Commissioner of Income Tax vs Manager, State Bank of Patiala

N.K. Sud, J.—Revenue has filed this appeal u/s 260A of the IT Act, 1961 (for short "the Act"), against the order of the Income Tax Appellate Tribunal, Chandigarh Bench ''A'', Chandigarh (for short "the Tribunal"), dt. 21st Oct., 2002, whereby the appeal of the assessee has been allowed and penalty levied u/s 272A(2)(f) of the Act has been cancelled.

Penalty proceedings .had been initiated by the AO for delay in furnishing the declarations in Form 15H furnished by various depositors within the time stipulated u/s 197A(1A) of the Act. The Tribunal has found that the assessee was not required to deduct any tax at source u/s 194A of the Act as in none of the cases, interest payable exceeded Rs. 10,000 and, thus, even Forms 15H was not required to be filed. The Tribunal also noticed that even the Departmental Representative admitted that there was no loss of revenue involved in the matter. The Tribunal, therefore, held that since the assessee was neither required to deduct tax at source nor any loss of revenue had occurred on this account, the default committed by the assessee in not filing Form 15H received by it from various depositors within the stipulated period, was only of technical nature for which no penalty u/s 272A(2)(f) of the Act was leviable. In support of its conclusions, the Tribunal placed reliance on the judgment of the Supreme Court in Hindustan Steel Ltd. Vs. State of Orissa, .

Having perused the order of the Tribunal, we are satisfied that in the light of the factual position stated by the Tribunal, no case for interference is made out. It is clear that the default in the present case is merely of technical or venial in nature and the following observations of the Supreme Court in the case of Hindustan Steel Ltd. (supra) clearly apply :

".....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. ......."

We, therefore, find no merit in this appeal and dismiss the same in limine.