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2022 (6) TMI 1160 - AT - Income TaxPenalty u/s 271C - assessee did not remit the TDS on the due date - Genuine hardship due to accumulated loss - amount with interest was deposited before issuance of notice - HELD THAT:- As the major part of the TDS relates to remuneration to the Directors credited to the unsecured loan account - TDS was payable on that amount also, but the same could not be remitted due to acute fund shortage for the assessee-company. The assessee-company had incurred huge loss during the relevant financial year and accumulated losses as on 31.03.2010. In addition to the heavy losses, the assessee had huge liability towards bank loan and other borrowings, which is evident from the balance sheet placed on record. In the subsequent years, the bank had taken action under SARFAESI Act and taken possession of the resort and the resort was kept closed for a long time. It was also submitted that after bank had taken possession of the property, one of the NRI Directors had brought in additional funds and settled the dues to the bank and reopened the resort. After reopening due to Covid pandemic, resort was again closed in the month of March 2020. Therefore, the total accumulated losses as per the books of account as on 31.03.2021 is Rs.32,17,77,436. Only because of these hardships there was delay in remitting the TDS. Therefore, there is reasonable cause as envisaged u/s 273B for the delayed remittance of TDS. Moreover, the assessee had paid the entire TDS amount along with interest on 30.04.2011, much prior to notice u/s 274 r.w.s. 271C of the I.T.Act was issued to the assessee-deductor on 05.03.2013. Therefore, for the aforesaid reasoning and the judgment of Lakshadweep Development Corporation Ltd. [2019 (3) TMI 333 - KERALA HIGH COURT] we delete the penalty imposed u/s 271C - Assessee appeal allowed.
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