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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeal of the asse ssee is d irected against the order dated 04.12.2025 u/s 272A(2)(g) of the Income T ax Act, 1961 (hereinafter refe rred to as “the Act”) where in the penalty of Rs.2 ,66,000/- passed by JCIT(TDS), Range-73, New Delhi was confirmed.
Facts in brief as culled out from the orders of the authorities below are that the assessee has not complied with the provision of sectio n 203 of the Act, as it has delayed in issuing Form 16A by 2660 days which attracts penalty u/s 272A(2)(g) of the Act. Accordingly a show-cause notice for imposing the penalty under the said section r.w.s. 274 was issued to the asse ssee on 21.11.2019, 11.12.2020 and 29.12.2020, fixing a case for hearing on 09.12.2019, 21.12.2020 and 07.01.2021, respectively. Neither anyone appeared nor any reply received from the assessee. Accordingly, a final show-cause notice dated 17.02.2021 was issued for 22.02.2021 which w as duly served through speed post as well as e-mail ID of the assessee. Again no one appeared and no reply was filed. As a result, the penalty order was passed by imposing penalty of Rs.2,66,000/- being to tal number of the days i.e . 2660 days as per section 272A(2)(g) of Act and also following the C BDT notification No .35/2020 dated 24.06.2020 regarding extension of various time limits under the Direct Tax laws.
Aggrieved by the penalty order, the assessee filed appeal before the ld. CIT(A) who has dismissed the same by passing the impugned order on the ground that there was no limitation for imposing pe nalty in view of CBDT no tification regarding extension of time. It is fur ther observed that default in furnishing TDS certificate is factually admitted and time ly issuance of TDS certificate is mandatory to facilitate deductees names and compliance. W ith regard to the lack of opportunity and effective hearing, the ld. CIT(A) observed that there was no irregularity or breach of natural justice as multiple opportunities were provided by issuing notice which were duly served but assessee failed to participate.
Aggrieved by the impugned ord er, the assessee is in appeal before us and has raised the following grounds of appeal:
“1 . That the levy of pe nalty fo r Rs 2,66,000/- passed by the Ld JCIT (TDS) is bad both i n the e yes of law and facts of the case . That the appellant denies i ts liabi lity imposed u/s 272A(2)(g) for an amount of Rs 2,66,000/-.
2.That the Ld C IT(A)-29 Ne w Del hi erre d i n confirmi ng t he le vy of Rs 2,66,000 passed by the Ld JCIT(TDS ) applyi ng the pri nciple of strict l iability.
3.That the Ld C IT(A)-29 Ne w Del hi erre d i n confirmi ng the initiation of penalty proc eedi ngs which was barred by limitation havi ng been initiated beyond a reasonable time pe riod of 4 years and t her efor e, the penalty order passed by Ld JCIT(TDS) deserves to be quashed.
4.That the Ld C IT(A)-29 Ne w Del hi erre d i n confirmi ng t he levy of pe nalty failing to exe rcise t he judicial discreti on vested i n him as no prejudice had been caused either to Reve nue or t he deductee(s) due to dela yed furnishi ng of For m 16A.
5.Witho ut pr ejudice to other grounds of appeal and in the alternative, the levy of penalt y, if at all requi red to be imposed, be res tricted to R s 7,600 as the Ld JCIT(TDS ) erred in det ermi ni ng the total delay of 2660 days i n furnishing Form 16A without considering t he composite nature o f defaul t.
6.Witho ut pr ejudice to other grounds of appeal and in the alt er nati ve, the Ld JC IT(TDS) erred i n l evying penalty of Rs 2,66,000 by si ngli ng o ut a part icular quarter and at the same time did not give any due cre dence to suo-moto furnishing of For m 16A to the deduct ees , the past and future co nduct of the appellant and other r elevant fac tors availabl e on reco rd.”
We have heard the ld. AR who has argued that the delay in issuance of Form 16A has not caused any loss to the Revenue. The assessee has been regularly deducting the tax as TDS on time. Therefore, in these factual background imposing of the penalty was not justified and liab le to be de leted.
It is fur ther argued that the submitting of Form 16A tho ugh delayed slightly, but is within the same financial year before return filing due date. Hence, the penalty is not warranted. The ld. AR has relied the case o f Hon’ble Supreme Cour t in Hindustan Steel Ltd. Vs. State of Orissa (1972) 83 ITR 26 (SC) wherein it was been held that no penalty could be levied when there is a technical/ venial breach of the provision of the Act. The appellant has further re lied upon the follow ing case laws:
Bansal Bros Vs. DCIT (1998) 64 ITD 129 (ITAT Del.)
CIT Vs. Gabrial India Ltd. (2005) 146 taxmann.com 740 (MP HC)
HMT Ltd. Vs. CI T (2004) 140 taxmann.co m 606 (P&H HC)
Harsiddh Constructio n (P) Ltd. Vs. DCIT (2001) 70 TTJ Ahd 266 (ITAT Ahd.)
It is further argued that the appellant has always furnished Form 16A timely and as such had no intention for delaying the downloading of TDS certificate for financial year 2013-14 (quarter under consideration) and this was late delayed due to the first quarter after the shift from T IN portal to TRACES portal. Lastly, it is ar gued that amount of penalty imposed by ld. AO is Rs.7,600/- each per deductee for all 35 deductees and as such the penalty amount should not exceed the TDS amount of the deductee . It is therefore prayed that the appeal be allowed and penalty be deleted.
The ld . DR has relied upon the orders of the ld. lower authorities.
In order to understand and appreciate the submissions raised before us, we have examined the provision (g) sub-section (2) to section 272A w hich is as under:
“272A. (1 ) If any person,— ...
(2 ) If any person fails— ...
(g)t o fur nis h a certificate as r equi red by section 20 3 or section 206C; or”
Section 203
“C ertificate fo r tax deducted.
203.(1) Every person ded ucting tax in acc ordanc e with the for egoi ng pro visio ns o f this Chapt er s hall, withi n such peri od as may b e prescribed from the time of credit or payme nt of t he sum, or, as the case may be, from the ti me of issue of a cheque or warrant for payment of any dividend t o a shareholder, furnis h t o the person to whose acco unt s uc h credit is give n or t o whom such pay ment is made or t he cheque or warr ant i s iss ued, a cer tificate to the effect that tax has been d educt ed, and spe cifyi ng t he amo unt so deduc ted, the rate at which t he tax has been deducted and such other particul ars as may be prescribed.
(2 ) Eve ry person, bei ng an employer, referred to i n sub-section (1A ) o f section 192 shall, withi n such peri od, as may be pr escribed, furnish to t he person i n respec t of whose income such payment of tax has been made, a certificate t o the e ffec t that tax has bee n paid to t he Central Government, and speci fy the amount s o paid, the rat e at which the tax has be en paid and suc h ot her particulars as may be pres cribed.
(3 ) [***]”
It is further argued that the penalty order suffers from not following the principles of natur al justice as the effective opportunities of hearing has not been given to the assessee which find reflected from para 3 of the penalty order as the impugned no tice were never received or served upon the assessee and no evidence has b een placed on record in that regard. It is therefore argued that the asse ssee was never given opportunity to explain the factual matrix to show that the penalty was not required to be lev ied in his case.
We further notice that se ctio n 272A sub-section (4) provides as under:
“272A. (1 ) If any person,— ...
...
(4 ) No order und er this s ec tion shall be pass ed by any income-tax authority referred to in sub-secti on (3) unl ess the person o n whom the penalty is pr oposed to be imposed is give n an oppor tuni ty of bei ng heard i n t he mat ter by such authority.
Explanati on.—In t his sec ti on, "i ncome-tax authority" incl udes a Pr incipal Director General or Director General, Pri ncipal Dir ector or Director , Joi nt Dir ector and an Assistant Direct or or Deputy Director while exe rcisi ng t he powers v est ed i n a court under the C ode of C ivil Procedur e, 1908 (5 of 1908), when trying a suit in res pect of t he matters specifi ed i n s ub-sec tion (1 ) of section 131.”
We have examined the facts and the submissions made before us to find whether effective opportunity of hearing for compliance of sub-section (4) to sectio n 272A has been done or not. Para 3 of the penalty order reads as under:
“3 . Show caus e notice for impositio n of penalty u/s 272A (2) (g) read with S ecti on 274(1) was issued to t he assessee on 21.11.2019, 11.12.2020 and 29.12.2020 fixing the case for heari ng o n 09.12.2019, 21.12.2020 and 07.01.2021. However, neit her anyone appe ared nor any r eply rec eived. Further a fi nal opport unity s how cause notice was issued on 17.02.2 021 whic h was fixed for 22.02.2021.All the notices were duly served t hr ough speed post as we ll as email i d [email protected] n and ajayv erma84.tds @qmail.com. No one appear ed nei t her any submission was made in this regard by the assessee on the s aid date.”
We have noticed that no material or evidence has been furnished before us to show the notice (supra) wherever duly served or received as per procedure prescribe d upon the assessee. In the absence of such material having not bee n placed o n recor d, we are of the considered opinion that principle of natural justice has not been followed and requirement of sub-section (4) to section 272A has not been fulfilled which has resulted into miscarriage of justice . Further the facts narrated before us needs to be verifie d in order to understand the genuineness o f the claim made by the assessee before the Tribunal in respect of its claim that in the given facts and circumstances, impo sing of penalty was not justified. In view of these facts and circumstances, the impugned as well as penalty order are no t sustainable and accordingly set aside with direction to restore the matter to the file of JCIT for deciding the matter afresh after giving effective opportunities of hearing. The ld. JCIT will consider all the sub missions to be made before him by the assessee/appellant within a period 60 days of this order.
In the result, the appeal of the assessee is allowed for statistical purposes.