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TMI Blog2015 (12) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Years ('AYs') 1996-97 to 1999- 2000. 2. Initially this Court dismissed the appeals on 5th October 2004 on the ground that no substantial question of law arose. This order was taken in appeal by the Revenue to the Supreme Court and on 5th September, 2007 the Supreme Court allowed the appeal and remanded the matter to this Court for a fresh decision. This order was later corrected on 10th December 2007, as under: "This I.A. is for addition of a sentence in the order dated 5th September, 2007 passed by this Court. The order shall now read as follows: "Delay condoned. Leave granted. The short point which arises for consideration in these Civil Appeals is whether the High Court was right in dismissing the appeal filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasonable cause for not depositing the tax?" In view of the above circumstance, we admit this appeal and frame the following question: "Whether the assessee was entitled to plead reasonable cause for not depositing the tax deducted at source although the same had been deducted from the salaries paid to the expatriate employees?" The filing of paper books is dispensed with. Learned counsel for the parties agreed that this matter be listed for disposal in the category of 'After Notice Miscellaneous' matters. It is ordered accordingly. Renotify on 17.10.2008." 4. The facts leading to the filing of the present appeals are that the Respondent is a wholly owned Indian subsidiary of Air Liquide France ('ALF') which is a Fre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atriate employees and, therefore, did not deduct tax. A penalty of Rs. 74,23,043 equal to the amount that the Assessee failed to deduct was imposed under Section 271C of the Act. 7. After the Commissioner of Income Tax (Appeals) ['CIT (A)'] dismissed the Respondent's appeals by the order dated 23rd January 2003, the Respondent appealed to the ITAT. 8. The factual findings of the ITAT were that there was no material on record to show that the Respondent had been intimated by the expatriate employees about the remuneration received by them from ALF in France. It noted: "Neither in the course of search under Section 133A nor subsequent thereto in evidence was found by the Department to this effect". It was further noticed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven by the expatriate employees to the Indian company that they were receiving salary from the parent company outside India. It was not in dispute that whatever salaries they were getting "in India or outside India" were for the services rendered by them to the Indian company. In the circumstances, this Court was of the categorical view that "Section 192(2) of the Act is attracted in such a situation and the liability to deduct TDS in terms of Section 192(1) arises after the information is provided by the employee in terms of Section 192(2) of the Act". Since prior to the proceedings initiated for levy of penalty for failure to deposit TDS deducted from the salary received by the expatriate employee outside India, the Indian company was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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