Section 272B — the law in short
What the courts have decided on section 272B, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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CIT (TDS) v Superintendent of Police
High CourtHelps taxpayerValidity unconfirmed
CPC has raised a s.272B penalty of ten thousand rupees for each of 196 deductees whose PANs were invalid in my TDS statement. The deductees gave me those numbers. Is that reasonable cause?
Yes, on these facts. The Punjab and Haryana High Court dismissed the Revenue's appeal against the deletion of a Rs 19,60,000 penalty levied at Rs 10,000 per default for 196 invalid PANs in a quarterly TDS statement. The Court held that whether sufficient cause had been shown within s.273B was a question of fact, on which the CIT(A) and the Tribunal had concurrently found in the assessee's favour after examining the explanation, and that no substance remained in the Revenue's argument.
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Statutory position — section 139A(5), rule 114B and Form 60: where PAN must be quoted, and the section 272B penalty of ten thousand rupees for each default
CBDT Circulars & InstructionsCuts both ways
A penalty notice under s.272B says ten thousand rupees for each of dozens of defaults. Where is PAN actually required to be quoted, what does a person without one do, and is the penalty really per default?
Rule 114B lists eighteen transactions in which every person must quote his permanent account number, from opening a bank account and buying a car to a sale or purchase of immovable property exceeding ten lakh rupees and any sale or purchase of goods or services exceeding two lakh rupees per transaction. A person other than a company or firm who has no permanent account number makes a declaration in Form No. 60 instead. Section 272B(1) charges ten thousand rupees for failure to comply with section 139A; sub-sections (2), (2A) and (2B) each charge ten thousand rupees 'for each such default', and no order under any of them may be passed without an opportunity of being heard.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.