TMI Blog2015 (6) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... 276B, which prescribed punishment for failure to deduct tax at source or after deducting, failure to pay the same to the Govt. It was decided that the first part of the default, i.e. failure to deduct tax at source should be made liable to liable to levy of penalty, while the second part of the default, i.e., failure to pay the tax deducted at source to the Govt. which is a more serious offence, should continue to attract prosecution. The Amending Act, 1987 has accordingly inserted a new section 271C to provide for imposition of penalty on any person who fails to deduct tax at source as required under the provisions of Chapter XVIIB of the Act. The penalty is of a sum equal to the amount of tax which should have been deducted at source. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of penalty proceedings? iii) is not the order Annexure A barred by limitation on account of inordinate delay? iv) should not the Appellate Tribunal have found that the judgment in the case of M/S U.S.Technologies International (P) Ltd.'s case no penalty is exigible u/s 271C when the entire TDS amount and interest was remitted before initiation of penalty proceedings? v) did not the Appellate Tribunal err in law in failing to consider the financial hardship urged before the Statutory Authority and the Appellate Tribunal and consider the reasonable cause urged before it? vi) did not the Appellate Tribunal err in law in failing to appreciate that mere delay in remittance of TDS amount resulted in warranting levy of penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned, what is relevant is paragraph 4 thereof which reads thus: The next question to be considered is the quantum of penalty which in this case is above ₹ 1.1 crore. Counsel for the appellant referred to Section 273B of the Act authorising the officer to waive or reduce the penalty if the defaulted assessee proves that there was reasonable cause for such failure which attracts penalty. Standing Counsel has referred to the findings on cash flow and the application of funds by assessee for other purposes and contended that there was no reasonable cause justifying the failure on the part of the assessee. He has further contended that even for earlier year assessee had remitted recovered tax with delay. In our view, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. 5. Reading of the above paragraph shows that even Section 273B, providing for waiver or reduction of penalty is not attracted in a case where tax is deducted and not remitted to the revenue. Therefore, the judgment in U.S. Technologies International Private Limited (supra), in our view, does not support the case of the appellant in any manner. 6. In so far as paragraph 16.5 of the Circular 551 relied on by the learned counsel for the appellant is concerned, the relevant paragraph reads thus: 16.5 Insertion of a new Section 271C to provide for levy of penalty for failure to deduct tax at source--Under the old provisions of Chapter XXI of the Income Tax Act no penalty was provided for failure to deduct tax at source. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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