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TMI Blog2025 (2) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... e had applied on 11.09.1997 seeking advance ruling and that the Chairman of the Advance Ruling Authority did not process the same for personal reasons. Added, what benefit the respondent could derive by not deducting the tax at source, is also a factor.
All these certainly constitute a reasonable cause for not effecting TDS and therefore the impugned orders being consistent with the same are not vulnerable for challenge, as rightly contended by learned Sr. Advocate appearing for the respondent. Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee's short deduction of TDS and belated transfer of the TDS amount deducted to the department was due to reasonable cause and penalty could not be levied without taking into account that all these clarification regarding legal position was taken by the assessee due to the survey conducted by the department pursuant to which the defect was pointed of, and consequently the penalty levied under Section 271C of the Act by Assessing Officer was justified?" 3. Having heard the learned counsel for the parties and having perused the appeal papers, we decline indulgence in the matter essentially on the ground that the above question based on which appeal is admitted for consideration does not have sufficient trappings of law, much less substantial question of law. Sec. 260(A)(1) of the Act which is relevant for our consideration reads as under: "An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal before the date of establishment of the National Tax Tribunal, if the High Court is satisfied that the case involves a substantial question of law". 3.1 It hardly needs to be stated the concept of substantial question of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing text: "271C. Penalty for failure to deduct tax at source (1) If any person fails to- (a)deduct the whole or any part of the tax as required by or under the provisions of Chapter XVII-B; or (b)pay the whole or any part of the tax as required by or under,- (i) sub-section (2) of section 115-O; or (ii) The proviso to section 194-B, then, such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct or pay as aforesaid. (2) Any penalty imposable under sub-section (1) shall be imposed by the [Joint Commissioner]." The text of this section is plain. It makes failure to deduct tax liable for penalty. The Joint Commissioner can impose penalty in a sum equal to the amount of tax not deducted or paid. Sec.273B which begins with a non obstante clause as amended by Act 46 of 1986 w.e.f. 10.09.1986 provides that no penalty is imposable for any failure to deduct or pay tax deducted, if the Assessee proves that there was a reasonable cause for that. The Apex Court in CIT vs. ELI LILLY & CO. (INDIA) (P) LTD. (2009) 15 SCC 1 has at para 94 observed as under: "Section 273B states that notwithstanding anything co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Woodward Governors India (P) Ltd v. CIT and Others, 253 ITR 745. In view of what is stated hereinabove, we are of the view that the issue, whether there was reasonable cause or not for the Assessee not to deduct tax at source is a question of fact which has been determined by the Tribunal. As such, no substantial question of law arises." We are broadly in agreement with the above decisions. 3.5 A Division Bench of Madras High Court in COMMISSIONER OF INCOME-TAX v. VISWAPRIYA FINANCIAL SERVICES AND SECURITIES LIMITED (MANU/TN/7657/2007), at paragraph 8 of the judgment, observed thus: "From a reading of the above, it is clear that the Tribunal has accepted the explanation and given a finding that there is a reasonable cause for not deducting the tax at source. The finding that there is a reasonable cause is a only a question of fact and also it is not perverse. Hence, the Tribunal is justified in deleting the penalty levied under Section 271C of the Act. The concurrent finding given by both the authorities below are based on valid materials and evidence. In the case of CIT v. P. Mohanakala MANU/SC/7712/2007:[2007]291ITR278(SC), the Supreme Court held that whenev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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