No Penalty for wrong / non furnishing of PAN in TDS return if Asseee files later revised return with Correct PAN

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ITO (TDS) Panchkula v. Bharat Electronics Ltd. (ITAT Chandigarh) – ‘ Tax deductor’ is the holder of tax deduction and collection account Number RTKBO 1838 E. The TDS quarterly statement of deduction of Tax in Form No. 24Q for Financial year 2008-09 relevant to Assessment Year 2009-1 0. as required under sub-sec (3) of Sec 200 of the Act was filed on 22.7.2009. The ITO (TDS) while going through the quarterly return in Form NO. 24Q filed by the assessee noted that it has omitted to quote PAN/has quoted invalid PAN in 64 cases. The ITO(TDS) has afforded number of opportunities to the assessee to explain his position and file the correct details in this regard. However, the assessee did not file any reply due to which the AO concluded that the assessee has committed a default u/s 139A(5B) for which penalty u/s 272B(1) of the Act is leviable. The ITO (TDS) therefore, levied a penalty of Rs. 6,40,000/- @ of Rs. 10,000/- per default vide his order dated 26.7.2010.

On Appeal ITAT has held that it is apparent from the record that the assessee deducted TDS correctly and revised the PAN and filed revised statement in Form No. 26Q, hence there was sufficient compliance of the provisions of section 139A of the Act. Even otherwise the assessee did not derive any benefit whatsoever, by filing the wrong PANs and PAN was corrected after ascertaining the same from the respective deductees. In our view the assessee has proved that there was reasonable cause for alleged failure and hence no penalty is leviable. Even otherwise also no penalty is leviable when there is a technical or venial breach of the Act.