9911796707
TMI Blog2001 (12) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... se staff, who were on short-term assignment toIndia. The emoluments were paid inTokyo,Japan. The Japanese staff were also paid salary inIndiaon which TDS was deducted. During August 1996 TDS on the salaries paid inJapanfor all the years along with interest under section 201(A) was remitted fromTokyoby the appellant company. The tax remitted by the Liaison Office was at Rs. 7,99,52,387 and interest at Rs. 2,08,49,930, whereas in the case of Project Office the tax and interest under section 201(1A) was remitted at Rs. 1,11,49,233 and Rs. 30,03,278 respectively. The case of the department is that there was a delay in deduction of TDS and accordingly the penalty under section 271C were imposed by the Assessing Officer on account of Liaison Office and Project Office by separate orders. In the case of Liaison office the penalty of Rs. 10,08,02,319 and in the case of Project Office the penalty of Rs. 1,41,52,511 were levied under section 271@ 100 per cent equivalent to TDS. 3. For the purpose of better understanding, the brief background of the case is explained here as under: 3.1 The appellant-company is non-resident company. Head Quarter of the same is situated atTokyo,Japan. During t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority and in view of the Circular No. 719 dated22-8-1995, it was submitted that compliance should not be insisted inNew Delhi. The Assessing Officer Circle 22(1),New Delhiwas not satisfied and accordingly he issued summons under section 131 along with letter dated24-4-1996and insisted for compliance and submission of the details inNew Delhi. The company was also informed in regard to penal consequence for any failure of compliance. 5. Again in reply the counsel of the assessee filed a letter datedMay 13, 1996andMay 20,1996, wherein it was submitted that appellant had paid certain salaries and emoluments to its expatriate employees inJapan. It was further submitted that since the data was spread over in various companies where the employees were located and since the data was required for number of years, accordingly the time was sought for two months to file the details, as required by the Assessing Officer. Along with this reply the assessee had filed copies of Form 24 already filed with the Assessing Officer of Bombay. It was also informed by the company that it had not deducted tax on the emoluments paid inJapanand the appellant is in process of verifying the legal position r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; 1,11,49,233 30,03,228 --------------------------------------------------------------------------------------- 6. The aforesaid payment of TDS was made inTokyothrough the banking channel, i.e., Bank of Tokyo and Mitsubishi remitted the above sum fromTokyoto Indian Overseas Bank atNew Delhi, which in turn paid the said sum to Reserve Bank ofIndiain favour of the Income-tax Department. The Bank of India atNew Delhiacted as intermediary to effect the payment fromJapan. Thereafter for almost 19 months no further Communications, nor any proceedings were initiated against the appellant company. On 4-2-1998 a notice under section 271C read with section 274 was issued by the Deputy Commissioner of Income tax, Range-23, New Delhi (now Joint Commissioner of Income-tax, Range-23, New Delhi). The notice was addressed to Liaison Office of the appellant-company. In penalty notice the Joint Commissioner had made reference of certain Form No. 24 and sought explanation from the company that as to why penalty should not be levied on the short deduction of tax of Rs. 11,49,54,831. A similar notice with identical sum of short deduction was also issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter dated 26-2-1998 that though the Circular by CBDT is at variance with the decision of the High Court in the case of CIT v. S. G. Pgnatale [1980] 124 ITR 391, yet the appellant-company in line with various other Japanese companies, decided to review the matter through their internal legal cell. It was further stated that though the time given to avail the amnesty was up to February, 1995, which these companies felt was not sufficient considering the number of years involved as well as its strong belief that these sums are not liable to tax. However, the process of review of legal position inIndiawas initiated and decision to pay the tax voluntarily on its own could be arrived at only in August, 1996. Thus, the delay was on account of its own internal, long and time consuming procedure, which involved a lengthy exercise because of the data as well as collection of information of employees were to be collected by the company, which were spread over in 165 countries. It was further stated that obtaining of financial clearance from Head Office was also involved. In support of its claim through letter dated 26-2-1998 it was further submitted that the assessee-company had several inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under section 271C were dropped by the same Assessing Officer was also filed before the CIT(Appeals) and accordingly it was stated that the facts and issues involved in those cases were identical to that of the appellant company. Thus, it was pleaded that in case of appellant-company also the penalty should be cancelled. 10. Before the CIT(Appeals) it was also submitted that penalty in case of Liaison Office, there was no jurisdiction with the present Assessing Officer who levied the penalty because jurisdiction lies with Mumbai charge and no order has been passed under section 127 by the CBDT before the date of imposing penalty. It was also informed that the jurisdiction was transferred only on11-2-1999, when the order under section 127 was passed by the CBDT. Accordingly it was pleaded that there was no valid jurisdiction with the officer who imposed penalty. Several other issues were also raised before the CIT(Appeals) and after considering the submissions of the appellant-company and perusing the remand report and penalty order, the CIT(Appeals) was of the view that Assessing Officer was correct in imposing penalty. The contention of the appellant in regard to jurisdiction w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een allotted TAN No. vide TDS Circle 31(1),Bombay. It was further submitted that transfer of jurisdiction was effected by CBDT only on 11 -2-1999. Prior to that the Joint Commissioner of Income-tax,New Delhi, who issued notice under section 271C on4-2-1998did not have the jurisdiction and this position continued even on the date of passing of penalty order on31-8-1998. Accordingly it was vehemently argued that penalty order in case of Liaison Office suffers from total lack of jurisdiction. To establish the fact that the appellant Liaison Office was assessed in Mumbai, attention of the Bench was drawn on copies of Form No. 24 were filed in Mumbai. Attention of the Bench was also drawn on copies of challans for payment of taxes, copies of several correspondence and order passed under section 201 of the Act in respect of the very same year by the Asstt. Commissioner of Income tax, Mumbai. It was further submitted that the notice and order of penalty even did not contain the TAN No. issued by Assessing Officer atNew Delhi, as no TAN No. was allotted by theTDS Circle,New Delhiand therefore, it was rightly not mentioned. It was further submitted that when a notice under section 133(6) wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. v. ITO [1973] 87 ITR 539, wherein it is held that no authority, much less a quasi judicial authority, can confer jurisdiction on itself by deciding a jurisdiction factor wrongly. The reliance was further placed on the decision in 113 ITR 381 (sic), wherein it is held that order passed by an authority without jurisdiction is a nullity. It was further submitted that the decision in Hindustan Transport Co. v. IAC [1991] 189 ITR 326 (All.) relied upon by the learned CIT(Appeals) is not applicable on the facts of the present case, as the said decision was under section 124(5) of the Income-tax Act; whereas section 127 is applicable on the facts of the present case, as the assessee is existing one. It was also submitted by the counsel of the assessee that jurisdiction is not procedural but substantive. 15. The counsel of the assessee stated that the findings given by the CIT(Appeals) in paragraphs 4 and 6 of his order are legally and factually incorrect. The learned CIT(Appeals) has mentioned that the appellant had filed TDS returns inNew Delhicharge for more than 10 years with TAN No. M-0121-C and further mentioned that Form No. 24 for assessment year 1996-97 was filed in New Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Form No. 24 filed at Mumbai, challans for making the payment of tax in Mumbai and certain orders under section 201 passed in Mumbai for the very same year. It was further submitted that payment of TDS in Reserve Bank of India cannot be treated as conferring jurisdiction, as factually the TDS was remitted through Bank of Tokyo and Mitsubishi to Indian Overseas Bank at New Delhi which deposited the tax with Reserve Bank of India, which acted as a conduit for payment of tax, and such an act cannot be regarded as conferring of jurisdiction. It was further submitted that the payment of salary is the place where the jurisdiction for TDS lies and in this case the Indian portion of salary was paid in Mumbai and overseas salary was paid inJapanand not atNew Delhi. Accordingly there is no question of jurisdiction atNew Delhi. The reliance was placed on the Board Circular No. 719 dated22-8-1995, which indicates that in case where the assessee is already filing return under section 206, no other office shall require the assessee to file such a return with him. Accordingly it was stated that it amply clarifies any doubt of jurisdiction. Therefore, it was submitted that direction of the Joint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . v. ITO [1996] 57 ITD 536 (Bom.). Accordingly it was stated that at least the penalty order for assessment years 1990-91 to 1994-95 should be treated as barred by limitation. 19. On merit the learned AR submitted that there is no case of levy of penalty under section 271C, as has been done by the Assessing Officer, without first establishing that there indeed was a failure on the part of the appellant to deduct tax. It was further added that even it was not ascertained that whether at all there was any obligation to deduct tax by the appellant and if presuming that there was some liability to deduct tax, then in that case the quantum of deduction has to be ascertained first, and then penalty proceedings can be started. In the present case even till the order of penalty, this exercise was not done by the Assessing Officer. It was further submitted that there was a bona fide and, therefore, there was a reasonable cause in not deducting the tax by the appellant, as the appellant-company was taking legal advice from various authorities i.e., Department of Revenue, Ministry of Finance as well as from its own legal cell. It was further submitted that the order of penalty is silent on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up. Accordingly it was submitted that the very nature of the emoluments clearly establish that it has no nexus with the services inIndiaand has clear nexus with the services outsideIndia. The provisions of section 9(l)(ii) were also referred at this stage by the counsel of the assessee. 20. Accordingly it was added that since no tax was payable in India, one cannot presume that there existed a liability or obligation to deduct tax in India in terms of section 192, so as to construe that there was a failure to deduct tax to come within the mischief of section 271C. It was further contended that the Assessing Officer has not established any liability on the appellant prior to passing of the order of penalty. The AR also contended that these facts were brought to the knowledge of the authorities below even before passing the penalty order. However, the authorities have rejected these contentions. The attention of the Bench was drawn on the correspondence made by assessee copies of which are placed at pages 9,13,14,47,73, 82, 111 and 121 of the paper book. It was further contended that only on establishing failure to deduct tax that prima facie case for liability can be made without w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessing Officer are not correct. 23. It was further submitted that the appellant had a reasonable cause for delay in deduction and was under bona fide belief that tax was not payable inIndiaon the emoluments paid inJapanto its expatriate employees who were on short-term assignment toIndia. In this regard the reliance was placed on the decisions in S.G. Pgnatale's case, N. Beaman v. ITO [1995] 52 ITD 83 (Delhi) and Morgenstern Werner v. CIT [1998] 233 ITR 751. The reliance was also placed on the decisions in Sunderdas Thackersay & Bros. v. CIT [1982] 137 ITR 646 and Azadi Bachao Andolan v. Union of India [2001] 116 Taxman 249 (Delhi). It was again submitted that appellant had prior discussion with the authorities in the department as well as in the CBDT and Department of Revenue, Government of India and the assessee remitted the tax and interest only when it was assured that on remittance of tax, no penalty would be levied. However, contrary to the assurance and expectation the penalty has been levied. In this regard the learned counsel of the assessee refers to the correspondence with Revenue Secretary, Government of India and other authorities in the department. The att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n giving the finding that the appellant had defrauded the revenue by not deducting the tax. It was submitted that such a sweeping finding has been given without any evidence at all. The learned Joint Commissioner has not adduced any evidence or reason to come to such a finding. It was submitted that non-deduction of tax would not lead to any loss of revenue to Government of India. In support of this contention, it was submitted that the appellant had submitted a statement of corporate income declared and corporate taxes paid ill all these years and perusal of the statement indicates that corporate tax paid by the appellant was far in excess of TDS liability. The appellant-company had not debited the emoluments paid inJapanin the profit & loss account here inIndiaand accordingly had not claimed any deduction for the salaries paid. To that extent the corporate tax paid inIndiawithout claiming deduction for the salaries paid, would establish that the revenue has been fully recovered by the government even without payment of tax deducted at source. Accordingly it was submitted that looking to these facts it clearly establishes that there was no mala fide intention on the part of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty. The attention of the Bench was drawn on the order of the Assessing Officer placed in the paper book, where the penalties were dropped. Accordingly it was submitted that a different treatment given to the appellant was not justified. Accordingly the penalty should be cancelled. It was further submitted that even in appellant's own group company's case i.e., Merubeni India Pvt. Ltd., the penalty was dropped by the department on the identical circumstances. The attention of the Bench was drawn on pages 99 to 107, where the copy of reply and the copy of order dropping penalty are placed. On this contention the reliance was placed on the decisions of the Supreme Court in Union of India v. Kaumudini Narayan Dalal [2001] 249 ITR 219, Union of India v. Satish Pannalal Shah [2001] 249 ITR 221 and 45 ITR 422 (sic). 27. The learned counsel of the assessee stated that one of the reasons taken by the Assessing Officer and again by CIT(Appeals) is that there was delay in payment of TDS. In this connection, it was submitted that section 271C does not envisage levy of penalty for merely delay in deduction of tax. Section 271C is applicable only where there is a total failure and not merely d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Bros. & Co. Ltd. v. CIT [1945] 13 ITR 39 (FC). It was further submitted that jurisdiction is not a vital issue to the survival of the order of penalty. It is only an administrative question and lack of jurisdiction does not go to the root of the matter. It was further submitted that the Assessing Officer in case of short deduction of tax can initiate proceedings anywhere inIndiaand the Assessing Officer has rightly issued penalty notice in the present case here fromDelhi. At this point of time the Bench has raised a query to the learned DR that where the appellant was filing return in case of Liaison Office. It was fairly admitted by the learned DR that the returns were filed earlier atBombay. However, it was further submitted that later on the appellant has accepted the jurisdiction ofDelhias all the replies were filed here atDelhi. It was further submitted by the learned DR that section 124(5) of the Income-tax Act is very clear and since the salaries were paid inNew Delhi, the territorial jurisdiction vests with Joint Commissioner of Income-tax, here atDelhi. Accordingly it was submitted that the learned CIT(Appeals) has reached on correct conclusion in holding that jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 455 (SC) and Addl. CIT v. I.M. Palel & Co. [1992] 196 ITR 297 33. On the question of limitation, the learned DP, submitted that the decision relied upon by the counsel of the assessee in Raymond Woollen Mills Ltd.'s case does not deal with the limitation of section 271C. The said decision is on section 201 and hence is not applicable on the facts of the present case. It was further submitted that there is no time limit prescribed under the Act for initiating the penalty proceedings and in the absence of any time limit, the penalty order is within the time limit under the Act. 34. On the question of passing of order under section 201 prior to levy of penalty, the learned DR submitted that the Income-tax Act does not provide any such passing of the order. It was further submitted that penalty proceedings and assessment proceedings are independent and penalty can be levied without passing any order under section 201. In support of this contention the reliance was placed on the decision of Rajasthan High Court in Universal Supply Corpn. v. State ofRajasthan[1994] 206 ITR 222. 35. On the question of reasonable cause the learned DR contended that existence of reasonable cause should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TO v. Mukundrai Kuberdas Katakia [1989] 176 ITR 381 (Bom.). 36. It was further added that the Board has issued Circular No. 685 in June, 1994, which was extended up to February, 1995 and whereby it was clearly stated that those persons who have not deducted the TDS on account of emoluments paid outside India, they can paid the same up to February, 1995 and in that case no penalty would be levied. Accordingly it was submitted that appellant was very much aware of this Circular but even then the due tax was not paid and was paid after the lapse of 16 months. Therefore, it cannot be stated that there was any bona fide on the part of the assessee. Accordingly it was submitted that the orders of the authorities below should be confirmed. 37. In regard to the contention of the learned AR that the payee was located inJapan, it was submitted that there cannot be any doubt on the applicability of section 192 read with section 209(l)(a). Accordingly it was submitted that Income-tax Act applies even to overseas and validity of the Act cannot be questioned. On this proposition the learned DR placed reliance on the decision in R.K. Garg v.UnionofIndia[1982] 133 ITR 239 (SC). Further reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax information for foreign employees working in Japan" and another report titled as "International Comparison of unit of taxation and basic personal exemption". Based on these two reports, the learned DR contended that appellant had positively engaged in not paying tax inIndia. Lastly it was requested that the orders of the authorities below should be sustained on all the points. 41. In rejoinder, the learned counsel of the assessee submitted that the department has failed to produce the relevant records on which the Assessing Officer as well as the CIT(Appeals) have placed reliance, Le., the re turns were filed in Delhi and the tax was paid as shown in the returns in Delhi. It was further submitted that even the records in the case of 14 assessees where the penalties were dropped, have not been produced by the department. At this point of time the learned DR intervened that all the records are available with her, those can be seen at any time. However, it was fairly admitted by her that before assessment year 1997-98 no record is available which established that returns were filed here atDelhi. All the records which were available with the learned DR were for the period1-4-1996to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the defects in notice if it is fatal and does not cause any harm then such defects can be ignored. It was further submitted that defects in the present case are vital and cause harm to the assessee, therefore, the ratio of these decisions are distinguishable. Accordingly it was submitted that in reality no proceedings were in existence, therefore, all the notices were without jurisdiction. Therefore, the order should be declared void ab initio. It was further submitted by the counsel of the assessee that in this case tax was paid with an intention to avoid litigation and purchase peace and in line with suggestions made by authorities in the department. The tax and interest was paid in good faith and the department had specifically assured that no penalty would be levied. In such circumstances no penalty shall be visited, as held by the Supreme Court in the case in CIT v. Suresh Chandra Mittal [2001] 251 ITR 9. In this case the decision of the Madhya Pradesh High Court was upheld in CIT v. Suresh Chandra Mittal [2001] 241 ITR 124 (MP). It was further submitted by the learned AR though amendment to section 9(1)(ii) were brought in 1983, still the department clarified the legal p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mitsui Accordingly it was requested that the decision in the case of Mitsui should be followed. Again reliance was placed on the decision in L.G. Ramamurthi's case; Kaumudini Narayan Dalal's case and also on the decision of Delhi High Court in CIT v. A.L. Ramanathan [2000] 245 ITR 494, wherein it is held that for the sake of consistency, the same view as taken earlier should be taken unless there is material change in the facts. 46. In last, it was submitted that the department has adopted a highly arbitrary and discriminatory approach against the appellant, inasmuch as in all 14 cases cited above, where the facts were identical, the penalties have been dropped by the department itself. Accordingly it was pleaded that penalties levied in these cases and confirmed by the CIT(Appeals) should be cancelled. 47. We have heard the rival submissions and considered them carefully. We have perused the material on record on which our attentions were drawn also with the case laws, as relied upon by both the parties. We have also considered the decision of the Tribunal, Delhi Bench in the case of Mitsui & Co. Accordingly we deal with each of the issue as under: 48. First and foremost issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeals) that the appellant had paid tax in his jurisdiction and had revised returns filed before him. We have obtained the records from the learned DR and find that the report of the Assessing Officer is not correct, as from the records it is very clear that assessee was filing Form No. 24 etc. with the Asstt. Commissioner of Income-tax, Mumbai and copies thereof were filed before the Assessing Officer on his requirement. We find that the report of the Assessing Officer on point of jurisdiction that the issue was never raised before him, is also not correct, as from the correspondence it is very clear that assessee has raised this objection on initial stage. We further noted that the learned DR also could not see these replies filed by the appellant before the Joint Commissioner of Income-tax. However, all the copies of these correspondence are placed in the paper book. We noted that the appellant has categorically stated before the CIT (Appeals) that no returns were filed inDelhicharge and had furnished full details with jurisdiction in Mumbai. We find that in spite of such submissions the CIT (Appeals) ignored the plea of the appellant, which was well founded with evidence and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is sought to be enforced. Accordingly we are not satisfied with the contention of the learned DR in saying that question of jurisdiction cannot be raised in appellate proceedings. Therefore, such a view does not find any merit. This view of ours further find support from the ratio of the decisions relied upon by the counsel of the assessee. 50.1 The reliance placed by the learned DR on the decision in Hindustan Transport Co.'s case is not applicable on the facts of the present case. In fact the decision of the Hon'ble Supreme Court in the case in Raza Taxtiles Ltd.'s case has categorically held that no authority, much less quasi judicial authority, can confer jurisdiction on itself by deciding a jurisdictional factor wrongly. 51. We further noted that Circular No. 719 dated22-8-1995issued by the CBDT has also clarified the issue in regard to jurisdiction. Para 3 of Circular No. 719 dated22-8-1995says as under 1.** ** ** 2.** ** ** 3. It is clarified where the Head Office or the branch office is already filing the return under section 206 no other Assessing Officer shall require the assessee to file such return with him. Where, however the return is not being filed the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out with the scheme for foreign company to pay the short deduction amount from salary paid to its expatriate employees, including that paid in foreign country to avoid penalty and prosecution, various Japanese companies having their business interest in India, such as, Mitsubishi, Sumitomo, Itochen, Merubeni Missho Corporation, Mitsui, Bank of Tokyo and Sakura Bank held consultations among themselves and in the meeting held the Bank of Tokyo and Saukra Bank expressed their opinion that they wanted to revise their returns accordingly to the intention of the tax authorities in India but looking to several financial years involved it was found impossible to do so before the target date. It so appears that other Japanese companies including the assessee company, fell in line with the Bank of Tokyo and Sakura Bank and ultimately paid the short deduction amount as well as interest thereon. This indicates that most of the Japanese companies having business interest inIndiaincluding the assessee company were not deducting tax on payment made to their expatriate employees inJapan. Thus, the bona fide belief entertained by the assessee that Chapter XVIIB has no extra territorial operation wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Larger Bench on the issue of extra territorial application of the provisions of the Income-tax Act remained inconclusive and thereby strengthen the argument of the existence of bona fide belief. 54. The decision cited by the learned AR on L. G. Ramamurthi's case; Kaumudini Narayan Dalal's case and A.L. Ramanathan's case, wherein the Delhi High Court has held that the earlier decision of the Tribunal on the same facts must be followed. In this case no misapplication of law or any other thing has been brought to our notice so as to warrant a departure. The written submissions filed by the learned DR on13-11-2001and the appellant's reply thereon have been considered. On going through the submissions we do not see any reason to disturb the finding given in the case of Mitsui & Co. The arguments of the learned DR does not bring out any material difference and are not compelling enough to make a departure. 55. After going through the orders of the CIT(Appeals), wherein it is mentioned that reasonable cause should be judged on the basis of facts of each case, accordingly the decision of Mitsui case was not followed, we noted that CIT(Appeals) has not brought out any distinction b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... borne out from the records. The department had merely issued a general notice under section 133(6) calling for details from the appellant from the date of incorporation of the appellant company. It was gathered that the appellant-company is in existence for more than eight decades and one hopes, it was not the intention of the Assessing Officer to seek details for such a long period. A perusal of the notice under section 133(6) does not give rise to any idea that the issue of notice was as a result of sustained investigations. Moreover mere issue of general notice cannot be termed as sustained investigation. It is gathered that such notices were issued in general to large number of people. 58. We further noted that after knowing the contents of the notice issued in May, 1996, the appellant immediately informed its Head Office at Japan and after collecting the datas from all branches, as they were spread over in 165 countries of the world, and then immediately made payment in August, 1996, Therefore, this fact of the appellant cannot be said that they were not interested in making the payments. On the other side the efforts were going on with the Ministry of Finance and the CBDT an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Finance and higher officials of Central Board of Direct Taxes. Therefore, there is no case that assessee was not willing to pay the tax. If there was any delay that was due to bona fide belief that the company is not liable to pay tax on the amount of emoluments paid inJapan. Accordingly, in our considered view, there was a sufficient reasonable cause for not making the payment in time. 61. We have seen that the assessee was taking advice from its legal cell and also was in continuous touch with the Department of Revenue, Ministry of Finance from the very beginning. The appellant-company along with others, had made a representation to the Secretary of Revenue, Ministry of Finance and was seeking advice that in such circumstances, what should be done. The copies of the correspondence are lying in the paper book. We have also seen that in some of the cases the department has dropped the penalty proceedings itself. No detail whatsoever has been furnished by the department that why these penalties were dropped and what were the distinguishable facts in those cases. Nothing was brought on record and no details were furnished. Therefore, in our considered view, the department should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for not depositing the tax in time, as the appellant-company is a big company and the branches of the same are spread over 165 countries of the world and it was collecting datas. No contrary material has been brought on record by the department that the intention of the appellant company was not bona fide, especially when the same department is dropping the penalty in another assessee's case, where the same set of facts were involved. We have seen that even after issuing the circular by the CBDT, the appellant was in touch with the department to discuss its liability and such a consultation was provided under Double Taxation Avoidance Treaty betweenIndiaandJapan. Such correspondences by assessee cannot be said that assessee was having any mala fide intention to avoid due tax. From the correspondences done by appellant-company the only inference can be drawn that the appellant company was trying to clear itself on the issue of payment of taxes. Even before hearing from the Revenue Secretary or from CBDT, the appellant company immediately made payment in August, 1996. The notices/ summons was issued in May, 1996 only. Therefore, it can be said that there was no mala fide intention of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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