TaxTMI 
TaxTMI 
2001 (3) TMI 292
X X X X Extracts X X X X
X X X X Extracts X X X X
....of factory building being contract payment. The said payments fell in financial year 1991-92, 1992-93 and 1993-94. While paying the contract sums, the company failed to deduct tax at source as contemplated in s. 194C. The AO accordingly held the company deemed to be an assessee in default by virtue of s. 201 and 201(1A) of the Act. Accordingly, the AO initiated proceedings under s. 201 and 201(1A) of the Act and after giving an opportunity of being heard to the assessee, raised a demand for the failure to deduct tax at source and also charged interest upto 31st Dec., 1996, in respect of the short deduction as per s. 201(1A). The details are as per the chart enclosed with the AO's order. 3. The assessee appealed to the CIT(A) who noted th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ich was rendered on relying upon the facts in the case earlier decided by the same Hon'ble High Court CIT vs. Manager M.P. Co-operative Devp. Bank Ltd. (1982) 31 CTR (MP) 187 : (1982) 137 ITR 230 (MP), in which case the tax deductor had actually deducted the tax, but it was short deducted and the High Court had taken the view that it was not the case that the tax deductor had not deducted the tax at source, but a case where the ITO (TDS) was not satisfied with the various deductions which were taken into consideration at the time of computing the tax payable at source and had raised the demand for the remaining tax. He further submitted that on the facts and in the circumstances of the case and in law, the CIT(A) failed to appreciate that t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....herefore, his orders have no legs to stand. Accordingly, I reverse the findings of the CIT(A) and restore those of the AO. 7. In the result, the appeals are allowed. ITAs No. 910 to 912/Pn/1998 8. The common grievance projected in these appeals is that the learned CIT(A) is not justified in cancelling penalties levied by the AO under s. 272A(2)(c) of the Act. 9. The ITO(TDS) Kolhapur noted that the assessee-company had failed to furnish annual returns in Form No. 26C under s. 206 of the Act. He accordingly issued show-cause notice under s. 274 r/w s. 272A(2)(c) of the Act and after giving an opportunity of being heard, levied the following penalties: Asst. yrs. Penalty 1991-92 13,284 1992-93 13,776 1993-94 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Court cannot accept such plea as reasonable cause. According to the learned Departmental Representative, the CIT(A) misdirected himself in deleting the penalties levied by the AO on the ground of reasonable cause and accordingly because one default (failure to deduct tax) cannot be reasonable cause for another default (failure to comply with s. 206 of the Act). 12. S.P. Joshi, the learned counsel for the assessee, relied upon the order of the CIT(A). 13. I have considered the rival submissions and perused the facts on record. In my opinion, the CIT(A) has tried to rewrite the law by holding that when TDS was not deposited, the annual TDS return could not have been filed because details about the payment of TDS were required to be....