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TMI Blog2011 (7) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the liability to levy of penalty can be fastened only on the person who do not have good and sufficient reason for not deducting tax at source. Only those persons will be liable to penalty who do not have good and sufficient reason for not deducting the tax. Thus appeal stands dismissed. - ITA No.86 of 2006 - - - Dated:- 20-7-2011 - Mr. N. KUMAR AND Mr. RAVI MALIMATH JJ. Represented by: Shri K.V. Arvind, Advocate, Shri M.V. Seshachala, Advocate for Appellant Shri S. Parthasarathi Malla Rao. Advocates for Respondent JUDGEMENT The Revenue has preferred this appeal against the order passed by the Tribunal, which rejected the appeal filed by the Revenue refusing to interfere with the order passed by the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which also came to be rejected affirming the Appellate Commissioner. Aggrieved by the same, the Revenue is in appeal. 6. The learned Counsel for the Revenue assailing the impugned order contends that ignorance of law cannot be an excuse and it would not constitute a reasonable cause. Therefore he submits that the order passed by the Assessing Authority imposing penalty was legal and valid and it ought not to have been interfered with by the appellate authority. 7. Per contra, the learned Counsel for the assessee submitted that sub-clause (5) of Section 194A(3) expressly provides that the provisions of sub-section (1) of Section 194A shall not apply to such income credited or paid by a co-operative society to a member thereof or to any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any part of the tax as required by the provisions of Chapter XVII-B then such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct. In these case we are concerned with Section 271C(1)(a). Thus Section 271C(1) (a) makes it clear that the penalty leviable shall be equal to the amount of tax which such person failed to deduct. This provision cannot be held to be mandatory or compensatory or automatic because under section 273B Parliament has enacted that penalty shall not be imposed in cases falling thereunder. section 271C falls in the category of such cases. section 273B states that notwithstanding anything contained in section 271 C, no penalty shall be imposed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... survey the said mistake was notice and pointed out immediately they have paid the tax with interest. Therefore, in the light of this undisputed facts of this case, when the Appellate Commissioner and the Tribunal held that the same constitutes a reasonable cause and when the same is not shown to be false, the assessee has satisfied the requirement of Section 273-B, in which event, no penalty shall be imposable. Therefore the order passed by the Tribunal and the appellate Commissioner is valid and legal and do not suffer from any legal infirmity which calls for interference. Accordingly the substantial question of law framed is answered in favour of the assessee and against the Revenue. Appeal dismissed. - - TaxTMI - TMITax - Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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