TaxTMI 
TaxTMI 
2020 (10) TMI 659
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....y. As grounds raised in all these three appeals are similar, for convenience we are reproducing below the grounds raised by Shri Jitendra Sharma in Appeal No.500/Ind/2018; Ground-I 1. On the facts and in the circumstances of the case and in law, the Commissioner of Income Tax (Appeals)-13, Ahmedabad ("CIT(A)") erred in exparte dismissing the appeal of the assessee for non prosecution and thereby confirming the addition made by the Assessing Officer. 2. He failed to appreciate that the notice of hearing was not served on the appellant and the appellant had himself requested for early hearing which remained unresponded. 3. Accordingly, the appellant prays that the said exparte order of learned CIT(A) being in violation of principles of natural justice be set aside and restored back for fresh hearing with adequate opportunity of hearing. Ground-II 1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming the penalty under Section 271C of the Act amounting to Rs. 515000/- 2. The appellant prays that the said penalty be deleted. Ground-III 1. On the facts and in the cir....
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....tax he deducted tax @20.6% u/s 195 of the Act and deposited the due amount with the applicable interest. But this submission of the assessee could not satisfy the Ld. A.O and he proceeded to levy penalty at Rs. 5,15,000/- in each case for the default of wrong deduction of tax at source. Aggrieved assessee preferred appeal before Ld. CIT(A) but could not succeed as the reasonable cause mentioned by the assessee did not find any favour by the lower appellate authority. 6. Now all the three assessee(s) are in appeal before the Tribunal challenging the finding of Ld. CIT(A) confirming the levy of penalty u/s 271C of the Act at Rs. 5,15,000/- in each case for the default committed by the assessee(s) for wrong deduction of tax at source. 7. Ld. Counsel for the assessee referred to the paper book running from page 1 to 25 and relied on following written submissions :- 1. The Appellant is an individual and had purchased an immovable property in the year 2014-15 and had deducted the tax of the seller under Section 194IA of Act at the rate of one percent of the sale consideration and filed the TDS return on the date of deduction as prescribed. 2. The Assessee did not ....
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.... raised by the department and deposited balance TDS along with interest levied thereon. 8. Propositions a. No penalty should be levied since there was deduction of tax under a different section being 194IA instead of Section 195 of Act bonafidely as both sections apply on same transactions. b. The deductor who is an individual common person was not knowing he residential status of seller being NRI (which has still not been established based on Section 6 of the Act) nor he was aware about different TDS provisions of Section 195 and acted as per common knowledge to deduct 1% TDS under section 194IA of the Act. c. As regards the observation of CIT(A) that ignorance of law is no excuse it is submitted there is no such maxim known to law. Your kind attention is invited to decision of Supreme Court in case of Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh [1979] 118 ITR 326 wherein it was observed that there is no presumption that every person knows the law. It is often said that everyone is presumed to know the law, but that is not a correct statement; there is no such maxim known to the law. d. Penalty under Section 271C of ....
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....o the payment made by person being a transferee to the respective transferer if the consideration for transfer of immoveable property is Rs. 50 lakhs or more, in the instant case all the three assessee(s) individually were paying the consideration of Rs. 25 lakhs only (which is less than Rs. 50 lakhs) as mentioned in Section 194IA) of the Act but still being at a safer side they deducted tax at source @1% of the purchase consideration and deposited it. 12. We further observe that subsequently when proceedings were carried out u/s 201(1)/201(1A) r.w.s. 195 of the Act and respective assessee(s) were brought to the notice that the seller is a Non Resident Indian they bonafidely deducted the TDS @20.6% (Tax + surcharge) of Rs. 5,15,000/- each on the payment of Rs. 25 lakhs and also paid interest at Rs. 1,03,000/- for the delay and in total all the three assessee(s) they deposited Rs. 6,18,000/- each before the conclusion of the proceedings and thus no demand was payable. 13. However Ld. A.O further initiated the proceedings u/s 271C for levy of penalty at Rs. 5,15,000/- in each of the case for low deduction of tax. Now the short issue remains is whether in these given circumstanc....
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.... depositing the same immediately on coming to know the same would constitute reasonable cause. The assessing officer also gave a finding that ignorance of law is no excuse but simultaneously it is also true that there is no presumption that everyone knows the law. What is important is the fact that the moment a person comes to know that he has committed a mistake and being a person of reasonable intelligence and ordinary prudence if he takes the corrective measures to rectify the same immediately, then it cannot be said that he acted deliberately with complete disregard to law. There is also considerable force in the contention of the assessee that non-recording of satisfaction by assessing officer in the order under section 201(1) with regard to the fact that case is fit for levy of penalty makes the levy of penalty void ab initio. In view of above discussion and in the totality of facts and circumstances of the case we are of the considered opinion that the findings of learned Commissioner of Income Tax (Appeals) in his appellate order are in accordance with law and therefore, we uphold the order of learned Commissioner of Income Tax (Appeals). Thus, all grounds of revenue in all....
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....on-recording of satisfaction by assessing officer in the order under section 201(1) with regard to the fact that case is fit for levy of penalty makes the levy of penalty void ab initio. In view of above discussion and in the totality of facts and circumstances of the case we are of the considered opinion that the findings of learned Commissioner of Income Tax (Appeals) in his appellate order are in accordance with law and therefore, we uphold the order of learned Commissioner of Income Tax (Appeals). Thus, all grounds of revenue in all appeals are rejected. 15. From going through the above decision of Hon'ble Tribunal and examining the facts of instant case we find that this decision is squarely applicable on the facts of the instant case wherein also the assessee in addition to the tax deducted u/s 194(1A) @ 1% in addition also deposited deducted and deposited TDS u/s 195 of the Act along with the interest for delay. 16. Even otherwise in our view the provisions of Section 273B of the Act "the penalty is not to be imposed in certain cases" is applicable on the assessee as Section 273B of the Act contemplates that no penalty shall be imposable on the persons for any viol....