The Commissioner Of Income Tax ??? ... vs Dhir Global Industries Pvt. Ltd.
2008 Latest Caselaw 950 Del

           THE HIGH COURT OF DELHI AT NEW DELHI

%                                  Judgment delivered on: 04.07.2008

+             ITA Nos. 677/2008 & 679/2008

THE COMMISSIONER OF INCOME TAX - XVII ... Appellant

                                    Through : Ms Rashmi Chopra
                                              with Mr Subhash Sharma

                                  - versus -

DHIR GLOBAL INDUSTRIES PVT. LTD.                          ... Respondent

Through: None.

CORAM:-

HON'BLE MR JUSTICE BADAR DURREZ AHMED HON'BLE MR JUSTICE RAJIV SHAKDHER

1. Whether Reporters of local papers may be allowed to see the judgment ?

2. To be referred to the Reporter or not ?

3. Whether the judgment should be reported in Digest ?

BADAR DURREZ AHMED, J (ORAL)

CM No. 7834/2008 in ITA 677/2008

Allowed subject to all just exceptions.

ITA Nos. 677/2008 & 679/2008

1. These appeals pertaining to the assessment years 2000-2001

and 2001-02 have been preferred against the common order of the

Tribunal passed on 03.08.2007. The only issue sought to be raised by

the revenue in these appeals is with regard to the question of penalty

under Section 272A (2) (g) of the Income Tax Act, 1961 (hereinafter

referred to as the 'said Act'). According to the learned counsel for the

revenue the levy of such penalty by the Assessing Officer ought to

have been confirmed by the Income Tax Tribunal. According to the

learned counsel the imposition of penalty under Section 272A (2) (g) of

the said Act is independent to the penalties that can be levied under

Section 221 which pertain to default in depositing the tax deducted at

source, which is a consequence of the assessee being in default in view

of the provisions of Section 201 (1). The present case, according to the

learned counsel, falls under Section 203 (1) of the said Act and the two

are unrelated and independent.

2. The Tribunal has noted that by virtue of its earlier order dated

26.08.2005 in ITA Nos. 117 and 118/D/2002, after considering the

explanation of the assessee, it held that the assessee was not in default

under Section 201 (1) of the said Act and thereby there was no question

of imposing penalty under Section 221 of the said Act. The Tribunal

took the view that if on the basis of the explanation of the assessee the

Tribunal has already held the assessee not to be in default under

Section 201 (1) of the said Act, then on the basis of the same

explanation the assessee cannot be held to be in default, inter alia,

under Section 272A (2) (g) of the said Act for levying the penalty. The

Tribunal also noted that it was not controverted by the revenue that the

filing of the annual TDS returns and issuance of TDS certificates to the

deductees was dependent on the deposit of TDS as well as copy of TDS

certificate and details of TDS deposits which were required to be given

in the TDS returns as also in the TDS certificates. The explanation

given by the assessee for the delay in making the deposits and in filing

the TDS returns has been accepted. In these circumstances, the

Tribunal was of the view that once the explanation for the delay, which

is common, both, for the making of the deposit and filing of the TDS

return, on the one hand, and the issuance of the TDS certificate on the

other, has been accepted, then there is no question of imposing a

penalty on the assesee even under Section 272A (2) (g) of the said Act.

3. We have also examined Form 16-A, which is a form in which

the TDS certificate is to be issued in terms of Rule 31 (1) (b) of the

Income Tax Rules, 1962. It is apparent from an examination of the

said form that the TDS certificate can only be issued after the TDS

amount is deposited with the Central Government in the bank. The

details of the challan through which the deposit has been made are also

required to be filled in the said certificate. Therefore, it cannot be said

that the issuance of the TDS certificate is independent to the making of

the TDS deposit. Once the explanation of delay in making the deposit

has been accepted, there is no reason as to why the same cannot be used

for the purposes of delay in the issuance of the TDS certificate. The

Income Tax Tribunal has committed no error. No substantial question

of law arises. These appeals are dismissed.

BADAR DURREZ AHMED, J

RAJIV SHAKDHER), J July 04, 2008 SR