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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 ..... is seen that the Tribunal had allowed the assessee's appeal and cancelled the penalty levied under Section 271(1)(c) on the specific finding 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 in Union of India v. Dharmendra Textile Processors, [2008 (9) TMI 52 - SUPREME COURT] 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 civ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether 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 Act, 1961 and runs an educational institution, namely, Eurotech Maritime Academy Pvt.Ltd. The assessee is paying rent for the building occupied by them and also has a responsibility, statutorily mandated, to deduct tax at source. It was found that the tax deducted at source was deposited belatedly to the Central Government account for the assessment years 2010-11, 2011-12 and 2012-13. The assessee has been defaulting such payment even prior to this. Hence, notice under Section 271C of the Act was issued by the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee 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 submission. 5. The second proviso of Section 194-I cannot be applicable to the assessee in this case, because a trust cannot be included within the definition of an individual or a Hindu undivided family and therefore, the monetary rules specified in clause (a) or (b) of Section 44AB also is not relevant. It is also pertinent that the second proviso to Section 194-I speaks of Section 44AB, to include individuals and Hindu Undivided Families, whose income exceeds the limits specified in clauses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ... 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, in our view, failure to deduct or failure to remit recovered tax, both will attract penalty under Section 271C of the Act. So much so, the contention of the appellant fails and we uphold the finding of the Tribunal dismissing the challenge against levy of penalty. In Classic Concepts Home India Pvt.Ltd. v. Commissioner of Income Tax, [2016] 383 ITR 626 (Ker.) relying on the decision reported in US Technologies International (P) Ltd. , another Division Bench of this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and circumstances of this case, we are of the considered opinion that the assessee is liable to pay penalty under Section 271(1)(c) of the Act, and therefore, the impugned order of the Tribunal deleting the penalty is not sustainable and hence, set aside. The questions of law are answered in favour of the Revenue and against the assessee. The appeal is allowed, setting aside the order of Tribunal and restoring those of the Assessing Authority and the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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