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TMI Blog2025 (1) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... bility to compute correct taxes was on assessee and the assessee could not absolve himself by shifting this burden to the remitter banker. Even otherwise if this argument was to be accepted, it would be pertinent to note that the assessee has never reflected aforesaid transactions in Income Tax Returns. Even assuming that the banker had deducted due taxes, still the assessee was obligated to reflect this income in the return of income. Having not done so, the argument thus raised by Ld. AR could not be accepted. We order so. Though it has been submitted that the assessee has settled the final tax liability and paid due taxes forthwith as finally determined by Ld. AO, no evidence thereof has been adduced before us to support the same - CIT(A) has deleted the penalty merely by extracting observations of Hon ble Supreme Court in the case of Hindustan Steels Ltd [ 1969 (8) TMI 31 - SUPREME COURT] - The arguments as well as case laws being put before us by revenue as well as by AR have nowhere been considered by first appellate authority. No finding has been rendered on the alternative submissions made by the assessee. We deem it fit to set aside the impugned order and restore the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S is TDS or Tax Deducted at Source is income tax reduced from the money paid at the time of making specified payments by the persons making such payments as advance payment of taxes due. Further, the persons receiving the income are liable to pay the relevant income tax on the amounts received under the relevant heads of income. The idea behind the Tax Deducted at Source provisions is only to make sure that income tax is deducted in advance from the payments being made to the payee and there is no escapement of income in the hands of the receiver and in order to file the return of income to claim credit of the TDS available in his account. The recipient of income is under obligation to disclose the actual taxable income and claim the amount of TDS adjusted against the final tax liability. In this case, the deductor cannot be held responsible for the default in payment of taxes but it is the deductee, i.e., assessee, who has defaulted in disclosing the actual income and failed to pay the relevant taxes due. Hence, the intention to conceal the particulars of income is present in this case. 1.2 The Ld. CIT-DR advanced argument to support levy of impugned penalty. The Ld. AR also advan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to concealment of income. Had the case not been reopened, entire gains would have escaped the tax liability thereby avoiding payment of tax of Rs. 456.94 Lacs. Considering the same, Ld. AO levied penalty of Rs. 456.94 Lacs. 2.4 During appellate proceedings, the assessee submitted that there was no concealment as the responsibility to deduct and remit the due taxes lay with the Banker who remitted the share sale proceeds to the assessee. The assessee assumed that since the due taxes were deducted by the said bank, the income was not be included in the return of income. The assessee made out a case of bona-fide mistake. It was also stated that once the assessee was made aware about the short-deduction of TDS, the assessee paid the differential tax and settled the dues. The assessee did not make any attempt to willfully or deliberately conceal any particulars of income. In the alternative, the assessee submitted that Ld. AO erred in ignoring the TDS amount of Rs. 353.59 Lacs and therefore the penalty, at the most, could be levied for additional tax demand of Rs. 103.35 Lacs only. 2.5 The Ld. CIT(A) considering the decision of Hon ble Supreme Court in the case of Hindustan Steel Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dharmendra Textiles (306 ITR 277), penalty u/s. 271 (1) (c) is a civil liability. 4. The Ld. AR, on the other hand, has stated that responsibility to ensure payment of entire tax on Short Term Capital Gains was on the remitter banker. As a non-resident of more than 40 years, the assessee reasonably presumed that the entire TDS payment was deducted by the deductor and there was no further responsibility on his part to disclose the same. The Ld. AR also stated that this being AY 2007-08, the procedure prior to insertion of sub-section (6) to Sec.195 has to be seen. Prior to insertion of sub-section (6), the remittance to non-resident was governed by the RBI guidelines. As per master circular no.4/2007-08 dated 02-07-2007, remittance was to be made based on any undertaking by the remitter and certificate by Chartered Accountant in the format prescribed vide CBDT Circular No.10/2022 dated 10-09-2002. Considering the same, the bank managing the assessee s equity portfolio had responsibility to ensure that the due tax was deducted and remitted on the capital gains. The Ld. AR also sought distinction in the case laws being relied upon by revenue. The Ld. AR further relied on certain judi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, tax demand of Rs. 1.45 Crores has been raised against the assessee which has thus attained finality. In our considered opinion, the primary liability to compute correct taxes was on assessee and the assessee could not absolve himself by shifting this burden to the remitter banker. Even otherwise if this argument was to be accepted, it would be pertinent to note that the assessee has never reflected aforesaid transactions in Income Tax Returns. Even assuming that the banker had deducted due taxes, still the assessee was obligated to reflect this income in the return of income. Having not done so, the argument thus raised by Ld. AR could not be accepted. We order so. 6. Proceeding further, we find that though it has been submitted that the assessee has settled the final tax liability and paid due taxes forthwith as finally determined by Ld. AO, no evidence thereof has been adduced before us to support the same. 7. In the impugned order, Ld. CIT(A) has deleted the penalty merely by extracting observations of Hon ble Supreme Court in the case of Hindustan Steels Ltd. (supra) . The arguments as well as case laws being put before us by revenue as well as by Ld. AR have nowhere been c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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