In case, the PAN Numbers are not furnished by the deductees, the respondent-assessee cannot be penalised under Section 272B. Section 139A also imposes the obligation on the deductees to furnish PAN Number to the deductor.
The Board in the letter dated 5-8-2008 vide No. 275/24/2007-IT(B) has clarified that penalty of 10,000/- under Section 272B is linked to the person, i.e., the deductor who is responsible to deduct TDS, and not to the number of defaults regarding the PAN quoted in the TDS return.
Therefore, regardless of the number of defaults in each return, maximum penalty of Rs. 10,000/- can be imposed on the deductor.-CIT(TDS) vs. DHTC Logistics Ltd. ITA 314 of 2013 Order dated 26-7-2013 (Delhi High Court).
In the case given above The assessing officer had imposed penalty of Rs.10,000/- in each case where PAN Number was not provided by the deductee. There were in all 30706 cases in which the PAN Number was missing or was incorrectly stated. The assessing officer, accordingly, imposed penalty of Rs.10,000/- in each case. Thus, penalty of Rs.30,70,60,000/- was imposed.
Board in the letter dated 5.8.2008 vide No.275/24/2007-IT(B) has clarified that penalty of Rs.10,000/- under Section 272B is linked to the person, i.e., the deductor who is responsible to deduct TDS, and not to the number of defaults regarding the PAN quoted in the TDS return. Therefore, regardless of the number of defaults in each return, maximum penalty of Rs.10,000/- can be imposed on the deductor.
Penalty cannot be imposed by calculating the number of defective entries in each return and by multiplying them with Rs.10,000/-.