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TMI Blog2020 (10) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... als are similar, for convenience we are reproducing below the grounds raised by Shri Jitendra Sharma in Appeal No.500/Ind/2018; Ground-I 1. On the facts and in the circumstances of the case and in law, the Commissioner of Income Tax (Appeals)-13, Ahmedabad ("CIT(A)") erred in exparte dismissing the appeal of the assessee for non prosecution and thereby confirming the addition made by the Assessing Officer. 2. He failed to appreciate that the notice of hearing was not served on the appellant and the appellant had himself requested for early hearing which remained unresponded. 3. Accordingly, the appellant prays that the said exparte order of learned CIT(A) being in violation of principles of natural justice be set aside and restored back for fresh hearing with adequate opportunity of hearing. Ground-II 1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming the penalty under Section 271C of the Act amounting to Rs. 515000/- 2. The appellant prays that the said penalty be deleted. Ground-III 1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming the penalty under Section 271C by not ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee could not satisfy the Ld. A.O and he proceeded to levy penalty at Rs. 5,15,000/- in each case for the default of wrong deduction of tax at source. Aggrieved assessee preferred appeal before Ld. CIT(A) but could not succeed as the reasonable cause mentioned by the assessee did not find any favour by the lower appellate authority. 6. Now all the three assessee(s) are in appeal before the Tribunal challenging the finding of Ld. CIT(A) confirming the levy of penalty u/s 271C of the Act at Rs. 5,15,000/- in each case for the default committed by the assessee(s) for wrong deduction of tax at source. 7. Ld. Counsel for the assessee referred to the paper book running from page 1 to 25 and relied on following written submissions :- 1. The Appellant is an individual and had purchased an immovable property in the year 2014-15 and had deducted the tax of the seller under Section 194IA of Act at the rate of one percent of the sale consideration and filed the TDS return on the date of deduction as prescribed. 2. The Assessee did not know the seller and the deal of property was done through a broker who got prepared the sale deed and other documents. The registered deed also bore In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 195 of Act bonafidely as both sections apply on same transactions. b. The deductor who is an individual common person was not knowing he residential status of seller being NRI (which has still not been established based on Section 6 of the Act) nor he was aware about different TDS provisions of Section 195 and acted as per common knowledge to deduct 1% TDS under section 194IA of the Act. c. As regards the observation of CIT(A) that ignorance of law is no excuse it is submitted there is no such maxim known to law. Your kind attention is invited to decision of Supreme Court in case of Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh [1979] 118 ITR 326 wherein it was observed that there is no presumption that every person knows the law. It is often said that everyone is presumed to know the law, but that is not a correct statement; there is no such maxim known to the law. d. Penalty under Section 271C of Act is levied for non compliance of Chapter XVII-B of the Act however when the TDS is deducted and deposited with interest there is compliance of Chapter XVII - B on a whole basis and therefore the penalty should not be levied in such cases. e. The deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han Rs. 50 lakhs) as mentioned in Section 194IA) of the Act but still being at a safer side they deducted tax at source @1% of the purchase consideration and deposited it. 12. We further observe that subsequently when proceedings were carried out u/s 201(1)/201(1A) r.w.s. 195 of the Act and respective assessee(s) were brought to the notice that the seller is a Non Resident Indian they bonafidely deducted the TDS @20.6% (Tax + surcharge) of Rs. 5,15,000/- each on the payment of Rs. 25 lakhs and also paid interest at Rs. 1,03,000/- for the delay and in total all the three assessee(s) they deposited Rs. 6,18,000/- each before the conclusion of the proceedings and thus no demand was payable. 13. However Ld. A.O further initiated the proceedings u/s 271C for levy of penalty at Rs. 5,15,000/- in each of the case for low deduction of tax. Now the short issue remains is whether in these given circumstances as discussed above the Ld. A.O was justified in levying penalty on the assessee(s) u/s 271C of the Act. 14. Before proceeding further we will like to go through the finding of the Co-ordinate Bench of Mumbai in the case of DCIT V/s Sms India Ltd (supra) (2006) 7 SOT 424 Mum dated 30.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the moment a person comes to know that he has committed a mistake and being a person of reasonable intelligence and ordinary prudence if he takes the corrective measures to rectify the same immediately, then it cannot be said that he acted deliberately with complete disregard to law. There is also considerable force in the contention of the assessee that non-recording of satisfaction by assessing officer in the order under section 201(1) with regard to the fact that case is fit for levy of penalty makes the levy of penalty void ab initio. In view of above discussion and in the totality of facts and circumstances of the case we are of the considered opinion that the findings of learned Commissioner of Income Tax (Appeals) in his appellate order are in accordance with law and therefore, we uphold the order of learned Commissioner of Income Tax (Appeals). Thus, all grounds of revenue in all appeals are rejected. 11. We have considered the submissions made by both the sides, material on record and orders of the authorities below. Admittedly, the assessee filed its annual salary return for each year in the prescribed forms within the time specified. It is also an admitted fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the findings of learned Commissioner of Income Tax (Appeals) in his appellate order are in accordance with law and therefore, we uphold the order of learned Commissioner of Income Tax (Appeals). Thus, all grounds of revenue in all appeals are rejected. 15. From going through the above decision of Hon'ble Tribunal and examining the facts of instant case we find that this decision is squarely applicable on the facts of the instant case wherein also the assessee in addition to the tax deducted u/s 194(1A) @ 1% in addition also deposited deducted and deposited TDS u/s 195 of the Act along with the interest for delay. 16. Even otherwise in our view the provisions of Section 273B of the Act "the penalty is not to be imposed in certain cases" is applicable on the assessee as Section 273B of the Act contemplates that no penalty shall be imposable on the persons for any violation referred to in the said provisions (which in this case is Section 271C of the Act) if he proves that there was a reasonable cause for the said failure. In the case of the assessee(s) also when the transactions took place there was only copy of PAN card issued by Income Tax Department having no address. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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