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TMI Blog2021 (8) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses as discussed above but failed to deposit the same in the account of Government exchequer account within the specified time. Thus in such a situation, the penalty u/s 271C of the Act is not attracted. We also note that the judgments relied by the authorities below in reaching to the conclusion that the assessee is subject to the penalty under the provisions of section 271C of the Act have been reversed by the subsequent judgment in the case of Lakshadweep development Corporation Ltd [ 2019 (3) TMI 333 - KERALA HIGH COURT] The assessee cannot be visited with the penalty under the provisions of section 271C of the Act on account of failure on his part to deposit the amount of TDS deducted on the expenses as discussed above with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellant craves leave to add, alter or amend and/or withdraw any part of the ground or grounds either before or at the time of hearing of appeal. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 3. The only issue raised by the assessee is that the learned CIT (A) erred in confirming the penalty levied by the AO under section 271C of the Act for an amount of ₹ 22,23,512 only. 4. The facts in brief are that there was a survey action under section 133A of the Act at the business premises of the assessee on 15 July 2015 wherein it was found that the assessee has claimed interest expenses for ₹ 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses subjected to TDS under chapter XVIIB of the Act. The AO in holding so relied on the judgment of Hon ble Kerala High Court in the case of M/s US technologies versus CIT in ITA No. 3 of 2009 dated 16 June 2009 reported in 195 taxman 323. Thus the AO levied the penalty for ₹ 22,23,512.00 under the provisions of section 271C of the Act. 5. Aggrieved assessee preferred an appeal to the learned CIT (A) who confirmed the order of the AO. The learned CIT (A) in confirming the order of the AO also placed his reliance on the judgment of Hon ble Kerala High Court in the case of Classic Concepts Home India Private Ltd versus CIT reported in 79 taxmann.com 349. 6. Being aggrieved by the order of the learned CIT (A) the assessee is in 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed above clearly reveals that the penalty can be attracted under section 271C of the Act only in a situation where the assessee failed to deduct the TDS under the chapter XVII-B of the Act. In the case on hand there is no dispute to the fact that the assessee has deducted the TDS with respect to the expenses being interest under the provisions of section 194A of the Act but failed to deposit the same in the account of Government exchequer. For this purpose, the reference is made to the finding of the AO as recorded in his order under section 271C of the Act which is reproduced as under: A survey verification was carried out on 15.07.2015 at the business premises of the assessee. During the course of verification, it was found that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The relevant extract of the judgment is reproduced as under: 43. In the light of the above discussion, the Reference is answered as follows: 1. The finding of the Division Bench in U.S.Technologies International Pvt. Ltd. (supra) and Classic Concepts Home India Pvt. Ltd. (supra) to the effect that Section 271C(1)(b) will take in Section 271C(1)(a) as well, to attract penalty for non-payment of the tax deducted at source, does not reflect the correct provision of law. They stand overruled. 2. The finding and reasoning in U.S.Technologies International Pvt. Ltd (supra) and Classic Concepts Home India Pvt. Ltd. (supra) that the benefit of waiver/reduction of penalty [once good and sufficient reason is established in terms o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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