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TMI Blog2018 (12) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... is not liable to penalty u/s 271C on the following grounds: i) That the Ld CIT (A) has not considered the various facts before passing the order. ii) That assessee had Bona fide reasons for not deducting TDS. iii) That the assessee had deposited TDS with interest where ever applicable and in another case the deductee has duly deposited due tax by offering full income in its income tax return and the assessment of deductee was completed u/s 143(3) of The Act. iv) That no order u/s 201(1) is passed in assessee's case which shows that assessee is not in default for not deducting TDS. The same has not been adjudicated by the Ld CIT (A). Therefore the basis taken and method adopted by the assessing officer for imposing penalty u/s 271 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficate u/s 197(1) of the Income Tax Act for NIL deduction. The Ld. AR submitted that the assessee Company complied with the provisions of the Act by depositing the TDS where it was due and had added back to its income. The gross amount of expenditure and the receiving entities offered the amount in short income and paid due taxes on it. The Ld. AR further submitted that there is no order u/s 201 (1) was passed by the Assessing Officer which was duly reflected in the order wherein the Assessing Officer held that not passing order u/s 201(1) before initiation of proceedings u/s 271C would make imposition of penalty invalid. The Ld. AR relied upon the decision of Indo Nissin Foods Ltd. Vs. CIT (2004) 3 SOT 495 (Bang), Sahara India Financial C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 SOT 627 (Bang) wherein it is held that where tax has already been paid by the payee no penalty can be levied on the assessee payer for the failure to tax at source. 6. The Ld. DR relied upon the Penalty order u/s 271C and the order of the CIT(A). 7. We have heard both the parties and perused the material available on record. The CIT(A) held as under: "5.8 TPS on interest payable to M/s Moderate Leasing and Capital Services Ltd.: 5.8.1 The appellant had not deducted tax on the interest of Rs. 41,00,515/- payable to this company. The tax deductible on the same was Rs. 9,29,177/-. The appellant has claimed that a 'NIL' deduction of tax certificate had been issued by the department to the deductee on the opening balance. The appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 201(1) has been passed in its case, holding it assessee-in-default, and in the absence of this penalty u/s 271C is not leviable. The appellant has relied on several decisions in support of this claim. " (1) Sahara India Financial Corporation Ltd. Vs. CIT (2009) 30 SOT 149 (Delhi) (2) Indo Nissin Foods Ltd. Vs. CIT (2204) 3 SOT 495 (Bang) 5.8 In all the above mentioned decisions quoted by the appellant, the judicial authorities have held that for non applicability of penal provisions u/s 271C, there has to be a reasonable cause for non deduction of taxes and the reasonable cause will depend on the facts and circumstances in each case. Hence from this analysis it can be reasonably affirmed that the case laws quoted by the appellant i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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