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2016 (1) TMI 583 - SC - Income TaxPenalty u/s 271C - Penalty for failure to deduct tax at source - reasonable cause - ITAT and HC deleted the penalty levy - Held that - In the present appeals we are concerned with levy of penalty u/s 271-C for which it is necessary to establish that there was contumacious conduct on the part of the assessee. We find that on similar facts Hon ble Delhi High Court have deleted levy of penalty u/s 271-C in the cae of M/s. Itochu Corporation (2004 (5) TMI 53 - DELHI High Court) and CIT Vs. Mitsui & Company Ltd. reported in 2004 (5) TMI 17 - DELHI High Court wherein held as reasonable cause as shown by the assessee-company has not been properly appreciated and deliberated by the lower authorities penalty cannot be confirmed . Thus allow the assessee s appeal and cancel the penalty as levied u/s 271-C - Decided against revenue
Issues: Assessment of penalty under Section 271-C of the Income Tax Act, 1961.
The judgment pertains to the assessment of penalty under Section 271-C of the Income Tax Act, 1961. Initially, the Commissioner of Income Tax (Appeals) deleted the penalty levied by the Assessing Officer. The matter was then taken to the Income Tax Appellate Tribunal by the Revenue. The Tribunal, after considering the submissions, referred to previous judgments and decided in favor of the assessee, canceling the penalty. The Revenue further appealed to the High Court of Delhi, which dismissed the appeal stating no substantial question of law arose. The Supreme Court, upon review, found no merit in the appeal as the facts and law were correctly assessed by the lower authorities. Therefore, the appeal was dismissed with no costs incurred. In the detailed analysis, it is crucial to note that the Income Tax Appellate Tribunal based its decision on the need to establish contumacious conduct on the part of the assessee for the levy of penalty under Section 271-C. The Tribunal referenced judgments by the Hon'ble Delhi High Court in similar cases to support its decision. The High Court of Delhi, in rejecting the appeal, emphasized the absence of any substantial question of law. The Supreme Court concurred with the lower authorities, affirming that the facts and law were appropriately evaluated, leading to the dismissal of the appeal. The judgment underscores the importance of establishing contumacious conduct for the imposition of penalties under the Income Tax Act, supported by legal precedents and proper assessment by the appellate authorities.
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