2011 (1) TMI 1545

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....ARAGHAVAN (JM) For the Appellant : Shri Sandeep Goyal For the Respondent : Shri Porus Kaka. ORDER PER BENCH : This batch of three appeals by the Revenue and equal number of cross objections by the assessee arise out of the three separate orders passed by the CIT(A) on 24-09-2009 in relation to the asstt. years 1997-98 to 1999-2000 deleting penalty imposed by the AO u/s.271C of the A....

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....the orders u/s.201(1) and 201(1A) in respect of these years, the ld. CIT(A) ordered for the deletion of penalty u/s.271C in these years, against which the Revenue has come up in appeals before us. 3. We have heard the rival submissions and perused the relevant material on record. Shorn of unnecessary details, it is seen that sec. 271C provides for imposition of penalty for failure to deduct tax....

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....mount constitutes the basis for imposition of penalty u/s.271C. In other words, the liability of the assessee u/s.201(1) is a pre-condition for imposition of penalty u/s.271C. If the very order passed u/s.201(1) creating liability has been set aside on account of limitation and there is no possibility of any fresh order being likely to be passed u/s.201(1), there remains no question of the assesse....

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..... The effect of the Tribunal order is that the assessee is not deemed to be in default in respect of any failure to deduct or pay tax at source. In such circumstances, the question of penalty u/s.271C cannot arise. 5. As the ld. CIT(A) has also ordered for the cancellation of penalty u/s.271C on the basis of the Tribunal order, without going into the merits, we are refraining ourselves from con....