TMI Blog2001 (4) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income-tax, TDS Range: 28 (hereinafter described as "the Assessing Officer") was upheld. A brief reference to the factual aspect would be necessary before we deal with the petitioner's main stand that no penalty was imposable. The petitioner filed its salary tax deducted at source (in short "TDS") return in Form No. 24. On verification of the same, the Assessing Officer found that TDS in respect of one expatriate employee was not deducted properly. Orders under section 201/201(1A) of the Act were passed working out short deduction of tax at Rs.27,68,844. Proceedings under section 271C for short deduction were initiated and penalty amounting to Rs.27,68,844 was imposed. The same was assailed before the Commissioner under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the main question, as to whether there was a liability to deduct tax at source. We feel that the stand of the petitioner is on terra firma. So far as the consideration of the question of existence of reasonable cause is concerned, the two pivotal provisions, i.e., section 271C and section 273B, read as follows: "271C. Penalty for failure to deduct tax at source.-If any person fails to deduct the whole or any part of the tax as required by or under the provisions of Chapter XVII-B, he shall be liable to pay, by way of penalty, a sum equal to the amount of the tax which he failed to deduct as aforesaid. 273B. Penalty notice be imposed in certain cases.--Notwithstanding anything contained in the provisions of clause (b) of sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the non obstante clause is that in spite of the provision or Act mentioned in the non obstante clause, the enactment following it will have its full operation or that the provisions embraced in the non obstante clause will not be an impediment for the operation of the enactment (see Smt. Parayankandiyal Eravath Kanapravan Kalliani Amma v. K. Devi, AIR 1996 SC 1963). Therefore, in order to bring in application of section 271C in the backdrop of section 273B, absence of reasonable cause, existence of which has to be established by the assessee, is the sine qua non. Levy of penalty under section 271C is not automatic. Before levying penalty, the concerned officer is required to find out that even if there was any failure referred to in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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