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TMI Blog2017 (2) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... t tax at source. No penalty proceedings under section 271C shall be taken in any of these cases as the issue involved was a nascent issue. See Commissioner of Income-tax, New Delhi Versus Eli Lilly & Company (India) Pvt. Ltd. [2009 (3) TMI 33 - SUPREME COURT ] - Decided in favour of assessee. - W. P. (C) Nos. 17525 and 17526 of 2004 - - - Dated:- 5-10-2016 - S. Ravindra Bhat And Deepa Sharma, JJ. For the Petitioner : Piyush Kaushik, Advocate For the Respondents : Rahul Kaushik, Senior Standing Counsel for Income-tax JUDGMENT 1. The writ petitioner challenges an order of the Commissioner of Income- tax made under section 264 of the Income-tax Act 1961. The revisional authority had by impugned order upheld the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the penalty leviable shall be equal to the amount of tax which such person failed to deduct. We cannot hold this provision to be mandatory or compensatory or automatic because under section 273B Parliament has enacted that penalty shall not be imposed in cases falling thereunder. Section 271 Calls in the category of such cases. Section 273B states that notwithstanding anything contained in section 271C, no penalty shall be imposed on the person or the assessee for failure to deduct tax at source if such person or the assessee proves that there was a reasonable cause for the said failure. Therefore, the liability to levy of penalty can be fastened only on the person who do not have good and sufficient reason for not deducting tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent in each case has discharged its burden of showing reasonable cause for failure to deduct tax at source. 3. In the operative portion, the Supreme Court has held as follows (page 253) : 38. For the reasons mentioned hereinabove, however, no penalty proceedings under section 271C shall be taken in any of these cases as the issue involved was a nascent issue. Accordingly we quash the penalty proceedings under section 271C. 4. In view of this subsequent development, the petition has to succeed, the impugned order of the Commissioner of Income-tax and the penalty imposed by the Assessing Officer under section 271C are hereby quashed. 5. The writ petition is allowed in the above terms. - - TaxTMI - TMITax - Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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