Tribunal upholds penalty for non-remittance of TDS under Section 271C. No reasonable cause found.

The Tribunal dismissed the appeal, affirming that Section 271C applies to both the failure to deduct tax and the failure to remit it to the Government account. No reasonable cause or mitigating circumstances were found for the non-remittance of TDS, upholding the penalty imposed by the Addl. CIT(TDS). The appeal was dismissed, with the Tribunal distinguishing the facts from a relevant case law.

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Issues Involved:
1. Applicability of Section 271C for non-remittance of TDS deducted to the Government account.
2. Assessment of reasonable cause for non-remittance of TDS.
3. Consideration of mitigating circumstances for non-deduction and non-remittance of TDS.

Issue-wise Detailed Analysis:

1. Applicability of Section 271C for Non-remittance of TDS Deducted to the Government Account:
The primary issue in this appeal is whether Section 271C applies to cases where the TDS has been deducted but not remitted to the Government account. The assessee argued that Section 271C applies only to the non-deduction of TDS and not to the non-remittance of TDS. However, the Tribunal, following the judgment of the Hon'ble Kerala High Court in the case of US Technologies International (P) Ltd. Vs. CIT, held that Section 271C applies to both the failure to deduct tax and the failure to remit the deducted tax to the Government account. The Tribunal emphasized that the deductor is duty-bound to remit the deducted taxes into the Government account in compliance with Section 201(1) of the Act.

2. Assessment of Reasonable Cause for Non-remittance of TDS:
The assessee contended that the delay in remittance was due to the periodic preparation of books of accounts and financial constraints. However, the Tribunal noted that no satisfactory explanation was provided either before the Assessing Officer or the CIT(A). The Tribunal cited the case of M/s. Esskay Shipping Pvt. Ltd. Vs. JCIT, where it was held that financial crisis does not constitute a reasonable cause for non-remittance of TDS. The Tribunal upheld the CIT(A)'s observation that the assessee failed to show any reasonable cause for the default committed.

3. Consideration of Mitigating Circumstances for Non-deduction and Non-remittance of TDS:
The assessee also raised an alternative plea regarding mitigating circumstances for non-deduction of TDS, attributing it to an oversight by the Finance Manager. The Tribunal referred to the Hon'ble Kerala High Court's observation that there can be no justifying circumstances for the delay in remittance of deducted tax. The Tribunal found that the assessee did not make immediate payments even after the default was pointed out during the survey, and only made payments after the order under Section 201(1) & 201(1A) was passed. Therefore, the Tribunal concluded that the mitigating circumstances claimed by the assessee were not applicable in this case.

Conclusion:
The Tribunal dismissed the appeal filed by the assessee, affirming that Section 271C applies to both the failure to deduct tax and the failure to remit the deducted tax to the Government account. The Tribunal found no reasonable cause or mitigating circumstances for the non-remittance of TDS and upheld the penalty levied by the Addl. CIT(TDS). The judgment of the Hon'ble Bombay High Court in the case of Reliance Industries Ltd. was found to be not applicable to the present case due to differing facts. Thus, the appeal filed by the assessee was dismissed, and the order of the CIT(A) was upheld.

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