9911796707
TMI Blog2013 (1) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... ake of convenience. 2. Briefly stated facts of the case extracted from ITA No. 8751/Mum/2010 for A.Y. 2007-08 are that the assessee is a charitable trust running hospital and research centre in the city of Mumbai. A survey u/s 133 A of the Income Tax Act, 1961 (the Act) was carried out at the premises of the assessee on 19-9-2007. The A.O. while passing orders u/s 201(1)/201(1A) held the assessee to be an assessee in default u/s 201(1) and levied interest u/s 201(1A) in respect of the following payments: (i) Drug handling charges, (ii) Provision for doctors fees payable & (iii) Equipment hire charges. As far as drug handling charges and TDS on provision of doctor fees are concerned, no penalty has been levied by the A.O. as the ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tarted deducting tax at source on equipment hire charges from the month of September, 2007 onwards. Your goodselves will thus appreciate that it was not an intentional non-compliance of TDS provisions on the part of the assessee. The assessee hospital failed to deduct tax at source on equipment hire charges as it was genuinely under the impression that it was not liable to deduct TDS and there was no malafide intention of the assessee. Hence, no penalty u/s 271C shall be levied on the assessee hospital." However, the A.O. did not accept the assessee's submission and held that the assessee has committed default within the meaning of section 271-C of the Act to the extent of Rs. 10,79,400/- and accordingly imposed the penalty of Rs. 10,79,40 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is nothing on record to prove this contention. (iii) The Ld. CIT(A) has erred on facts and in law in not appreciating the acceptability of the phrase that ignorance of law is not an excuse. (iv) The Ld. CIT(A) has erred on facts and in law in relying on decision of Hon'ble Bombay High Court in the case of CIT vs. Schell International 278 ITR 630 though, the ratio of this decision is not applicable because assessee has failed to prove that it did not know the law". 8. The grounds taken for the A.Y. 2008-09 read as under:- (i) The Ld. CIT(A) has erred on facts and in law in holding that the assessee had a reasonable cause not to deduct TDS without properly appreciating the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... patients and has paid the same amount to the doctors, therefore, the payment made to doctors is in the nature of reimbursement not subjected to TDS. She further submits that the ld. CIT(A) after considering the assessee's submission that the doctors have paid due taxes on the said receipts has allowed relief to the assessee on an appeal filed by the assessee against the order passed u/s 201(1)/201(1A) of the Act. She further submits that since the assessee was under a bonafide belief that the assessee is not liable to deduct the TDS, therefore, the ld. CIT(A) was fully justified in deleting the penalty imposed by the A.O. and, hence, the order passed by the ld. CIT(A) be upheld. 11. We have carefully considered the submissions of the riva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r substitute its own views. The rejection of the application was justified". However, in the case before us it is not the case of the assessee that there was any contravention of fundamental rights or violation of the principles of natural justice or gross unreasonableness or arbitrariness, therefore, the decision relied on by the ld. D.R. is distinguishable and not applicable to the facts of the present case. 13. In Eli Lilly and Co. (India) P. Ltd. (supra) it has been held (Headnote) : " Held, (i) that the payment of home salary abroad by the foreign company to the expatriates had a connection or nexus with their rendition of services in India, and, therefore, such payment constituted income which was deemed to accrue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icient reason for not deducting tax at source. The burden, of course will be on that person to prove such good and sufficient reason". 14. In Hindustan Steel Ltd. vs. State of Orissa (1972) 83 ITR 26 (SC) it has been held (Headnote) : "An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a m ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
