Income Tax Appellate Tribunal - Delhi
Mahendra Prakash Sarraf vs Deputy Commissioner Of Income-Tax on 8 October, 1997
Equivalent citations: [1998]64ITD382(DELHI)
ORDER
1. This appeal by the assessee is directed against the maintenance of penalty of Rs. 1,78,650 imposed under section 272A(2)(iii) of the Income-tax Act, 1961 and relates to the assessment year 1989-90.
2. I have heard the rival submissions in the light of material placed before me and precedents relied upon. It is prescribed under proviso to section 272A(2) : "that the amount of penalty for failures in relation to returns under sections 206 and 206C shall not exceed the amount of tax deductible or collectible, as the case may be". This proviso was inserted with effect from 1-10-1991. It was argued without prejudice to the main contentions, that this provision being of clarificatory in nature, is to be applied retrospectively.
3. It was submitted by Shri Sapra that provisions dealing with penalty must be strictly construed. Penalties are to be construed within the terms and language of the particular statute. Whether penalty should be imposed for failure to perform statutory obligation, is a matter of discretion of authority to be exercised judicially and on a consideration of all the relevant circumstances. It is not mandatory under the section that penalty must be imposed in every case.
4. In the instant case assessee was required to deduct tax at source to the tune of Rs. 4,580. The amount was deducted. It was duly paid to the credit of the Central Government within time. There is no dispute on this aspect. Further assessee was required to give information of such deposit on a prescribed form. Such form could not be furnished. It was stated that assessee was labouring under a bona fide belief that no such requirement was there to furnish the form. The default caused due to the non-furnishing of the form is excusable and assessee should not be asked to pay the amount of penalty to the tune of Rs. 1,78,650.
5. IGNORENTIA LEGIS NON EXCUSAT (ignorance of law is no excuse) is an age old maxim. It confirms the tenet that justice is blind. It is all very well to paint justice blind, but she does better without a bandage round her eyes. She should be blind in-deed to favour or prejudice, but clear to see which was lies the truth. Law is not a brooding omnipotence in the sky, it is a pragmatic tool of social order. The primary object of the Government is to secure justice. "REMOTA JUSTITIA, QUID SINT, REGNA NISI, MAGNA LATROCINIA" said St. Augustine in the 5th century and it is just as true today. The expression looses its terseness in translation but the question which St. Augustine asked, in modern language was whether a Government which did not have justice as objective was really anything more than a venture in large scale gangsterism.
6. To mitigate the rigour of the dictum "IGNORENTIA LEGIS NON EXCUSAT", and to promote the cause of justice another dictum was prescribed : "DE NON MINIMIS CURAT LEX" (Law does not take into account trivialities).
7. Levy Ullmann, the great French jurist says that a definition of law should have two aims -
firstly, to make precise the meaning of law, and secondly to call up in the mind of the reader a true picture of law and its operation.
8. Coming now to the facts of the present case, I find that the assessee had not intention to the violate the law. Due amount of tax was deducted. It was paid to credit of the Government in time. Only Form 26A was not filed. Having regard to the facts of the case, in my opinion, it is not a circumstance alliunde to which penalty can be sustained, as I find that there existed a bona fide belief in not furnishing Form No. 26A. This, in my opinion, is a reasonable cause. Assessee can, therefore, be exonerated from the rigour of penalty. I, therefore, direct the Assessing Officer to delete the same.
9. In the result, the appeal of the assessee stands allowed.