TMI Blog2008 (8) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... karni for M/s. S. K. R. Prasad for the appellant. M. V. Seshachala for the respondents. JUDGMENT 1. This appeal is by the assessee challenging the concurrent findings of the order passed by the Commissioner of Income-tax (Appeals) and the Income-tax Officer and so also by the Income-tax Appellate Tribunal, Bangalore Bench "C" in I.T.A. No. 712/2001, dated March 22, 2004. 2. The facts relevant to this case are as hereunder: 3. The appellant is a public sector company wholly owned by the State of Karnataka. The appellant-company has entrusted certain contracts to a foreign company known as M/s. Louis Berger International Inc., U. S. A., which is a non-resident company to provide technical know-how and consultancy to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nged by the assessee by filing an appeal before the Commissioner of Income-tax (Appeals), which appeal came to be dismissed on June 15, 2001, Against which, the second appeal filed before the Income-tax Appellate Tribunal also ended in dismissal. Being aggrieved by the concurrent findings of the courts below, the present appeal is filed. 4. After hearing, we have reformulated the questions of law as hereunder: (1) Whether, on the facts and in the circumstances of the case, the Assessing Officer, the Commissioner of Income-tax (Appeals) as well as the Tribunal were justified in passing an order under section 201 of the Income-tax Act, without considering the cause and explanation shown by the appellant. (2) Whether the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttedly, the company is wholly owned by the State of Karnataka. In the explanation, it is contended that the tax was deducted at source based on the actual payment made to the non-resident companies to provide technical know-how and so also, the consultancy charges. Since small amount was spent by the company towards the accommodation and conveyance of the officers of non-resident companies, when they visited India, under the bona fide belief the same was not deducted and there was no intention to violate the provisions of section 195 of the Income-tax Act. We do see some force in the arguments advanced by the learned counsel for the appellant on the first question of law. Since the authorities have not properly considered the explanation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer of the Department and these two sections cannot be read conjunctively, as they are independent and not linked with each other. Section 201 reads as hereunder: "201.(1) If any such person (referred to in section 200) and in the cases referred to in section 194, the principal officer and the company of which he is the principal officer does not deduct (the whole or any part of the tax) or after deducting fails to pay the tax as required by or under this Act, he or it shall, without prejudice to any other consequences which he or it may incur, be deemed to be an assessee in default in respect of the tax: Provided that no penalty shall be charged under section 221 from such person, principal officer or company unless the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are not inter-linked and they cannot be read conjunctively as levy of interest and levy of penalty are two different proceedings. In the circumstances, we have to accept the arguments advanced by the Revenue and reject the contention advanced by the learned counsel for the assessee. Accordingly, we answer question No. 2 in favour of the Revenue and against the assessee. 10. In the result, the appeal is allowed in part. The order passed by the Assessing Officer confirmed by the Commissioner of Income-tax (Appeals) and further confirmed by the Income-tax Appellate Tribunal in levying penalty under section 201 of the Income-tax Act is hereby set aside. The order levying interest under section 201(1A) of the Income-tax Act is hereby c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
