M/S Pvr Ltd., Lucknow vs Department Of Income Tax

These appeals are preferred by the Revenue against the respective orders of the ld. Commissioner of Income-tax deleting the penalty levied under section 271C of the Income-tax Act, 1961 (hereinafter called in short "the Act").

2. During the course of hearing, the ld. counsel for the assessee has invited our attention to the penalty order with the submission that the Assessing Officer has simply passed an order under section 201(1A) of the Act levying interest on the delayed payment of tax by the deductee- assessee. No order was passed under section 201(1) of the Act holding the assessee to be in default, as the assessee has already made payment of tax deducted at source though the payment was delayed. The ld. counsel for the assessee has further contended that since there was no order under :-2-:

section 201(1) of the Act holding the assessee to be in default, penalty under section 271C of the Act cannot be levied. In support of his contention, the ld. counsel for the assessee has invited our attention to various judicial pronouncements and circular issued by the CBDT. The ld. counsel for the assessee has also placed reliance upon the order of the ld. CIT(A) who has discussed the issue of levy of penalty in such circumstances in the light of various judicial pronouncements.

3. The ld. D.R. did not dispute the factual aspect. She has simply placed reliance upon the order of the Assessing Officer.

4. Having carefully examined the orders of the lower authorities in the light of the rival submissions, we find that undisputedly no order was passed under section 201(1) of the Act holding the assessee to be in default. The Assessing Officer has passed an order under section 201(1A) of the Act charging interest on the delayed payment of tax. We have also carefully perused the relevant provisions of section 271C of the Act and we find that the penalty under section 271C of the Act can only be levied where the assessee fails to deduct the whole or any part of the tax as required by or under the provisions of Chapter XVII-B or pay the whole or any part of the tax as required by or under (i) sub-section (2) of section 115-O; or (ii) the second proviso to section 194B.

5. Our attention was also invited to the judgments of the Hon'ble Apex Court in the case of Coca Cola Beverage P. Ltd. vs. CIT, 293 ITR 226 (SC) and the Hon'ble jurisdictional High Court in the case of Jagran Prakashan Ltd. v. Deputy Commissioner of Income-tax (TDS) 345 ITR 228 (Alld) and also various orders of the Tribunal, in which it has been held that wherein TDS was paid by the assessee or required tax was paid by the deductee, the assessee should not held to be in default. Only interest on delayed payment under section 201(1A) of the Act can be charged. In the light of these decisions where the assessee has made payment of TDS though late, :-3-:

he cannot be held to be in default and there is no question of levy of penalty under section 271C of the Act. We have carefully perused the order of the ld. CIT(A) and we find that the ld. CIT(A) has adjudicated the issue in the light of various judicial pronouncements. Since no infirmity has been pointed out in the order of the ld. CIT(A), we confirm the same. Accordingly, the appeals of the Revenue are dismissed.

6. In the result, appeals of the Revenue are dismissed.

Order was pronounced in the open court on the date mentioned on the captioned page.

Sd/- Sd/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER

DATED:10th July, 2015 JJ:0107

Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR Assistant Registrar