TMI Blog2015 (1) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... iled to discharge the initial burden placed upon it – thus, the order of the CIT(A) is upheld – Decided against assessee. Orders passed u/s 201(1) & 201(1A) – Held that:- The assessee could not controvert the findings given by the ITO(TDS) except pointing out certain computational error - Hence the ld CIT(A) has confirmed the orders subject to verification of the errors pointed out by the assessee - the assessee did not furnish any material for giving reason to interfere with the orders of CIT(A) - Though the assessee has submitted that the recipients have paid the tax on the income received by them, yet no material was furnished to substantiate the same – the order of the CIT(A) is upheld - Decided against assessee. Levy of penalty u/s 271C – Held that:- The financial problem, i.e., lack of money may be considered reasonable cause, since the financial problem has made the staffs and Chartered Accountant to leave the assessee company - Hence, there is merit in the submission of the assessee that it did not get proper assistance to comply with the tax laws - the assessee has shown that there was reasonable cause for his failure to deduct tax at source – the order of the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... post. Hence, we proceed to dispose of these appeals ex-parte, without the presence of the assessee. Since all these appeals were heard together, they are being disposed of by this common order, for the sake of convenience. (A) ITA No. 2039, 2041 2049/Mum/ 2013(AYs:2003-04 to 2005-06): 3. We shall first take up the appeals relating to the quantum assessment orders passed u/s 143(3) r.w.s 147 of the Act and they pertain to the assessment years 2003-04 to 2005-06. The facts relating to the case are stated in brief. The assessee company is a producer of feature films. The TDS section of the department conducted a survey operation u/s 133A of the Act at the business premises of the assessee on 03-08-2006. At the time of survey, it was noticed that the assessee company did not file its return of income. The TDS officials did not find any audited books of account also. Further, it was noticed that the assessee did not pay the tax deducted by it at source. The TDS officials intimated these details to the assessing officer and accordingly the assessing officer re-opened the assessments relating to the assessment years 2003-04, 2004-05 and 2005-06. During the course of assessment pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors and the genuineness of transactions. In the instant cases, we notice that the assessee has failed to discharge the initial burden placed upon it. Under these circumstances, we do not find any reason to interfere with the order passed by Ld CIT(A) in all the three years referred above. (B) ITA Nos.2038, 2042, 2045 2053/Mum/2013(AYs :2003-04 to 2006-07) : 5. We shall now take up the appeals relating to the orders passed u/s 201(1) 201(1A) of the Act for assessment years 2003-04 to 2006-07. As stated earlier, the TDS officials noticed that the assessee did not remit the tax deducted by it at source. Further the assessee did not deduct tax at source in respect of certain payments. Hence, the ITO (TDS) passed orders raising following demand:- Assessment Year Demand u/s 201(1) Interest u/s 201(1A) 2003-04 3,36,938 1,62,984 2004-05 83,372 35,235 2005-06 6,04,451 1,81,884 2006-07 76,373 15,063 The assessee challenged the orders passed by the ITO(TDS) by filing appeals before Ld CIT(A), but could not succeed. Henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty for failure to remit the tax deducted at source also. However, a careful reading of the provisions of sec. 271C would show that the penalty under that section is leviable for failure to deduct tax at source under the provisions of Chapter XVII-B of the Act. However, the penalty for failure to remit the whole or part of tax is leviable only if such failure is related to sec. 115-O(2) relating to dividends and the second proviso to sec. 194B of the Act relating to lottery winnings. In the instant cases, the failure to remit the TDS amount is not related to the items referred to sec. 115O(2) or sec. 194B of the Act. Hence the penalty levied by the Additional Commissioner for failure to remit the TDS amount is liable to be set aside, as the same is not in accordance with the mandate of sec. 271C of the Act. 9. The provisions of sec. 271C is subject to the provisions of sec. 273B of the Act. As per the provisions of sec. 273B of the Act, the penalty u/s 271C is not imposable if the assessee proves that there was reasonable cause for the said failure. It is well settled proposition that the reasonable cause has to be examined from the point of view of a common man with reasona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the provisions of sec. 273B of the Act. As per the provisions of sec. 273B of the Act, the penalty u/s 272A(2) is not imposable if the assessee proves that there was reasonable cause for the said failure. It is well settled proposition that the reasonable cause has to be examined from the point of view of a common man with reasonable mind. While dealing with the appeals relating to the penalty levied u/s 271C of the Act, we have held that the financial crisis faced by the assessee coupled with the fact of no staffs and lack of help from Chartered Accountant may be considered to be reasonable cause. The assessee has offered identical explanations for non-furnishing of annual return prescribed in sec. 206 of the Act in time. In the instant cases, the assessee did not file the annual return for all the four years under consideration. The reason for the same is understandable, i.e., when the assessee did not remit the tax deducted at source, then it would not be in a position to file the annual return prescribed in sec. 206 of the Act. Hence, we are of the view that there was reasonable cause for the assessee for the failure to furnish the annual returns for all the years under con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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