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2022 (2) TMI 980 - AT - Income TaxPenalty u/s 271BA - not filing the report of the accountant as required by section 92E - proof of 'reasonable cause' for not filing the report of the accountant - HELD THAT:- MTML is responsible to pay salaries to the deputed employees and the Salary, cost of these employees are a charge on the profits of the Mahanagar Telephone Mauritius Limited (MTML). Also, the employees who are deputed to Mauritius are employees of Mahanagar Telephone Mauritius Limited (MTML) and the said employees are under direct control and supervision of MTML. The staff which was sent on deputation from MTNL was paid salaries in India by MTNL on the behalf of MTML. The said payment was made in India on the account of payment of salary in the bank accounts of the employees sent on deputation to MTML. MTNL was under a bonafide belief that the above transaction is not an international transaction. However, when made aware it was realized that such a transaction would be covered under the ambit of International Transaction. The salary payment made by the MTNL to the employees of MTNL deputed to MTML has been reimbursed by the MTML. It is also a matter on record that the Form No. 3CEB has been filed before the AO. Also considered the issue of loans & advances outstanding as on 30.01.2013 between MTNL and MTML. Based on the adjustments as suggested by TPO, the revised statement of income for the relevant assessment year and form 3CEB was filed before the assessment of the said year and the assessment was completed by the AO on 6th October 2016. No ill intention of MTNL could be attributed of evading tax or non- compliance of the tax laws as the report was filed as required by the authorities. From the above mentioned facts and law, it is evident that MTNL was under bonafide belief that it is not required to file form 3CEB but later on realization of the facts and law, MTNL filed the same with the concerned authority. Provisions of Section 273B can be invoked in the case of the assessee as a reasonable cause for failure could be substantiated. In the case of CIT Vs. MP Electricity Board [2004 (12) TMI 61 - MADHYA PRADESH HIGH COURT] based on the judgment of Hindustan Steel Ltd. Vs. State of Orissa [1969 (8) TMI 31 - SUPREME COURT] held that the authority competent to impose the penalty would be justified in refusing to impose the penalty when there is a technical or venial breach of the provision of the Act are where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by statue. The assessee is a public sector undertaking cannot be deemed to have any deliberate inclination to avoid payment of tax or to follow the statutory provisions. Hence, the law laid down and the provisions of the Section 92E, Section 271BA and Section 273B of the Act, we hereby direct that the penalty levied be obliterated. - Decided in favour of assessee.
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