The meaning of deductible or collectible under section 272A of the Income Tax Act is not defined in the act itself. But we can take guidance from decisions by various high courts. Here are excerpts of courts orders in which the Hon’ble High Court tried to explain the meaning of deductible or collectible.
Meaning of deductible or collectible
The phrase ‘deductible or collectible’ used in section 272A of the Income Tax Act came up before various high courts as detailed under :
1. Hon’ble Rajasthan High Court explained the meaning of ‘deductible or collectible’ while delivering judgment in CIT vs. Superintending Engineer [2002] 177 CTR (Raj.) 586 as under :
Meaning: A plain reading of the provision clearly shows that it only provides an outer limit of the penalty. The words ‘deductible’ or ‘collectible’ have been used only with reference to the quantum of penalty to be levied.
2. Hon’ble Jamshedpur High Court explained the meaning of ‘deductible or collectible’ while delivering judgment in Superintending engineer vs. ITO [1996] 54 TTJ (JP. – Trib.) 608 as under :
Meaning: The words ‘deductible’ and ‘collectible’ used in the language of the proviso to section 272a(2) refer to the part of the amount of tax, which remains to be deducted or collected, in whole or in part. The amount of tax which has been deducted or collected would be called tax deducted or tax collected.
The part of the amount of tax which remains to be deducted or collected would fall within the purview of the expression ‘tax deductible or tax collectible’ as the case may be. The words ‘deductible and collectible’, therefore, differ in meaning and convey sense different from those of the words ‘deducted and collected’. The former expressions refer to an incomplete act or an act yet to be done, and the latter to a completed act or act already done.
Section 272A of Income Tax Act
Penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc.
272A. (1) If any person,—
(a) being legally bound to state the truth of any matter touching the subject of his assessment, refuses to answer any question put to him by an income-tax authority in the exercise of its powers under this Act; or
(b) refuses to sign any statement made by him in the course of any proceedings under this Act, which an income-tax authority may legally require him to sign; or
(c) to whom a summons is issued under sub-section (1) of section 131 either to attend to give evidence or produce books of account or other documents at a certain place and time omits to attend or produce books of account or documents at the place or time; or
(d) fails to comply with a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or fails to comply with a direction issued under sub-section (2A) of section 142,
he shall pay, by way of penalty, a sum of ten thousand rupees for each such default or failure.
(2) If any person fails—
(a) to comply with a notice issued under sub-section (6) of section 94; or
(b) to give the notice of discontinuance of his business or profession as required by sub-section (3) of section 176; or
(c) to furnish in due time any of the returns, statements or particulars mentioned in section 133 or section 206 or section 206C or section 285B; or
(d) to allow inspection of any register referred to in section 134 or of any entry in such register or to allow copies of such register or of any entry therein to be taken; or
(e) to furnish the return of income which he is required to furnish under sub-section (4A) or sub-section (4C) of section 139 or to furnish it within the time allowed and in the manner required under those sub-sections; or
(f) to deliver or cause to be delivered in due time a copy of the declaration mentioned in section 197A; or
(g) to furnish a certificate as required by section 203 or section 206C; or
(h) to deduct and pay tax as required by sub-section (2) of section 226;
(i) to furnish a statement as required by sub-section (2C) of section 192;
(j) to deliver or cause to be delivered in due time a copy of the declaration referred to in sub-section (1A) of section 206C;
(k) to deliver or cause to be delivered a copy of the statement within the time specified in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C;
(l) to deliver or cause to be delivered the statements within the time specified in sub-section (1) of section 206A;
(m) to deliver or cause to be delivered a statement within the time as may be prescribed under sub-section (2A) of section 200 or sub-section (3A) of section 206C,
he shall pay, by way of penalty, a sum of one hundred rupees for every day during which the failure continues:
Provided that the amount of penalty for failures in relation to a declaration mentioned in section 197A, a certificate as required by section 203 and returns under sections 206 and 206C and statements under sub-section (2A) or sub-section (3) of section 200 or the proviso to sub-section (3) or under sub-section (3A) of section 206C shall not exceed the amount of tax deductible or collectible, as the case may be:
Provided further that no penalty shall be levied under this section for the failure referred to in clause (k), if such failure relates to a statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C which is to be delivered or caused to be delivered for tax deducted at source or tax collected at source, as the case may be, on or after the 1st day of July, 2012.
(3) Any penalty imposable under sub-section (1) or sub-section (2) shall be imposed—
(a) in a case where the contravention, failure or default in respect of which such penalty is imposable occurs in the course of any proceeding before an income-tax authority not lower in rank than a Joint Director or a Joint Commissioner, by such income-tax authority;
(aa) in a case falling under clause (d) of sub-section (1), by the income-tax authority who had issued the notice or direction referred to therein;
(b) in a case falling under clause (f) of sub-section (2), by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner; and
(c) in any other case, by the Joint Director or the Joint Commissioner.
(4) No order under this section shall be passed by any income-tax authority referred to in sub-section (3) unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter by such authority.
Explanation.—In this section, “income-tax authority” includes a Principal Director General or Director General, Principal Director or Director, Joint Director and an Assistant Director or Deputy Director while exercising the powers vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit in respect of the matters specified in sub-section (1) of section 131.
In this article, you can get guidance from high courts on the meaning of deductible or collectible under section 272A of the Income Tax Act.
Updated up to Finance Act 2021