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TMI Blog2018 (12) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... essment years 2010-11, 2011-12 and 2012-13. Penalty was imposed on the assessee by the Assessing Officer, which confirmed by the Appellate Authority, was reversed by the Tribunal and hence these appeals. 2. The questions of law that arises for consideration in these three appeals re-framed by us are as follows: 1) Whether the Tribunal was justified in cancelling the penalty levied under Section 271(c) of the Income Tax Act holding that the assessee had reasonable cause within the meaning of Section 273(B) of the Act. 2) Whether the assessee is entitled to the exemption under Section 194-I in view of Section 44AB of the Act ? 3. The facts in brief are that the assessee-company is a trust registered under Section 12A of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b)--- Provided---- Provided further that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such income by way of rent is credited or paid, shall be liable to deduct income-tax under this section:" According to the learned Counsel, the assessee is a trust registered under Section 12A, and therefore, not obliged to carry out an audit as provided under Section 44AB. Only those persons covered under Section 44AB would have to discharge the statutory obligation under Section 194-I is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nced it is also to be noticed that the assessee had been making the payments piece-meal through out the year and not deducting the tax on its payment in the respective months. Hence, it is not a case of thorough ignorance and there is deliberate laxity on the part of the assessee. 7. In the decision of a Division Bench of this Court in US Technologies International (P) Ltd. v. Commissioner of income Tax, [2010] 195 Taxman 323 (Ker), it is held thus in paragraph 3 of the judgment: "..... We are unable to accept this contention because the first part of clause (b) of Section 271C(1) i.e. failure to pay whole or any part of tax as required, takes in the tax deducted under clause (a) under any of the provisions of Chapter XVIIB. So much so, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that it is necessary to establish that there was contumacious conduct on the part of the assessee to attract penalty under Section 271(1)(c) of the Act. The Hon'ble Supreme Court agreed with the High Court that there was no substantial question of law raised and rejected the challenge. We find that the Hon'ble Supreme Court in Union of India v. Dharmendra Textile Processors, [2008] 306 ITR 277 (SC) held that mens rea is not an essential element for imposing penalty for breach of civil obligations. Imposition of penalty for non-compliance of statutory provision, is not a criminal liability, but is only a civil liability and therefore, bad motive on the part of the assessee is not essential to be proved. 9. Taking the entire facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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