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TMI Blog2018 (4) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to establish a reasonable cause for the said failure. See Commr. Of Income Tax-XVIII, Delhi Versus Bank Of Nova Scotia [2016 (1) TMI 583 - SUPREME COURT] - Decided in favour of assessee - ITA No. 3019/Del/2014 to ITA No. 3023/Del/2014 - - - Dated:- 29-1-2018 - Shri G.D.Agrawal, President and Smt. Beena A Pillai, Judicial Member Appellant by : Sh. Bharat Bhushan Jain and Shri U S Agarwal, Adv. Respondent by: Sh.Amit Jain, Sr.D.R. ORDER PER BENCH The present appeals for various assessment years have been preferred by revenue against order dated 22/10/13 passed by Ld. CIT(A), Sector 12, Karnal. The Ld. AO levied penalty under section 271C of the Income Tax Act, 1961 (the Act) vide order dated 25/05/12 for the ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral Haryana Circle Ambala on 09/10/02 which was received by assessee Postmaster on November,2002. It was thus submitted that assessee had sufficient reason for not deducting TDS. Ld. A.R. submitted that the staff had collected form No. 15 I from the payee s who has withdrawn from NSS accounts and due to the shifting of official record, certain forms could not be found. Ld. A.R. thus submitted that assessee cannot be held to be guilty of conduct of contumacious or dishonest action. He thus submitted for the penalty being deleted as the non-deduction was on the basis of a bona fide belief. 2.1. Ld. AO however levied penalty under section 271C of the act for years under consideration. 2. Aggrieved by the order of Ld. AO, assessee prefer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a result of quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose a penalty will be justified in refusing to impose penalties, when there is a technical or venial breach of the provisions of the act or wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,] clause (c) or clause (d) of sub-section (1) or sub-section (2) of section 272A, sub-section (1) of section 272AA] or [section 272B or] [sub-section (1) [or subsection (1A)] of section 272BB or] [sub-section (1) of section 272BBB or] clause (b) of sub-section (1) or clause (b) or clause (c) of sub-section (2) of section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure. 4.1. We observed from the submissions advanced by LdAR, that admittedly, non-deduction of TDS was not deliberate but merely a technical default. We observe that there was a reasonable cause for not deducting TDS. Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that whether there was reasonable cause or not for the assessed not to deduct tax at source, is a question of fact which has to be determined by the Tribunal and normally would not give rise to a question of law. With respect, we would adopt the reasoning of the Division Bench in the CIT v. ITOCHU Corpn. (supra). In the present case, the Tribunal has come to a finding of fact that the reasonable cause can be reasonably said to be a cause which prevents a man of average negligence and ordinary prudence acting under a normal circumstances without negligence or inaction or want of bonafide. It then recorded a definite finding that the act on the part of the assessed was bonafide and it acted under a reasonable belief. Subsequently Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. On facts, we are convinced that there is no substantial question of law, the facts and law having properly and correctly been assessed and approached by the Commissioner of Income Tax (Appeals) as well as by the Income Tax Appellate Tribunal. 4.3. Applying the ratio upheld by Hon ble Supreme Court in the case of CIT vs. Bank of Nova Scotia (supra) to the facts of the present case we are inclined to delete the penalty levied by Ld. AO under section 271C of the Act. Accordingly grounds raised by the assessee stands allowed in all the assessment years under consideration. 5. In the result appeals filed by assessee stand allowed for all the assessment years under consideration. (Order pronounced in the open court on 29.01.2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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