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TMI Blog2016 (6) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue Department has not treated the assessee as assessee in default as far as TCS is concerned. The ld. CIT(Appeals) was, therefore, justified in following decision of Banglore Bench in the case of Wipro GE Medical Systems Ltd. [2005 (1) TMI 609 - ITAT BANGALORE ] in which the Tribunal has considered reasonable cause for not levying the penalty when sufficient compliance was made because of the tax demand had already been paid. Since taxes have already been paid by the buyers and there was no tax demand remained. Therefore, ld. CIT(Appeals) correctly held that there was reasonable cause for failure to comply with provisions of law. - Decided against revenue - ITA Nos. 341 & 342/CHD/2016 - - - Dated:- 20-6-2016 - SHRI BHAVNESH SAINI, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (Banglore). The Assessing Officer did not accept the said order for the reason that same has not reached finality. The Assessing Officer followed CBDT circular dated 16.07.2013. According to the Assessing Officer, since assessee had not deducted TCS @ 1% on the sales and failed to explain any reasonable cause for non deduction of tax at source, therefore, penalty under section 271CA was imposed. 3. Penalty orders were challenged before ld. CIT(Appeals). The written statement of the assessee is reproduced in the impugned order in which the assessee briefly explained that assessee is not liable to collect TCS because assessee did not deal in scrap and provisions are not applicable in the case of the assessee. The assessee also explained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their income. Material sold are duly accounted in their books of account, hence non-deduction of TCS is no ground for levy of penalty and relied upon decision of the Supreme Court in the case of Hindustan Coco cola Beverage P.Ltd. V CIT 293 ITR 226. In the present case also, there is no dispute that tax payable by the parties on their income has been paid and this fact is accepted by the Assessing Officer. 4. The ld. CIT(Appeals), after considering the submissions of the assessee in detail, decided the issue differently. The ld. CIT(Appeals) held that the goods sold by the assessee are covered by the definition of scrap in terms of Explanation (b) of Section 206C of the Act. However, as regards the default, ld. CIT(Appeals) cancelled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R by him. I have considered the case laws referred by the appellant and am of firm view that the judgment of Hon'ble Income Tax Appellate tribunal delivered in the case of WIPRO GE Medical Systems Ltd (2005) 24 CCH 0001 Bang Tribunal is applicable. The relevant excerpt reads as under:- 8. Regarding penalty under s. 271C of the Act, it has been submitted on behalf of the assessee that sufficient compliance was made because the tax demand was already paid by Wipro Ltd, Hence, there was a reasonable cause for not levying penalty. In this regard, the learned counsel for the assessee brought to our notice, the decision of the Bangalore Bench of the Tribunal in Wipro Finance Ltd. (supra), wherein a number of decisions were relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 7,42,086/- imposed by the assessing officer . 5. After considering rival submissions, I am not inclined to interfere with the order of the ld. CIT(Appeals) in canceling the penalty. The ld. CIT(Appeals) has recorded specific finding of fact that assessee furnished complete details of sales of scrap made to various traders alongwith copies of their Income Tax returns of relevant assessment year proving that payment of due taxes have been made by the respective purchasers. It was also recorded that no demand on account of non-deduction of tax at source has been raised by the Assessing Officer and only interest has been charged. It is, therefore, clearly established that Revenue Department has not treated the assessee as assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der to bring in application of Section 271C, in the backdrop of the overriding non obstante clause in section 273B, absence of reasonable cause, existence of which has to be established, is A sine qua non. Before levying penalty, the concerned officer is required to find out that even if there was any failure to deduct tax at source, the same was without reasonable cause. The initial burden is on the assessee to show that there exists reasonable cause which was the reason for the failure. There- after, the officer has to consider whether the explanation offered by the assessee or other person as regards the reason for failure, was on account of reasonable cause . 6. Considering the facts of the case in the light of the above discussion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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