TaxTMI 
TaxTMI 
2015 (1) TMI 1455
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..... 3. The Ld. AR submitted that the assessee has filed appeals against the orders levying penalty u/s. 271C of the I.T. Act in respect of the Financial Years 2008-09 to 2011-12 aggregating to Rs. 27,80,002/- as shown below: A.Y. Amount 2008-09 Rs. 11,16,260 2009-10 Rs. 2,16,289 2010-11 Rs. 9,46,936 2011-12 Rs. 5,00,517 Rs. 27,80,002 3.1 The Ld. AR submitted that there was short delay in remittance of TDS and TDS could not be deposited before the date due to stringency of funds. However, the Assessing officer did not accept the explanation of the assessee and held that tax deducted at source and retained by the assessee was not the money of the assessee. According to the Assessing officer....
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.... the last quarter was concerned, the Ld. AR submitted that the number of delay ranged from 19 day onwards which was shown separately in the tabulation. 3.4 The Ld. AR submitted that for each of these quarters for the delay in remittance, interest under section 201(1A) was charged and such interest was also remitted before initiation of penalty proceedings u/s. 271C of the I.T. Act. 3.5 According to the Ld. AR, the action under section 271C was belated by almost four years. The order imposing penalty was passed on 15/11/2013 with respect to all the four Financial Years. The Ld. AR submitted that the delay in remitting the TDS was due to severe financial difficulties. For this, she relied on the judgment of the Kerala High C....
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....es Ltd. (1989) (193 ITR 471). 3.7 The Ld. AR also submitted that the assumption made by the Assessing Officer in the order levying penalty that the tax deducted at source and retained by the assessee was not the money of the assessee was not correct and it is not as if the assessee retained the TDS amount without remitting the same to the Government Treasurary. According to the Ld. AR, the payments were first made to the customers as and when funds came in, as otherwise the business itself would come to a standstill without payment to the customers. However, according to the Ld. AR, sufficient care was taken to see that the delay was unavoidable. According to the Ld. AR, there was reasonable cause for the delay because even before ....
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....essee deductor is constantly delaying deposit of tax deducted at source to the Central Government Account, without any satisfactory explanation for the same. 4.1 According to the Ld. DR, it has been noticed in a large number of cases that the deductors have been retaining TDS amount even for more than a year and has been utilizing such amount for business purposes and that once a cycle is maintained, the deductor can get away with retaining the amount on a regular basis year after year. Further, the Department is receiving grievance petitions from deductees regarding non-credit of TDS, due to non deposit/delay in deposit of tax deducted and/or non-filing of quarterly statements under the provisions of the Income Tax Act and Rules. 4.2....
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....from 1.4.1989 providing for penalty for failure to deduct or remit tax under Chapter XVIIB, sub-section (2) of section 115(O) and section 194B of the Act. The relevant portion of section 271C is extracted below: "Penalty for failure to deduct tax at source u/s. 271C (1) If any person fails to: (a) deduct the whole or any part of the tax as required by or under the provisions of Chapter XVIIB; or (b) pay the whole or any part of the tax as required by or under: (i) sub-section (2) of section 115O; or (ii) the second proviso to section 194B, then, such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct or pay as aforesaid. ....
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....emit or deduct the tax in whole or any part thereof, will attract provisions of penalty under section 271C of the I.T. Act. Being so, the assessee cannot re-argue the same issue before us. The facts in this case being identical to that one considered by the High Court of Kerala in the case of US Technologies International (P) Ltd., cited supra, we are inclined to hold that the assessee is liable for penalty not only in terms of provisions of Chapter XVIIB but also for non payment of tax deducted at source in time. 9. The Ld. AR made a plea before us that because of financial problem, the assessee failed to remit or deduct tax to the Government. However, there is no iota of evidence to suggest that the assessee is suffering from financial....