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TMI Blog2018 (2) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... get attracted. Accordingly, the assessee is found to have had reasonable cause for not deducting the tax at source. The penalty levied is, accordingly, deleted. - Decided in favour of assessee. - I.T.A Nos. 65& 66/Agra/2017 - - - Dated:- 25-1-2018 - Shri A. D. Jain, Judicial Member Assessee by : Ms. Prarthna Jalan, Shri Chanchal Jain, ARs Revenue by : Shri Waseem Arshad, Sr.DR. ORDER ITA No. 65/Agra/2017 This is assessee s appeal for assessment year 2012-13, taking the following grounds: 1. On the facts and in the circumstances of the case and- in law the CIT(A) erred in confirming the penalty of ₹ 4,25,420 under section 271C of the Act and not appreciating the fact there was a reasonable cause which prevented the assessee to act like a man of average intelligence and ordinary prudence under normal circumstances. 2. On the facts and in the circumstances of the case and in law the Assessing Officer and the CIT(A) erred in arriving at calculating the penalty on the amounts paid as interest on FDR without appreciating the fact that there exists a reasonable cause as contemplated under section 273B, for the short deduction/ non deduction and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of tax before the finalization of the order and has suo-moto made all the compliances; and that the Assessing Officer and the CIT(A) erred in not appreciating the fact that the assessee, being a Branch of a banking company, has no reason to deduct the tax at lower or NIL rate and hence, the penalty levied is without any application of mind and is unjustified and bad in law. 4. The ld. DR, on the other hand, has placed strong reliance on the impugned order. Besides, the following decisions have been relied on: i. CIT vs. M/s PVS Memorial Hospital , order dated 20.07.2015, passed by the Hon ble Kerala High Court in ITA Nos. 2/2012 and 16/2014. ii. M/s Hindustan Coco Cola Beverage Pvt. Ltd. vs. CIT , judgment dated 16.08.2007 rendered by the Hon ble Supreme Court in Civil Appeal No.3765/2007. iii. M/s US Technologies vs. CIT , order of the Hon ble Kerala High Court, dated 16.06.2009, in ITA No. 3/2009. iv. DCIT vs. M/s Pfizer Ltd , order dated 25.05.2016 passed by the Mumbai Tribunal in ITA Nos. 5053 to 5057/Mum/2013, for A.Ys. 2004-05 to 2006-07, 2008-09 and 2009-10. And v. Pfizer Ltd. vs. ITO (TDS) and ITO (TDS) vs. Pfizer Ltd. , order dated 31.10.2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of the opinion that under such circumstances, the only way the appellant can escape the penal provisions laid down under that section, is to prove that it had a reasonable cause for the default. It is not only important but also interesting to note that despite getting three distinct opportunities given to it by the A.O., the appellant did not point out even one reasonable cause of its failure to deduct TDS. Its only submission dated 16.09.2014 does not talk about the alleged updation error in its software, caused in turn by some human errors, which allowed PANs of some of its customers escape consideration for the purpose of deduction of TDS. Also, I find that no evidence whatsoever has been produced even during the present proceedings which could prove that the alleged reasonable cause indeed existed and contributed to its failure to deduct TDS as per the provisions of section 194A of the Act. In my opinion, the appellant has grossly failed to prove that there existed a reasonable cause for its failure to comply with the provisions of section 194A. The alleged reasonable cause for its failure to deduct TDS as per law, appears to be an afterthought and not genuine. Therefore, wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad Tribunal in the case of M/s. Good Health Plan , in ITA No. 155/Hyd/2013, pronounced on 22.01.2014, has held: When the AO himself treated the assessee as an assessee not in default in respect of the amounts of TDS to be deducted, then there cannot be any scope for levying penalty u/s. 271C of the Act. As in this case the amount of tax has been paid by the recipient of the income. Being so, the provisions of section 271C cannot be applied to the assessee's case as these provisions dearly state that if any person fails to deduct whole or any part of the tax as required under the provisions of Chapter XVII-B, then such person shall be liable to pay by way of penalty an amount equal to the amount of tax which such person failed to deduct or pay as above said. Being so, in the present case the assessee being not in default in respect of the amount of tax itself, there cannot be any levy of penalty u/s. 271C, more so, where there was a reasonable cause for not deducting the TDS on the payment made by the assessee. Considering the cumulative effect of all the facts and circumstances of the case, we are inclined to confirm deletion of penalty by the CIT(A). 9. Now, undoub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have had reasonable cause for not deducting the tax at source. The penalty levied is, accordingly, deleted. ITA No. 66/Agra/2017 15. This is assessee s appeal for assessment year 2013-14, taking the following grounds: 1. On the facts and in the circumstances of the case the CIT(A) erred in confirming the demand of ₹ 2,54,335/- for the purpose of the section 201(1) and 201(1A) of the Act. 2. On the facts and in the circumstances of the case and in law the Assessing Officer and the CIT(A) erred in arriving at the short deduction on the amounts paid as interest on for without appreciating the fact that the parties on whom short deduction has been worked out have already considered the same as income at the time finalizing their accounts. 3. On the facts and in the circumstances of the case and in law the Assessing Officer and the CIT(A) erred in not appreciating the fact that if the payee has discharged its tax liabilities then the payer of the income tax need not be held as assessee in default for the tax amount. 4. On the facts and in the circumstances of the case and in law the Assessing Officer and the CIT(A) erred in not appreciating the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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