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2018 (11) TMI 1126 - HC - Income TaxWaiver of penalty u/s 234B - Penalty u/s 271C - failure to deduct tds as contemplated by Section 194 A (1) and to deposit the same with the Central Government by assessee bank - eligibility of exemption from penalty by applying the provision of Section 273-B - Held that:- In the present case it is not disputed that tax at source was not deducted by the assessee Bank at the time interest income was credited to the income of the payee ie., Agra Development Authority but was deducted and deposited subsequently though before the close of the financial year. Thus, apparently on account of non deduction of the tax at source at the time stipulated under Section 194 (1) the assessee Bank became liable for penalty under Section 271C of the Act. Exemption from penalty by applying the provision of Section 273-B provided the assessee Bank is able to satisfy that there was a reasonable cause for failure to deduct tax at source on the interest income - assessee Bank contends that the failure to deduct TDS was due to the fact that the Agra Development Authority had obtained certificates under Section 197 of the Act permitting the assessee Bank not to deduct tax at source on its interest income - Held that:- Found no aforesaid cause to be reasonable as in the earlier year no certificate under Section 197 of the Act was submitted by the Agra Development Authority and in that year necessary feeding was done in the computer system and the deduction of tax at source was made on the interest income. Thus, there was no occasion to commit the mistake of not deducting tax at source on interest income in time in the relevant years. It is pertinent to point out that due to certificates under Section 197 of the Act furnished by the Agra Development Authority no tax was deducted at source on the interest income in the Financial Year 2010-11 . The software was updated in the subsequent year with the result tax at source on interest income was deducted in the year 2011-12. Once the software was updated, there was no reason for any error in the subsequent year ie. 2012-13 and 2013-14. The finding of the tribunal on the above aspect is a finding of fact and when the cause shown has not been found to be reasonable by the tribunal, it does not inhers this Court to take a contrary view and to accord the benefit of Section 273 B of the Act - Decided against assessee.
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