TMI Blog2022 (6) TMI 1160X X X X Extracts X X X X X X X X Extracts X X X X ..... t. After reopening due to Covid pandemic, resort was again closed in the month of March 2020. Therefore, the total accumulated losses as per the books of account as on 31.03.2021 is Rs.32,17,77,436. Only because of these hardships there was delay in remitting the TDS. Therefore, there is reasonable cause as envisaged u/s 273B for the delayed remittance of TDS. Moreover, the assessee had paid the entire TDS amount along with interest on 30.04.2011, much prior to notice u/s 274 r.w.s. 271C of the I.T.Act was issued to the assessee-deductor on 05.03.2013. Therefore, for the aforesaid reasoning and the judgment of Lakshadweep Development Corporation Ltd. [ 2019 (3) TMI 333 - KERALA HIGH COURT] we delete the penalty imposed u/s 271C - Assessee appeal allowed. - ITA No.96/Coch/2015 - - - Dated:- 24-6-2022 - Shri George George K, JM And Shri Laxmi Prasad Sahu, AM For the Appellant : Sri.Thomas Joseph, CA For the Respondent : Smt. J.M. Jamunna Devi, Sr.DR ORDER PER GEORGE GEORGE K, JM : This appeal at the instance of the assessee is directed against CIT(A) s order dated 24.11.2014. The relevant assessment year is 2010-2011. 2. There is a delay of 1 day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 2738 are not applicable in this case by relying on the decision of the Hon'ble High Court of Kerala in the case of US Technology Ltd (2010) 195 Taxman 323 (Ker). However the appellant also has relied on the same decision of Hon.High Court of Kerala by stating that: It is pertinent to point out that the Hon'ble High Court, in the concluding paragraph, has said that failure to remit on account of failure to recover for any reason, whatsoever, then the case cal/s for reduction of penalty, if not waiver. Similarly, recovery and remittance of tax though with delay, but with interest, before detection is certainly a mitigating circumstance for waiver or reduction of penalty. In the same judgement, the Assessing Officer was directed to consider new facts or circumstances that are brought to his notice in view of the Court's observations, or in terms of section 273B of the l.T. Act. The above observations were made by the Hon. High Court with regard to a specific scenario where the failure to remit TDS was due to failure to recover from the deductee for any reason, Whereas in the appellant's case the deductees were mainly its own directors and the delay in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed AR relied on the Full Bench judgment of the Hon ble jurisdictional High Court in the case of Lakshadweep Development Corporation Ltd. v. Addl.CIT Anr. Reported in (2019) 411 ITR 213 (Ker) (FB) and reiterated that there is reasonable cause as envisaged u/s 273B of the I.T.Act, and therefore, penalty u/s 271C of the I.T.Act ought to be deleted. 8. The learned Departmental Representative strongly supported the orders of the Income Tax Authorities. 9. We have heard rival submissions and perused the material on record. The Full Bench of the Hon ble Kerala High Court in the case of Lakshadweep Development Corporation Ltd. v. Addl.CIT Anr. (supra) had reversed the judgment of the Hon ble Kerala High Court in the case of US Technology International Private Limited v. CIT (supra) and Classic Concepts Home India Pvt. Ltd. v. CIT reported in (2016) 383 ITR 225 (Ker.). The Full Bench of the Hon ble Kerala High Court had held penalty u/s 271C(1)(b) of the I.T.Act for non-remittance of tax deducted at source will have application only to a limited extent, involving sub-section (2) of section 115-O of the I.T.Act (coming under Chapter XII-D) or covered under the second proviso to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Addl.CIT Anr. (supra) while reversing the Division Bench ruling in the case of U S Technology International Limited (supra), had held that section 273B of the I.T.Act shall be applicable for also the cases covered u/s 271C(1)(b) of the I.T.Act and not confined to section 271C(1)(a) of the I.T.Act. The relevant finding of the Full Bench of the Hon ble Kerala High Court reads as follows:- Section 273B of the Income-tax Act stipulates that no penalty shall be imposed on the person or the assessee, as the case may be, for any failure referred to in the provisions mentioned therein, if he proves that there was reasonable cause for the failure. The said provision has already been extracted. One among the provisions mentioned therein is section 271C . To put it more clear, the whole provision of section 271C is reckoned as such and no segregation has been effected unlike the limited extent of reckoning clause (b) of sub-section (1) of section 271. In other words, clause (b) of sub-section (1) of section 271C (dealing with failure to remit the deducted tax) is not excluded or the benefit is not confined to the instance covered by section 271C(1)(a) alone. Section 273B itself starts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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