY RETURNS TO BE FILED CANNOT BE AN EXCUSE, AS THE PERSON UNDER LEGAL OBLIGATION TO COMPLY, CANNOT ESCAPE THE CONSE QUENCE OF NON COMPLIANCE BY STATING THAT HE WAS NOT AWARE OF THE CHANGES BROUGHT IN LAW. HE FURTHER OBSERVED THAT IT IS THE DUTY OF THE PERSON ON WHOM THE LAW CASTS OBLIGATIONS OF COMPLIANCE TO SEE THAT COM PLIANCE IS MADE EVEN IF THE REASONS MADE IS GENUINE. HE THUS, AGREED WITH THE STAND OF THE ASSESSING OFFICER AND DECLINE TO INTERFERE IN THE M ATTER. THE ASSESSEE IS AGGRIEVED AND IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MA TERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CA SE AS ALSO THE APPLICABLE LEGAL POSITION. 6. LEARNED COUNSEL FOR THE ASSESSEE HAS RAISED PRELIMI NARY POINT REGARDING INAPPLICABILITY OF PROVISIONS OF SECTION 272A(2)(C) OF THE ACT IN RESPECT OF A RETURN WHICH IS NOT REQUIRED TO BE FILED U/S 206 OF THE ACT. IT IS POINTED OUT THAT THE SAID SECTION PERTAI NS TO NON-COMPLIANCE IN RESPECT OF THE RETURNS WHICH ARE REQUIRED TO BE FILED U/S 206, WHEREAS, THE RETURNS IN RESPECT OF WHICH THE IMPUGN ED PENALTY IS LEVIED ARE REQUIRED TO BE FILED U/S 200(3). LEARNED COUNSEL INVITES OUR ATTENTION TO THE DECISION OF A CO-ORDINATE BENCH IN THE CASE OF CREST COMMUNICATION LTD. VS ADDL. DIT, (2007) 106 ITD 558 , WHEREIN PENALTY U/S 272A(2)(C) WAS CANCELLED ON THE GROUND THAT THE RETURNS IN RESPECT OF NON-FILING OF WHICH THE SAID PENALTY WAS LEVIED WAS NOT COVERED BY SECTION 206 OF THE ACT. A REFERENCE IS A LSO MADE TO THE DECISION DATED 29 TH JANUARY 2010, PASSED BY A CO-ORDINATE BENCH IN THE CASE OF M/S. ROYAL METAL PRINTERS P. LTD. VS ADDL. CIT (TDS), DECIDED IN ITA NO. 6839/MUM/2008 ASSESSMENT YEAR : 2007-08 PAGE 5 OF 12 ITA NO.6840/MUM./2008 FOR ASSESSMENT YEAR 2007-08, VIDE ORDER DATED 29 TH JANUARY 2010, WHEREIN A REFERENCE IS MADE TO THE D ECISION IN THE CASE OF CREST COMMUNICATION LTD. (SUPRA). W E ARE, THUS, URGED TO QUASH THE IMPUGNED PENALTY FOR THIS SHORT REASON ALONE. HOWEVER, WHEN THE COUNSELS ATTENTION WAS INVITED TO THE FAC T THAT W.E.F. 1 ST APRIL 2005, EVEN A NON-COMPLIANCE WITH THE OBLIGATI ON TO FILE RETURN U/S 200(3) CAN RESULT IN LEVY OF PENALTY U/S 272A(2 )(K) AND THAT THE LAPSE, IF ANY, IS ONLY IN MENTIONING THE WRONG SECT ION WHICH NEED NOT IN VIEW OF THE SPECIFIC PROVISIONS OF SECTION 292B, VITIATE THE ENTIRE PENALTY PROCEEDINGS, LEARNED COUNSEL INVITED OUR AT TENTION TO THE CO- ORDINATE BENCH DECISION IN THE CASE OF M/S. ROYAL METAL PRINTERS P. LTD. (SUPRA), WHICH WAS DEALING WITH POST AMENDMENT YEAR I.E., ASSESSMENT YEAR 2007-08. 7. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER H AND, SUBMITS THAT IN VIEW OF THE INSERTION OF CLAUSE (K ) IN SECTION 272A(2) AND IN VIEW OF THE PROVISIONS OF SECTION 292B, THE MERE MENTION OF WRONG SECTION DOES NOT MAKE ANY DIFFERENCE. IT IS S UBMITTED THAT THERE IS NO DISPUTE THAT THE NON FILING OF RETURN U/S 200 (3) WAS TO BE VISITED BY PENALTY U/S 272A(2) AND, THEREFORE, TECHNICAL OB JECTION RAISED BY THE ASSESSEE IS DEVOID OF LEGALLY SUSTAINABLE MERIT S. AS REGARDS TRIBUNAL DECISION IN THE CASE OF M/S. ROYAL METAL P RINTERS P. LTD. (SUPRA), IT WAS POINTED OUT BY THE LD. DEPARTMENTAL REPRESENTATIVE THAT THE RELIEF HAS BEEN GIVEN TO THE ASSESSEE ON T HE GROUND THAT DELAY IN FILING OF RETURN IS EXPLAINED BY REASONABLE CAUS E AND THAT THE OBSERVATIONS RELIED UPON BY THE LD. DEPARTMENTAL RE PRESENTATIVE ARE MERELY IN THE NATURE OF OBITER WHICH DO NOT HAVE PR ECEDENCE VALUE. IN ITA NO. 6839/MUM/2008 ASSESSMENT YEAR : 2007-08 PAGE 6 OF 12 ANY EVENT, ACCORDING TO THE LD. DEPARTMENTAL REPRES ENTATIVE, THE PROVISIONS OF LAW ARE QUITE CLEAR AND ADMIT NO AMBI GUITY. 8. HAVING REGARD TO THE RIVAL CONTENTIONS AND HAVING P ERUSED THE MATERIAL AVAILABLE ON RECORD, WE ARE UNABLE TO SEE ANY SUBSTANCE IN THE OBJECTION RAISED BY THE COUNSEL. WE FIND THAT CLAUS E (K) HAS BEEN INSERTED IN SECTION 272A(2) W.E.F. 1 ST APRIL 2005 AND, THUS, WHEN THE ASSESSEE FAILS TO DELIVER A COPY OF THE STATEMENT W ITHIN TIME SPECIFIED IN SUB-SECTION (3) OF SECTION 200, HE SHALL PAY, BY WAY OF PENALTY, A SUM OF RS.100 FOR EVERY DAY DURING WHICH THE DEFAUL T CONTINUES. IT DOES NOT, THEREFORE, MATTER WHETHER THE COMPLIANCE REQUIREMENT WAS UNDER SECTION 206 OR UNDER SECTION 200(3) INSOFAR A S THE IMPOSITION OF PENALTY IS CONCERNED. IT IS ALSO ELEMENTARY THAT IN VIEW OF THE PROVISIONS OF SECTION 292B, INTER-ALIA, NO PROCEEDI NGS TAKEN IN PURSUANCE OF ANY OF THE PROVISIONS OF THE ACT, SHAL L BE INVALID MERELY BY THE REASON OF ANY MISTAKE, DEFECT OR OMISSION IN SUCH PROCEEDINGS AND IF THE PROCEEDING IS IN SUBSTANCE AND IN EFFECT IN THE CONFORMITY WITH OR ACCORDING TO INTENT AND PURPOSE OF THIS ACT . IN OTHER WORDS, A MERE MENTION OF WRONG SECTION PER-SE DOES NOT INVAL IDATE THE PENALTY PROCEEDINGS. AS REGARDS RELIANCE OF TRIBUNALS DECI SION IN THE CASE OF CREST COMMUNICATION LTD. (SUPRA), WE HAVE NOTICED T HAT THE SAID DECISION PERTAINS TO ASSESSMENT YEARS 1997-98 AND 1 998-99, WHICH ARE YEARS PRIOR TO THE INSERTION OF SUB-CLAUSE (K) TO S ECTION 272A(2). THIS DECISION, THEREFORE, DOES NOT HAVE ANY RELEVANCE IN SOFAR AS THE YEAR BEFORE US IS CONCERNED. AS FAR AS RELIANCE ON THE D ECISION OF M/S. ROYAL METAL PRINTERS P. LTD. (SUPRA) IS CONCERNED, WE HAV E NOTED THE DELAY IN FILING OF THE RETURNS WAS SUPPORTED BY REASONABLE C AUSE AND IT IS ON ITA NO. 6839/MUM/2008 ASSESSMENT YEAR : 2007-08 PAGE 7 OF 12 THIS GROUND THAT PENALTY WAS DELETED. IN ANY EVENT, CO-ORDINATE BENCH HAD NO OCCASION TO DEAL WITH THE PROVISIONS OF SECT ION 272A(2)(K) R/W SECTION 292B OF THE ACT. THE DIFFERENCE IN LEGAL PO SITION FOR ASSESSMENT YEAR 2007-08 VIS--VIS ASSESSMENT YEAR 1 997-98, DID NOT THUS COME UP FOR CONSIDERATION BEFORE THE CO-ORDINA TE BENCH. WE, THEREFORE, REJECT THE TECHNICAL OBJECTION RAISED BY THE ASSESSEE. 9. HAVING HELD SO, WE MAY ADD THAT THE REQUIREMENT OF FILING QUARTERLY RETURNS WAS, ADMITTEDLY, INTRODUCED W.E.F . THE YEAR 2005-06 AND THE YEAR BEFORE WAS IN THE INITIAL PERIOD WHEN THE NEW PROCEDURE WAS PUT TO PRACTICE. WE HAVE ALSO NOTED THAT THE OP ERATIONS OF THE ASSESSEE ARE ON A RELATIVELY SMALL SCALE AND THE TO TAL TAX REQUIRED TO BE DEDUCTED WAS MERELY RS.33,425. WHEN ASSESSEE WAS WO RKING ON SUCH A LOW SCALE OF OPERATIONS, AND EVEN THE PART TIME ACC OUNTANT HAS LEFT THE JOB, DELAY IN SUBMISSION OF QUARTERLY TDS RETURNS C ANNOT BE MALAFIDE OR DELIBERATE. AS REGARDS THE DECISION OF HONBLE K ARNATAKA HIGH COURT IN THE CASE OF SARASWATI ELECTRONICS (SUPRA) IN SUP PORT OF THE CONTENTION THAT IGNORANCE OF LAW IS NO EXCUSE, WE F IND THAT HONBLE KARNATAKA HIGH COURT HAD MERELY OBSERVED THAT IGNOR ANCE OF THE PROVISIONS OF INCOME TAX ACT IS NOT A GOOD GROUND F OR NON MAINTENANCE OF BOOKS OF ACCOUNT. THAT OBSERVATION H AS NO APPLICATION TO THE FACT OF THE PRESENT CASE OR THE REJECTION OF IGNORANCE OF LAW AS AN EXPLANATION. AS TO THE QUESTION WHETHER IGNORANC E OF LAW IS INDEED NOT AN ACCEPTABLE EXPLANATION, WE CAN DO NO BETTER THAN TO QUOTE THE FOLLOWING EXTRACTS FROM A DECISION OF THIS TRIBUNAL IN THE CASE OF SUDERSHAN AUTO AND GENERAL FINANCE VS CIT, 60 ITD 1 77, WITH WHICH WE ARE IN MOST RESPECTFUL AGREEMENT:- ITA NO. 6839/MUM/2008 ASSESSMENT YEAR : 2007-08 PAGE 8 OF 12 24. THE CONTENTION OF THE REVENUE THAT IGNORANCE O F LAW IS NOT A VALID EXCUSE IS ALSO NOT VALID. THE LEARNED DEPARTMENTAL REPRESENTATIVE WAS CONFRONTED WITH THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F MOTILAL PADAMPAT SUGAR MILLS LTD. VS. STATE OF UTTA R PRADESH (1979) 118 ITR 326 (SC). HE COULD NOT GIVE ANY VALI D EXPLANATION IN SUPPORT OF HIS CONTENTION THAT EVERY BODY IS SUPPOSED TO KNOW THE LAW AFTER GOING THROUGH THE SA ID JUDGMENT. THE HONBLE SUPREME COURT IN THE AFORESAI D CASE HAS, INTER ALIA, HELD AS UNDER AT PAGE 339 : 'MOREOVER, IT MUST BE REMEMBERED THAT THERE IS NO PRESUMPTION THAT EVERY PERSON KNOWS THE LAW. IT IS OFTEN SAID THAT EVERYONE IS PRESUMED TO KNOW THE LAW, BUT THAT IS NOT A CORRECT STATEMENT : THERE IS NO SUCH MAXIM KNOWN TO THE LAW. OVER A HUNDRED AND THIRTY YEARS AGE, MAULA, J. POINTED OUT IN MARTINDALE VS. FALKNER (1846) 2 CB 706 : 'THERE IS NO PRESUMPTION IN THIS COUNTRY THAT EVERY PERSON KNOWS THE LAW : IT WOULD BE CONTRARY TO COMMONSENSE AND REASON IF IT WERE SO'. SCRUTTON, L.J. ALSO ONCE SAID : 'IT IS IMPOSSIBLE TO KNOW ALL THE STATUTORY LAW, AND NOT VERY POSSIBLE TO KNOW ALL THE COMMON LAW'. BUT, IT WAS LORD ATKIN WHO, AS IN SO MANY OTHER SPHERES, PUT THE POINT IN ITS PROPER CONTEXT WHEN HE SAID IN EVANS V. BARTLAM (1937) AC 473 : ' THE FACT IS THAT THERE IS NOT AND NEVER HAS BEEN A PRESUMPTION THAT EVERY ONE KNOWS THE LAW. THERE IS THE RULE THAT IGNORANCE OF THE LAW DOES NOT EXCUSE, A MAXIM OF VERY DIFFERENT SCOPE AND APPLICATION.' THE IGNORANCE OF THE LAW MAY OR MAY NOT CONSTITUTE A VALID EXCUSE FOR JUSTIFYING NON-COMPLIANCE WITH A PROVISI ON OF STATUTE. IT WILL DEPEND UPON THE NATURE OF THE DEFA ULT. IF IT IS MERELY A TECHNICAL OR VENIAL BREACH, NO PENALTY WOU LD BE IMPOSABLE BECAUSE THE LEVY OF PENALTY UNDER ANY STA TUTORY PROVISION NECESSARILY IMPLIES EXISTENCE OF SOME GUI LTY ITA NO. 6839/MUM/2008 ASSESSMENT YEAR : 2007-08 PAGE 9 OF 12 INTENTION ON THE PART OF THE DEFAULTER OR THE OFFEN DER. IN ORDER TO DETERMINE THE EXISTENCE OR ABSENCE OF ANY GUILTY INTENTION ON THE PART OF THE ASSESSEE, ONE WILL HAV E TO CONSIDER ALL THE SURROUNDING FACTS AND CIRCUMSTANCE S. WHETHER BY COMMITTING ANY DEFAULT OF NON-COMPLIANCE WITH A STATUTORY PROVISION OF LAW, AN ASSESSEE HAS DERIV ED ANY BENEFIT, GAIN OR ADVANTAGE WHETHER BY SUCH A DEFAUL T OR NON-COMPLIANCE THE ASSESSEE HAS DEFRAUDED THE REVEN UE OR HAS CAUSED ANY LOSS TO THE REVENUE. THESE ARE SOME OF THE FACTORS WHICH WILL HAVE TO BE SERIOUSLY CONSIDERED BEFORE CONSIDERING THE FACT AS TO WHETHER THE IGNORANCE ON THE PART OF THE ASSESSEE AND HIS CONSULTANT CAN CONSTITUTE A VALID EXCUSE OR A REASONABLE CAUSE FOR THE PURPOSES OF S. 273B IN RELATION TO THE ALLEGED DEFAULT SPECIFIED IN S. 272 A(2)(F). IN THE PRESENT CASE, THE ASSESSEE HAS NOT DERIVED ANY GAIN, BENEFIT OR ADVANTAGE BY DELAYED SUBMISSION OF FORMS NO. 15H. THE REVENUE HAS ALSO NOT SUFFERED ANY LOSS. TH E GUILTY INTENTION ON THE PART OF THE ASSESSEE IS TOTALLY AB SENT BECAUSE THE ASSESSEE HAS FURNISHED COMPLETE DETAILS RELATING TO ALL THOSE 49 DEPOSITORS IN THE PRESCRIBED FORM N O. 27A WHICH WAS DULY FURNISHED WITHIN THE TIME PRESCRIBED UNDER THE RELEVANT PROVISIONS OF LAW. THE REVENUE HAS BRO UGHT NO MATERIAL ON RECORD TO PROVE THAT THE ASSESSEE HAD D ELAYED THE FURNISHING OF THE COPY OF THEIR DECLARATION IN FORM NO. 15H WITH ANY ULTERIOR MOTIVE SUCH AS TO KEEP THE INFORMATION RELATING TO THEIR DEPOSIT, THEIR INTERE ST INCOME SECRET FROM THE DEPARTMENT OR THAT THOSE 49 DEPOSIT ORS IN COLLUSION WITH THE ASSESSEE EVADED PAYMENT OF TAX O N THEIR INTEREST INCOME. THE CIT HAS NOT EVEN EXAMINED FEW OF THOSE 49 DEPOSITORS TO BRING ANY SUCH MATERIAL ON RECORD. ON THE OTHER HAND, THE ASSESSEE HAS FURNISHED THE COMPLETE DETAILS RELATING TO NAME AND FULL ADDRESSES OF THOSE PERSON S TO WHOM INTEREST WAS CREDITED/PAID WITHOUT DEDUCTION O F TAX AT SOURCE, THE AMOUNT OF INTEREST CREDITED TO THEIR ACCOUNT DURING THE FINANCIAL YEAR 1993-94 AND THE DATE OF C REDIT OR PAYMENT AS REQUIRED IN THE PRESCRIBED FORM NO. 27A. THE DEPARTMENT COULD MAKE NECESSARY ENQUIRIES AGAINST T HOSE DEPOSITORS ON THE BASIS OF SUCH ADEQUATE INFORMATIO N GIVEN IN THE FORM NO. 27A. THE DETAILS AND FACTS STATED I N FORM NO. 27A VIRTUALLY CONTAIN ALL THE DETAILS WHICH ARE CONTAINED ITA NO. 6839/MUM/2008 ASSESSMENT YEAR : 2007-08 PAGE 10 OF 12 IN FORM NO. 15H. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAD FURNISHED SUCH A FORM NO. 27A FOR THE RELEVANT YEAR WITHIN THE TIME PRESCRIBED UNDER THE RELEVANT RULE AND THE PROVISION OF IT ACT, 1961. THIS FACT PROVES TOTAL A BSENCE OF ANY GUILTY INTENTION ON THE PART OF THE ASSESSEE. 25. IT WILL BE WORTHWHILE TO MAKE A USEFUL REFERENC E TO THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF HI NDUSTAN STEEL LTD. VS. STATE OF ORISSA (SUPRA) : '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 BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE.' THE RATIO OF THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. (SUPRA) IS FULLY APPLI CABLE ON THE FACTS OF THE PRESENT CASE. 10. KEEPING IN VIEW THE FORGOING DISCUSSION, WE ARE OF THE CONSIDERED VIEW THAT THE LD. CIT(A) DID INDEED ERR IN UPHOLDING THE ITA NO. 6839/MUM/2008 ASSESSMENT YEAR : 2007-08 PAGE 11 OF 12 IMPUGNED PENALTY. WE, THEREFORE, SET ASIDE THE ORDE R OF THE AUTHORITIES BELOW AND DELETE THE IMPUGNED PENALTY. 11. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. PRONOU NCED IN THE OPEN COURT TODAY ON THIS 25 TH DAY OF JUNE 2010. SD/XX SD/XX (N.V. VASUDEVAN) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; 25 TH DAY OF JUNE 2010. COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION), MUMBAI 4. COMMISSIONER (APPEALS) , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, I BENCH, ITAT, MUMB AI 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR PRADEEP J. CHOWDHURY INCOME TAX APPELLATE TRIBUNAL SR. PRIVATE SECRETARY MUMBAI BENCHES, MUMBAI ITA NO. 6839/MUM/2008 ASSESSMENT YEAR : 2007-08 PAGE 12 OF 12 DATE INITIAL 1. DRAFT DICTATED ON 22.6.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 22.6.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 22.6.2010 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 22.6.2010 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 22.6.2010 SR.PS/PS 6. DATE OF PRONOUNCEMENT 25.6.2010 SR.PS 7. FILE SENT TO THE BENCH CLERK 25.6.2010 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER