9911796707
TMI Blog2014 (6) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-08. 3. The short facts of the case are that the assessee is a cable network operator and distributes the programmes of different TV channels to the subscribers. The JCIT (TDS) found that the assessee has failed to deduct tax u/s.194C from payments made to broadcasters of different TV channels on account of air time charges. In view of the same, penalty proceedings u/s 271C was initiated. It is gathered from the penalty proceedings that the assessee did not appear and, accordingly, in absence of reply, JCIT (TDS) presumed that there was no reasonable cause for failure by the assessee. Accordingly, he levied penalty under section 271C of the Act for both the assessment years under consideration. 4. The assessee carried the matter in appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onable cause for non-deduction. The assessee has also given PAN No. and his account No. to whom air time charges was paid and the said payees have filed their income tax returns for the respective assessment years. Accordingly, the assessee ought not be treated as an assessee in default u/s.201(1) of the Act following the decision of the Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverage (P) Ltd vs. CIT, 293 ITR 267 (SC). Assessee contended that ITAT Cuttack Bench in the assessee's own case for the assessment year 2008-09 has deleted the penalty on similar facts. Therefore, penalty for the assessment years under consideration has to be deleted. 6. On the other hand, ld D.R. supported the orders of authorities below. 7. We h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T [2002] 253 ITR 745 (Delhi), it is held that levy of penalty under section 271C is not automatic. Before levying penalty, the concerned officer is required to find out that even if there was any failure referred to in the concerned provision the same was without a reasonable cause. The initial burden is on the assessee to show that there existed reasonable cause which was the reason Tor the failure referred to in the concerned provision. Thereafter the officer dealing with the matter has to consider the explanation offered by the assessee or the person, as the case may be. 'Reasonable cause' as applied to human action is that which would constrain a person of average intelligence and ordinary prudence. It can be described as proba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of circumstances, which assuming them to be true, would reasonably lead any ordinary prudent and cautious man, placed in the position of the person concerned, to come to the conclusion that the same was the right thing to do. Our above view finds support from the various decisions cited by the learned AR of the assessee. The assessee in the present case has given explanation before the authorities below that the due to circumstances prevailing and under bonafide belief that tax was not required to be deducted at source U/S.194C on the payments in question. Considering the facts and circumstances of the case, we are of the considered view that the non-deduction of tax at source on such payments cannot be said to be without a reasonable cause ..... X X X X Extracts X X X X X X X X Extracts X X X X
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