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TMI Blog2016 (9) TMI 904X X X X Extracts X X X X X X X X Extracts X X X X ..... s’, while reaching to a conclusion regarding deletion of penalty. Therefore, in our considered view, the ld. CIT(A) has reached to a conclusion without mentioning its basis. Hence, the order of ld. CIT(A) is nonspeaking to that extent. Considering the facts of the present case, in our considered view the present appeal is to be remanded back to the file of the CIT(A) with a direction to pass speaking order, while mentioning the basis or the details of ‘favourable decisions’ which were available at ‘that time’ before the assessee, according to which no tax was deductible. Needless to mention that the ld. CIT(A) would give a fresh opportunity of hearing to both parties before passing a fresh order in accordance with law. - Decided in favour of revenue for statistical purposes. - ITA No.7402 & 7403(Mum) 2013 - - - Dated:- 10-8-2016 - SHRI JASON P BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER For The Appellant : Shri Neil Philip, For The Revenue : Shri Ashish Sodhani ORDER PER SHRI SANDEEP GOSAIN, JUDICIAL MEMBER Both these appeals have been filed by the revenue against the order of the ld.CIT(A)-13, Mumbai dated 11-10-2013 in Appeal No.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant. 7. The Assessinq Officer failed to appreciate that there was no judicial precedent directly on the applicability of payments made to the hospital by third party administrators its determination was at a nascent' stage and therefore the penal provisions of section 271C of the IT Act could not be imposed against the Appellant. 8 The Assessing Officer tailed to appreciate that the practice of not deducting tax at source under Section 194J for the payments made by the Third Party Administrators directly to the hospital under the cashless hospitalization scheme was an established industry practice and therefore the penal provisions of section 271C of the ITA could not be imposed against the Appellant. 9. The Assessing Officer erred in imposing penalty under section 271C of the IT Act as the appellant had not acted deliberately in defiance of law and was not guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligations. The appellant submits that each grounds of appeal are without prejudice t one another. Further, the appellant craves leave to add, alter, vary, omit, substitute or amend of the above ground of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x. Therefore, a sum of ₹ 21,39,048/- was imposed as penalty u/s 271C of I.T. Act. 6. Aggrieved by the order of imposing penalty, the assessee preferred an appeal before the CIT(A) and the CIT(A) after considering the case of both the parties has allowed the appeal and deleted the penalty imposed by the Assessing Officer u/s 271C of the IT AC, 1961. 7. Aggrieved by the order of CIT(A), the revenue is appeal before us on grounds mentioned herein above. 8. Ground no.2 3 are general in nature and needs no adjudication. 9. Ground no.1. In this ground, the revenue has challenged the order of the CIT(A) by pleading that the CIT(A) had erred in deleting the penalty imposed u/s 271C of the IT Act, levied by Addl.CIT(TDS), as the quantum addition has been confirmed by the learned CIT(A) and without properly appreciating the factual and legal matrix of the case, as clearly bought out by the Addl.CIT(TDS) in his order. 10. We have heard the counsel for both the parties and we have also perused the material placed on record as well as the orders passed by the revenue authorities. 11. The moot question before us, for our consideration is as to whether the CIT(A) has err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the decision given regarding applicability of CBDT Circular which was set aside for the purpose levying penalty u/s 271C. I have also considered this aspect and after going through these facts available on record. I am of the considered view that penalty u/s 271C was not leviable in this case for the reason that appellant did not deduct tax following favourable decision available to them at that time according to which no tax was deductible by them being TPA u/s 194J. This being a reasonable cause itself in view of provision of section 273B, the penalty levied u/s 271C when the appellant has reasonable cause for not deducting the tax Is not tenable. Accordingly, the penalty imposed u/s 271C of the Act levied at ₹ 21,39,048/- for SAY: 2007- 08 being not sustainable is deleted herewith . 12. From the conjoint reading of the impugned order passed by the CIT(A) as well as the written submissions by the assessee as well as the arguments advanced by both the parties, we are of the considered view, that while deleting the penalty the CIT(A) has mentioned that the penalty u/s 271C was not leviable in the case of assessee for the reasons that the assessee did not deduct tax fol ..... 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