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TMI Blog2021 (4) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... aived or reduced, based on the facts and circumstances. Section 271C of the Income Tax Act is quite categoric. Its scope and extent of application is discernible from the provision itself, in unambiguous terms. When the non-deduction of the whole or any part of the tax, as required by or under the various instances/provisions of Chapter XVII-B would invite penalty under Clause 271C(1)(a); only to a limited extent, involving sub-section (2) of Sec.115-O(coming under Chapter XIID) or covered by the 'second proviso' to Section 194B (coming under Chapter XVIIB) alone would constitute an instance where penalty can be imposed in terms of Section 271C(1)(b) of the Act. Since there is no obscurity in the above provision, it is not for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Standing Counsel Mr.Christopher Abraham for respondents. 3. The instant appeals raise the question whether, on the facts and in the circumstances of the case, the explanation offered by the appellant could have been considered positively under Sec.273B of the Income Tax Act, 1961 and whether the Tribunal failed to appreciate the distinction provided under Sec.273B of the Income Tax Act, 1961 vis- -vis the cases covered by Sec.271C (1) (a) and the imposition of penalty for the delayed deposit of the TDS deducted by the assessee is warranted or not. The operative portion of the order under appeal reads as follows: 7. Aggrieved by the penalty impossed, the assessee preferred an appeal before the first appellate authority. The CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment Account in time. The Hon'ble jurisdictional High Court in the case of Classic Concepts Home India Pvt Ltd (supra) had categorically held that in a case where tax has been deducted but not paid within the time limit prescribed under the law, reasonable cause mentioned u/s 273B would not come to the rescue of the assessee. In the light of the judgment of the Hon'ble jurisdictional High Court, cited supra, we hold that the CIT(A) is justified in confirming the penalty imposed u/s 271C of the Act. It is ordered accordingly. 4. Dr.K.P Pradeep relying on the Full Bench judgment of this Court in Lakshadweep Development Corporation Ltd v. Additional Commissioner of Income tax (TDS) 2019 (2) KLT 564 argues that the quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. vs. Commissioner of Income Tax[(2016)383 ITR 626 (Ker.)] reflect the correct position of law? These are the points to be clarified by this Court in the appeals preferred by the assessee, raising substantial questions of law under Section 260A of the Act. and thereafter the following paras answering the reference in the Full Bench judgment are read out: 33. The next point to be considered is with regard to the observation/finding rendered by the Bench in U.S. Technologies case, holding that failure to remit the tax after deducting the same, will constitute a more grievous default than the omission to deduct the tax under Section 271C(1)(a) and hence it cannot come within the purview of Section 273B for claiming the benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax at source. XXX XXX XXX 36. From the above, it is crystal-clear that, once the burden is discharged by the person/assessee as to the existence of good and sufficient reason for not complying with the stipulation under Section 271C, it is for the authorities to consider with proper application of mind, whether the penalty is to be waived or reduced, based on the facts and circumstances. 37. Section 271C of the Income Tax Act is quite categoric. Its scope and extent of application is discernible from the provision itself, in unambiguous terms. When the non-deduction of the whole or any part of the tax, as required by or under the various instances/provisions of Chapter XVII-B would invite penalty under Clause 271C(1)(a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or this Court to decide the merit as well, by virtue of the specific power conferred under 'Section 7' of the Kerala High Court Act, instead of having the case sent back to the same/appropriate Bench for further consideration, after answering the reference. In view of our declaration that non- remittance of tax deducted at source as in the instant case (which comes under Section 194C of Chapter XVIIB of the Act) is not covered by Section 271C(1)(b) of the ct to attract penalty, nothing remains to be considered further, either by the Tribunal or by this Court since the verdict passed by the departmental authorities and the Tribunal (copies of which have been produced as Annexures A, B and C) stand contrary to the declaration as above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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