A.M Sapre, J.:— The decision rendered in this appeal shall govern disposal of the other connected appeal being I.T.A No. 62 of 1999, as both these appeals are filed against the same respondent/assessee and secondly, both the appeals involve identical point.
2. This is an appeal filed by the Commissioner of Income-tax under section 260A of the Income-tax Act against an order dated February 24, 1999, passed by the Tribunal in I.T.A No. 628.Ind/1998.
3. This appeal was admitted for final hearing on the following substantial questions of law:
“1. Whether, on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal was justified in law in coming to the conclusion that penalty has been levied against a wrong person and hence, not sustainable in the eyes of law even when penalty who has committed default under section 203 read with section 194C of the Income-tax Act?
2. Whether, on the facts and in the circumstances of the case, the hon'ble Tribunal was justified in law in holding that the person as used in section 203 of the Income-tax Act was different from the person responsible for paying as used in section 194C of the Income-tax Act even when the provisions of section 203 speak of a person deducting tax in accordance with the provisions of section 194C?
3. Whether, on the facts and in the circumstances of the case, the hon'ble Tribunal was justified in law in holding that the provisions of section 204 read with section 2(35) of the Act were not attracted even when the person as stated in section 203 of the Income-tax Act has to be defined with reference to the provisions of section 194C and section 204 of the Income-tax Act?”
4. Heard Shri R.L Jain, learned senior counsel with Ku. V. Mandlik, learned counsel for the appellant/Revenue, and Shri G.M Chafekar, learned senior counsel with Shri R.K Sarda, learned counsel for the respondent/assessee.
5. In fact the issue involved in this appeal relates to imposition of penalty on the assessee under section 272A(2)(g) of the Act for non-compliance with section 203 of the Act. In substance, the question that really arises for consideration in this appeal is whether any case is made out for imposition of penalty on the assessee under section 272A(2)(g) ibid for alleged breach of the provisions of section 203 of the Act. In the opinion of the Assessing Officer and the Commissioner of Income-tax (Appeals), a case for imposition of penalty is made out whereas in the opinion of the Tribunal it was not and hence, the order imposing penalty was set aside giving rise to filing of this appeal by the Commissioner of Income-tax, i.e, the Revenue.
6. It is not in dispute that the assessee had collected/deducted the tax properly but there was some delay (few days) in issuing the certificate in Form No. 16A as required under rule 31 in the assessment years 1994-95 and 1995-96. It is the case of the assessee in response to a show cause notice issued by the Assessing Officer proposing penalty, that firstly, the assessee has already deposited TDS within time. Secondly, there is no revenue loss. Thirdly, no penalty should be levied for not furnishing TDS certificate to a particular person within time. Fourthly, no one has complained that he was not issued the certificate in time. Fifthly, the delay if at all was due to the fact that it was a new provision to which the office of the assessee was not fully acquainted and, hence, the delay was bona fide. This explanation found favour with the Tribunal and the penalty imposed on the assessee came to be set aside. It is this order of the Tribunal which is now impugned in this appeal by the Revenue.
7. We find no fault in the impugned order of the Tribunal, when it was held by the Tribunal that the explanation offered by the assessee is bona fide, genuine and sufficient to set aside the penalty. It is a clear case where no loss was occasioned to the Revenue due to some delay in issuing the certificate in favour of a person from whom the tax was deducted in time. He too never complained and used the same for his assessment in claiming the benefit. It was, therefore, a fit case where no penalty could be levied due to technical/venial breach of a provision of law. [see Hindustan Steel Ltd. v. State of Orissa, [1972] 83 ITR 26 (SC)].
8. Once the penalty on the facts is held not sustainable then in that event, the other legal and technical ground that the same could be raised on a company or any authorised person does not arise for decision. It then becomes academic. In other words, when the assessee has succeeded on the merits of the case then the other question as to whether issuance of notice of penalty to a proper person—namely, to company or officer loses its significance and hence, does not arise for any judicial debate. It is in substance an academic issue calling for no examination. It is for this reason that we decline to examine any of the questions framed supra as in our view the same does not now really arise out of the case in view of the finding recorded by us supra, in favour of the assessee.
9. Accordingly and in view of the aforesaid discussion, the appeal fails and is dismissed. No costs.