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2015 (1) TMI 299 - AT - Income TaxAddition su/s 68 - Burden to prove - cash credit - genuineness of creditors – Held that:- The assessee furnished before CIT(A) certain details relating to the loan creditors for each of the year under consideration - In the remand report, the AO has pointed out that there were differences between the details so furnished and the Balance Sheet of the assessee - it was pointed out by the AO that the Statement of accounts claimed to have been obtained by the assessee from the creditors have been signed by the director of the assessee company - CIT(A) has also noticed that the assessee has failed to prove the credit worthiness of the creditors - the assessee company has failed to prove the cash credits in terms of sec. 68 of the Act - the initial burden of proof to prove the cash credits is placed upon the assessee u/s 68 of the Act, i.e., the assessee is required to prove three main ingredients viz., the identity of the creditors, the credit worthiness of the creditors and the genuineness of transactions - the assessee has failed to discharge the initial burden placed upon it – thus, the order of the CIT(A) is upheld – Decided against assessee. Orders passed u/s 201(1) & 201(1A) – Held that:- The assessee could not controvert the findings given by the ITO(TDS) except pointing out certain computational error - Hence the ld CIT(A) has confirmed the orders subject to verification of the errors pointed out by the assessee - the assessee did not furnish any material for giving reason to interfere with the orders of CIT(A) - Though the assessee has submitted that the recipients have paid the tax on the income received by them, yet no material was furnished to substantiate the same – the order of the CIT(A) is upheld - Decided against assessee. Levy of penalty u/s 271C – Held that:- The financial problem, i.e., lack of money may be considered reasonable cause, since the financial problem has made the staffs and Chartered Accountant to leave the assessee company - Hence, there is merit in the submission of the assessee that it did not get proper assistance to comply with the tax laws - the assessee has shown that there was reasonable cause for his failure to deduct tax at source – the order of the CIT(A) is set aside and the penalty levied u/s 271C is to be set aside. Penalty levied u/s 272A(2)(c) – failure to submit TDS return in time - Held that:- The provisions of sec. 272A(2) is subject to the provisions of sec. 273B of the Act - As per the provisions of sec. 273B of the Act, the penalty u/s 272A(2) is not imposable if the assessee proves that there was reasonable cause for the said failure - the “reasonable cause” has to be examined from the point of view of a common man with reasonable mind - While dealing with the appeals relating to the penalty levied u/s 271C of the Act, the financial crisis faced by the assessee coupled with the fact of no staffs and lack of help from Chartered Accountant may be considered to be reasonable cause - The assessee has offered identical explanations for non-furnishing of annual return prescribed in sec. 206 of the Act in time - the assessee did not file the annual return for all the four years under consideration - The reason for the same is understandable, i.e., when the assessee did not remit the tax deducted at source, then it would not be in a position to file the annual return prescribed in sec. 206 of the Act - there was reasonable cause for the assessee for the failure to furnish the annual returns for all the years – thus, the order of the CIT(A) is set aside and the ACIT is directed to delete the penalty u/s 271A(2)(c) – Decided in favour of assessee.
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