TMI Blog2005 (11) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... e parties and have also perused the material on record. 3. In all these appeals following common issues are involved : "1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the revised return filed by the assessee was a valid return. 2. On the facts and circumstances of the case while deleting the penalty under section 271C, the learned CIT(A) failed to appreciate that the revised return was filed by the assessee after the default in deduction of tax at source was detected and brought to the notice of the assessee by the Assessing Officer. 3. On the facts and in the circumstances of the case the CIT(A) erred in holding that the provisions of section 271C are not applicable to as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whole amount of tax under section 192 of the Act along with the interest payable under section 201(1A). It was also contended that initially assessee treated certain allowances as exempt under bona fide belief and hence, did not deduct the tax at source on the same. However, on being professionally advised to deduct the tax the assessee voluntarily deposited the same along with the interest thereon. The Assessing Officer however held that the mistake of law and facts could not be made available as defence in any penal proceedings, either civil or criminal. The Assessing Officer further held that the assessee has himself admitted its failure to deduct the tax on the payments given to its employees by not filing the appeal against the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant cannot be visited with two or more penalties which are identical in effect and belong to the same genus. Section 271C and section 221(1) relate to penalties belonging to the same genus. Reliance is placed on a decision of ITAT Calcutta in the case of ITO v. Titagarh Steels Ltd. [2001] 79 ITD 532 . ( iii ) The penalty under section 271C is not an automatic consequence of non-deduction or short deduction of tax at source, since section 273B, inter alia , provides that penalty under section 271C cannot be imposed if the person concerned can demonstrate that there was a reasonable cause for his failure referred to in section 271C. When an explanation is offered by the person concerned, it is the duty of an officer to objectively co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) further considered the findings of the Assessing Officer and submissions made by the assessee and held that there was no prohibition against the filing of revised annual salary return and, therefore, the revised returns filed by the assessee before passing an order under section 201(1) of the Act were valid returns. The learned CIT(A) further held that penalty under section 271C could be levied only if there was a failure to deduct the tax at source and since in the instant case no demand was raised on account of short deduction of tax in the order passed under section 201 of the Act, therefore, the provisions of section 271C were not applicable to the facts of the case and accordingly, be cancelled the order passed under section 271C f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to contend that misconception of legal provisions could not be taken as defence to avoid the penalty under section 271C of the Act. 9. The learned counsel appearing on behalf of the assessee, besides reiterating the submissions made before the learned CIT(A) and putting a strong reliance on the appellate order, contended that there was a reasonable cause in the form of bona fide belief that impugned reimbursement/allowances were not taxable in the hands of the employees in view of different judicial decisions existing at that point of time. It was further contended that the assessee filed revised returns voluntarily and deposited the short deducted tax on its own and therefore, the conduct of the assessee was not to violate the law in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel that at this point only the assessee took professional advice relating to deduction of tax at source and when advised to deduct the tax on impugned payments the assessee paid the short deducted tax and interest thereon voluntarily and filed revised annual salary returns for all four years. The Assessing Officer levied the penalty mainly on the ground that the deposits of the short deducted tax was made after initiation of the proceedings and therefore, the same was in voluntary and also relied on the principle that ignorance of law was no excuse. From the facts of the case it is observed that the assessee filed return for all years within the time and once the return for first year was accepted as such, the belief on the part of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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