PRADEEP KUMAR V. COMMISSIONER OF INCOME TAX,EKM

WP(C)/11202/2008

AI Insights

Pradeep Kumar, the petitioner and branch manager of LIC, Nedumkandam, challenged the penalty imposed on him for not including PAN numbers in the TDS returns filed for the last quarter of the financial year 2005-2006. The returns were filed shortly after the amendment requiring PAN numbers came into effect on June 1, 2006. The petitioner argued that he had just assumed office and was unaware of the new requirement. However, the court found that ignorance of the law is not a valid excuse and that the penalty for non-compliance with Section 139A is automatic, as per Section 272B of the Income Tax Act, 1961.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 699728 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 11-08-2014
• Assessment Year: misc
• Other Referred Cases: Hindustan Steel Ltd. v. State of Orissa, Union of India and Others v. Dharmendra Textiles Processors and Others
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: P K R MENON; JOSE JOSEPH; N NAGRESH
• Assessee Lawyers: S KUMAR; SIBI KARUN
• Keywords: PAN Number; Tax deduction at source; TDS returns; Penalty for failure to comply
• Section: 272B; 139A

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN MONDAY, THE 11TH DAY OF AUGUST 2014/20TH SRAVANA, 1936 WP(C).No. 11202 of 2008 (H) ---------------------------- PETITIONER: -------------------------- PRADEEP KUMAR, AGED 40 YEARS, S/O.K.RAMASWAMY, AISWARYA, KATTUNGAL EAST ROAD, PACHALAM P.O, KOCHI-12, AND WORKING AS BRANCH MANAGER, LIC, NEDUMKANDAM. BY ADVS.SRI.S.SUDHISH KUMAR SRI.SIBI KARUN RESPONDENTS: ---------------------------- 1. THE COMMISSIONER OF INCOME TAX, ERNAKULAM 2. INCOME TAX OFFICER,WARD NO.2, THODUPUZHA. BY ADVS. SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES) SRI.JOSE JOSEPH, SC FOR IT BY SRI.N.NAGARESH, ASST. SOLICITOR GENERAL OF INDIA THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11-08-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 11202 OF 2008 APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE NOTICE DATED 10.4.2007 U/S.272(B) OF I.T. ACT TO THE PETITIONER. EXT.P2: COPY OF THE REPLY TO EXT.P1 NOTICE DATED NIL TO THE 2ND RESPONDENT. EXT.P3: COPY OF THE PROVISIONAL RECEIPT ISSUED BY KARVY CONSULT ANTS. EXT.P4: COPY OF THE PENALTY ORDER U/S.272 B OF I.T. ACT TO THE PETITIONER. EXT.P5: COPY OF THE PRINTED NOTICE PUBLISHED BY THE PETITIONER DATED 5.10.2007. EXT.P6: COPY OF THE REQUEST DATED 2.11.2007 BY THE PETITIONER TO THE 2ND RESPONDENT. EXT.P7: COPY OF THE LETTER/ORDER DATED 12.11.2007 ISSUED BY THE 2ND RESPONDENT. EXT.P8: COPY OF THE ORDER PASSED BY THE 1ST RESPONDENT IN THE REVISION FILED BY THE PETITIONER. EXT.P9: COPY OF THE LETTER RECEIVED BY THE PETITIONER DATED 28.3.2008 ISSUED ON 17.3.2008 BY THE 2ND RESPONDENT. RESPONDENTS' EXHIBITS: NIL /TRUE COPY/ P.A. TO JUDGE AV K.VINOD CHANDRAN, J. =-=-=-=-=-=-=-=-=-=-= W.P.(C)No.11202 of 2008 =-=-=-=-=-=-=-=-=-=-=-=-=-=-= Dated this the 11th day of August, 2014 JUDGMENT The petitioner challenges the imposition of penalty as per Ext.P4, as also Ext.P8 appellate order, which confirms the same. The penalty was imposed with respect to the return filed, regarding tax deduction at source, which the Life Insurance Corporation as employer was obliged to do under the Income Tax Act, 1961. Section 139A provided that the PAN number of the deductees from whom such tax was deducted should be specified in the quarterly TDS returns filed under the Act. Admittedly no such numbers were evident in the TDS returns filed for the last quarter of the financial year 2005-2006. 2. The contention of the petitioner is that, he had assumed charge of the Manager of the Life Insurance Corporation, Nedumkandam Branch on 29.5.2006 and the TDS returns were filed under Form 26-Q on 26.6.2006. Though it is admitted that the petitioner had filed the said returns, it is contended that the same was prepared by the predecessor in office, who prepared it on W.P.(C)No.11202 of 2008 2 8.4.2006. There is also an additional contention raised that, section 139A mandating the PAN numbers to be disclosed in the returns came into force on 1.6.2006 and the return was filed only 26 days after that. The amendment brought in introducing section 139A was not noticed by the petitioner is the contention. 3. With reference to the second contention raised, it is trite that none can plead ignorance of law. The provision having been introduced from 1.6.2006, any return filed subsequent to that, would have to comply with the said provision and any dalliance thereon would invite proceedings under section 272B. Further, the return having been filed by the petitioner, the fact that it was prepared by his predecessor in office, cannot be countenanced by this Court. The petitioner having put his signature to the returns ought to have verified whether the returns are filed in compliance with the Income Tax Act. 4. The next contention raised is, with respect to there being no intentional default on the part of the petitioner. The learned counsel for the petitioner would place a decision of the Honourable Supreme Court in Hindustan Steel Ltd. v. State of Orissa (1972 [83] ITR 26) wherein it was held that without the element of “mens rea” no penalty could be imposed. The learned Standing Counsel, W.P.(C)No.11202 of 2008 3 Government of India (Taxes) would however place before me the decision of the Honourable Supreme Court itself, again by a three Judge Bench in Union of India and Others v. Dharmendra Textiles Processors and Others ([2008] 306 ITR 277 [SC]) wherein the Honourable Supreme Court drew a distinction, with respect to civil obligations and found that “mens rea” is not an essential element for imposing penalty, for breach of civil obligations or liabilities. 5. One has to understand the dictum and apply it with reference to the specific words used in the provision. 272B(1) is extracted hereunder:- “Penalty for failure to comply with the provisions of section 139A: 272B. (1) If a person fails to comply with the provisions of section 139A, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of ten thousand rupees.” 6. By virtue of the words employed in the above provision, it cannot be gainsaid that, the Assessing Officer has any discretion in the matter or that the intention of the defaulter has to be gone into for levying penalty. If a failure is disclosed, the penalty is automatic. In such circumstances, this Court is not convinced that the petitioner's contentions can be sustained. Ext.P4 order, as W.P.(C)No.11202 of 2008 4 upheld by Ext.P8, is not liable to be interfered with. The writ petition stands dismissed. Parties are left to suffer their respective costs. Sd/- K.VINOD CHANDRAN JUDGE vpv "