TMI Blog2011 (9) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... s been explained, we have no hesitation in setting aside the orders of the authorities below and delete the addition - Decided in favor of the assessee - IT APPEAL NO. 280 (COCHIN) OF 2011 - - - Dated:- 13-9-2011 - N . VIJAYaKUMARAN, SANJAY ARORA, JJ. R. Sreenivasan for the Appellant. Ms. Vijayaprabha for the Respondent. ORDER N. Vijayakumaran, Judicial Member This appeal by the assessee, M/s. Muthoot Bankers, Ernakulam, is directed against the order of the ld. CIT(Appeals)-III, Kochi, dated 28-02-2011 confirming the levy of penalty u/s.271C of the I.T. Act. The assessment year involved is 2004-05. 2. The facts relevant are that the Jt. Commissioner of Income-tax (TDS), Ernakulam came to the conclusion that on ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her-more, interest component on which TDS is attracted was paid only at the end of the financial year. There is no deliberate defiance of law. The assessee was no guilty of conduct or dishonest or acted in conscious disregard. Therefore, it was requested by the assessee that penalty should be dropped. 2.2 On a similar case in the case of its sister concern, the first appellate authority as well as the Tribunal had deleted the penalty imposed u/s.271C. 2.3 However, the Jt.CIT., imposed penalty and this was confirmed by the ld. CIT(Appeals), against which the assessee is in appeal before the Tribunal. 3. The ld. counsel for the assessee elaborately argued the case, but he repeated the same submissions which were advanced before the auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee relied on the decision of the Cochin Bench of the Tribunal in the case of Asst.CIT v. Abutty A.M. [IT Appeal No.889 (Coch.) of 2008 for the assessment year 1998-99 dated 08-07-2011, the decision of the Calcutta Bench in the case of ITO v. Dishergarh Power Supply Co. Ltd. [2001] 71 TTJ 725 and contended that penalty is not automatic on non deduction or short deduction. Further recipient firm paid the tax. There is no loss to the Revenue. All the recipients paid the tax within the time, i.e. in October as envisaged in the statute. Assessee never concealed anything. Payments were disclosed in the return of income filed by the assessee, which conduct will show the bonafide on the part of the assessee. Therefore, the penalty is to be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been deducted from that income. It is as per section 205. 7. Now we will go to the section where the assessee can be deemed to be in default. The obligation to deduct tax at source is imposed with a view to ensure that after interest payment, etc. made in respect of which tax is required to be deducted at source, the State promptly receives the amounts so required to be deducted. The provision providing for charging interest, penalty is to ensure that persons who are required to deduct tax at source in fact comply with that provision and remit the amount of tax to the Government. The person who pays the interest at the time of deduction of tax, etc. is paid is not in any way concerns with the extent of the liability for tax of the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. 9. Further in the assessee's group concern, the Tribunal had an occasion to consider the very same identical issue of levy of penalty u/s.271C in the case of ITO v. Muthoot Financiers [2006] 103 ITD 108 (Cochin), wherein the Tribunal accepted the shelter taken by the assessee u/s.273B of the Act and accepted the reasonable cause for non deduction of tax by relying on the decision of the Hon'ble Delhi High Court in the case of Woodward Governors India (P.) Ltd. v. CIT [2002] 253 ITR 745/[2001] 118 Taxman 433 and the decision of the Apex Court in the case of Hindustan Steel Ltd. (supra). The decision of the Hon'ble jurisdictional High Court in the case of Muthoot Bankers Financiers (supra) Trivandrum, is yet another sister concern of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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