TMI Blog2001 (4) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... ax at source from dividends, and that such a short-deduction amounts to Rs. 1,20,000. This short-deduction is attributed to a programming error. It appears that the computer was programmed to print tax amount in five figures (before decimal points) and surcharge amount in four figures (before decimal points) since, apparently due to a briefing error, the programmer could not visualise that some tax deduction amounts will be more than Rs. 99,999 or that some surcharge amounts will be more than Rs. 9,999. However, there were two cases where these parameters were proved wanting-in the case of Andrew Yule Co. Ltd. (AYCL) and Bengal Coal Co. Ltd. (BCCL), where the relevant details were as follows: Dividend Tax deductible Surchar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is not leviable for such bona fide mistakes. 5. It cannot be in dispute that penalty under s. 271C is not an automatic consequence of non-deduction or short-deduction of tax at source, since s. 273B inter aha provides that penalty under s. 271C cannot be imposed in case the person concerned can demonstrate that there was a reasonable cause for his failure referred to in s. 271C. In other words, in case the assessee can show reasonable cause for his failure for non-deduction or short-deduction of taxes, penalty under s. 271C cannot be imposed. However, as to what will constitute reasonable cause' is essentially a question of fact, which needs to be determined after taking into account facts and circumstances of each case. These facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s favour this explanation of the assessee. No doubt that in an ideal situation, such errors should have been detected by some inbuilt mechanism in the program itself, but we are not sitting in judgment about the quality of computer program, nor do we have the requisite expertise to reach a conclusion about the same. Even Dy. CIT's rejection of assessee's explanation, on the basis of some information gathered by him, to our mind, was not judicious way of examining the matter in a quasi-criminal proceeding that a penalty proceeding inherently is. We are of the view that the learned Dy. CIT, without necessary expertise and merely based on some tentative enquiries, should not have concluded that explanations given by the assessee are incorrect. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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