ORDER
I.S. Verma, J.M.
1. The appellant, through this appeal, has disputed the levy of penalty under s. 272A(2)(c) imposed by the AO as per his order dt. 30th April, 1990 and reduced to Rs. 23,000 from Rs. 26,100 by the CIT(A) as per order dt. 6th September, 1993.
2. We have heard the appellant’s counsel as well as the Departmental Representative. The appellant’s counsel has submitted that the appellant is a Govt. Federation. During the financial year relevant to asst. yr. 1989-90, it had to file statement of tax deducted at source from salary and contract payments in Form Nos. 24 and 26 respectively. The statement of TDS from salary in Form No. 24 was filed in time but statement for TDS on contract payments, which was due on 30th April, 1989 was filed on 30th April, 1990 after receipt of letter dt. 30th November, 1989 from the ITO, TDS. The appellant’s counsel has further submitted that the appellant had been deducting and depositing the tax in time regularly and there was no default either in deducting the tax or in paying the same.
According to him, the only default was in furnishing the Form No. 86. Elaborating the reasons for not filing the Form No. 26 in time, the appellant’s counsel submitted that the appellant was under bona fide belief that it was to file only the statement for TDS from salary and not for TDS on contract receipts and, therefore, failure to file statement in Form No. 26 was under this bona fide belief. He further submitted that as soon as the appellant received letter from the ITO, TDS, it acted on the same and after collecting details from its various offices, spread all over the state, filed the statement on 30th April, 1990. He, therefore, submitted that the delay was not deliberate and was in the nature of a technical mistake only, for which no penalty may be imposed. Concluding his arguments, the appellant’s counsel submitted that the default being not wilful, the imposition of penalty under appeal is not justified.
3. The learned Departmental Representative on the other hand, submitted that when the appellant was filing Form No. 24, then its plea regarding bona fide belief for not filing Form No. 26 is not tenable and, therefore, penalty under appeal is justified.
4. After considering the submission from both the sides, and having gone through the orders of the lower authorities, we have noticed that there is no default on the part of the appellant either in deducting the tax at source or in depositing the same into Govt. account. This fact has not been disputed even by the learned Departmental Representative. The only default is in furnishing statement of TDS in Form No. 26 which in view of appellant’s explanation, is only a technical default, for which we are of the opinion that such a penal action is not justified, because the appellant default is purely of a technical or venial nature. In support of this conclusion, we rely on the observations of the Hon’ble Supreme Court in the case of Hindustan Steel Ltd. vs. State of Orissa (1972) 83 ITR 26 (SC), which are reproduced as under :
“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 the 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”.
In view of above facts and circumstances, we cancel the penalty under appeal and the assessee’s appeal is allowed.