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2017 (9) TMI 1233 - HC - Income TaxPenalty u/s 271C - non deduction of TDS on interest paid to sister concerns in terms of Section 194A - Held that:- We are of the opinion that the issue raised has been held in favour of the Revenue in CIT Versus M/s. MUTHOOT BANKERS (ARYASALA) [2016 (6) TMI 739 - KERALA HIGH COURT]. With respect of the contentions raised as regards the finding that contumacious conduct is necessary before a penalty can be imposed, we are of the opinion that the position has been clarified by the Bench decision of the Apex Court in Dharamendra Textile Processors's case (2008 (9) TMI 52 - SUPREME COURT ) wherein as relying on precedents that mens rea is not an essential element for imposing penalty for breach of civil obligations. Considering the nature of penalty under the scheme of the Act, it was held that the penalty leviable in cases of default or failure of statutory obligation or in other words for breach of civil obligation is not a criminal offence and there is no question of proof of intention or mens rea by the assessee for imposing penalty. We are of the opinion that in view of the clear language of Section 271C of the Act, the assessee was liable to pay the penalty unless he could plead and prove that he was prevented from deducting the tax at source with reasonable cause. In the absence of any such pleading of proof, the penalty under Section 271C is liable to be imposed on the assessee. We find that the order of the Tribunal cancelling the penalty imposed on the assessee is unsustainable. The questions of law are answered in favour of the Revenue
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