TMI Blog2017 (11) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... cal, the Assessing Officer has not initiated proceedings for imposition of penalty under section 271C for A.Y. 2010–11. Thus one can reasonably conclude that the failure on the part of the assessee to deduct tax at source while making such payment was for bona fide reasons, hence, in terms of section 273B of the Act there being a reasonable cause for such failure, no penalty can be imposed under section 271C of the Act - Decided in favour of assessee. - ITA no.4117/Mum./2014, ITA no.4118/Mum./2014, ITA no.2359/Mum./2015 And C.O. no.22/Mum./2015 - - - Dated:- 31-10-2017 - SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER For The Revenue : Shri R.P. Meena a/w Shri Rajesh Kumar Yadav For The Assessee : Shri Dhanesh Bafna a/w Shri Ravi Sawana and Shri Yogesh Indap ORDER PER SAKTIJIT DEY, J.M. These are bunch of three appeals and one cross objection. Appeals by the assessee are against two separate orders passed by the learned Commissioner (Appeals) 12, Mumbai, arising out of proceedings under section 201 of the Income Tax Act, 1961 (for short the Act ) pertaining to assessment years 2010 11 and 2011 12. Whereas, appeal by the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condonation of delay and also made submissions before the Commissioner (Appeals), however, learned Commissioner (Appeals), found the reasons shown by the assessee for delay in filing the appeals unsatisfactory. Relying upon certain judicial precedents learned Commissioner (Appeals) ultimately dismissed assessee s appeals in limine without condoning delay. Being aggrieved of the aforesaid orders of the Commissioner (Appeals) assessee is in appeal before us. The learned Authorized Reprentative(A.R.) reiterating the submissions made before the First Appellate Authority for explaining the reasons for the delay in filing the appeals submitted that the employee who was in charge of the tax affairs of the company was preoccupied with closure of books of account, statutory audit, tax audit, compliances under other legislations. He further submitted, the concerned employee in charge due to his inexperience was unable to comprehend the significance of the orders passed under section 201(1)/201(1A) by the Assessing Officer and the further steps to be taken for filing appeals against those orders. The learned A.R. submitted, learned Commissioner (Appeals) under a misconception that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to be false or untrue. Moreover, by not filing the appeals in time the assessee has not derived any benefit, on the contrary, the turn of events due to nonfiling of appeals in time has been proved to be detrimental to the interest of the assessee, since, assessee s appeals were dismissed in limine without getting decided on merits. It is well settled proposition of law, the expression sufficient cause has to be interpreted liberally. A litigant having a genuine grievance should not suffer on the ground of delay if such delay is for bonafide reasons. When technicalities and substantial justice are pitted against each other, efforts should be made to lean towards justice by deciding the issue on merits. A litigant should not be turned away at the threshold on technical grounds, unless of course there is deliberate negligence on the part of the litigant in approaching the court in time. In aforesaid view of the matter, we are of the considered opinion that the Commissioner (Appeals) was not justified in dismissing the appeals of the assessee on the ground of delay without deciding the issues on merits. At the same time, in our opinion, the assessee should have been more vigilant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty, as observed by the Assessing Officer, the assessee vide letter dated 12.09.2012 requested the Assessing Officer not to impose penalty as demand raised under section 201(1)/201(1A) was disputed by the assessee. The Assessing Officer, however, did not find merit in the aforesaid submission of the assessee and proceeded to pass an order imposing penalty of ₹ 1,02,55,663/ under section 271C of the Act. Assessee challenged the imposition of penalty before the CIT(A). Learned CIT(A) after considering the nature of assessee s default in respect of each of the payments made without complying to the TDS provisions, ultimately restricted the penalty under section 271C of the Act to ₹ 10,57,155/ . In the present appeal the Department has restricted its challenge in respect of imposition of penalty under section 271C in so far as it relates to payment ₹ 10,45,82,003/ being made to overseas entities. 9. The learned Departmental Representative submitted, during assessment proceedings the assessee has not produced any evidence with regard to the nature of payment made to the overseas group entities. Further, learned Departmental Representative submitted, the first App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 643 (Mum.); iii) Balmer Lawrie Co. Ltd. v/s ITO, [2016] 68 taxmann.com 384 (Kol.) 11. We have heard the rival contentions and perused the materials on record in the light of the decisions relied upon. Section 271C empowers the Assessing Officer to impose penalty for failure of the assessee to deduct tax at source. However, as per section 273B no such penalty shall be imposed on a person if he proves that there was reasonable cause for failure to deduct tax at source. Therefore, keeping in view the aforesaid statutory provision it is necessary to examine whether the assessee has made out sufficient cause for non deduction of tax at source on the payment of ₹ 10,45,82,003/ to overseas group entities. As could be seen from the facts on record, such payment was made to the overseas group entities for transportation of goods by them outside India and in their respective countries. Thus, as per the claim of the assessee, not only payments were made to persons outside the territory of India, but, also for services rendered outside the territory of India. It is also the claim of the assessee that the overseas entities have absolutely no presence in India. The aforesaid c ..... 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