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TMI Blog2016 (6) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... y your appellant. 3. The learned CIT has conveniently overlooked the genuine reasons which prevented your appellant from paying the TDS on time. 4. It is submitted that there is no deliberate intent to evade paying of TDS and the same was paid along with interest by your appellant. This fact the authorities below should have been considered judicially. 5. The finding of the Assessing Officer that the TDS have been used for business is an in correct and irrelevant observation. The delay in payment of TDS due to circumstances beyond the control of the your appellant. 6. The authorities below is not justified in not considering the various decisions of Honourable Courts mentioned by your appellant. 7. the Learned CIT is erred in sustaining the penalty levied by the Assessing authority. In view of the above and any other ground urged at the time of hearing it is prayed that the penalty levied u/s. 271C may be quashed. 3. The brief facts of the case are that the assessee is a private limited company carrying on the business of construction of apartments. During the impugned year, the assessee had belatedly deposited the tax deducted at source to the Central Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee that as per the audited financial statements for the year 2009-10, there was an accumulated loss of ₹ 118.74 lakhs as against the paid up capital of ₹ 75 lakhs and the net wealth of the Company was (-) ₹ 43.74 and the net current assets was (-) ₹ 44.96 lakhs as under: Rs. Total current assets : 2794.56 lakhs Less Total Current liabilities : 2839.52 lakhs Net current assets : (-) 44.96 lakhs Copy of the Annual report including Audited Financial Statements for the impugned year are placed on record at PB pg. nos. 11-33. In the above situation, there was no positive current ratio in the company, whereas the current ratio for reasonable working capital position should be atleast 1.33 which is a matter of accepted business practice. The assessee had current liabilities which were much higher than the current assets and the assessee had to borrow funds even to pay salary to the staff. During the impugned year, the assessee was facing acute financial crisis and unable to pay the salary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itigating circumstance for waiver or reduction of penalty. Further, if full amount of tax with interest was paid before levy of penalty, we feel quantum reduction is called for by the Assessing Officer. Therefore, we direct the Assessing Officer to reconsider the quantum of penalty by giving one more opportunity to the assessee to furnish facts in the light of our observations above. The appeal is accordingly, disposed of upholding the order of the Tribunal on the levy of penalty, but with direction to the Assessing Officer to grant further reduction in penalty, if any, new fact or circumstance is brought to the notice of the Assessing Officer based on observations above or otherwise in terms of section 273B of the Act. 10. It was alleged by the Assessing Officer that the assessee has retained the tax deducted at source during the year and has utilized the same for their business purposes. It was explained and argued by the Ld. AR that it is not the case that the appellant had received money by way of TDS from the employees and retained the money with itself by not paying the TDS to the credit of Central Government within the prescribed time. As a matter of fact, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of CIT vs. Mitsui Co. Ltd., 140 Taxman 430 vide para 10 of its order at PB pg. 40 further has held as under: The arguments with regard to retention has been considered by the Tribunal in detail and supported by the decision of the Gujarat High Court in case of CIT vs. S.G. Pgnatale (1980) 124 ITR 391. The Tribunal has , in great detail, examined the facts and all the material on record and has arrived at a conclusion. It is not possible for us to say that the finding recorded by the Tribunal is perverse. Therefore, the appeal is disposed of against the Revenue and in favour of the assessee. 14. The ITAT, Bangalore Bench B in the case of Indo Nissin Foods Ltd. vs. Joint Commissioner of Income-tax, 3 SOT 495 where the contention raised was that no order has been passed against the assessee-company or Nissin on the liability under the Act in as much as the assessee company had never been held to be an assessee in default u/s. 201 or section 221 of the Act. Section 201(1) prescribes liability for failure to deduct tax and declares the assessee in default in cases where good and sufficient reason is found to exist, the action under these sections ..... X X X X Extracts X X X X X X X X Extracts X X X X
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