AGILITY LOGISTICS P.LTD, MUMBAI V. DCIT TDS 1(1), MUMBAI

ITA 4117/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8764 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 05-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Permanent establishment; Non-deduction of tax; Reasonable cause; Non compliance; Condonation of delay
• Section: 273B; 133A; 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 4117 / MUM./2014 ( ASSESSMENT YEAR : 20 1 0 11 ) AGILITY LOGISTICS PVT. LTD. A 501/502, POLARIS 5 TH FLOOR, OFF MAROL MAROSHI ROAD MAROL, ANDHRI (E), MUMBAI 400 059 PAN AAACL3717A . APPELLANT V/S DY . COMMISSIONER OF INCOME TAX TDS 1 (1), MUMBAI . RESPONDENT ITA NO. 4118/MUM./2014 ( ASSESSMENT YEAR : 20 11 12 ) AGILITY LOGISTICS PVT. LTD. A 501/502, POLARIS 5 TH FLOOR, OFF MAROL MAROSHI ROAD MAROL, ANDHRI (E), MUMBAI 400 059 PAN AAACL3717A . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX TDS 1(1), MUMBAI . RESPONDENT ITA NO. 2359/MUM./2015 ( ASSESSMENT YEAR : 20 11 12 ) DY. COMMISSIONER OF INCOME TAX TDS 1(1), MUMBAI . APPELLANT V/S AGILITY LOGISTICS PVT. LTD. A 501/502/503, POLARIS 5 TH FLOOR, OFF MAROL MAROSHI ROAD MAROL, ANDHRI (E), MUMBAI 400 059 PAN AAACL3717A . RESPONDENT 2 AGILITY LOGISTICS PVT. LTD. C.O. NO.22/MUM./2015 ( ARISING OUT OF ITA NO. 2359/MUM./2015 ) ( ASSESSMENT YEAR : 20 11 12 ) AGILITY LOGISTICS PVT. LTD. A 501/502/503, POLARIS 5 TH FLOOR, OFF MAROL MAROSHI ROAD MAROL, ANDHRI (E), MUMBAI 400 059 PAN AAACL3717A . CROSS OBJECTOR [ORIGINAL APPELLANT ] V/S DY. COMMISSIONER OF INCOME TAX TDS 1(1), MUMBAI . RESPONDENT [ORIGINAL APPELLANT] REVENUE BY : SHR I R.P. MEENA A/W SHRI RAJESH KUMAR YADAV ASSESSEE BY : S HRI DHANESH BAFNA A/W SHRI RAVI SAWANA AND SHRI YOGESH INDAP DATE OF HEARING 10 .10 .201 7 DATE OF ORDER 31.10.2017 O R D E R PER SAKTIJIT DEY, J.M. THESE ARE BUNCH OF THREE APPEALS AND ONE CROSS OBJECTION. APPEALS BY THE ASSESSEE ARE AGAINST TWO SEPARATE ORDER S PASSED BY THE LEARNED COMMISSIONER (APPEALS) 12, MUMBAI, ARISING OUT OF PROCEEDINGS UNDER SECTION 201 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) PERTAINING TO ASSESSMENT YEAR S 2010 11 AND 20 11 1 2 . WHEREAS, APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE ARE ARISING OUT OF PENALTY PROCEEDINGS UNDER SECTION 271C OF THE ACT FOR THE ASSESSMENT YEAR 2011 12 . 3 AGILITY LOGISTICS PVT. LTD. ITA NO.4117/MUM./2014 ITA NO.4118/MUM./2014 2 . THESE APPEALS BY THE ASSESSEE ARE AGAINST THE CONFIRMATION OF ORDER PASSED UNDER SECTION 201(1) AND 201(1A) OF THE ACT. 3 . BRIEF FACTS ARE, THE ASSESSEE A COMPANY IS ENGAGED IN THE BUSINESS OF FREIGHT FORWARDING, LOGISTICS AND TRANSPORTATION BY AIR, ROAD AND SEA. TO VERIFY ASSESSEES COMPLIA NCE TO TAX DEDUCTION AT SOURCE (TDS) ON VARIOUS PAYMENTS MADE , A SURVEY UNDER SECTION 133A WAS CONDUCTED ON THE ASSESSEE AND ON THE BASIS OF INFORMATION OBTAINED DURING THE SURVEY THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS NOT DE DUCTED TAX AT SOURCE ON PAYMENTS MADE DURING THE YEAR TOWARDS HANDLING FEES FOR AIR EXPORTS, AIR IMPORTS, OCEAN EXPORTS, OCEAN IMPORTS AND CUSTOMS CLEARANCE. ACCORDINGLY , HE INITIATED PROCEEDINGS UNDER SECTION 201(1)/201(1A) BY ISSUING A SHOW CAUSE NO TICE ON 17.02.2012. AS OBSERVED BY THE ASSESSING OFFICER , AFTER INITIAL NON COMPLIANCE THE ASSESSEE FINALLY SUBMITTED ITS REPLY ON 27.03.2012 FURNISHING SOME DETAILS ALONGWITH SAMPLE COPIES OF F OR M 16A EVIDENCING TDS. THE ASSESSING OFFICER , HOWEVER, FOUND THE DETAILS FURNISHE D BY THE ASSESSEE INSUFFICIENT. THUS , HE FINALLY CONCLUDED THAT THE ASSESSEE HAS FAILED TO DEDUCT TAX AT SOURCE ON PAYMENT OF HANDLING FEES OF ` 36,88,76,120/ ON WHICH THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE @2% AS PER SECTION 194C OF THE ACT. THER EFORE, HE 4 AGILITY LOGISTICS PVT. LTD. WORKED OUT THE DEFAULT FOR NON DEDUCTION OF TAX AT ` 73,77,522/ AND RAISED A DEMAND UNDER SECTION 201(1) ALONG WITH INTEREST UNDER SECTION 201(1A) AMOUNTING TO ` 26,55,908/ FOR ASSESSMENT YEAR 2010 11 . SIMILARLY, DEMAND OF ` 82,70,796/ UNDER SEC TION 201 (1) ALONG WITH INTEREST OF ` 19,84,967/ UNDER SECTION 201(1A) FOR ASSESSMENT YEAR 2011 12 WAS ALSO RAISED BY THE ASSESSING OFFICER . BEING AGGRIEVED OF THE ORDERS PASSED UNDER SECTION 201(1)/201(1A) OF THE ACT, ASSESSEE PREFERRED APPEALS BEFORE THE COMMISSIONER ( A PPEALS ). 4 . AT THE TIME OF HEARING OF APPEALS LEARNED COMMISSIONER (APPEALS) FOUND THAT THERE WAS A DELAY OF ALMOST SEVEN MONTHS IN FILING THE APPEALS BY THE ASSESSEE. HE , THEREFORE , CALLED UPON THE ASSESSEE TO EXPLAIN THE CAUSE OF DELAY FOR E NTERTAINING THE APPEALS. THOUGH , THE ASSESSEE FILED AN APPLICATION FOR CONDONATION OF DELAY AND ALSO MADE SUBMISSIONS BEFORE THE COMMISSIONER (APPEALS), HOWEVER, LEARNED COMMISSIONER ( APPEALS) , FOUND THE REASONS SHOWN BY THE ASSESSEE FOR DELAY IN FILING THE APPEALS UNSATISFACTORY. RELYING UPON CERTAIN JUDICIAL PRECEDENTS LEARNED COMMISSIONER (APPEALS) ULTIMATELY DISMISSED ASSESSEES APPEAL S IN LIMINE WITHOUT CONDONING DELAY. BEING AGGRIEVED OF THE AFO RESAID ORDER S OF THE COMMISSIONER (APPEALS) ASSESSEE IS IN APPEAL BEFORE US. THE LEARNED A UTHORIZED R EPRENTATIVE(A.R.) REITERATING THE SUBMISSIONS MADE BEFORE THE FIRST 5 AGILITY LOGISTICS PVT. LTD. APPELLATE AUTHORITY FOR EXPLAINING THE REASONS FOR THE DELAY IN FILING THE APPEALS SUBM ITTED THAT THE EMPLOYEE WHO WAS IN CHARGE OF THE TAX AFFAIRS OF THE COMPANY WAS PREOCCUPIED WITH CLOSURE OF BOOKS OF ACCOUNT, STATUTORY AUDIT, TAX AUDIT, COMPLIANCES UNDER OTHER LEGISLATIONS. HE FURTHER SUBMITTED, THE CONCERNED EMPLOYEE IN CHARGE DUE TO HI S INEXPERIENCE WAS UNABLE TO COMPREHEND THE SIGNIFICANCE OF THE ORDERS PASSED UNDER SECTION 201(1)/201(1A) BY THE ASSESSING OFFICER AND THE FURTHER STEPS TO BE TAKEN FOR FILING APPEALS AGAINST THOSE ORDER S . THE LEARNED A.R. SUBMITTED, LEARNED COMMISSIONER (APPEALS) UNDER A MISCONCEPTION THAT THE ASSESSEE WAS REPRESENTED BY A PR OFESSIONAL CHARTERED ACCOUNTANT FIRM, I.E. PRICE WATER HOUSE COOPER PVT. LTD. (PWC) HAS REFUSED TO CONDONE DELAY. THE LEARNED A.R. SUBMITTED, PWC HAS ONLY AUDITED THE ACCOUNTS OF TH E COMPANY AND NEVER REPRESENTED THE ASSESSEE BEFORE THE ASSESSING OFFICER. HE SUBMITTED, IN THE PROCEEDINGS BEFORE THE ASSESSING OFFICER ASSESSEE WAS REPRESENTED THROUGH ITS EMPLOYEES ONLY. THE LEARNED A.R. SUBMITTED, BY NOT FILING THE APPEAL S IN TIME THE ASSESSEE HAS NOT GAINED ANY ADVANTAGE , RATHER , IT HAS BEEN PUT TO A DISADVANTAGEOUS POSITION. HE SUBMITTED, THE EXPRESSION SUFFICIENT CAUSE HAS TO BE INTERPRETED LIBERALLY TO SUBSERVE THE CAUSE OF JUSTICE. IN SUPPORT OF HIS CONTENTION THE LEARNED A.R. RE LIED UPON THE DECISION OF THE HONBLE 6 AGILITY LOGISTICS PVT. LTD. SUPREME COURT IN THE CASE OF N. BALAKRISHNAN V/S. M. KRISHNAMOORTHY IN JUDGEMENT DATED 03.09.1998. 5 . THE LEARNED D EPARTMENTAL R EPRESENTATIVE(D.R . ) SUPPORTING THE ORDER OF THE CIT(A) SUBMITTED, THE ASSESSEE HAVING NOT SHOWN REASONABLE CAUSE FOR DELAY IN FILING THE APPEALS THE FIRST APPELLATE AUTHORITY WAS JUSTIFIED IN DISMISSING ASSESSEES APPEALS ON THE GROUND OF DELAY. 6 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD IN THE LIGHT OF THE DECISION RELIED UPON. UNDISPUTEDLY , AS PER ASSESSEES OWN ADMISSION THERE WAS A DELAY OF 217 DAYS IN FILING THE APPEALS BEFORE THE COMMISSIONER ( A PPEALS ). THE CAUSE OF DELAY AS EXPLAINED BY THE ASSESSEE BEFORE COMMISSIONER (APPEALS) AS WELL AS BEFORE US THROUGH AN AFFIDAVIT FILED AND ALSO IN THE SUBMISSIONS MADE IS , DUE TO THE FACT THAT THE CONCERNED EMPLOYEE IN CHARGE OF TAX AFFAIRS WAS PREOCCUPIED WITH THE CLOSURE OF BOOKS OF ACCOUNTS, A UDIT, COMPLIANCES, ETC. AND FURTHER DUE TO HIS INEXPERIENCE HE WAS UNABLE TO COMPREHEND THE IMPORTANCE OF FILING OF APPEAL S AGAINST THE ORDERS PASSED BY THE ASSESSING OFFICER. LEARNED COMMISSIONER (APPEALS) HAS FOUND THE AFORESAID REASONS SHOWN BY THE ASSE SSEE UNACCEPTABLE BASICALLY ON THE REASONING THAT THE ASSESSEE WAS GETTING PROFESSIONAL ADVICE AND WAS REPRESENTED BY A CHARTERED 7 AGILITY LOGISTICS PVT. LTD. ACCOUNTANT FIRM. IN OUR VIEW , DISMISSAL OF ASSESSEES APPEAL IN LIMINE WITHOUT ACCEPTING THE PRAYER FOR CONDONATON OF DELAY ON AFORESAID REASONING IS IMPROPER. THE ASSESSEES CLAI M THAT THE CHARTERED ACCOUNTANT FIRM WAS ONLY ENTR USTED WITH AUDIT WORK AND IT NEVER REPRESENTED THE ASSESSEE BEFORE THE ASSESSING OFFICER HAS NOT BEEN FOUND TO BE FALSE OR UNTRUE. MOREOVER, BY NOT FILIN G THE APPEALS IN TIME THE ASSESSEE HAS NOT DERIVED ANY BENEFIT , ON THE CONTRARY, THE TURN OF EVENTS DUE TO NONFILING OF APPEALS IN TIME HAS BEEN PROVED TO BE DETRIMENTAL TO THE INTEREST OF THE ASSESSEE , SINCE , ASSESSEES APPEAL S WE RE DISMISSED IN LIMINE W ITHOUT GETTING DECIDED ON MERITS. IT IS WELL SETTLED PROPOSITION OF LAW, THE EXPRESSION SUFFICIENT CAUSE HAS TO BE INTERPRETED LIBERALLY. A LITIGANT HAVING A GENUINE GRIEVANCE SHOULD NOT SUFFER ON THE GROUND OF DELAY IF SUCH DELAY IS FOR BONAFIDE REASONS . WHEN TECHNICALITIES AND SUBSTANTIAL JUSTICE ARE PITTED AGAINST EACH OTHER, EFFORTS SHOULD BE MADE TO LEAN TOWARDS JUSTICE BY DECIDING THE ISSUE ON MERITS . A LITIGANT SHOULD NOT BE TURNED AWAY AT THE THRESHOLD O N TECHNICAL GROUNDS , UNLESS OF COURSE THERE IS DELIBERATE NEGLIGENCE ON THE PART OF THE LITIGANT IN APPROACHING THE COURT IN TIME. IN AFORESAID VIEW OF THE MATTER , WE ARE OF THE CONSIDERED OPINION THAT THE COMMISSIONER (A PPEALS ) WAS NOT JUSTIFIED IN DISMISSING THE APPEALS OF THE ASSESSEE ON THE GROU ND OF DELAY WITHOUT DECIDING THE ISSUES ON MERITS. AT THE SAME TIME, IN OUR OPINION, THE ASSESSEE SHOULD HAVE 8 AGILITY LOGISTICS PVT. LTD. BEEN MORE VIGILANT AND SHOULD NOT HAVE LEFT SUCH IMPORTANT MATTER S TO THE TOTAL DISCRETION OF THE EMPLOYEE, WHO , IN ASSESSEES OWN ADMISSION , WAS AN INEXPERIENCED PERSON. AT LEAST , THE ASSESSEE IS EXPECTED TO PUT SUCH IMPORTANT TASK S IN CHARGE OF SOME EXPERIENCED PERSONS WHO ARE CAPABLE OF HANDLING SUCH MATTERS AND FURTHER, ASSESSEE IS REQUIRED TO KEEP TRACK OF THE FOLLOW UP ACTION TAKEN IN SUCH MAT TERS. NOT DOING SO REVEALS LAXITY ON THE PART OF THE ASSESSEE , TO SOME EXTENT , FOR WHICH THE OPPOSITE PARTY (REVENUE) SHOULD NOT SUFFER , AS , AGAIN IT HAS GO T HROUGH THE RIGMAROLE OF THE SAME JUDICIAL PROCESS RESULTING IN WASTAGE OF VALUABLE TIME. F OR THE AFORESAID LAXITY ON THE PART OF THE ASSESSEE, THE REVENUE HAS TO BE COMPENSATED. IN THIS CONTEXT , WE REFER TO THE JUGEMENT OF THE HON'BLE SUPREME COURT IN THE CASE N . BALAKRISHNAN V/S. M. KIRSHANMOORTY (SUPRA) CITED BEFORE US BY THE LEARNED A.R. IN VI EW OF THE AFORESAID, THOUGH , WE ARE INC LINED TO CONDONE THE DELAY OF 21 7 DAYS IN FILING THE APPEALS BEFORE THE CIT(A), HOWEVER, WE DIRECT THE ASSESSEE TO PAY COST OF ` 10,000/ FOR EACH O F THE APPEALS TO THE REVENUE. ON PAYMENT OF COST AS DIRECTED ABOVE AND FURNISHING THE PROOF BEFORE THE CONCERNED AUTHORITY , ASSESSEES APPEALS SHALL BE TAKEN U P FOR HEARING BY THE LEARNED COMMISSIONER (A PPEALS) AND DECIDED ON MERIT AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. SINCE , WE ARE REMITTING THE MATTERS BAC K TO THE COMMISSIONER (A PPEALS ) , ALL ISSUES ON MERITS ARE KEPT OPEN TO BE 9 AGILITY LOGISTICS PVT. LTD. RAISED BEFORE THE CIT(A) FOR ADJUDICATION. GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 7 . IN THE RESULT, BOTH THESE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 2359/MUM/2015 & CO NO. 22/MUM/2016 8 . THE APPEAL BY THE DEPARTMENT IS AGAINST THE ORDER OF THE CIT(A) IN DELEING PENALTY IMPOSED UNDER SECTION 271C OF THE ACT FOR A.Y. 2011 12. AS DISCUSSED IN EARLIER PART OF THE ORDER , PURSUANT TO A SURVEY CONDUCTED UNDER SECTION 133A OF THE ACT TO VERIFY TDS COMPLIANCE BY THE ASSESSEE , THE ASSESSING OFFICER INITIATED PROCEEDINGS UNDER SECTION 201 OF THE ACT AND ULTIMATELY PASSED ORDERS RAISING DEMANDS UNDER SECTION 201(1)/201(1A) FOR A SSESSMENT YEARS 2010 11 AND 2011 12. FURTHER , FOR DEFAULT COMMITTED BY THE ASSESSEE IN DEDUCTING TAX AT SOURCE THE ASSESSING OFFICER INITIATED PROCEEDINGS ONLY FOR ASSESSMENT YEAR 2011 12. IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED FOR I MPOSITION OF PENAL TY, AS OBSERVED BY THE ASSESSING OFFICER, THE ASSESSEE VIDE LETTER DATED 12.09.2012 REQUESTED THE ASSESSING OFFICER NOT TO IMPOSE PENALTY AS DEMAND RAISED UNDER SECTION 201(1)/201(1A) WAS DISPUTED BY THE ASSESSEE. THE ASSESSING OFFICER, HOWEVER, DID NOT FI ND MERIT IN THE AFORESAID SUBMISSION OF THE ASSESSEE AND PROCEEDED TO PASS AN ORDER IMPOSING PENALTY OF 10 AGILITY LOGISTICS PVT. LTD. ` 1,02,55,663/ UNDER SECTION 271C OF THE ACT. ASSESSEE CHALLENGED THE IMPOSITION OF PENALTY BEFORE THE CIT(A). LEARNED CIT(A) AFTER CONSIDERING THE NATU RE OF ASSESSEES DEFAULT IN RESPECT OF EACH OF THE PAYMENTS MADE WITHOUT COMPLYING TO THE TDS PROVISIONS , ULTIMATELY RESTRICTED THE PENALTY UNDER SECTION 271C OF THE ACT TO ` 10,57,155/ . IN THE PRESENT APPEAL THE DEPARTMENT HAS RESTRICTED ITS CHALLENGE IN RESPECT OF IMPOSITION OF PENALTY UNDER SECTION 271C IN SO FAR AS IT RELATES TO PAYMENT ` 10,45,82,003/ BEING MADE TO OVERSEAS ENTITIES. 9 . THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED, DURING ASSESSMENT PROCEEDINGS THE ASSESSEE HAS NOT PRODUCED ANY EVID ENCE WITH REGARD TO THE NATURE OF PAYMENT MADE TO THE OVERSEAS GROUP ENTITIES. FURTHER, LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED , THE FIRST APPELLATE AUTHORITY HAS DELETED PENALTY ON THE AFORESAID PAYMENT ON THE BASIS OF EVIDENCES FURNISHED BEFORE HER WHICH WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER. THEREFORE, LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED, PENALTY IMPOSED ON SUCH PAYMENT SHOULD BE RESTORED. 10 . THE LEARNED A UTHORIZED R EPRESNETATIVE SUBMITTED, IMPOSITION OF PENALTY UNDER SECTION 271C IS NOT AUTOMATIC AS IT HAS TO BE LEVIED IN CONSONANCE WITH THE PROVISION CONTAINED UNDER SECTION 273B OF THE ACT. HE SUBMITTED, THE ASSESSEE HAS BEEN IN THIS BUSINESS FOR MORE THAN A DECADE AND SUCH PAYMENTS HAVE BEEN MADE TO THE OVERSEAS 11 AGILITY LOGISTICS PVT. LTD. GROUP ENTITIES F ROM THE VERY INCEPTION OF ITS BUSINESS. HE SUBMITTED, THE SERVICE FEES WERE PAID TO OVE RSEAS GROUP ENTITIES FOR TRANSPO R T ATION OF GOODS CARRIED OUTSIDE INDIA. T HEREFORE, SUCH INCOME IN THE HANDS OF THE OVERSEAS GROUP ENTITIES ACCRUES/ARISES OUTSIDE INDIA. SINCE , THE OVERSEAS ENTITIES HAVE NO PERMANENT ESTABLISHMENT IN INDIA , THE IR INCOME IS NOT TAXABLE IN INDIA. THE LEARNED A UTHORIZED R EPRESENTATIVE SUBMITTED B EFORE MAKING SUCH PAYMENT THE ASSESSEE HAS OBTAINED A CERTIFICATE FROM AN INDEPENDENT CHARTERED AC COUNTANT IN FORM NO. 15CB WHEREIN IT WAS CERTIFIED THAT SUCH PAYMENTS DO NOT REQUIRE DEDUCTION OF TAX AT SOURCE AND RELYING UPON SUCH CERTIFICATE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE ON THE PAYMENT MADE. FURTHER , LEARNED AUTHORIZED REPRESENTATIVE SUBMIT TED , THOUGH , IN PAST YEARS THE ASSESSEE HAS MADE SIMILAR PAYMENTS TO OVERSEAS GROUP ENTITIES WITHOUT DEDUCTING TAX AT SOURCE , THE D EPARTMENT NEVER PASSED ANY ORDERS UNDER SECTION 201(1) OR DISALLOWED SUCH PAYMENTS UNDER SECTION 40(A)(I) OF THE ACT. HE SUBM ITTED, EVEN IN THE IMPUGNED ASSESSMENT YEAR ALSO THERE IS NO DISALLOWANCE UNDER SECTION 40(A)(I). FURTHER , HE SUBMITTED , EVEN IN A.Y. 2010 11 FOR WHICH PROCEEDINGS UNDER SECTION 201 WERE TAKEN UP SIMULTANEOUSLY BY THE ASSESSING OFFICER , NO PROCEEDINGS FOR IMPOSITION OF PENALTY UNDER SECTION 271C WAS INITIATED BY THE ASSESSING OFFICER. HE SUBMITTED, FOR THE FORETASTED REASONS THE ASSESSEE BEING UNDER A BONA FIDE BELIEF THAT THERE WAS NO 12 AGILITY LOGISTICS PVT. LTD. REQUIREMENT FOR DEDUCTION OF TAX AT SOURCE ON SUCH PAYMENT HAS NOT DEDUC T ED TAX AT SOURCE. IN SUPPORT OF SUCH CONTENTION THE LEARNED A.R. RELIED UPON THE FOLLOWING DECISIONS: I ) CIT V/S ELI LILLY & CO. INDIA PVT. LTD. & ORS., [2009] 312 ITR 225 (SC); II ) AISHWARYA RAI BACHCHAN V/S ACIT, [2016 ] TTJ 643 (MUM.); III ) BALMER LAWRIE & CO. LTD. V/S ITO, [2016] 68 TAXMANN.COM 384 (KOL.) 11 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS ON RECORD IN THE LIGHT OF THE DECISIONS RELIED UPON. SECTION 271C EMPOWERS THE ASSESSING OFFICER TO IMPOSE PENALTY FOR FAILURE OF THE ASSESSEE TO DEDUCT TAX AT SOURCE. HOWEVER, AS PER SECTION 273B NO SUCH PENALTY SHALL BE IMPOSED ON A PERSON IF HE PROVES THAT THERE WAS REASONABLE CAUSE FOR FAILURE TO DEDUCT TAX AT SOURCE. THEREFORE, KEEPING IN VIEW THE AFORESAID STATUTORY PROVISION IT IS NECESSARY TO EXAMINE WHETHER THE ASSESSEE HAS MADE OUT SUFFICIENT CAUSE FOR NON DEDUCTION OF TAX AT SOURCE ON THE PAYMENT OF ` 10,45,82,003/ TO OVERSEAS GROUP ENTITIES. AS COULD BE SEEN FROM THE FACTS ON RECORD , SUCH PAYMENT WAS MADE TO THE OVERSEAS GROUP ENTITIES F OR TRANSPORTATION OF GOODS BY THEM OUTSIDE INDIA AND IN THE IR RESPECTIVE COUNTRIES. THUS , AS PER THE CLAIM OF THE ASSESSEE , NOT ONLY PAYMENTS WERE MADE TO PERSONS OUTSIDE THE TERRITORY OF INDIA, BUT, ALSO FOR SERVICES RENDERED OUTSIDE THE TERRITORY OF INDI A. IT IS ALSO THE CLAIM OF 13 AGILITY LOGISTICS PVT. LTD. THE ASSESSE E THAT THE OVERSEAS ENTITIES HAVE ABSOLUTELY NO PRESENCE IN INDIA. THE AFORESAID CONTENTIONS OF THE ASSESSEE REMAINS UNCONTROVERTED EVEN BE FORE US AS THE D EPARTMENT HAS NOT BROUGHT ANY MATERIAL ON RECORD TO PROVE THE C ONTRARY. FURTHERMORE , THE ASSESSEE HAS OBTAINED A CERTIFICATE FROM AN INDEPENDENT CHARTED ACCOUNTANT IN FORM NO. 15CB , WHEREIN , THE CONCERNED CHARTERED ACCOUNTANT HAS OPINED THAT TDS IS NOT REQUIRED TO BE MADE ON SUCH PAYMENT. FURTHERMORE , IT IS A FACT ON RECORD THAT , THOUGH , THE ASSESSEE HAS MADE PAYMENT OF IDENTICAL NATURE TO OVERSEAS GROUP ENTITIES IN PAST SEVERAL YEARS WITHOUT DEDUCTING TAX AT SOURCE , NO PROCEEDINGS HAS BEEN INITIATED BY THE DEPARTMENT UNDER SECTION 201(1) , EXCEPT ASSES SMENT YEARS 2010 11 AND 2011 12 . IN AS MUCH AS , NO DISALLOWANCE UNDER SECTION 40(I)(A) HAS EVER BEEN MADE. EVEN THOUGH , SIMILAR PAYMENT WAS MADE IN A.Y. 2010 11 AND FACTS FOR BOTH THE ASSESSMENT YEARS ARE IDENTICAL , THE ASSESSING OFFICER HAS NOT INITIATED PROCEEDINGS FOR IMPOSITION OF PENALTY UNDER SECTION 271C OF THE ACT FOR A.Y. 2010 11. THUS , ON A CONSPECTUS OF AFORESAID FACT S, WITHOUT ENTERING INTO THE CONTROVERSY AS TO WHETHER TDS PROVISIONS ARE APPLICABLE OR NOT TO SUCH PAYMENT , ONE CAN REASONABLY CON CLUDE THAT THE FAILURE ON THE PART OF THE ASSESSEE TO DEDUCT TAX AT SOURCE WHILE MAKING SUCH PAYMENT WAS FOR BONA FIDE REASONS , HENCE , IN TERMS OF SECTION 273B OF THE ACT THERE BE I NG A REASONABLE CAUSE FOR SUCH 14 AGILITY LOGISTICS PVT. LTD. FAILURE , NO PENALTY CAN BE IMPOSED UNDER SECT ION 271C OF THE ACT. ACCORDINGLY , WE UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE BY DISMISSING THE GROUNDS RAISED. 12 . IN VIEW OF OUR AFORESAID DECISION IN DEPARTMENTS APPEAL , THE CROSS OBJECTION HAVING BECOME INFRUCTUOUS IS DISMISSED. 13 . IN THE RESULT, BO TH DEPARTMENTS APPEAL AND ASSESSEES CROSS OBJECTION ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.10.2017 SD/ - G.S. PANNU ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 31.10.2017 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, MUMBAI