2004 (5) TMI 53

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... these matters together and at length. At the initial stage when the appeals were heard the following common question was raised by the Revenue: "Whether the Tribunal was right in law in cancelling the penalty imposed under section 271C of the Income-tax Act, 1961?" We shall consider this in the light of the facts in I. T. A. No. 17 of 2003. The respondent-M/s. Itochu Corporation is a company incorporated in Japan having its liaison office in Delhi for business activities. Japanese employees were deputed to work in India. The remuneration was paid to these employees on the basis of the respondent's worldwide compensation policies for rendering services in India. It transpires that the assessee filed its annual return of salary in F....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d a reasonable cause which is covered by the provisions of section 273B." The Tribunal also held in para. 27 as under: "After examining the ratios of the various case laws, referred to above and the facts of this case, we are of the opinion that there was a reasonable cause for not deducting the tax at source on account of emoluments paid to the expatriate employees outside India and hence no penalty under section 271C is exigible by the alleged default." The Commissioner of Income-tax (Appeals) in his order dated December 21, 2000, in para. 8 has recorded in detail the submissions made by learned counsel which have been considered by the Appellate Tribunal whereupon the conclusion has been arrived at which we have referred to here....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....clusions are perverse based on conjectures or surmises and/or have been arrived at without consideration of relevant material and/or taking into account irrelevant material, there is no scope for interference. Reasonable cause, as applied to human action, is that which would constrain a person of average intelligence and ordinary prudence. The expression 'reasonable' is not susceptible of a clear and precise definition; for an attempt to give a specific meaning to the word 'reasonable' is trying to count what is not number and measure what is not space. It can be described as rational according to the dictates of reason and is not excessive or immoderate. The word 'reasonable' has in law the prima facie meaning of reasonable with regard to ....