Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order of
the Commissioner of Income Tax (Appeals), Salem, dated
30.09.2016, confirming the penalty levied by the Assessing Officer
under Section 271C of the Income-tax Act, 1961 (in short 'the Act').
2 I.T.A. No.255/Mds/17
There was a delay of 16 days in filing this appeal by the
assessee. The assessee has filed a petition for condonation of delay. We have heard the Ld. counsel for the assessee and the Ld. D.R. We find that there was sufficient cause for not filing the appeal
before the stipulated time. Therefore, we condone the delay and admit the appeal.
Ms. S. Sriniranjani, the Ld.counsel for the assessee,
submitted that the assessee - co-operative society, due to ignorance of law, failed to deduct tax in respect of contract payment to the extent of `23,66,415/-. According to the Ld. counsel, the
assessee in fact deducted the amount subsequently to the extent of `30,272/- and the same was paid to the Department on 29.08.2013.
The balance amount of `18,476/- along with interest under Section
201(1A) of the Act to the extent of `33,636/- was remitted to the
Government account on 12.03.2014. Therefore, the Ld.counsel by placing reliance on the unreported judgment of Apex Court in CIT v. Bank of Nova Scotia in Civil Appeal No.1704 of 2008 dated
07.01.2016, submitted that the penalty cannot be levied.
On the contrary, Ms. S. Vijayaprabha, the Ld. Departmental Representative, submitted that the assessee paid contract amount
3 I.T.A. No.255/Mds/17
without deducting tax, therefore, the Assessing Officer levied
penalty under Section 271C of the Act. Since the assessee has not complied with mandatory requirement of TDS under Section 194C of the Act, according to the Ld. D.R., the Assessing Officer levied penalty of `48,748/- and the same was rightly confirmed by the
CIT(Appeals).
We have considered the rival submissions on either side and perused the relevant material available on record. It is not in dispute that the assessee failed to deduct tax in respect of contract payment. The assessee was expected to deduct `48,748/- under
Section 194C of the Act in respect of contract payment. However, the same was not deducted during the year under consideration. However, subsequently, the assessee deducted and paid `30,272/-
on 29.08.2013. The balance amount of `18,476/- along with
interest of `33,636/- was paid on 12.03.2014. These factual
aspects are not in dispute. On identical circumstances, Delhi High
Court in CIT v. Itochu Corporation (2004) 268 ITR 172 and in CIT v. Mitsui & Co. Ltd. And Another (2005) 272 ITR 545, deleted the penalty. The Apex Court, after reproducing the observation made
by the Delhi Bench of this Tribunal, confirmed the order of the Delhi
4 I.T.A. No.255/Mds/17
High Court in Bank of Nova Scotia. In fact, the Apex Court
observed as follows:-
“2. The matter was pursued by the Revenue before the Income Tax Appellate Tribunal. The Income Tax Appellate Tribunal vide order dated 31.03.2006 entered the following findings:-
“11. We have carefully considered the rival submissions. In the instant case we are not dealing with collection of tax u/s 201(1) or compensatory interest u/s 201(1A). The case of the assessee is that these amounts have already been paid so as to end dispute with Revenue. In the present appeals we are concerned with levy of penalty u/s 271-C for which it is necessary to establish that there was contumacious conduct on the part of the assessee. We find that on similar facts Hon'ble Delhi High Court have deleted levy of penalty u/s 271-C in the case of M/s Itochu Corporation, reported in 268 ITR 172 (Del) and in the case of CIT Vs. Mitsui & Company Ltd. reported in 272 ITR 545. Respectfully following the aforesaid judgments of Hon'ble Delhi High Court and the decision of the ITAT, Delhi in the case of Television Eighteen India Ltd., we allow the assessee’s appeal and cancel the penalty as levied u/s 271-C.”
Being aggrieved, the Revenue took up the matter before the High Court of Delhi against the order of the Income Tax Appellate Tribunal. The High Court rejected the appeal only on the ground that no substantial question of law arises in the matter.”
Respectfully following the judgment of Apex Court in Bank of
Nova Scotia (supra), penalty levied by the Assessing Officer is
deleted and the appeal of the assessee is allowed.
5 I.T.A. No.255/Mds/17
Order pronounced on 27th September, 2017 at Chennai.
sd/- sd/- (ए. मोहन अलंकामणी) (एन.आर.एस. गणेशन) (A. Mohan Alankamony) (N.R.S. Ganesan) लेखा सद�य/Accountant Member �या�यक सद�य/Judicial Member
चे�नई/Chennai, �दनांक/Dated, the 27th September, 2017.
Kri. आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त (अपील)/CIT(A), Salem 4. आयकर आयु�त / CIT, TDS, Coimbatore 5. �वभागीय ��त�न�ध/DR 6. गाड� फाईल/GF.