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2016 (6) TMI 739 - KERALA HIGH COURT

2016 (6) TMI 739 - KERALA HIGH COURT - [2016] 385 ITR 51 - Penalty under Section 271C - non deduction of tds as required by them under Section 194A - Held that:- When there is a failure on the part of the assessee to deduct tax at source in violation of Section 194A, the penal provisions of Section 271C are attracted. In such a case, the only way out for the assessee is to take the benefit of Section 273B by establishing that there was reasonable cause justifying their failure to comply with Sec .....

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the issue by putting the burden on the revenue, which is evident from the extracted portion of the Annexure B order passed by the Commissioner. The order of the Tribunal shows that the Tribunal has given totally different reasons which are mere surmises and assumptions made by it and are not founded on any materials that were made available by the assessee. All this therefore show that the assessee had not established a reasonable cause, as contemplated in Section 273B to resist an order of pen .....

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l, the Revenue is calling in question the order passed by the Income Tax Appellate Tribunal, Cochin Bench in ITA No. 398/2002 for the assessment year 1998-1999. By the said order, the Tribunal upheld the order passed by the Commissioner of Income Tax (Appeals), by which the Commissioner cancelled the penalty levied under Section 271C of the Income Tax Act. It is in this background, this appeal is filed with the following questions of law: 1. Whether, on the facts and in the circumstances of the .....

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273B should not the Tribunal have confined to the causes urged/repeated before the assessing officer/Commissioner of Income Tax (Appeals) and is not consideration of new reasons and sustaining the order of CIT(A) on new reasons without jurisdiction, illegal and vitiated? 4. Whether, on the facts and in the circumstances of the case, are not the reasons urged (para 4 of the order of the Tribunal) in support of 'reasonable cause' under Section 273B and considered and relied on by the CIT ( .....

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he Joint Commissioner? 2. On 03.06.2016, we heard the senior counsel for the revenue. On account of absence of the counsel for the assessee, the case was adjourned to 06.06.2016, when also the counsel for the assessee was absent. Therefore, we proceed to dispose of the appeal on merits. 3. The assessee is a firm engaged in money lending. From the audit report concerning the assessment year in question, it was found that the assessee had not deducted tax at source as required under Section 194A o .....

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ce of reasonable cause in this case, I am of the view that the penalty cannot be sustained legally. Considering all these aspects, I am of the view that the appellant's case deserves a lenient treatment in respect of the bonafide mistake committed by it. The penalty levied u/s 271C is accordingly cancelled. 4. It was this order which was confirmed by the Tribunal. 5. Having heard the Senior Counsel for the revenue and also going through the orders passed by the statutory authorities, we find .....

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