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2018 (12) TMI 215 - HC - Income TaxPenalty levied u/s 271(c) - entitled to the exemption under Section 194-I in view of Section 44AB - reasonable cause within the meaning of Section 273(B) - Held that:- In a case where the assessee is liable to deduct tax at source and fails to do so, penalty under Section 271(1)(c) is liable to be imposed. The learned Counsel appearing for the assessee has pointed out a decision in Commissioner of Income Tax v. Bank of Nova Scotia, [2016 (1) TMI 583 - SUPREME COURT] wherein had considered the question regarding deletion of penalty under Section 271(1)(c). Going through that decision, it is seen that the Tribunal had allowed the assessee's appeal and cancelled the penalty levied under Section 271(1)(c) on the specific finding that it is necessary to establish that there was contumacious conduct on the part of the assessee to attract penalty under Section 271(1)(c) of the Act. The Hon'ble Supreme Court agreed with the High Court that there was no substantial question of law raised and rejected the challenge. We find that in Union of India v. Dharmendra Textile Processors, [2008 (9) TMI 52 - SUPREME COURT] held that mens rea is not an essential element for imposing penalty for breach of civil obligations. Imposition of penalty for non-compliance of statutory provision, is not a criminal liability, but is only a civil liability and therefore, bad motive on the part of the assessee is not essential to be proved. We are of the considered opinion that the assessee is liable to pay penalty under Section 271(1)(c) of the Act, and therefore, the impugned order of the Tribunal deleting the penalty is not sustainable and hence, set aside. The questions of law are answered in favour of the Revenue
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