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TMI Blog2020 (3) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... as a separate proceeding. Merely because in the assessment order the AO comes to a conclusion that the assessee had failed to collect the STT or had failed to pay such STT to the credit of the Central Government, it would not ipso-facto lead to imposition of penalty. Once such a conclusion is reached, the assessee is required to be provided reasonable opportunity of hearing and during the hearing if the assessee can prove that there was reasonable cause for such failure, no penalty shall be imposed. Though, as observed by the Supreme Court, the expression penalty is a word of wide significance, but in substance penalty is in the nature of punishment. Therefore, before imposing penalty the Assessing Officer must come to the conclusion that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and in the circumstances of the case and in law the Tribunal erred in deleting the penalty levied under Section 105(a) of the Securities Transaction Tax (STT) falling under Chapter VII of Finance (No.2) Act, 2004? (ii) Whether in the facts and in the circumstances of the case and in law the Tribunal erred in deleting the penalty levied under Section 105(a) of the Securities Transaction Tax (STT) falling under Chapter VII of Finance (No.2 ) Act, 2004 in view of the failure of the assessee to discharge its statutory liability to collect the STT at prescribed rates under section 100(4) of the Securities Transaction Tax (STT) falling under Chapter VII of Finance (No.2) Act, 2004? 4. In Income Tax Appeal No.1187 of 2017, we have alr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opportunity of being heard. 8. If Section 105 is read in isolation, it would appear that failure to pay the tax by the assessee i.e., either failure to collect the STT or failure to deposit the STT so collected to the credit of the Central Government would automatically lead to imposition of penalty. This is so because of the use of the word "shall" in that section. However, Section 108 starts with a non-obstante clause by use of the expression "notwithstanding". It is further clarified that Section 108 would have effect notwithstanding anything contained in Section 105 or the other two sections mentioned therein. In other words, Section 108 would have overriding effect over Section 105. Section 108 makes it abundantly clear that merely be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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