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2015 (2) TMI 505 - DELHI HIGH COURTPenalty u/s Section 271 (1) (c) - non deduction of TDS - disallowance of expenditure - Held that:- In the present case, records would indicate that in the course of the proceedings, the enquiries were made from Simoco and its books and returns were apparently scrutinized. These showed that the amounts received by the said concern were reflected. That apart, TDS deductions and deposits were also made in respect of the fees and amounts paid to the Simoco. Furthermore, Simoco was itself owned by third concern, i.e., Phillips UK. The assessee had explained the need to engage Simoco, i.e., that its ability to market its products, was restricted on account of lack of technical expertises and personnel. To substantiate this, it relied upon the response given by various government agencies/users, which had, in fact, stated that Simoco's representative used to visit it on behalf of the assessee. This Court is of the opinion that there can be no doubt that mens rea or willingness is not an essential principal requisite for initiation and imposition of penalty under Section, 271 (1) (c), yet, it is important to notice that the provision itself is discretionary and the assessee is free to furnish the justification for a particular conduct - in the present case, of claiming certain expenditure. That ultimately such expenditure was disallowed on merits could not automatically result in the imposition of a penalty, akin to the AO's approach. Having regard to the materials placed on the record, which were analysed in detail and discussed, this Court is of the opinion that the reasoning and conclusions of the courts below being entirely facts based, do not involve determination of any substantial question of law. The appeal is, therefore, dismissed. - Decided in favour of assessee
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