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TMI Blog2017 (5) TMI 1709X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 206C(1) of the Act. 2. The grounds of appeal raised by the Revenue are as follows : (i) The Ld.CIT(A) is erred in deleting penalties u/s 271CA r.w.s. 274 of the I.T. Act, 1961 for the A. Y. 2012-13 even the Ld. CIT(A) himself hold that goods sold by the appellant are covered in the definition of "Scrap" in the terms of the Explanation (b) to the section 206C of the I.T. Act, 1961 and its sale is liable for TCS not only at the first stage but also at each stage of sale as provided in section 206C of the I. T. Act, 1961. (ii) The Ld.CIT(A) is erred in deleting penalties 271CA r.w..s. 274 of the I.T. Act, 1961 ignoring that the assessee had not complied statutory provisions either by collecting tax or by collecting form No. 27C fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase are that the assessee is an individual. He is running the business of purchase and sale of old iron scrap. Though on purchase of the scrap, the tax was being collected by the parties from whom the assessee had made purchases, yet on the sale of this scrap, the assessee had neither collected tax at source nor deposited the same into government account, as required under section 206C(1) of the I. T. Act, 1961. Therefore, penalty proceedings under section 271CA r.w.s. 274 of the I.T. Act, 1961 were initiated. The Assessing Officer issued show cause notice on as to why penalty under section 271CA of the Income Tax Act may not be imposed as the assessee had failed to collect TCS on sale of scrap during the financial year 2011-12 as required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he judgment of the I.T.A.T., Bangalore Bench in the case of Wipro GE Medical System Ltd. (2005) 24 CCH 001 (Bang Trib.) and held that since taxes had been paid by the buyers no loss had been caused to the exchequer on account of assessee's default in not collecting TCS and this constituted reasonable cause for not levying penalty. Thus, the Ld. CIT (Appeals) deleted the penalty levied by the Assessing Officer. 7. Aggrieved by the same, the Revenue has filed the present appeal before us. 8. During the course of hearing before us, it was brought to the notice of the Bench that on identical set of facts in the own case of the assessee, this Tribunal has upheld the order of the CIT(Appeals) deleting the penalty levied u/s 271CA of the Act v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t belief based on reasonable grounds that the goods sold were not scrap. The same constituted reasonable cause for not collecting tax at source even though the Ld. CIT( appeal) did not accept this contention of the assessee on merit. The Hon'ble Delhi High Court in the case of Woodward Governor India Private Limited vs CIT and others 253 ITR 745 has defined reasonable cause as follows: "Reasonable cause" as applied to human action is that which would constrain a person of average intelligence and ordinary prudence. It can be described as a probable cause. It means an honest belief founded upon reasonable grounds, of the existence of a state of circumstances, which assuming them to be true, would reasonably lead any ordinarily prudent and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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