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2022 (6) TMI 1200 - ITAT AHMEDABADLevy of penalty u/s 271C - assessee failed to pay the deducted tax within the stipulated time - HELD THAT:- From the perusal of the penalty order, it can be seen that the Assessing Officer proceeded on the basis that the assessee failed to pay the deducted tax within the stipulated time but from the perusal of the submissions of the assessee before the Assessing Officer it is seen that except the TDS on the interest payment to two parties the assessee has paid the TDS before the survey proceedings conducted at their premises as there was death of a person who was looking after the Income Tax matter of the Company which is mentioned in paragraph no.3 of the penalty order. These crucial facts were totally ignored by the AO as well as by the CIT(A) - payment of delayed TDS to the Government Treasury was not a negligent act on the part of the assessee but due to unavoidable circumstances. Therefore, Section 271C of the Act is not properly invoked. The ratio laid down in CIT vs. Reliance Petroproducts Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] is applicable in the present case though the Section mentioned in that decision is Section 271(1)(c) - CIT(A) has simplicitor confirmed the penalty without looking into the aspect that the levy of penalty was in excess of the default. Thus, the reasoning given by the CIT(A) is not just and proper. Hence, penalty levied under Section 271C of the Act needs to be deleted. Levy of penalty under Section 272A(2)(g) - assessee made default by not filing quarterly returns in Form No.24Q and 26Q and by not issuing certificates of TDS in time - assessee submitted that the assessee company suffered from liquidity crash due to slow-down of the business and there was a delay in payment of TDS due to non-availability of funds and thus this cannot be treated as wilful default - Penalty was imposed without taking cognisance of the reasons given by the assessee which was genuine reason and cannot be strictly adhered to. The delay in issuance of certificate within the stipulated time was due to the non-availability of financial advise/concerned person who dealt with the tax matters of the company (death of Manish Shah). Thus, the CIT(A) totally ignored crucial aspect of the case and imposed penalty without application of mind. Hence, appeal of the assessee allowed.
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